Facilitating farmers: Food ministry for continuing fertiliser subsidy next year as well

Has sent a proposal in this regard to the finance ministry

ISLAMABAD: The Ministry of National Food Security and Research has expressed interest in continuing with the di-ammonium phosphate (DAP) subsidy for farmers with deduction at source of the provincial share from the divisible pool of taxes.

According to sources, the food security ministry has forwarded a proposal to the finance ministry seeking allocation of funds for the DAP subsidy for next year as well.

The federal government, in the 2015-16 budget, had set aside Rs20 billion for DAP subsidy with 50% share from the four provinces as per their consumption needs.

Under the scheme, a 50kg bag of DAP fertiliser is provided to the farmer at Rs500 less than the market price, which has helped them reduce the cost of production.

However, the Finance Division and the Punjab government have expressed their reservations about the provincial share as except for Punjab no other province has contributed its due share, despite scores of reminders and meetings with the authorities concerned.

Under the formula, 50% share of the Rs20 billion budget was to be contributed by the federal government and the remaining by the provinces with Punjab having the highest share of Rs7 billion.

The federal government and Punjab have already contributed their shares, but the other three provinces have yet to release the subsidy. Sources said Sindh and Balochistan have agreed, in principle, to provide the amount.

However, the Khyber-Pakhtunkhwa government has refused to credit the amount to the joint account at the State Bank of Pakistan.

In order to avoid the controversy in future, the food ministry has suggested that instead of requesting the provincial governments to release their share, the federal government should deduct the amount at source from the divisible pool so that it could be easy to implement the subsidy scheme.

Under the scheme, the subsidy is given to the fertiliser manufacturing companies that import DAP and provide it at Rs500 cheaper than the market price.

Published in The Express Tribune, May 14^th, 2016.

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