ISLAMABAD: With wheat subsidy estimates going beyond Rs130 billion this year, the government is likely to arrange importing Russian commodity through land route via Kazakhstan and Afghanistan and increase minimum support price (MSP) close to Rs1,800 per 40kg.

The Economic Coordination Committee (ECC) of the Cabinet in its meeting on Monday with Finance Adviser Dr Abdul Hafeez Shaikh in the chair, constituted two sub-committees to deal with wheat demand and supply and logistics.

The Ministry of National Food Security and Research (MNFSR) informed the meeting that about Rs90bn subsidy was required this year for wheat to bridge almost a 25pc gap between imported and local commodity on the basis of about Rs1,650 per 40kg MSP recommended by the ECC.

Food Minister Syed Fakhar Imam told the ECC that he would still insist on at least Rs1,800 per 40kg MSP in Tuesday’s meeting. This MSP was unavoidable to encourage local farmers for better output and discourage inter-provincial smuggling. In that case, the wheat subsidy was estimated at about Rs130bn.

Informed sources said given greater representation of members of the parliament including those from rural areas in the cabinet, there was strong likelihood of the prime minister agreeing to a higher MSP for wheat than recommended by the ECC at Rs1,650 per 40kg.

These sources said the members of the ECC’s sub-committee on wheat logistics was suggesting the import of remaining 300,000 tonnes of wheat import from Russia under government-to-government arrange through land route via Kazakhstan and Afghanistan in case of freezing sea routes from Moscow and also to benefit from falling exchange rate. About 180,000 tonnes earlier chunk of wheat from Russia was already reaching Karachi port.

An official statement said that in light of the recommendations of the ECC meeting held on Sunday, it was decided that a subcommittee under the guidance of SAPM on Revenue Dr Waqar Masood would be constituted in consultation with the ministries of Finance and NFSR and the provincial governments to work out the total volume of subsidy involved on imported and local wheat.

The ECC also discussed the issues related to demand and supply of wheat. The MNFSR reported that the wheat imported under the G2G arrangement from Russia will reach the country this month and there will be no shortage of the commodity.

The ECC also decided to form a Logistics Committee in order to resolve the day-to-day logistic issues of wheat import. The committee led by Secretary NFSR comprised secretaries and representatives of Finance, communication, Maritime Affairs, Commerce, Industries and Production, Railways and Managing Director PASSCO, Chairman Trading Corporation of Pakistan, Director General of National Logistic Cell, Port authorities, provincial ­governments and private ­transporters.

The committee will deal with day-to-day inter-agency issues and matters related to priority berthing, axle load, lifting of cargo and any other ancillary matter.

Published in Dawn, November 10th, 2020