ECC rejects hike in wheat support price proposal
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has turned down the Ministry of National Food Security and Research’s proposal to increase the support price of wheat crop 2023-24 at Rs 4,000 per 40 kg and decided to maintain last year’s price of Rs 3,900.
Well-placed sources told Business Recorder that on the recommendations of the provincial governments, the Ministry of NFS&R put a summary to the recent meeting of the ECC for approval to fix the profitable support price of wheat crop 2023-24 at Rs 4,000 per 40 kg.
However, the ECC, after discussion with the provinces, decided to recommend last year’s price of Rs 3,900/40kg because a substantial increase was given in support price in 2022/23.
The Food and Agriculture Ministry has also acknowledged in the summary that the ECC on 01-03-2023 fixed the profitable support price of wheat at Rs 3,900 per 40 kg against the cost of production of an average farmer at Rs 2,495 per 40 kg, thereby, allowing 44 percent profit margin. This increase was allowed in the wake of losses of floods 2022 and squeezed rural economy against the average profit margin of 10 percent allowed during the last 11 years.
The ECC was told that the cost of production of wheat crop 2023-24 worked out by the Agriculture Policy Institute (API) at Rs 3,304 per 40 kg was also shared with the provincial governments for obtaining their endorsement.
Subsequently, the matter was again discussed in the meeting of the federal committee on agriculture (FCA) in October 2023 and the provincial governments agreed to submit their recommendations at the earliest after duly endorsed by their respective provincial cabinets.
All the provincial governments submitted their recommendations to fix the minimum support price at Rs 4,000 per 40 kg for the next fiscal year.
The ECC was further informed that the Pakistan Bureau of Statistics (PBS) in its reports for the week ended on 30-11-2023 has reported average price of wheat at Rs 4,939.38 per 40 kg or Rs 123 per kg and wheat flour at Rs 2,831.33 per 20 kg or Rs 142 per kg.
While International Grains Council on 30-11-2023 has reported Black-Sea wheat prices at USD 245/MT (FOB) or USD 323/MT (CNF) at Karachi which equals to Rs 3,686 per 40 kg at Karachi, including withholding tax, marine insurance, stevedoring and management charges.
The meeting was also stated that in order to bridge the gap of 2.40 MMT in demand and supply of wheat in the country, the private sector has been encouraged to import wheat from their own resources. So far, 20 private vessels of imported wheat have arrived up till 04-12-2023 carrying 1,147,795 MT of imported stock, whereas, an additional import of 1.00 MMT is projected to arrive till the end of February 2024.
The Food Ministry’s contention was that the ideal time of sowing of wheat crop is considered in the mid of November, therefore, announcement of support price before its sowing is a crucial factor in order to fix a uniform profitable support price across the count.
However, due to delay in the submission of provincial response, its announcement has been delayed.
Provincial governments have submitted their recommendations regarding profitable support price of wheat crop 2023-24 which included; Punjab Rs 4,000 per 40 kg whose production share is 74.73 percent followed by Sindh Rs 4,000 per 40 kg whose production share is 12.58 percent, Khyber Pakhtunkhwa Rs 4,100 per 40 kg whose share is Rs 8.47 percent and Balochistan Rs 400 per 40 kg with a production share of 4.58 percent.
The Ministry of Finance and the Ministry of Commerce have supported the recommendation of the Ministry of NFSR for fixing the profitable support price of wheat crop 2023-24 at the level of Rs 4,000 per 40 kg and the summary was moved to the ECC in this regard.
Source Link: https://www.brecorder.com/news/40281820
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