Wheat stocks: benefiting the people
THIS has reference to the government’s decision to release strategic stocks of wheat with the Pakistan Agricultural Storage and Services Corporation (Passco). The applications were invited on a first-come first-serve basis.
The wheat crop of 2010-11 was announced to be released at Rs1,050 per 40 kg whereas wheat crop of 2011-12 was announced to be released at Rs1,100 per 40 kg. The government had taken the decision to control the prices that were on the rise in the wake of reported shortage of flour in the market.
However, at the time of final decision the stock was primarily released to traders instead of wheat millers, as reported by the press and complained by wheat millers.
Now this stock will be sold to wheat millers at higher prices by traders, while wheat millers will pass this cost on to the consumers.
As such, the benefit that the government had envisaged while releasing these strategic reserves at a price less than Rs100 per 40 kg than the announced support price for the upcoming season of 2013, i.e., Rs1,200 per 40 kg, will not be passed on to end-consumers. Instead, middlemen would take that benefit away from the public at large.
I understand that the government should immediately cancel the sale by Passco and call applications with wheat millers as the only egible contenders.
If this is not done, the public at large will remain a net loser. An immediate action is required to unwind the transaction or else superior courts may intervene to take care of public interest.