ISLAMABAD, Jan 10: Ninety per cent flour mills in the NWFP have closed down as a result of the government’s policy of deregulation of wheat business.

As many as 230 flour mills, out of a total of 250 functioning in the province, have closed down due to deregulation of wheat procurement which unleashed cruel market forces rendering those lacking efficiency uncompetitive.

The flour mills installed in the NWFP were far in excess of the total requirement of the province, Minister for Food and Agriculture Khair Muhammad Junejo told Dawn.

He said these mills had been surviving till the government maintained the policy of quota system and kept control over the wheat procurement and distribution.

Previously, the food department used to issue wheat to different flour mills on uniform prices throughout the year on the basis of quota, therefore, even the most inefficient mills had been surviving, he said.

After the deregulation, the flour mills can purchase wheat from the open market on competitive prices and the government, too, releases wheat from its stores on cascading prices mechanism.

However, a mill owner from Hungu, Shahid Oarakzai who owned Gull Flour Mills and Khan Flour Mills, said the government had adopted very discriminatory policies.

He said even those mills operating in the NWFP had been grinding flour for UN agencies, supplying flour and other commodities to Afghan refugees.

Wheat in Punjab was selling at Rs700 per 100 kg while in the NWFP the same quantity was available at Rs830. The price differential had rendered these mills uncompetitive.

However, he admitted that there was no shortage of flour in the NWFP.

An official of food department said that most of the mills in the NWFP used to supply flour to Afghanistan on higher prices without caring for the demand in the local market.

The new mechanism of wheat procurement introduced by the government, he said, was aimed at ensuring good prices to the growers.

The government was also encouraging private sector to come forward in the storage business.