ECC raises wheat support price to Rs1,365/40 kg

ISLAMABAD: Economic Coordination Committee (ECC) of the cabinet on Thursday raised minimum support prices for wheat to Rs1,365/40 kg from Rs1,350/40 kg to support farmers, a statement said.

“(The minimum support price has increased) to compensate farmers in areas where the cost of wheat production had increased to Rs1,349.57/40 kg,” the government said in a statement.

“The decision to raise the minimum support price of wheat to Rs1,365 (was taken) to compensate and safeguard the interests of growers and ensure food security.”

Abdul Hafeez Shaikh, adviser to Prime Minister on Finance and Revenue, chaired the ECC meeting.

The decision was taken after deliberations with representations from various farmers and growers’ associations as well as the federal cabinet and the national assembly special committee on agricultural products ‘which had proposed a reconsideration of the minimum support price increased’.

The ministry of National Food Security and Research briefed the ECC on the feedback received from various farmers’ associations as well as different government forums and requested for fixing the minimum support price of wheat at Rs 1,400/40 kg.

“The ECC deliberated on the proposal at length and in view of the discussion and input regarding the impact of any further increase in wheat price on food inflation and financial impact on the commodity stock operations, decided to raise the minimum support price of wheat to Rs 1,365/40 kg.”

The ECC also viewed a presentation from the ministry of finance on the government commodity operations which had over the years resulted in Rs757 billion as total debt and liabilities and recommendations for reducing the debt.

The ECC also considered a proposal from the ministry of energy regarding tariff rationalisation for power sector in the first quarter of financial year 2019-20 and a approved proposal for notifying the NEPRA approved quarterly adjustment of 15 paisa/unit after incorporating a additional charge of 11 paisa/unit for maintaining uniform tariff on all categories of consumers except lifeline and domestic consumers.

“The increase coming into effect on December 1, 2019 for the next twelve-monthly billing cycle would not be applicable to nearly 20 million using up to 300 units/month, out of the total 30 million consumers while 600,000 of the remaining one million consumers would only pay 7 paisa/unit as a result of this increase,” the statement said.

The ECC also constituted a committee headed by Shaikh and comprising minister of National Food Security and Research Makhdoom Khusro Bakhtiar, Prime Minister's advisor on Commerce and Investment, Abdul Razak Dawood and special assistant to Prime Minister on Petroleum Nadeem Babar to examine the current framework of determining power tariff and make it more simple in line with the practice in mature markets.

The ECC also considered a set of proposals from the power division for risk mitigation post privatisation of National Power Parks Management Company, especially the impact on fuel basket price due to non or reduced off take of 66/cent generation under the PPA till year 2024 and cost of diversion of Regasified Liquefied Natural Gas (RLNG) to other sectors with workable options to mitigate the risk.

“The ECC discussed the proposals in details and approved them with a proviso that any other option that could be considered as part of the mitigation plan by the Power Division could also be taken into account and approved, if found suitable, by the ECC,” the statement said.

The ECC constituted an inter-ministerial committee under the chairmanship of minister Planning, Development and Reforms and comprising adviser to Prime Minister on Industries and Production, special assistant to Prime Minister on Petroleum, secretary finance, secretary industries and production and chairman Federal Board of Revenue for preparation of a policy framework for promotion of steel and iron in the country through foreign direct investment.

The ECC also considered a proposal by the ministry of Communications that all cash development loans and foreign loans, whether direct or relent, including interest accumulated thereon, received up to June 30, 2019 by the National Highway Authority be converted into government grant or the Government of Pakistan may either ‘write-off’ the said loans.

The ECC also took up a proposal from the ministry of Industries and Production for a technical supplementary grant of Rs6 billion to the Utility Stores Corporation for subsidy and procurement of essential commodities to be sold at a fair price.