STAFF REPORT IBD: The federal government has increased the wheat support price of 40-kg bag to Rs 1,200 from the existing Rs 1,050 for the next crop after it was informed that international wheat price was much higher, resulting in smuggling.
The decision of wheat support price raise has been taken at a meeting of the Economic Co-ordination Committee (ECC) of the Cabinet, which was presided over by Finance Minister Dr Abdul Hafeez Shaikh.
The ECC was of the view that high wheat prices in international market is resulting in smuggling of domestic wheat to neighbouring countries. Additionally, prices of agriculture inputs have gone up considerably over the past year and the increase in wheat support price was necessary to encourage wheat growers.
According to analysts, the wheat price increase would likely to fuel food inflation in the country and the government move might be aimed at benefiting its constituents for the forthcoming election.
As far as discouraging the smuggling of wheat is concerned it would not be controlled until and unless the authorities take stern action against this illegal exercise, market experts said.
The experts also adding the wheat support price raise is only to benefit the agriculture community and the consumers (public) are the ultimate sufferers.