20 January 2005	Thursday	09 Zilhaj 1425

PESHAWAR, Jan 19: The NWFP government's decision to enhance wheat quota of flour mills is unlikely to overcome the problem of wheat shortage being faced by mills in the province.

Provincial Food Minister Fazl-i-Rabbani, during a meeting with a delegation of the NWFP chapter of the Pakistan Flour Mills Association on Monday, had announced the increase in the quantity of wheat released daily from official godowns by 600 tons.

Though the flour mills association has welcomed the decision, business circles told Dawn that the move would cast had little impact as far as availability of wheat to flour mills was concerned.

According to the new decision, the government would now distribute about 1,500 tons of wheat every day among 150 plus flour mills set up in different parts of the province with majority functioning in Peshawar, Charsadda, Nowshera and Haripur.

"Since the distribution of wheat is made on the basis of population of a district, flour mills set up in large numbers within a district would benefit little from the decision," said a mill owner.

However, a PFMA spokesman expressed the hope that the move would lessen pressure on flour mills which had been facing wheat shortage for the past eight months. The province, according to business circles, has over 260 flour mills, out of which some 150 are functional, whereas the rest have been shut down due to wheat shortage.

The food minister told Dawn that the decision had been taken to help flour mills overcome problems caused by the shortage of wheat. The NWFP flour mills experienced an acute shortage of wheat during the May-August period last year after the Punjab government imposed a ban on transportation of wheat to other parts of the country.

Later, the decision was revoked after protests were lodged by other provinces. However, business circles said the 'belated' move to lift the ban did not make much difference to the NWFP flour mills as after the ban was lifted, not much wheat was left in Punjab's open market to be procured by the NWFP flour mills.

"At present, mills are solely relying on wheat being provided from official godowns, hence increasing the daily quota from 900 tons to 1,500 tons would not make much difference to 150 flour mills," said a mill owner.

A medium-sized flour mill needs 250 to 400 bags of wheat, weighing 100kg each, to operate at its maximum capacity. Keeping in view the quantity needed, the increase announced by the government is inadequate as each of the mills would get only a small amount when the 600 tons of additional wheat would be distributed on the basis of a formula laid down by the provincial government.

Previously, when the provincial government was releasing 900 tons of wheat from its godowns, each of the operational mills was getting 25 to 35 bags of 100kg each, business circles said.

According to Mr Rabbani, the decision would be implemented during the next couple of days after the dispatch of circles by the district-based functionaries of the food department.

He said the decision, which would remain enforced till April 2005, would not affect the provincial government's allocation for subsidy on wheat. The government has earmarked Rs900 million which would be used to provide subsidy in the 2004-05 financial year. "We are not going to cross the limit of expenditure set under the current financial year's budget," he added.

The NWFP government, according to official sources, is required to bring down its expenditure under the subsidy head in line with its agreement with the World Bank which is financing the province's multi-sectoral reform programme.