Govt to consider wheat support price increase

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Federal government is seriously considering the proposal to increase wheat support price from Rs950 to Rs1,150 per maund on the pretext of inflation. Though farmers are terming it a welcoming move, urban masses and economic experts are considering it a politically motivated development. Official inflation figures show that food group has the highest weightage of over 40 per cent in Consumer Price Index (CPI), which mainly consists of wheat, rice, edible oil, pulses, sugar, milk, meat and everyday use seasonal vegetables.
Numbers indicate that in terms of weightage, wheat is ranked at fourth place in CPI, after house rent, fresh milk and electricity. Available statistics of various developing and developed economies rank Pakistan at eighth place in list of inflation-hit countries, as inflation in the country is hovering above 11 per cent. Figures compiled by Profit indicate that Pakistan already have the highest wheat support price in the region, after China. In Pak Rupee terms, farmers in Pakistan are still getting highest price, at Rs950 per maund, for their wheat produce. Price statistics show that India has recently fixed minimum support price for wheat at Indian Rs1,170 per quintal that means India farmers are getting Pak Rs21,990 per tonne. On the other hand, Pakistani farmers are getting Rs23,750 per tonne at present wheat support price. Numbers suggest that Pakistan will surpass not only India but also China – a relatively expensive wheat buyer, if it fixes wheat support price at Rs1,150 per maund (Rs28,750 per tonne). Economic experts argue that no doubt prices of seeds, fertilisers, pesticides and diesel have been increased to unprecedented numbers during the past three years. This has made wheat cultivation unprofitable for farmers. They underscore that the politically motivated move might help the ruling party in the forthcoming general elections, but it will never benefit masses, especially in urban centers. Pakistan Flour Mills Association (PFMA) is also of the view that increase in wheat support price will result in a new wave of price hike in the country. It estimates that the proposed increase in wheat support price would add an additional Rs125 in the price of 20-kilogram wheat flour bag, which will touch over Rs700. After taking charge of economic affairs, present government announced highest ever increase of 46 per cent in wheat support price in 2008. It increased support price from Rs650 to Rs950 per maund in one go, which multiplied wheat flour and wheat products prices across Pakistan.