Farmers demand urea

LAHORE: The production and growth of crops this Rabi season are likely to be undermined if the government does not ensure urea supply to growers in time and at cheaper rates, farmers said.

Urea prices have risen from Rs850 per 50kg bag to Rs1,300 per bag in three months. This price hike is expected to cause a decline in the production of wheat, fruits and vegetables.

Farmers Association Pakistan (FAP) spokesman Dr Mohammad Tariq Bucha criticised the urea price hike, saying it was due to the government’s failure to import 250,000 tons of fertiliser. According to him, despite Saudi Arabia Basic Industries Corporation denying export of such a large volume, the government has not yet approached any other urea exporter.

He demanded that the government arrange steady supply of urea in the market to achieve the production target. He also condemned the 3.5 per cent withholding tax that was levied on agricultural produce. Bucha argued that the withholding tax will squeeze farmers’ liquidity, as the middlemen will either stop buying or will charge the tax from the farmers thereby paying less for their produce.

Moreover, he said that the notification of applying the 3.5 per cent withholding tax, issued by the Federal Board of Revenue (FBR) on December 31, 2010, is self-contradictory as sub-section (b) states that agriculture produce is exempt from tax.

Meanwhile, a senior official of the National Fertiliser Corporation Limited said that the government is unlikely to ensure uninterrupted gas supply to fertiliser producers, particularly in the wake of high demand from residential consumers. He said that catering to the demand of fertiliser producers – who consume around 200 million cubic feet of gas per day, is not possible under the current Sui Northern Gas Pipelines Limited’s load management plan.

Published in The Express Tribune, January 19^th, 2011.