LAHORE, Dec 29: The Punjab Food Department has retired Rs12 billion debt taken from commercial banks for the current year’s wheat procurement.

According to Food Director Javed Akhtar, the department wants to retire the maximum loan. The department has been under Rs37 billion debt with a carryover of Rs15.56 billion from the last year and Rs21 billion for the current year. Payment of mark-up is in addition to it.

The department has also sold 1.7 million tons of wheat during the current season out of its total stocks of four million at the start of the year. It has also exported 600,000 tons of wheat with an order of 50,000 tons in the pipeline.

According to the food director, the department has paid Rs6.45 billion to the National Bank of Pakistan, Rs2.40 billion to the Habib Bank Limited, Rs1.45 billion to the Muslim Commercial Bank, Rs0.89 billion to the United Bank of Pakistan, Rs0.45 billion to the Allied Bank of Pakistan and Rs0.56 billion to the Bank of Punjab.

The government fixes a credit line for the Punjab Food Department every year and the department sells wheat to pay it off later. The differential (known as subsidy) is met by the Punjab government. Historically, this figure has been around Rs4 billion which the provincial government is trying frantically to control. The department came under pressure in the year 2000 when the Punjab had produced a bumper crop and it had to purchase around 6.3 million tons of wheat against its normal targets of two million to 2.5 million tons. Since then, it is running behind its payment schedule which also increases cost of the loan.