ISLAMABAD: It will cost the national exchequer about Rs105 billion to mismanage wheat activities, which the Ministry of National Food Security has proposed to pay to the federal and provincial governments in grants.
After the conference, the Cabinet ‘s Economic Coordination Committee (ECC), which met here on Monday to discuss a single-point wheat demand and supply agenda, approved the creation of a subcommittee to finalise the subsidy estimates, the finance ministry said.
The constitution of the subcommittee, however, is a mere bureaucratic formality as the numbers have already been finalised by the Ministry of Food and vetted by Dr Waqar Masood Khan, Special Assistant to the Prime Minister for Revenue.
In view of the recommen-dations of the meeting of the ECC Coordinating Committee on wheat, held on 8 November 2020, it was agreed that, in consultation with the Ministries of Finance, National Food Security and Research and the Provincial Governments, a subcommit-tee will be set up under the guidance of the SAPM on revenue to assess the total amount of s.
The PTI allowed 5.5 million metric tonnes of wheat and its goods to be exported since coming to power in 2018, which not only created a supply shortage, but also drove prices up by at least 75 percent.
The government is now not only purchasing wheat from the domestic market at higher prices, but is also importing 2.2 million metric tonnes of wheat. On Monday, the National Ministry of Food Protection sent the ECC’s subsidy figures to the ECC on the basis of nine million metric tonnes of stocks, including 1.8 million tonnes of imported wheat for which tenders were released.
The wheat subsidy rate is projected at Rs90 billion at nine million tonnes and the subsidy will leap to Rs104 billion to Rs107 billion after an additional import of 400,000 metric tonnes, an ECC member told The Express Tribune.
The minimum wheat support price for the current season is Rs1,400 per 40 kilo-grams, but according to government officials, the real cost of procurement, storage and transportation per 40 kg is Rs1,931 in Punjab. The wheat is issued to the mills at only Rs1,475 against Rs1,931.
The projected volume of imported wheat is 1.8 million tonnes, which will cost Rs90 billion. But the proceeds from sales of imported wheat are projected at Rs66 billion, requiring a subsidy of Rs24 billion.
An raise in the import quota to 2,2 million tonnes has already been authorised by the ECC and the pro-curement and subsidy costs for wheat are not part of the total Rs90 billion subsidy budget. The subsidy would leap to Rs105 billion after the addition of import prices.
At Rs209 billion, the Punjab government has procured 4.3 million tonnes of wheat, but its estimated sales income is Rs160 billion, needing Rs49 billion in domestic stock subsidies. From the imported wheat, which will cost Rs34 billion, the provincial government also gets 700,000 metric tonnes.
However, the sales revenue is projected at Rs25 billion, resulting in a Rs8 billion subsidy. Overall, the Punjab government will spend Rs243 billion on domestic and imported wheat procurement, but it will receive Rs185 billion and need Rs58 billion subsidy, excluding the effects of additional imports. The Sindh government has 1.4 million metric tonnes of wheat stocks worth Rs55 b b
The province expects revenue revenues of Rs46 billion, but it will have to pay a subsidy of Rs9 billion. At Rs8 billion, the PPP-led provincial government is also having 170,000 metric tonnes of imported wheat. Its income from sales is projected at Rs6 billion and includes a subsidy of Rs2 billion.
In particular, Sindh spends Rs64 bil-lion on local and imported wheat, but will earn Rs53 billion, resulting in a Rs11 billion void. The government of Khyber-Pakhtunkhwa (K-P) spends Rs30 billion on local and international source wheats procurement, but it will earn Rs20 billion. Rs10 billion subsidies are provided by the provincial government, primarily on imported wheat. The wheat purchase needs of the Balochistan government are calculated at just 80,000 metric tonnes, which would need just Rs100 million subsidies.
Passco, run by the federal government, will have two million metric tonnes of local and imported wheat in stocks and wants a subsidy of Rs11 billion. The Ministry of Finance reported that the ECC addressed the issues related to the country’s demand and availability of wheat.
Sindh will spend Rs64 bil-lion on local and imported wheats in total, but will raise Rs53 billion, contributing to a vacuum of Rs11 billion. The Khyber-Pakhtunkhwa (K-P) government is spending Rs30 billion on local and international wheats supply procurement, but will receive Rs20 billion. The provincial government offers Rs10 billion in subsidies, mainly for imported wheat. The Balochistan government’s wheat procurement requirements are projected at just 80,000 metric tonnes, which will need subsidies of just Rs100 million.
Passco, run by the federal government, will have supplies of two million metric tonnes of local and imported wheats and will be eligible for a Rs11 billion subsidy. The Ministry of Finance announced that the ECC was resolving issues relating to the demand for and availability of wheats in the region.