ISLAMABAD, Oct 26: The federal cabinet is likely to enhance the support price for wheat by nearly 22 per cent. Existing price of Rs300 per 40kg was fixed in 1999.

The Ministry of Food, Agriculture and Livestock (Minfal) has submitted a summary to the economic coordination committee (ECC) of the cabinet to fix Rs365 per 40kg support price for the commodity for 2003-04, saying that the provincial governments be directed to ensure this price to farmers, a senior government official told Dawn.

The ECC in its Saturday’s meeting referred the matter to the federal cabinet. The ECC has recommended to the cabinet to accept the Minfal’s proposal because the cabinet’s decision would bind the provincial governments to ensure the implementation.

But some two ministries have certain reservations about the proposed Rs365 price.

Minfal was of the view that the increase of Rs65 would encourage the farmers community to increase production.

It said the production cost of wheat averaged Rs358 and Rs327 per 40kg in Punjab and Sindh respectively. The wheat support price has remained frozen at Rs300 per 40kg since 1999, while input cost has increased by Rs55 to Rs80 per 40kg.

The ministry of commerce has supported this proposal.

However, the planning commission and industries ministry have opposed it. The commission said the increase in support price should not be over 10 per cent, suggesting that the provincial governments should also be involved in finalizing the price because the effort would go futile in case the provinces were unable to ensure implementation of the new fixed price.

The industries ministry has pointed out that this Rs65 increase in one go would result in substantial raise in the flour price, and hence a reasonable increase be made in the support price of wheat.