ISLAMABAD, Nov 14: The federal cabinet is scheduled to meet here on November 19 to discuss the wheat price issue, sources told Dawn.
The sources said the government was likely to announce 22 per cent increase in the wheat support price to Rs365 per 40kg from the existing Rs300 per 40kg.
No increase in the wheat support price has been announced during the last four years. The price of Rs300 was announced in 1999.
The ministry of food, agriculture and livestock maintained that in case the proposed increase was not approved there was a strong possibility that growers might switch to other crops which could cause wheat shortage next year.
The ministry had submitted a summary to the Economic Coordination Committee (ECC) of the cabinet to fix the support price for wheat at Rs365 per 40kg for the year 2003-04, and the provincial governments be directed to ensure this price to farmers, a senior government official said.
The ECC, in its meeting last month, referred the matter to the federal cabinet and recommended it to accept Minfal’s proposal as the cabinet decision would be binding on the provincial governments who have to ensure its implementation.
However, some other ministries have expressed reservations over the support price recommended by Minfal. Minfal was of the view that Rs65 increase in support price would encourage the farmers community to increase wheat production given low wheat output during the current year.
Minfal said that production cost of wheat averaged Rs358 and Rs327 per 40kg in Punjab and Sindh, respectively. The wheat support price has remained frozen at Rs300 per 40kg since 1999 while input cost has increased by Rs55 to Rs80 per 40kg.
The ministry of commerce has also supported this proposal.
However, the Planning Commission and the industries ministry have opposed the support price. The Planning Commission said increase in support price should not be over 10 per cent.
The Planning Commission was also of the view that the provincial government should also be involved in finalizing the support price because all efforts would be wasted in case provinces were unable to ensure implementation of the price.
The industries ministry has pointed out that such an increase in support price would result in substantial raise in flour price and hence increase in support price by Rs65 in one go should be avoided and instead a reasonable increase be made in its place.