By IANS
Islamabad : Te Pakistani cabinet seems split over a proposal to crack down on individuals hoarding wheat as action against “some influential people” could backfire in the ensuing general elections.
According to a report submitted by intelligence agencies a few weeks ago, a number of “major players” are stockpiling wheat, but the government is hesitant to attach a “top priority” tag to the scandal because of the election factor.
Quoting sources, Dawn reported Sunday that a Karachi-based minister caused consternation at the last meeting of the cabinet’s Economic Coordination Committee (ECC) chaired by Prime Minister Shaukat Aziz when he alleged that a textile mill owner had stockpiled 100,000 tonnes of wheat.
According to the minister, businessmen – including the owners of textile mills and petrol pumps that had adequate storage capacities – were involved in wheat hoarding.
The revelation prompted a minister from Punjab to advise the government to avoid launching such an operation “for the time being” as this might “upset influential people” and create “problems” for the government in an election season.
“It has been learnt that black market operators have now decided to make windfall profits by hoarding non-perishable farm produce, for example wheat, rice and sugar, because the stock and real estate markets had failed to yield high returns,” Dawn said.
The average price of locally produced wheat is $200 dollars per tonne against the $415 per tonne landed cost of the imported variety, giving hoarders a huge 50 percent profit margin.
“The sources said the issue had been mishandled by the government’s economic wizards and this was one of the reasons for the spike in the price of wheat flour,” Dawn noted.
Initially, the agriculture ministry had come up with a proposal to export wheat to give a better price to farmers, benefiting only big farmers in Punjab, who have considerable influence in the government, bureaucracy and cabinet.
The export drive was suspended in May after millers and the Sindh government persistently resisted it but by then it had already created distortions in the market.
According to a letter written by Agriculture Development Commissioner Nadir Box Bloch to the Public Accounts Committee in May, wheat production was projected at 25 million tonnes. The estimate is now being disputed.
“Sources said that in total contradiction of facts, the agriculture ministry had misinformed the president, before the permission to export wheat, that the country had achieved an unprecedented production of 25 million tonnes,” Dawn reported.