ECC questions food ministry’s plea for additional wheat imports

Updated 17 Sep 2020

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Adviser to PM on Finance and Revenue Dr Abdul Hafeez Shaikh chairs the ECC meeting on Sept 16. — PID
Adviser to PM on Finance and Revenue Dr Abdul Hafeez Shaikh chairs the ECC meeting on Sept 16. — PID

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Wednesday raised serious questions over the data and processes leading to decision making on import and export of essential commodities affecting foreign exchange and consumer prices.

The ECC members were perturbed when Adviser to PM on Finance and Revenue Dr Abdul Hafeez Shaikh, who presided over the meeting, raised questions over the justification for additional import of 1.7 million tonnes of wheat.

The summary moved by the Ministry of National Food Security and Research has sought permission for 1.5m tonnes of import through private sector and about 200,000 tonnes through public sector.

Shaikh asked as to how the relevant ministry reached the conclusion that additional wheat imports were required only weeks after a decision for import of 1.5m tonnes currently in process and on what basis it wanted to allocate quantities between the private and public sector. He also wanted to know what sort of consultations had been made with provinces, the Trading Corporation of Pakistan (TCP) and Pakistan Agriculture Storage and Pakistan Agricultural Storage and Services Corporation (Passco) on the issue.

It emerged that during the course of a meeting at the Prime Minister Office, a private individual had suggested to the PM that Pakistan needed much higher quantities of wheat imports than 1.5m tonnes already allowed. The suggestion was not based on data or a written proposal and as such there was nothing on record.

Okays incorporation of Pakistan Single Window Company

Other ECC members also wanted to know as to who originally made the suggestion for additional imports and why the ECC should take decision for wheat import and why the provinces should not be taking the decision for import and pay for incidentals given the matter pertained to the provincial jurisdiction. The identity of the private person remained unknown to the ECC, a cabinet member told Dawn.

For example, Special Assistant to Prime Minister Nadeem Babar questioned as to why millers had been discouraged when they tried for procurement from farmers who traditionally used to utilise their stocks to keep their mills running. He also wanted to know how much quantities were in import pipeline, reached the market or under negotiations by importers.

Shaikh deplored that every now and then demands for export and import of wheat, sugar and other essential commodities were brought to the ECC without proper data, homework and market studies even though such knee-jerk moves had devastating impact on prices.

On enquiry, a senior TCP official told participants that such moves and decisions about large quantities of import had a direct bearing on international market as suppliers find desperation on part of buyers and jack up their prices.

He pointed out that the TCP’s earlier import orders were booked at $235 per tonne which kept on increasing as authorities announced higher import plans and gradually the final order came in at $274 per tonne within a few weeks.

The participants agreed that there was a need for a proper assessment of local crop, domestic demand and the gap or surplus at the start of the season and then smaller import orders should be placed over the period of time to avoid an element of desperate procurement. The TCP’s average cost of 330,000 tonnes of wheat was reported to be Rs1,640 per 40 kg against lower price being offered by some provinces.

The ECC finally decided to have a dedicated meeting, most probably on Friday, to have a full picture of wheat situation and then take a decision if required. “A detailed discussion on the issue of wheat import was also held but could not be finalised due to the paucity of time. ECC chairman decided that the issue being critical in nature would be further deliberated in a special meeting of the ECC to be held within the current week”, an official statement said.

The ECC allowed the amendment in the import of Customs Duty Free Cars under disabled persons’ scheme. Under the new amendments, the income bracket of person importing the vehicle was increased from the current limit of Rs20,000-100,000 per month salary to Rs100,000-200,000 per month. The person be allowed to import the vehicle if they have not imported or purchased locally-assembled car during the last 10 years under the scheme and provided that they hold NTN certificate and file annual tax return.

The ECC also approved the incorporation of the Pakistan Single Window Company under Section 42 of the Companies Act, 2017 with its objectives as contained in the memorandum and articles of association. The composition of the Board of its Directors was also approved.

The meeting also allowed a technical supplementary grant of Rs219.63m for the reimbursement of the expenditure of National Coordination Committee on Covid-19 for the current financial year.

An additional grant of Rs6 billion was also approved for the Ministry of Railways as at the rate of Rs500m per month to defray its mandatory liabilities including pay and pensions.

Two technical supplementary grants amounting to Rs160m and Rs96m were approved for the Ministry of Federal Education and Professional Training to carry out the skill for all programme and for mainstreaming of religious education and matters related to deeni madaris respectively.

The publication of Rolling Spectrum Strategy 2020-2023 was also approved by ECC.

Published in Dawn, September 17th, 2020