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ECC fixes minimum support price for wheat at Rs1365 per 40kg

ECC fixes minimum support price for wheat at Rs1365 per 40kg

ISLAMABAD – Economic Coordination Committee (ECC) of the Cabinet has raised the minimum support price of wheat from the previously announced Rs 1350 per 40 kg to Rs 1365 per 40 kg in view of representations from various farmers and growers’ associations as well as the Federal Cabinet and the National Assembly Special Committee on Agricultural Products.

Which had proposed a reconsideration of the minimum support price in order to compensate the farmers in areas, where the cost of wheat production had increased to Rs 1349.57 per 40 kg, said a statement issued by Ministry of Finance here.

The decision to raise the minimum support price of wheat to Rs 1365 to compensate and safeguard the interests of growers and ensure food security for the masses was taken at a meeting of the Economic Coordination Committee (ECC) of the Cabinet held at Cabinet Block on Thursday with Adviser to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh in the chair.

Earlier, the Ministry of National Food Security and Research briefed the ECC on the feedback received from various farmers’ associations as well as different government forums and requested for fixing the minimum support price of wheat at Rs 1400 per 40 kg.

The ECC deliberated on the proposal at length and in view of the discussion and input regarding the impact of any further increase in wheat price on food inflation and financial impact on the commodity stock operations, decided to raise the minimum support price of wheat to Rs 1365 per 40 kg.

The ECC also viewed a presentation from the Ministry of Finance on the government commodity operations which had over the years resulted in Rs 757 billion as total debt and liabilities and recommendations for reducing the debt.

The ECC also considered a proposal from the Ministry of Energy regarding tariff rationalization for power sector in the first quarter of financial year 2019-20 and an approved proposal for notifying the NEPRA, approved quarterly adjustment of 15 paisa per unit after incorporating a additional charge of 11 paisa per unit for maintaining uniform tariff on all categories of consumers except lifeline and domestic consumers.

The increase coming into effect on December 1, 2019 for the next twelve-monthly billing cycle would not be applicable to nearly 20 million using up to 300 units per month, out of the total 30 million consumers while 600,000 of the remaining one million consumers would only pay 7 paisa per unit as a result of this increase.

The ECC also constituted a committee headed by Adviser to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh and comprising Minister of National Food Security and Research Makhdoom Khusro Bakhtiar, Prime Minister’s Adviser on Commerce and Investment, Abdul Razak Dawood and Special Assistant to Prime Minister on Petroleum Nadeem Babar to examine the current framework of determining power tariff and make it more simple in line with the practice in mature markets.

The ECC also considered a set of proposals from the Ministry of Energy (Power Division) for risk mitigation post privatization of National Power Parks Management Company, especially the impact on fuel basket price due to non or reduced off take of 66 per cent generation under the PPA till year 2024 and cost of diversion of Regasified Liquefied Natural Gas (RLNG) to other sectors with workable options to mitigate the risk.

The ECC discussed the proposals in details and approved them with a proviso that any other option that could be considered as part of the mitigation plan by the Power Division could also be taken into account and approved, if found suitable, by the ECC.

To a proposal by the Ministry of Industries and Production, the ECC constituted an inter-ministerial committee under the chairmanship of Minister Planning, Development and Reforms and comprising Adviser to Prime Minister on Industries and Production, Special Assistant to Prime Minister on Petroleum, Secretary Finance, Secretary Industries and Production and Chairman FBR for preparation of a policy framework for promotion of steel and iron in the country through foreign direct investment.

The ECC also considered a proposal by the Ministry of Communications that all cash development loans and foreign loans, whether direct or relent, including interest accumulated thereon, received up to June 30, 2019 by the National Highway Authority be converted into government grant or the Government of Pakistan may either “write-off” the said loans while for future, all PSDP allocations including relent/direct loans, both rupee and foreign exchange component i.e. for non-commercially viable projects and for strategic/defence roads to NHA may also be provided as government grant.

The proposal also sought the CDL may be advanced only for commercially feasible projects on which Finance Division and NHA mutually agree regarding the terms and conditions of the loan and its repayment or these viable projects may be undertaken by NHA in PPP/BOT mode of financing.

The ECC discussed the proposals and in view of input from the members constituted a committee comprising Minister for Planning, Development and Reforms, Secretary Finance, Secretary Communications, Secretary Economic Affairs Division and Deputy Chairman Planning Division to examine the proposals and submit their recommendations to the ECC.

The ECC also took up a proposal from the Ministry of Industries and Production for a technical supplementary grant of Rs 6 billion to the Utility Stores Corporation (USC) for subsidy and procurement of essential commodities, including flour, ghee/oil, rice, sugar and pulses, to be sold at a fair price to the poor segment of the society.

The ECC discussed the issue in detail and in view of input from the members, asked the Utility Stores Corporation to prepare within the next few days a practical and comprehensive mechanism involving use of information technology to ensure the disbursement of specific food items to the poorest of the poor.

The ECC also constituted a committee comprising Adviser to Prime Minister on Industries and Production, Governor State Bank of Pakistan, Benazir Income Support Programme Chairperson and representatives from NADRA and PPRA to advise and assist the USC to firm up their proposals and present them to ECC.