ISLAMABAD, Sept 11: The government has conceded that slow and belated wheat release by the provincial governments has caused an unprecedented hike in flour prices ahead of Ramazan and the prime minister is asking the chief ministers to enhance and expedite supplies to flour mills immediately.

The Economic Coordination Committee (ECC) of the cabinet, which met here on Tuesday with Prime Minister Shaukat Aziz in the chair, approved recommendations of an inter-ministerial committee on core food inflation to control prices of some of the major essential items like wheat, sugar and pulses as well as livestock.

The meeting rejected a petroleum ministry’s proposal for deregulation of transportation of local crude oil for competition instead of allowing continuation of monopoly of the National Logistic Cell in this sector. The ECC did not agree to break NLC’s monopoly but decided to exclude the role of the ministries of finance and petroleum in providing 15 per cent premium for development purposes and instead transportation tariff should be a mutual arrangement between the crude producer and the NLC.

Adviser to the finance ministry Dr Ashfaque Hassan Khan told reporters that the ECC was informed that total wheat stocks stood at 4.646 million tons on Sept 9, which meant that the provinces released only 54,000 tons although the provinces had been directed to release maximum stocks between Sept 1 and 7.

He said the meeting was informed that Punjab and Sindh had started releasing stocks at Rs465 per 40kg but it was noted that about 12,000 tons per day release from Punjab was too low. Hence, the prime minister would take up with the chief ministers to enhance releases. He said it was also decided to provide wheat flour through USC outlets and sufficient stocks were being provided to the Utility Stores Corporation for this purpose.

Mr Khan said the ECC had formally approved policy recommendations of the inter-ministerial committee on core food inflation to link support prices for major crops like wheat and sugarcane on a long-term basis with better productivity and lower cost of production. He said the ministry of food and agriculture would determine a formula how to increase wheat productivity, reduce its cost of production and the impact of this support price on other crops to justify any increase.

The committee had recommended for increasing the wheat issue price on a bi-monthly basis from November onwards.

Mr Khan said in addition to setting volume targets, the Federal Committee on Agriculture (FCA) would also set yield and cost targets.

The meeting proposed that the farmers’ profitability balance should be created with other crops so as not to create shortages in production of other crops.

SUGARCANE: The ECC decided that sugar mills should every year start crushing on October 15 in Sindh and November 1 in Punjab and the NWFP, but provincial governments should remain flexible in start of crushing in case of later maturity due to weather.