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ISLAMABAD: A special meeting of the Economic Coordination Committee (ECC) of the Cabinet has approved minimum indicative prices (MIPs) of Rs240 per kg for Flue Cured Virginia (FCV) tobacco crop for the next fiscal year against Rs260 per kg proposed by the Ministry of National Food Security and Research (MNF&R).

The ECC meeting virtually presided over by the Minister for Finance, Shaukat Tarin, has considered and approved the Ministry of National Food, Security and Research’s proposal of fixing Minimum Indicative Prices (MIP) of various types of tobacco crops for 2022 with Rs240 per kg for FCV for plain area, Rs281.13 for sub-mountainous area. The meeting also approved dark air-cured tobacco (DAC) per kg price Rs149.09, white patta (WP) Rs123, burley, white Rs187.50 and Rs123 per kg has been approved for naswar/ snuff/ hookah and other Rustica tobacco and its products.

The Ministry of NFS&R said on the summary that Pakistan Tobacco Board (PTB) has been established mainly to regulate, control and promote the export of tobacco, as well as, tobacco products besides undertaking research in tobacco and develop new tobacco growing areas.

The MIPs for different grades of various types of tobacco are to be notified by the federal government, said that the ministry in the proposal, while referring that the MIPs are recommended by the prices and grade revision committee on the basis of the cost of production (CoP).

The ECC was informed that a survey for determination of cost of production was undertaken in pursuance of PTB bye-law. During compilation of survey results/ consultation meeting, the growers’ representative agitated that the average yield of FCV tobacco worked out as a result of cost pf production survey is much higher than the actual per hectare yield of FCV tobacco and unrealistic figure has resulted into lower CoP value than the actual CoP of tobacco growers.

ECC set to approve tobacco crop MIPs today

Subsequently, the ministry contended that results of the CoP survey were presented to the Ministry of National Food Security & Research on 16 November 2021 and to the National Assembly Special Committee on Agriculture on 22 November 2021. The meeting was further informed that both the Ministry and the Special Committee on Agriculture directed to revise the CoP as per current rates of crop inputs following substantial increase in their cost over the past few months. To reach consensus on average yield per hectare, average yield as recorded during last 10 years CoP surveys (2010-2019) was recorded for CoP 2022.

The prices and grade revision committee constituted with approval of the Ministry of National Food Security & Research recommended the minimum indicative prices for various types of tobacco for different areas in its meetings held on 25 November 2021. Minutes of the meeting dated 25th November 2021.

The ECC was informed that two meetings were convened regarding notification of MIP for 2022 crops and after detailed deliberation, the Minister for NFS&R has endorsed Rs260/kg MIP proposed by Ministry of (NFS&Rs) for 2022 tobacco crop for FCV, whereas, Adviser to Prime Minister on Commerce Investment disagreed with the Ministry of NFS&R) and proposed 225/kg for the same.

The Minister for Industries and Production did not attend both meetings. The meeting was informed that the proposed MIPs do not entail any financial obligation on the part for the cost for the federal government and requested the approval of the proposed MIPs.

Copyright Business Recorder, 2022

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