ECC to propose Cabinet on Rs 1,600 as MSP for wheat

By Staff Reporter
Tuesday – October 27, 2020
ISLAMABAD: The economic coordination committee (ECC) decided to propose to the cabinet Rs 1,600 as minimum support price (MSP) for wheat crop 2020-2021, Monday, it was briefed to the ECC that the support price mechanism plays a pivotal role in boosting wheat production as it stabilises market and increases profitability of the farmers.

According to a press release, adviser to the prime minister on finance and revenue (A-PM-FR) Abdul Hafeez Shaikh chaired the meeting of ECC of the cabinet, at cabinet division, in the federal capital.

Since 2010-2011, MSP for wheat has been revised four times. The new price decided by the ECC is close to the price recommended by Punjab, which is the largest producer of wheat in the country.

ECC was also apprised of the status of wheat import by the Trading Corporation of Pakistan (TCP). ECC was briefed that till January 2021 TCP shall be able to secure one million metric tons (MMT) of wheat through international bidding.

On the request of national food security and research (NFSR) ministry, ECC decided that the initial allocation of TCP for the import of 1.50 MMT of wheat may be enhanced to 1.80 MMT to cater for the additional requirement of 0.30 MMT demanded by Khyber Pakhtunkhwa (KP) and Sindh for shipment by mid-February.

It was also decided that 300,000 million tonnes (MT) of wheat shall be imported on government to government (G2G) basis from the Russian Federation by Pakistan Agricultural Storage and Services Corporation (PASSCO).

ECC endorsed the request of NFSR ministry to import another 320,000 from Russia under the G2G arrangement but constituted a committee of secretaries of finance, commerce and food ministries to look into the possibility of import of wheat either by PASSCO or TCP.

It was also decided that further tendering of wheat may be stopped and that TCP may resort to G2G arrangement for additional procurement of wheat.

Keeping in view the arrival of the new crop in March 2021, the forum decided that no vessel of imported wheat should be arranged either in public or private sector beyond February 2021.

ECC also decided to release 50 percent of the tariff differential subsidy to the power division. The finance division has earmarked Rs.140 billion for 2020-21 as power division subsidy.

The release of Rs 65.8 billion demanded by the power division will be used for payments to the power producers in order to maintain adequate liquidity.

On the summary moved by the industries and production (IP) ministry for the determination of gas rate for operations of Fatima fertiliser and Agritech, ECC decided that gas rate of Rs 772/metric million British thermal unit (MMBTU) with variable contribution margin at 186 per bag may be offered to both the units for the period November 3, 2020, onwards.

It was briefed to the ECC that the government of Pakistan’s (GoP) share at this gas rate has been estimated by national fertiliser development centre (NFDC) on the basis of re-gasified liquefied natural gas’ (RLNG) last notified rate for July by oil and gas regulatory authority (OGRA), which is approximately 0.42 billion.

Further, actual payment by GoP for price differential sum to Sui Northern Gas Pipelines Limited (SNGPL) may vary due to difference in monthly rate of RLNG.

ECC granted approval for the sale of surplus power available at the incremental rate of Rs 12.96/kilowatt-hour (kWh) to all industrial consumer categories, excluding zero-rated industrial consumers, on the incremental consumption over their respective historical consumption or established benchmark.

ECC also formed a committee consisting of Ishrat Hussain, Waqar Masood, IP minister Hammad Azhar, power minister Omer Ayub, special assistant to the prime minister (SAPM) Nadeem Babar and SAPM Tabish Gohar to prepare a proposal to include K-Electric in the package.

The committee will also propose whether the package shall continue for one year or three years, the committee will also analyse the need for any subsidy that will be involved in the package and source for arranging the same and all the issues that may come up in the calculation and distribution of that subsidy.