Cultivators to get support
of Rs100 per 100 kg transportation
PESHAWAR: The Khyber Pakhtunkhwa Food Department has allowed a subsidy of Rs100 per 100 kilogram on transportation charges of wheat being procured in the province.
The provincial Food Department has directed all Divisional Assistant Directors Food (DADF) and District Food Controllers (DFCs) to comply with the decision allowing subsidy to the growers and cultivators on transportation charges on the procurement of wheat. Interestingly the subsidy has been allowed at a time when the wheat has already been purchased and procured at a cost of Rs3250 per 100 kg under the state trading arrangements.
The state trading of the provincial government covers wheat procurement, which is kept separate from all other transactions of the provincial government. Funds required for procurement of wheat are normally obtained from commercial banks and guaranteed by the government.
The provincial government has estimated an amount of Rs101,905.000 million to be arranged for the procurement of wheat during the current financial year. Khyber Pakhtunkhwa is historically wheat deficit province and purchases wheat from Punjab and Pakistan Agricultural Storage and Supplies Corporation (PASSCO) and import from abroad through federal government for meeting its wheat requirements.
The provincial also caters to the needs of Fata and Afghan refugees residing in province. Apart from this Khyber Pakhtunkhwa has got a porous border with Afghanistan, which is a food deficit country and traditionally depends on Pakistan, especially Khyber Pakhtunkhwa for its food requirement.
The impact of the storage of wheat and its products in Afghanistan is also felt in Khyber Pakhtunkhwa either in the shape of shortage of supply or price hikes. The total wheat requirement of the province is around 4.5 million to 5 million metric tonnes while local production is about 11 lakh metric tonne and the deficiency is met through open market from the surplus wheat produced by Punjab.
The Food Department issues a specific quota to all districts on the basis of population to stabilise prices in the market during the lean period from September to April. At the time of purchase of wheat, Food Department bears the cost of wheat as well as the expenditure on account of transportation charges and incidentals, which is the landed cost of wheat.
In order to provide cheaper flour to the general public the department releases wheat to the flour mills at a price lower than the landed cost and the differential burden is taken up by the provincial government in the form of subsidy.
The government had estimated to procurement wheat of around Rs10 billion to meet the requirement of the province while a subsidy of over Rs2 billion also be allowed on the transportation of the staple grain.
The notification has directed the ADFs in the Provincial Reserve Centres (PRCs), Dera Ismail Khan, to allow Rs40 per 100 kg bag of wheat while in all other centres a subsidy of Rs100 per 100 kg bag vis-à-vis transportation charges on wheat purchased at the PRCs in addition to the cost of wheat at the rate of Rs3250 has been allowed.
However, they have been directed that 2 per cent income tax would also deductable from the subsidy given on account of transportation which may be collected in cash from the growers before issuance of purchase bill.