ISLAMABAD: The Economic Coordination Committee of Cabinet approved a Rs274 billion Cash Credit Limit (CCL) for the procurement of wheat by the provinces and Pakistan Agricultural Storage and Services Corporation Limited (PASSCO) on Friday.

Sources said that the ECC meeting presided over by Finance Minister Muhammad Aurangzeb on Thursday was unable to take any decision; therefore, the meeting was extended for another day to take provinces’ advice and input before taking a final decision in order to avoid any issue in future.

As the discussion remained inconclusive, therefore, the decision was taken to invite provinces for their input, to avoid confusion, sources added.

Sindh govt to start wheat procurement process on 20th

They added that there was also confusion about the wheat price, as Pakistan Bureau of Statistics (PBS) data for the last few months suggested that wheat price was hovering between Rs4,200 to 4,500 per 40kg, whereas, an anecdotal report quoted people maintaining that wheat prices was Rs3,200 to 3,500 per 40kg.

The Finance Ministry did not issue a statement about the conclusion as well as the decision taken by the two-day ECC meeting; however, sources said that the meeting has approved Rs274 billion CCL for new procurement of wheat and Rs100 billion CCL to Sindh for clearance of the previous amount.

Sources added that the Ministry of National Food Security and Research in the summary to the ECC stated that the public sector, comprising PASSCO and the provincial governments, procures local wheat on the profitable support price approved by the federal cabinet, in order to stabilise wheat prices and to ensure fair returns to farmers during the post-harvest period.

PASSCO procures wheat from Punjab, Sindh, and Balochistan, and provides the same to deficit provinces, areas, and agencies. The ministry added that PASSCO is also responsible for maintaining the strategic reserves of the country.

Similarly, Provincial Food Departments procure wheat from their growers and release it to the flour mills of the respective province as per the Release Policy approved by respective provincial cabinets.

The Ministry of Food added that public wheat procurement targets as conveyed by PASSCO, Sindh and Balochistan are of 2.45 MMT, included 1.40 MMT for PASSCO, 01 MMT for Sindh, and 0.050 MMT for Balochistan.

The proposed target for this year appeared to be insufficient to mitigate the provincial requirements, despite the presence of a carry-forward stock of 3.25 MMT.

Last year, 2023, the public wheat procurement target of 7.80 MMT was set up by the federal cabinet. The government of Punjab has also been requested accordingly, and the response is awaited. Punjab’s procurement target for the last year (2023) was set at 4.50 MMT.

Ministry of MNFRS has recommended the endorsement of provincial cabinets regarding public wheat procurement targets, along with CCL; (a) PASSC0 may be assigned wheat procurement target of 1.40 MMT with tentative CCL of Rs169.00 billion at Rs3,900/40kg; (b) government of Sindh may be assigned wheat procurement target of 01 MMT with tentative CCL for Rs100 billion at Rs4,000/40kg; (c) government of Balochistan may be assigned wheat procurement targets of 0.030 MMT with the CCL of Rs5.70 billion at Rs4,300/40kg;(d) incidental charges may be allowed to be borne by respective provincial government; and (e) in case of any emergency, the ministry may be allowed to re-approach the ECC of the Cabinet for revision of PASSCO’s procurement target.

The Finance Division has supported the proposals of the summary with the observation that the CCL demanded by PASSCO is more than the cost of wheat and asking for its justification. In this regard, the meeting was clarified that incidental charges are also included in the CCL of PASSCO along with the cost of wheat as per the report of PASSCO.

Copyright Business Recorder, 2024


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