Fertiliser use: K-P wants to distribute subsidy itself

Not willing to pitch in federal pool, amount part of subsidy package for farmers

ISLAMABAD: Unlike other provinces, Khyber-Pakhtunkhawa (K-P) has yet to transfer its due share of Rs0.8 million to the federal pool for payment of the fertiliser subsidy to farmers.

The share amount is part of the contribution of the provincial governments to the national pool for payment of the subsidy to farmers on di-ammonium phosphate (DAP) fertiliser under the Rs20-billion fertiliser subsidy package announced by the government in the current budget.

Under the plan, 50% of the total amount was supposed to be contributed by the provinces as per their DAP fertiliser requirement.

The federal government and Punjab have already transferred Rs10 billion and Rs7 billion, respectively, to the joint account of the pool in the State Bank of Pakistan.  Additionally, Sindh and Balochistan have committed to transfer their due share shortly.

Sources, however, said that K-P has so far not expressed its willingness to transfer its due share to the account, saying that it will pay directly to the farmers or the fertiliser importing companies.

A source in the food ministry said, “there is no option of directly disbursing the subsidy amount to the farmers or the fertiliser companies as we have opened a special account for the purpose.”

The officer further said that the finance division has also rejected the proposal of the K-P provincial government, saying that it has created a centralised mechanism for fund distribution which must be used.

The subsidy plan entails that the fertiliser companies will import the DAP and sell it in their respective zones as identified on a subsidised rate.

The officer said that the government has so far distributed Rs5 billion among the companies on their distribution of the subsidised DAP and the remaining amount will be distributed in the coming months.

Published in The Express Tribune, January 16^th, 2016.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.