No agreement: Farmers have to wait longer for Rs20b fertiliser subsidy

Companies refuse to accept demand for printing price on urea bags.

ISLAMABAD: The government and fertiliser manufacturers have failed to agree on establishing a mechanism for the release of subsidy to farmers after refusal of the latter to print the price on urea bags to avoid market manipulation and ensure transparency.

The government has been giving billions of rupees in subsidy on gas supply to the fertiliser industry for eventually benefitting the farmers, but they have never got the relief and have been forced to pay high fertiliser prices for the past few years.

According to officials familiar with the development, the subsidy issue came up for discussion in a meeting presided over by Federal Industries and Production Minister Ghulam Murtaza Jatoi and Federal National Food Security and Research Minister Sikandar Hayat Khan Bosan.

The government has set aside Rs20 billion in the budget for 2015-16 to subsidise the sale of phosphatic and potassic fertilisers, specifically diammonium phosphate (DAP).

In the meeting, the Ministry of Industries repeated its earlier demand that fertiliser companies must make the pricing process transparent and ensure the provision of updated price lists to dealers, who would display these prominently.

Officials, however, said the industry representatives did not agree with the ministry, arguing fertiliser prices were fluctuating and they would not be able to print prices on urea and other fertiliser bags. They also refused to take responsibility of the conduct of dealers, who were allegedly minting money from the farmers.

The growers have faced an abnormal increase in fertiliser prices for many years, prompting some in Punjab to stop planting rice in the last two years because of expensive inputs.

According to a statement, the minister of industries briefed meeting participants about the subsidy package, which would give a major relief to the farmers across the country. He suggested that a mechanism should be established to ensure that the subsidy reached the targeted beneficiaries - the farmers.

The two sides reviewed various proposals to arrive at a consensus on a viable arrangement to make the supply and sale process transparent and enforce the initiative. According to the industries ministry, any change in price will be communicated by the companies to provincial governments and the National Fertiliser Development Centre.

The minister stressed that fertiliser companies should prevent their dealers from overcharging and take appropriate action against those who had overcharged the farmers.

He stressed that the Ministry of Industries and Production and the Ministry of National Food Security and Research would encourage fertiliser importers and producers to maintain a smooth flow of supply.

He praised efforts of all stakeholders for establishing a long-term direct mechanism to disburse subsidies to the farmers by registering them. Such deliberations would pave the way for making the growers independent and successful, he remarked.

Published in The Express Tribune, August 5^th, 2015.

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