PESHAWAR, Jan 2: The NWFP chapter of Pakistan Flour Mills Association on Friday blamed the provincial government of following "wrong policy" regarding issuance of wheat from its warehouses, saying it had "further damaged" the local flour industry.

Addressing a press conference here on Friday, chairman of the PFMA, NWFP, Mohammed Naeem Butt said that the NWFP government was issuing only 1,000 tonnes of wheat to millers every day by comparison with the province's requirement of 6,000 tonnes per day.

"This clearly reflects that the sitting government, like its predecessors, is bent upon to intentionally turning flour mills into sick units," said the NWFP flour millers' representative.

He said that according to the federal government's policy regarding wheat market mechanism, provincial governments were supposed to provide adequate wheat at official rate to millers in their respective jurisdiction in the off-season, protecting the millers' interest.

In line with the federal government's policy, the government of Punjab, he added, was providing 12,000 tonnes of wheat every day to its millers as of Dec 31, 2003 and with the advent of new year the quota has been increased by 6,000 tonnes per day.

He said the move on the part of the Punjab government was meant to strengthen the local flour industry, adding millers were being provided wheat, from official warehouses, at a rate of Rs900 per tonne against the open market rate of Rs 1,100 per tonne.

"The NWFP millers cannot sustain this situation as the government of Punjab's decision has negatively impacted the millers in the NWFP as they are relying on wheat purchases from the open market at a rate much higher than the amount being paid by the Punjab millers," said Mr Naeem.

Accusing the Punjab government of helping its flour industry to establish a monopoly, destroying flour industries of other provinces, particularly, the NWFP.

He said that if the NWFP government did not reconsider its policy and continued to issue only 1,000 tonnes of wheat per day, the NWFP millers would not be able to sustain the pressure.

The PFMA president urged the provincial government to increase the volume of wheat issued from its warehouses, enabling the local millers to compete in the NWFP market.