Govt approves Rs1,650 wheat support price

ISLAMABAD: The federal cabinet on Tuesday fixed Rs1,650 as minimum support price of 40kg wheat and decided to rationalise overall subsidies to benefit deserving people in the country.

“The new support price of Rs1,650 per 40kg wheat to farmers would be beneficial to both masses as well as farmers,” said Information Minister Shibli Faraz in a post-cabinet meeting press conference.

It was informed in the Economic Coordination Committee that the government would have to bear Rs90 billion to Rs105bn as subsidy cost on wheat by fixing Rs1,650 as minimum support price of the commodity.

A participant at the meeting, who did not want to be named, told Dawn that Food Minster Fakhar Imam and Prime Minister’s Spokesperson Nadem Afzal Chan were of the view that the wheat support price should be Rs1,800 per 40kg as Sindh and Punjab had fixed it as Rs2,000.

Meanwhile, other cabinet members—Nadeem Babar, Shaikh Rashid Ahmed, Waqar Masood and Abdul Razzaq Daud were of the view that the price of atta [wheat flour] will become unaffordable for the common man if the minimum support price of wheat was fixed at Rs1,800 per 40 kg.

The insider said Nadeem Babar apprised the meeting that international wheat prices were high these days but they will definitely decline in March next year. He quoted Mr Babar as saying that “if we increase wheat support price in accordance with today’s international prices, we have to reduce them after three or four months.”

“The issue was being debated for quite some time and it was also taken up in the Economic Coordination Committee (ECCC) in its previous meeting,” Information Minister Faraz added.

On Sindh and Punjab’s resolution to fix wheat support price at Rs2,000 per 40 kg, the minister said the provinces could express their desire but it was a sole prerogative of the federal government to determine the support price keeping in mind interests of both people and wheat growers.

He said if Rs2,000 was fixed as wheat support price it will definitely benefit farmers but on the other hand, the price of atta [wheat flour] will go further up and will cause trouble to the common man in getting bread.

“The cabinet also discussed rationalisation of subsidies, which amounted to nearly Rs4tr but both the rich and the poor were benefitting from it while it would be for the first time that the government would give targeted subsidy, only to the poor and middle class and this would be given to only those industries, which exported their products,” he added.