Fertiliser industry awaits subsidy notification

Govt fails to clear backlog of Rs20b worth of subsidy claims

LAHORE: The government seems to be unwilling to issue a notification for fertiliser subsidy announced in the budget for 2017-18, said a lobby group of fertiliser manufacturers, fearing that this year too it will prove to be a mere political stunt rather than offering any significant relief to farmers.

“Stakeholders in the fertiliser sector are disappointed to see that over the past two years, the government has not been able to deliver real advantages of the subsidy on urea and fertiliser,” said the Fertiliser Manufacturers of Pakistan Advisory Council (FMPAC).

“It will fail to deliver results again because the government has not made any major policy amendments for relevant institutions or ministries.”

FMPAC was of the view that after the subsidy announcement in the new budget, none of the ministries was willing to take up the crucial responsibility without sufficient regulatory support.

Relevant officials already knew that the government had been unable to resolve and clear backlog of previous subsidy claims worth nearly Rs20 billion, it said.

Fertiliser manufacturers said they were suffering badly in terms of financial challenges because of the delay in subsidy payments, adding companies would refuse to participate in the programme in the new fiscal year.

The subsidy is channelled to the farmers through fertiliser producers and importers.

The current subsidy programme is going to end today (June 30) and a delay in notification from the ministry concerned will lead to withdrawal of the concession.

According to industry players, fertiliser prices in Pakistan have remained the highest in the region despite the subsidy programme.

FMPAC pointed out that this time of the year was considered to be the peak season for fertiliser consumption in an effort to increase crop yields. However, the farmers will be reluctant to buy urea because of the price increase.

“This whole scenario reflects weak planning by the finance ministry and poor performance of the Ministry of National Food Security and Research, which are having conflict of ownership and cannot devise a simple, fast and effective process for verifying the subsidy claims submitted by fertiliser companies,” it said.

FMPAC has also approached the relevant ministry and department with a proposal to effectively launch the newly announced subsidy and avoid mismanagement. “The aim is to support the government initiative and provide relief to the farming community,” it said.

If the government failed to come up with any feasible plan, the farmers would be facing a major strain, it cautioned and said the government must quickly issue a notification in order to prevent a surge in urea prices.

Published in The Express Tribune, June 30^th, 2017.

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