Violating free market principle: provinces being provided Rs 244 billion for wheat procurement
April 29, 2013
Federal government is providing Rs 244 billion to the provinces for procurement of wheat despite the fact that they have not retired the Rs 150 billion liability of commodity finance for the last fiscal year. Sources on the condition of anonymity said that the donors on several occasions expressed concerns over the government”s intervention in commodity operation because this mechanism is against the principle of free market.
Official documents available with Business Recorder reveal that liability on June 30, 2013 against Passco and provinces with respect to wheat procurement was Rs 247.829 billion, of which Punjab owed Rs 183.204 billion, followed by Sindh Rs 49.441 billion, Khyber Pakhtunkhwa Rs 8.531 billion, Balochistan Rs 6.653 billion and PASSCO Rs 97.903 billion.
The retired amount is as follows: Punjab Rs 77.663 billion, Sindh Rs 22.650 billion, KP Rs 8.531 billion, Balochistan Rs 2.211 billion and PASSCO Rs 5.764 billion.
The federal government hopes that provinces and PASSCO will retire Rs 37.876 billion before new crop procurement, of which Punjab will retire Rs 7.226 billion, Sindh Rs 7 billion, Balochistan Rs 0.500 billion and PASSCO Rs 23.150 billion.
Documents further disclose that receivables from the federal government stand at Rs 40.539 billion of which the share of Punjab is Rs 21.636 billion, Sindh Rs 6.865 billion and PASSCO Rs 12.038 billion. This implies that balance liability stands at Rs 150.498 billion and Punjab owes Rs 76.679 billion, Sindh Rs 12.926 billion, Balochistan Rs 3.942 billion and Passco Rs 6.951 billion.
Recently, the federal government approved Rs 244.638 billion for procurement of 7.91 million tons of wheat in 2013. The requirement of Punjab is Rs 135.338 billion for 4.35 million tons, of Sindh Rs 39 billion for 1.3 million tons, of KPK Rs 12 billion for 0.4 million tons, of Balochistan Rs 3.3 billion for 0.11 million tons and of Passco Rs 55 billion for 1.60 million tons of wheat.
Last year, public sector procured 5.80 million tons of wheat against a procurement target of 7.73 million tons. Low wheat procurement was made due to substantial public sector carry forward of 3.40 million tons. During last year public sector wheat procurement on an average has remained over 6 million tons per annum. A part of procured wheat stock is used as strategic reserve for emergencies as well as fulfilling the international obligations.Courtesy:Business Recorder
Published: Zarai Media Team
Agriculture in Pakistan