October 22, 2003	Wednesday	Sha’aban 25, 1424

ISLAMABAD, Oct 21: The federal government is expected to fix wheat support price at Rs365 per 40 kg and sugarcane at Rs42/43 per 40 kg for the year 2003-04, it was reliably learnt.

The Economic Coordination Committee (ECC) of the cabinet, which meets on October 25 with the finance minister in the chair, is expected to accord formal approval to this effect, informed sources said.

The ECC would also approve a Ramazan package to be offered by the Utility Stores Corporation and consider establishment of agriculture export cell on permanent basis besides allowing export of 50,000 tons of Urea to Afghanistan.

The sources said the Ministry of Food, Agriculture and Livestock (Minfal) has proposed Rs365 per 40 kg support price for wheat for the year 2003-04.

In its summary to the ECC, the Minfal said that production cost of wheat averaged Rs358 and Rs327 per 40 kg in the Punjab and Sindh respectively. The wheat support price has remained frozen at Rs300 per kg since 1999 while input cost has increased by Rs55 to Rs80 per 40 kg. The Ministry of Commerce has supported this proposal.

However, Planning Commission and Industries Ministry have opposed the support price. Planning Commission said the increase should not be more than 10 per cent. The Industries Ministry pointed out that such an increase would result in substantial increase in flour price.

The Minfal has proposed to fix Rs42 per 40 Kg support price for the Punjab and NWFP and Rs43 for Sindh and Balochistan. Ministries of industries, commerce and finance have opposed the proposal on the ground that it should be left to the free market mechanism.

However, the Planning Commission suggested that sugarcane support price issue should be placed at the disposal of provincial government because its price fixation by the centre would not yield result if provinces were not able to ensure this price to farmer.

The Minfal has also proposed the establishment of a special organization or cell for the export of agricultural commodities because Export Promotion Bureau (EPB) was more focussed on industrial sector.

The Minfal has said that most of the onion crop in Balochistan and potato in the Punjab was lost last year due to the absence of a dedicated export organization.

It proposed that the new organization comprising five to six agriculture experts should work in close coordination with Agricultural Prices Commission (Apcom) and EPB. The industries ministry has supported the proposal while ministries of commerce and finance have opposed the move.

The commerce ministry said that there was no need for such an organization and if it had to be established, it should not have the role of exporting commodities and export related terms should be deleted from its terms of reference (TOR).

The Finance Ministry is of the view that such an organization would result in additional financial burden.

The Minfal has suggested that Agriculture Export Organization should be responsible for marketing, surveys and production estimates of cereals, cotton, sugar, fruits, vegetables, flowers, livestock, fisheries and poultry and estimate surpluses and ensure their exports to increase profitability of farmers.

The Minfal has proposed export of 50,000 tons of urea to Afghanistan. It has estimated a surplus of 75,000 tons during the current year because there would be a total availability of 110,600 tons by November this year.

The Minfal said the World Food Programme and the ministry of foreign affairs have also asked the food ministry to export urea to Afghanistan.