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November 14, 2019

ECC raises wheat support price to Rs1,350/40kg

Business

November 14, 2019

ISLAMABAD: The government on Wednesday raised wheat support price by Rs50 to Rs1,350 per 40 kilograms after keeping the rate unchanged for the last five years, in a move to help farmers meet the escalating cost of agriculture production.

The Economic Coordination Committee (ECC) of the cabinet took the decision to increase the minimum support price of wheat from the current Rs1,300/40 kg during a meeting presided over by Adviser to the Prime Minister on Finance and Revenue Hafeez Shaikh.

The ECC was told that the minimum support price for wheat had not been enhanced for the last five years.

It was told that cost of production increased to Rs1,349.57/40 kg in the Punjab and Rs1,315.72/40 kg in Sindh as per the findings of the Agriculture Policy Institute.

The ECC decided to enhance the minimum support price for the next crop of wheat. Wheat price in the international market is hovering around Rs1,575/40 kg and Rs1,440/40 kg without customs duties and other levies.

The ECC also directed the ministry of national food security and research to ensure adequate wheat procurement in the coming season. “Failing which any request from provinces for releases from Pakistan Agricultural Storage and Services Corporation (Passco) would entail 100 percent payment of incidental charges,” the finance ministry said in a statement.

The committee directed the finance ministry to present a detailed presentation, in the next ECC meeting, on the rising circular debt on the commodity operation, which has already crossed Rs450 billion. Provincial chief secretaries or their representatives are invited to attend the meeting. The ECC constituted a committee, headed by Prime Minister’s Adviser on Commerce Razak Dawood, to resolve the issues regarding provision of utilities, particularly the installation of gas connections in the special economic zones.

The ECC approved a proposal for execution of amendment to the implementation agreement governing Thal Nova Power Thar Private Limited and Thar Energy Limited by increasing the time period for exercise of government’s right to terminate both the projects from 400 days to 490 days. The approval was linked with a proviso that the cabinet division would take further input from the planning division and bring the matter back to ECC if there were substantive and fundamental issues requiring further discussion and any change in the ECC approval.

The committee took up a proposal by the ministry of industries and production for grant of technical supplementary grant of Rs6 billion to the Utility Stores Corporation (USC) for subsidy and provision of essential commodities such as flour, sugar, ghee, rice and pulses at a fair price.

The ECC discussed the proposal entailing transfer of Rs4 billion funds from the Benazir Income Support Program and arrangement of another Rs2 billion by the finance division to ensure that the targeted subsidy reaches the people it is meant for.

The ECC constituted a committee to identify realistic and foolproof methods involving use of information technology to ensure the fulfillment of subsidy objective and that is poor purchases essential items from the 3,600 utility stores nationwide.

The ECC also considered a proposal by the ministry of national food security and research for release of 200,000 tons of wheat at Rs1,375 per 40 kg from the Passco stocks to the USC to compensate vulnerable segments of the society and to discourage hoarding and profiteering. The release is subject to a proviso that the financial implication of Rs1.314 billion on account of price differential and incidental charges of Rs6,573.98 per ton to be picked up by the finance division would be settled in the third or fourth quarters.

The ECC approved a four-year circular debt capping plan that envisaged measures to improve debt servicing of Power Holding Private Limited loans, 100 percent collection by five distribution companies, reduction in line losses, rationalisation of subsidy allocations, reduction of running and permanent defaulters and reducing power sector flows to less than Rs75 billion per annum from the current level of Rs465 billion per annum.

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