Ministry of National Food Security and Research is all set to again approach Economic Coordination Committee (ECC) of the Cabinet for increase in wheat support price to Rs 1400 per 40kg from Rs 1365 per 40kg fearing that ambitious procurement target of 8.25 million tons for 2019-20 would not be achieved at existing rates.
Secretary Ministry of National Food Security and Research, Dr Hashim Populzai informed Senate Standing Committee on National Food Security and Research presided over by Senator Syed Muzaffar Hussain Shah that an inter-ministerial meeting has been convened on Monday next to further deliberate on wheat procurement and finalization of new summary for the ECC, in which it would be recommended that wheat support price be enhanced to Rs 1400 per 40kg.
He said target for Punjab has been fixed at 4.5 million tons, followed by 1.4 million tons for Sindh, 0.450 million tons for KP, 0.100 million tons for Balochistan and 1.8 million tons for Passco.
The financial impact of procurement of 8.25 millions of wheat at 1365 per 40kg has been calculated at Rs 281.531 billion. Wheat harvesting season will commence from March 10, 2020 in Sindh and April 15, 2020 in Punjab. He said last wheat procurement was 35 per cent less than the target.
Populzai said that as the rates have come down private sector has started selling wheat in the market due to which it is expected that the next procurement season will start with carryover of up to one million tons of wheat.
Commenting on wheat crisis, Chairman Standing Committee said that procurement of 0.6 million tons wheat for poultry feed in Punjab was totally unwarranted at a time when there was already shortage in the country.
Secretary Food Punjab Waqas Ali Mehmood said that keeping in view different challenges including locust attack and comparatively limited carryover stocks, the cabinet committee on wheat of Punjab government has enhanced procurement target to 4.5 million tons which is ambitious as the Punjab government is setting target of 4 million tons from 2010. The government achieved those targets by over 3.5, 3.6 or 3.7 million tons but in those years carryover stocks were on higher side.
He said, traditionally wheat harvesting season starts from April 15, 2020 but the cabinet committee on wheat has advised that harvesting should begin from March 25, 2020 in South Punjab and by that time all arrangements will be in place. He said in South Punjab, wheat harvesting starts from Rajanpur.
"If we start procurement from March 25, there are three or four requirements which are in place. Procurement centres should be in place for which SOPs have already been issued. Punjab will establish 382 wheat procurement centres," he added.
Secretary Food Punjab further stated that commodity financing operation is already underway as Finance Ministry has given sovereign guarantees after banks extended limits.
"We are now trying if possible to start wheat procurement from March 25, 2020, however, it will not be practicable and if any wheat comes on the market we would be ready," he maintained.
Secretary Food further stated that last year, extra players like feed mills also entered the market who consumed market surplus of around 0.8 million tons of wheat because last year maize crop was damaged and they diverted it to wheat.
However, this year, Punjab government has decided to restrict food grain procurement licences and only Food Department Punjab to be followed by Agriculture Department (Seed Corporation) would have to fill the requirement. Other players are not being issued food grain licences and if any person purchases wheat for private consumption, the maximum limit will be 0.05 million tons 0.1 million tons but commercial players will be restricted.
A new regime of godowns is being introduced and if any party stores wheat privately, it will be considered as hoarding and will be lifted after crackdown.
"This year consciously we will not allow issuance of food grain licence to feed mills," he further added.
Senate Committee maintained that if wheat support price is increased to Rs 1400 per 40kg it will also have an impact on flour price by Rs 1.5 per kg. He said, receivable subsidies have already crossed Rs 400 billion in Punjab and Food department is paying mark up of Rs 50 billion per annum on this account. He further stated that price was Rs 1365 per 40kg but Rs 1400 per 40kg could not be ruled out.
Senator Hafiz Abdul Karim said that if the wheat price is fixed at Rs 1365 per 40kg, next year, farmers will replace wheat with sugarcane as presently the price of cane is Rs 225 per 40kg. However, Senator Immamuddin Shouqeen said that sugarcane price is Rs 280-290 per 40kg.
The representative of Sindh Food department said that wheat procurement has been finalised and bags are being made available at all the procurement centres. Committee members from Sindh expressed doubts on the provision of bags to farmers saying that without bribe bags are not given to the farmers.
Managing Director Passco informed the committee that an amount of Rs 3 billion has not been paid by Sindh government so far.
The committee expressed concern on non availability of quality seed of cotton and chilli. Senator Muzaffar Shah said that the available seed do not have the capacity to withstand heat.
Chairman Standing Committee expressed concern on continuous absence of Minister for National Food Security and Research, Makhdoom Khuroo Bakhtiar from the standing committee meetings.
Besides others, the meeting was attended by Senator Seemee Ezdi, Senator Najma Hameed, Senator Sajid Mir and Senator Sajjad Husain Turi attended the meeting.
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