Wheat procurement: Rs 224 billion financing requirements approved by ECC

The Economic Co-ordination Committee (ECC) of the Cabinet has approved Rs 224 billion financing requirements for procurement of 7.05 million tons of wheat for 2017 with financing need of Rs 130 billion for Punjab, followed by Rs 39 billion for Sindh.
According to a proposal submitted to a meeting of the ECC presided over by Finance Minister Ishaq Dar on March 28, 2017, a copy of which is available with Business Recorder, the financing requirements of Khyber Pakhtunkhwa and Balochistan for procurement of wheat are Rs 10 billion and Rs 8 billion respectively.
The proposed wheat procurement target of Punjab for 2017 was stated to be at 4.50 million tons, followed by 1.20 million tons of government of Sindh, 0.35 million tons of Khyber Pakhtunkhwa, and 0.10 million tons of the government of Balochistan. The proposed wheat procurement target of Pakistan Agriculture Storage and Services Corporation (PASSCO) for 2017 is 0.90 million tons and its financial requirement is Rs 37.5 billion.
The public sector procures wheat every year at minimum support price from the farmers for ensuring profitability in agriculture sector and a fair return to the farming community, stated the proposal, adding that a meeting of the ECC held on December 13, 2016 formally decided to maintain the minimum guaranteed price (MGP) of Rs 1,300 for per 40-kg wheat in 2016-17.
The public sector wheat stocks are maintained to augment flows during the lean period of wheat supplies as well as for fulfilling the food requirements of deficient provinces/areas. A part of procured wheat stock is used as a strategic reserve for emergencies as well as meeting the international obligations.
During the last three years, according to the proposal of Ministry of National Food Security and Research, the public sector wheat procurement on an average remained at 5.713 million tons per annum. Last year, a quantity of 5.806 million tons of wheat was procured against a procurement target of 7.05 million tons. Low wheat procurement was made due to leftover stock of the previous year and slow export of wheat despite provision of rebate. The current public sector wheat stock as on February 14, 2017 was 6.171 million tons. This includes strategic reserves of 1.00 million tons being maintained by Passco.
A meeting of wheat review committee was held on February 14, 2017 to reach an agreement between provincial food departments and Passco for fixation of the heat procurement target. As a result of this consultation, a procurement target of 7.05 million tons was agreed upon and the financial requirements for the proposed target were calculated at Rs 224.86 billion and proposal was put before the ECC for approval. Subsequently after considering the proposal, the ECC approved fixation of procurement target and financial requirements for the wheat crop.