Judul : Special audit unearths serious irregularities in import of wheat by Kakar-led caretaker govt
link : Special audit unearths serious irregularities in import of wheat by Kakar-led caretaker govt
Special audit unearths serious irregularities in import of wheat by Kakar-led caretaker govt
A special audit has unearthed serious irregularities in the import of wheat by the caretaker government led by Anwar-ul-Haq Kakar, non-procurement by Punjab government, and slow/less releases of wheat from the provinces which had created panic and resulted in inflated flour prices, demanding further investigation into the matter.
'Due to less procurement and excess import of wheat in the food year 2023-24, the local farmers sustained considerable losses. Farmers trust on the government stood shaken because of non-procurement, after the announcement of higher MSP. The non-procurement by the government forced the farmers to sell their product in open market on lesser price,' said a special study on wheat procurement/import crises, conducted by the Auditor General of Pakistan. Due to slow/less releases of wheat from the provinces, a panic was created in the local market which caused an increase in flour prices, said the report available with The Nation.
Though the government of Pakistan announced the minimum support price of Rs3,900 per 40kg during the food year 2023-24 (May, 2023 to April, 2024), but the procurement plan proved to be a huge failure for the farmers. Pakistan got a bumper crop of wheat for the food year 2024-25, which was 31.473 million metric ton (MMT). However, due to import of 3.590 MMT of wheat during the food year 2023-24 through private importers, the closing stock of wheat reached at a level of 4.640 MMT and therefore, provincial governments refrained from procuring wheat at the time of wheat harvesting season.
On an average, the government purchases around 20 percent of all the wheat produced by the local farmers at a fixed price, which ensures price stability, prevents hoarding and maintains the supply chain. However, the provinces procured wheat 5,347,649 MT, 4,748,949 MT and 1,100,306 MT for the food years 2022-23, 2023-24 and 2024-25, respectively. Punjab, which has been procuring wheat at around 4.00 MMT in the previous years, did not procure any quantity of wheat in the food year 2024-25, therefore, creating a huge imbalance in the process. The poor farmers, who mostly take private loans in the process of sowing and producing wheat, were forced to sell their wheat produce at a very meagre price of Rs2,400-2,600 per 40kg. Therefore, the farmers were crushed under this apathetic act and policy of the Punjab government which has many short-term and long-term impacts on the farmers, agriculture of the country and the economic stability of the country. According to the report, farmers become financially bankrupt and ruined, food security for future is compromised, money circulation and economic activity stand reduced drastically, hoarders and middlemen mafia get strong hold, for creating instability in future, confidence of the farmers is shaken, which may affect the other crops also.
It is important to note that at the time of the harvesting of the crop, the closing stock of wheat in April, 2024 was 4.643 MMT and therefore, government of Punjab, which has been procuring around 4.00 MMT of wheat in the previous years at the fixed support price, did not procure any quantity at all. The presence of huge closing stock of wheat in April, 2024 and the decision of the government of Punjab for non-procurement of wheat are questionable, and both these aspects need a thorough investigation. It was quite clear from the data that the wheat crop was sown on a surplus area of around 1.40 million acres in comparison to the last food year 2022-23, and a bumper crop was expected, it needs to be probed as to why the closing stocks of wheat were so high (4.643 MMT in April, 2024) with the huge import, in the closing months of the food year. Besides, the reasons for non-procurement of wheat by the Punjab government need to be probed, whereas all the other provinces and PASSCO procured the wheat to a certain extent, near to their previous years' procurement quantities. On the over-import of wheat, by the caretaker government, the report said that while examining the record of the MNFSandR, it was observed that 3.59 MMT of wheat stood imported in the food year 2023-24 against an approval of 2.40 MMT. This proved totally surplus as the closing balance of wheat for the year 2023-24 was noticed at 4.643 MMT. This huge quantity of closing balance and import of wheat was a huge blow and disaster for the local farmers.
The examination of record also revealed that the estimation of wheat requirement for the food year 2023-24, which provided justification for the wheat import, was completely unreliable. Despite being undependable, the requirement was presented (seems malafide). For the food year 2023-24, when the production of wheat was 31.473 MMT in comparison of 28.170 MMT and 26.500 MMT for the food years 2022-23 and 2021-22, respectively, the permission of 3.40 MMT of wheat import was given. In the last two years, the quantities of wheat imported were 2.20 MMT in 2021-22 and 2.73 MMT in 2022-23, respectively. The other factors which contributed adversely to the import decision of the wheat are slow release of wheat by the provinces, ignoring the opening and closing stocks of wheat while preparing the estimation of wheat import, late import of wheat when the local produce was almost ready, Trading Corporation of Pakistan (TCP) did not execute the assigned import quota (of wheat import), and all the import was done by the private sector, import of excess wheat against the approved quantity.
Audit observed that the carry forward balances and closing balances of wheat do not reflect the true picture of the stock positions. There is a clear discrepancy in the closing balance of 2021-22 and opening balance/carry forward balance of 2022-23, same is the case with the balance for 2023-24. Audit further observed that the wheat stock figures presented in the Wheat Board meetings are used to decide on imports and other market interventions. If the stock figures are overstated or understated, it could lead to poor decisions, such as importing too much wheat as is the case in 2023-24 or delaying necessary imports, causing shortages. The report further said that slow releases by the provinces leading to signal of an artificial shortage of wheat, while comparing five months wheat releases for 2022 and 2023 by the Punjab and Sindh provinces to the flour mills, it was observed that the provinces released less wheat as compared to the last year. Audit is of the view that due to slow/less releases of wheat from the provinces, a panic was created in local market which caused an increase of flour prices.
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