September 30, 2008	Tuesday	Ramazan 29, 2008

ISLAMABAD, Sept 29: The federal cabinet decided on Monday to increase the wheat support price from Rs625 per 40kg to Rs950 — a rise of Rs325 — for the next crop.

Prime Minister Syed Yousuf Raza Gilani, who presided over a special meeting of the cabinet, said at a news conference that the government had set a target of 25 million tons of wheat production this year which would help overcome shortage.

He said the new procurement price had been fixed as “guaranteed minimum price” to encourage farmers, discourage wheat smuggling and achieve food security in the country. He said that if farmers were paid less than Rs950 per kg in the market, the government would buy their produce at the guaranteed rate.

Mr Gilani said the decision to raise the support price to its level in neighbouring countries would discourage the smuggling of wheat.

He said that shortage of electricity and irrigation water would be overcome by the end of this year by building small dams and providing incentives to farmers, including a flat tariff for tubewells.The prime minister, who was accompanied by Minister for Food and Agriculture Nazar Mohammad Gondal and Minister for Information Sherry Rehman, said the main purpose of increasing the procurement price was to support small farmers and end wheat import on which the government spent Rs60 billion.

Mr Gilani said the increase in price would cost the government Rs10 billion but would be a great help for farmers. The money spent on importing wheat was much more than Rs10 billion.

The prime minister also announced the launching of the ‘Benazir Zarai Card’ scheme under which small farmers will be able to get financial support from banks for their crop before harvest.

He said the BZC could be used as an agricultural credit or debit card and would replace the passbook system. The farmers will be able to get cash through the card and pay back the amount after their produce comes to the market.

He said the government had also decided to introduce a Crop Insurance Scheme to provide farmers protection against natural calamities, adding that the premium for smaller growers would be paid by the government.

The prime minister said that a committee headed by the minister for finance had been constituted to look into the possibility of providing low-cost tractors to farmers. He said the Benazir Income Support Scheme would be functioning after Eid and application forms had been dispatched to all districts.

The food and agriculture minister briefed the cabinet on measures being taken to enhance agricultural production.

The meeting was informed that the previous government’s failure to announce the support price in time had resulted in reducing the wheat cultivation area. It was pointed out that because of higher prices in regional and international markets a large quantity of wheat had been smuggled or hoarded.

As result, the government was forced to import about 3.5 million tons of wheat this year, the meeting was told.