ECC hikes minimum support price for wheat to Rs 1350 per 40kg

ECC meeting was held under chair of Finance Advisor.

ISLAMABAD (Web Desk) - Economic Coordination Committee (ECC) of the Cabinet has increased the minimum support price of wheat from the current Rs 1300 per 40 kg to Rs 1350 per 40 kg to safeguard the interests of the growers and ensure food security for the masses.

The decision to raise the wheat price by Rs 50 per 40 kg was taken at a meeting of the Economic Coordination Committee (ECC) of the Cabinet held at the Cabinet Block with Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh in the chair.

The ECC was told that the minimum support price of Rs 1300 per 40 kg for wheat had not been enhanced for the last five years.

However, in view of factors such as the world wheat situation, cost of production, export-import parity prices and domestic producer prices, an appropriate support price for the next wheat crop was necessary to meet the cost of production which had risen in 2019-20 to Rs 1349.57 per 40 kg in Punjab and Rs 1315.72 per 40 kg in Sindh as per findings of the Agriculture Policy Institute.

The ECC discussed the issue in detail and in view of the world wheat price hovering around Rs 1575 per 40 kg with and Rs 1440 per 40 kg without duties and customs duties, decided to enhance the minimum support price for the next crop of wheat from the current Rs 1300 per 40 kg to Rs 1350 per 40 kg.

The ECC also asked the Ministry of National Food Security and Research to approach the provinces well in time to make adequate wheat procurement in the coming season failing which any request from provinces for releases from Pakistan Agricultural Storage and Services Corporation (PASSCO) would entail 100 per cent payment of incidental charges.

The ECC also asked for Chief Secretaries or their representatives from the provinces to be invited to attend the next ECC meeting, and directed the Ministry of Finance to present to the ECC a detailed presentation on the rising circular debt on the commodity operation which had already crossed Rs 450 billion. The ECC also considered a set of proposals by the petroleum Division regarding provision of utilities, particularly the installation of gas connections, in the Special Economic Zones (SEZs) and after a detailed discussion on the various proposals presented by the Petroleum Division to provide necessary provisions of gas, electricity and other facilities at the SEZs, constituted a committee headed by Prime Minister s Adviser on Commerce and Investment, Abdul Razak Dawood and including representatives from the Petroleum Division and the Board of Investment to resolve certain minor issues as pointed out during the discussion, and bring up the proposal in the next ECC meeting for a decision.

The ECC also took up a proposal by Power Division for grant of ECC approval for execution of amendment to the implementation agreement governing Thal Nova Power Thar Private Limited and Thar Energy Limited by increasing the time period for exercise of Government of Pakistan’s right to terminate the both projects from 400 days to 490 days.

The ECC was told that there was no financial implication involved in the proposal. The proposal was discussed in detail and in view of the scope of the agreement in question being global in nature, the ECC approved the proposal with a proviso that the Cabinet Division would take further input from the Planning Division and bring the matter back to ECC if there were substantive and fundamental issues requiring further discussion and any change in the ECC approval.

The ECC also considered and approved a proposal by the Ministry of Interior for release of funds through a technical supplementary grant to the tune of Rs 670.553 million to HQ Frontier Corps KP (North) Peshawar for the completion of laid down codal, financial, procedural and legal formalities for various Project Implementation Letters (PILs), including the upgradation of FC KP (North) training centre at Warsak Peshawar and construction of FATA Levies Training Centre at Shakas and 10 X FATA Levies check posts. The ECC also took up a proposal by the Ministry of industries and Production for grant of technical supplementary grant of Rs 6 billion to the Utility Stores Corporation for subsidy and provision of essential commodities such as flour, sugar, ghee, rice and pulses at a fair price to the under-privileged sections of the society, in line with the package announced by the Prime Minister on 8th November 2019.

The ECC discussed the proposal entailing transfer of Rs 4 billion funds from the BISP and arrangement of another Rs 2 billion by the Finance Division, in detail and in order to ensure that this targeted subsidy reached the people it was meant for, constituted a committee under Abdul Razak Dawood, Advisor to PM on Commerce, Textile, Industry & Production and Investment and comprising Railways Minister Sheikh Rashid, Privatisation Minister Muhammad Mian Soomro, Governor State Bank of Pakistan Reza Baqir, Special Assistant to the Prime Minister on Social Protection and Poverty Alleviation and Chairperson BISP Dr. Sania Nishtar, Secretary Finance, Secretary Industries and MD Utility Stores Corporation to come up within the next few days with a realistic and foolproof method involving use of information technology to ensure the objective of the subsidy as announced by the Prime Minister was fully met and the poorest of the poor benefited from this scheme by purchasing essential items from the 3600 utility stores spread across Pakistan.

The ECC also considered a proposal by the Ministry of National Food Security & Research for release of 200,000 tonnes of wheat @ Rs 1375 per 40 kg from the PASSCO stocks to the Utility Stores Corporation to compensate vulnerable segments of the society and to discourage hoarding and profiteering, with the proviso that the financial implication of Rs 1.314 billion on account of price differential and incidental charges of Rs 6573.98 per tonne to be picked up by the Finance Division, would be settled in the third or fourth quarter by the Finance Division finding suitable sources of funding.

Towards the end, the ECC also took up and approved a detailed proposal based on a comprehensive four-year Circular Debt Capping Plan presented by the Power Division to address the flow of the circular debt through effective efficiency improvement measures and ensure an effective implementation of the National Electricity Policy 2019. Under the plan that mainly addresses sector inefficiencies, discrepancies in tariff regime, fiscal allocations and government policy measures, planning and debt servicing of Power Holding Private Limited Loans, measures would be taken to improve power distribution collection, 100 % collection by five distribution companies, reduction in line losses, rationalisation of subsidy allocations, reduction of running and permanent defaulters and reducing power sector flows to less than Rs 75 billion per annum from the current level of Rs 465 billion per annum.