Fertiliser industry offers support for subsidy scheme

High fertiliser prices increase cost of production for farmers

LAHORE:

Fertiliser Manufacturers of Pakistan Advisory Council (FMPAC) has offered the federal government support for formulating a workable direct subsidy scheme for farmers.

In a letter to Finance Minister Miftah Ismail, the fertiliser body said that a direct targeted subsidy mechanism has been under consideration for the last two years in a bid to ensure that small farmers benefit.

As part of this scheme, a voucher-based SMS-enabled direct subsidy mechanism was introduced by the government of Punjab, considering the high prices of phosphatic fertilisers.

But despite their best efforts, the government has not yet been able to pass on this subsidy benefit to farmers across the country.

In Sindh, Khyber-Pakhtunkhwa (K-P) and Balochistan, this subsidy is not being offered while in Punjab, the shortage of funds means that even issued coupons have not been en cashed by the farmers.

Consequently, in the last Rabi sowing season, the lack of disbursement of subsidies on phosphatic fertilisers resulted in less consumption of di-ammonium phosphate (DAP) in wheat plantation. This became one of the reasons that impacted the yield and now the government would be required to import over three million tons of wheat to meet local requirements by spending foreign exchange, said the letter.

The FMPAC letter further said that any proposal to provide direct targeted subsidy to farmers in the absence of availability of exact land record and accurate profiles of farmers cannot be implemented in true spirit.

“It is crucial to mention here that the consumption of nitrogenous fertilisers is three times higher as compared to that of phosphatic fertilisers.”

The stipulation of the government for farmers to purchase fertilisers at higher prices would first require availability of substantial amounts of additional cash. Farmers would then have to wait for subsidies from the government, if at all provided to them. This change would substantially increase the cost of production for farmers which, in turn, would have a disastrous impact on crop yields.

FMPAC Executive Director Brig Sher Shah said that a significant drop in use of phosphatic fertilisers came in the wake of high prices and difficulties in the way of imports due to forex curbs.

Published in The Express Tribune, August 11^th, 2022.

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