ISLAMABAD, Feb 22: The federal government is in a fix as to how to dispose of around two million tons of surplus wheat following poor bidding results last week, official sources told Dawn on Friday.

“No body is ready to burn fingers as it is very difficult decision,” said a senior government official. The main question is whether the government should extend subsidy on export of wheat, he said. “The exporters would earn windfall and whosoever takes a decision would be accused of kickbacks,” said a senior government official.

Basically, the decision should have been taken by the ministry of food, agriculture and livestock (Minfal) to dispose of the surplus commodity as lifting of fresh crop would be impossible unless existing stocks are cleared, said a source.

The Minfal, however, passed on the matter to the Economic Coordination Committee (ECC) of the Cabinet. The finance minister is unwilling to take a decision that is going to benefit private wheat exporters at the cost of local consumers.

“The subsidy is meant for local people and could not be given to exporters to benefit foreign consumers. It’s a big amount and is going to raise public criticism. But the problem is that if we don’t provide subsidy on export, the commodity could not compete international price and quality,” said a finance ministry official.

The issue was placed before the ECC on Thursday but was deferred due to difficult situation. The finance ministry official said that the ECC would reconsider the issue soon after Eid, and is likely to suggest rebidding for wheat export.

At things stand now, Balochistan has stocks for 298 days followed by Punjab with 145 days, Sindh with 144 days, NWFP with 42 days. At some points, carry over stocks of 2000 are still in the storage.

Pakistan had total production of 20 million tons last season. Stocks in the public sector stood at seven million tons while 2 million tons was surplus.

The ECC had constituted last month a ministerial committee led by Privatization Minister Altaf M. Saleem to dispose of the surplus commodity, which decided to invite bids in lots of 5,000 tons each.

The committee had set April 30, 2002 as deadline to dispose of 1.3 million tons but the scheme did not succeed to fetch desirable rates.

The government had intended to dispose of the total exportable surplus of 2.7 million tons before April 30, 2002 because the new crop is getting ready and Passco and Punjab government did not have enough warehouses to store fresh commodity.

An official said that Pakistan’s wheat quality was very popular abroad but the only problem was that it was not refined. The private sector is not willing to spend on refining the commodity and want to squeeze the government through subsidies as much as possible. He said that the government would procure around 4 million tons of wheat in the coming season to stabilize prices.

He said that floor mills and private sector were asked to concentrate on export of finished products abroad to utilize their surplus capacity.