Pakistan. Exporters refused wheat subsidy

09.12.2016

The Economic Co-ordination Committee (ECC) of the Cabinet has refused to extend subsidy to those wheat exporters who had filed Goods Declaration (GD) after September 30, 2015, well-informed sources told Business Recorder Thursday. Ministry of National Food Security and Research said that the ECC in its meeting held on August 12, 2015 had allowed extension in the export period of wheat and wheat flour (Atta) till September 30, 2015.

On expiry of the period, another summary was moved to ECC for extension in export of wheat and ECC in its meeting held on January 13, 2016 had decided to allow 400,000 tons of wheat and wheat flour (Atta) by the Government of Punjab and 200,000 tons by the Government of Sindh at subsidies of $55 and $45 per ton, respectively, with effect from January 13, 2016 till March 15, 2016. Additionally, it was also decided that as per previous approval of the ECC of the Cabinet for the export of wheat and wheat flour (Atta) by Punjab and Sindh was up to September 30, 2015; therefore, export of wheat and wheat flour (Atta) made during the period from October 1, 2015 to January 12, 2016 shall not be entitled for any cash support/ subsidy.

The Ministry of National Food Security and Research further said that the matter was discussed in a meeting held on October 07, 2016 in the Ministry of Finance to deliberate on the issue of non-payment of rebate by the State Bank of Pakistan (SBP). The meeting was jointly participated by the M/o NFS&R and SBP, wherein all the participants agreed that the elimination is inadvertent and should not, therefore, make the exports of wheat during 1-30 October, 2015 ineligible if the exporters had already lifted wheat from the godowns of the provincial food departments till September 30, 2015. It was, therefore, unanimously agreed that a clarification/ corrigendum of the notification of January 22, 2016 will be issued to remove the anomaly.

Ministry of National Food Security and Research proposed that ECC should modify its decision of January 13, 2016 by adding that "the export rebate would be allowed up to September 30, 2015 and export process would be allowed 30 days beyond that date ie till October 30, 2015." The ECC observed that its earlier decision under Case No ECC-2/1/2016 dated 13th January, 2016 was very clear and there was no need for its modification/ amendment. The ECC further observed that the notification issued by the Ministry of National Food Security and Research for implementation of the decision of the ECC was not correct and as a result, an ambiguity had arisen with regard to the grant of subsidy on export of wheat. It was suggested that the earlier decision of the ECC on the issue may not be amended; however, a clarification in the decision may be made that the subsidy would be allowed only to those exporters who have filed their Goods Declaration (GD) for export of wheat on or before 30th September, 2015.


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