Islamabad, July 19, 2021 (PPI-OT):The Pakistan Economy Watch (PEW) on Sunday lauded the government’s decision to curtail its role in wheat procurement to allow the private sector to play a bigger role. The World Bank has suggested reducing public sector role in wheat procurement to maintaining strategic reserves which has prompted to reduce procurement target from 4.2 million tonnes to 3.5 million tonnes which is a step in the right direction, it said.

The government has planned to reduce annual grain procurement to one million tonnes and leave rest to the private sector which will stabilize prices, improve supply and reduce the financial burden on the exchequer, said Dr. Murtaza Mughal, President PEW. The government is also working on a project to provide targeted subsidy to the poor in case of hike in flour prices which is a laudable decision.

He said that the involvement of the government departments in wheat procurement have a negative effect on the overall situation as food sector circular debt has risen to Rs560 billion which is equal to Annual Development Programme. Dr. Murtaza Mughal said that the debt was Rs 36.9 billion in 2002, it jumped to Rs400 billion by the end of last financial year and Rs160 billion has been added to the debt afterward.

The food department is also planning to issue Sukuk bonds to retire debt but it needs finetuning for better results. He noted that authorities continue to face the challenge of bringing down the prices of wheat flour in the country that is skyrocketing despite the import of the commodity which has necessitated an improved role for the private sector.

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