Inquiry Committee Finds Low Procurement, Weak Assessment, Flourmills' Malpractices Reasons For Wheat Crisis

The inquiry committee constituted to probe the wheat/flour crisis, in its report published Saturday, found short-of- target wheat procurement, failure in grasping the market situation, and malpractices by flourmills as reasons for recent wheat crisis across the country

ISLAMABAD, (UrduPoint / Pakistan Point News - 4th Apr, 2020 ) :The inquiry committee constituted to probe the wheat/flour crisis, in its report published Saturday, found short-of- target wheat procurement, failure in grasping the market situation, and malpractices by flourmills as reasons for recent wheat crisis across the country.

The report held Pakistan Agricultural Storage and Services Corporation (PASSCO), Ministry of National Food Security and Research and provincial food departments responsible for the failures.

According to the report, PASSCO failed to meet its procurement target and fell short by 0.42 million tons in a year where the national carry forward stocks remained the lowest during the last five years.

The report said that the ministry failed to grasp the market situation following low national produce and as such their recommendations to federal government were routine and misleading.

It said that the ministry's decision to allow the export of other wheat products like Maida and Suji on August 7, 2019 was inexplicable. The committee observed that all wheat products were exported under the same code in the system of Federal board of Revenue (FBR) and it was very difficult for even custom officers to say that wheat flour was exported in the grab of line Atta and Maida.

According to the report, the ministry failed to timely advice the federal government for import of wheat, a policy intervention that could have effectively discouraged speculations, hoarding and profiteering that subsequently fueled what shortage and price hike.

The report held Secretary MNFS&R responsible for failures, adding that the responsibility of missing the procurement target of PASSCO lied with the Ex-MD of the corporation.

At provincial level, the Punjab Food Department delayed procurement by crucial 20-22 days and ultimately failed to meet its target by 0.67 million tons, less in a year where its carry forward stock remained the lowest during the last five years.

It also found that the Punjab Food Department failed to exercise control on flourmills, which resorted to profiteering campaigns as they sensed the government was ill-prepared to handle the wheat demand and supply chain.

A sample survey by ACE Punjab has identified some mill owners who are involved in malpractice and recommended a post audit of flourmills, specially involved in such practices needs to be conducted.

The report said that the Punjab food department allowed, with tacit approval, the poultry feed mills to purchase huge quantities of wheat from private market.

The Punjab government resorted to erratic transfers in food department including posting/transfer of four food secretaries and of nearly all DFCs thrice during the year.

The Punjab food department failed to devise a mechanism to regulate the demand and supply of wheat, and keep track of the government and private stocks that started heading in every direction, without being accounted for.

It said that the department did not put in place any reform to rectify the situation.

According to the report, the responsibility for failure to meet the procurement targets lies with the ex-food secretary and Ex-Director Food Punjab whereas the Minister for Food, is responsible for not devising any reform agenda to address the chronic ailments in the functioning of Punjab Food department.

In Sindh province, the provincial government decided not to procure stocks, whereas MNFS&R had set up a target of 1 million tons for the year, at a time when the national surplus remained the lowest during the last five years.

Sindh government claimed having carry forward wheat stock to the tone of 0.98 million tons, whereas the veracity of those stocks was seriously put into question when the National Accountability Bureau found massive pilferage and theft in the Sindh wheat stocks.

The Sind Food Department failed to lift wheat allocated to it by PASSCO in time, thereby allowed the shortage and price hike to continue, it said adding the department failed to devise a mechanism to regulate the demand and supply of wheat, and keep track of government and private stocks.

The responsibility for failure to procure cannot be fixed in Sindh individually as the decision on summary to procure wheat was not take by the cabinet, it added.

The food department Khyber Pakhtunkhwa failed to meet its procurement target for the last two years, it said adding that responsibility lies with the Ex-Secretary Food Department and Ex Director Food Department and the Minister for Food.

The report recommended the NFS&R to devise a mechanism for accurate crop assessment, on scientific basis, in coordination with provinces, adding that the ministry should set up the procurement targets in accordance with the available carry forward stocks.

A minimum wheat stock should be calculated and agreed to which would serve as a standard for calculating procurement targets and the need to import or export wheat, it added.

It recommended that MNFS&R and provinces should strengthen mechanism for policy formulation, planning, coordination and implementation effectively, especially those related to setting up and achieving procurement targets PASSCO and provinces.

The ministry should formulate policy and implementation mechanism for aggressive procurement this year as the opening stocks at the beginning of coming crop year would be the lowest in last 10 years. The minimum support price may also be enhanced to ensure competitiveness with market rates The ministry should have a mechanism to monitory export of wheat and wheat products by private sector for proper assessment of the situation and the requirement of any intervention.

It recommended that the provinces shall meet the national wheat procurement target set up by the MNFS&R adding that they should devise mechanism for monitoring private stocks to ensure that prices are not manipulated by creating artificial shortage.

Shall devise effective mechanism for safety of public stocks, including putting in place IT-based surveillance mechanism, to prevent pilferage and damage, adding that it should also devise IT-based mechanism of QR codes for tracking every bag of wheat supplied to flourmills and flour bags produced.

Provincial government should conduct post audit of the flourmills to verify the allegations of malpractice in grinding of public wheat and recommended quota allocation n of public wheat to flourmills.