The week in focus

Persistent energy shortage, in a knock-on effect, has given birth to a new problem in the agricultural sector as farmers clamour for smooth supply of fertiliser at affordable prices at a crucial time of wheat cultivation – the staple food of the country.

As ministries differ on who to give priority when gas imports start after three years, the prime minister issued immediate directives to restore gas supply to fertiliser plants, some of which were running well short of capacity due to irregular supply.

Last week, the Ministry of Industries underlined the need for allocating gas imports from Iran first to fertiliser plants and other industries to avert any threat to the agricultural sector – the mainstay of economy. Countering this view, the Ministries of Finance and Water and Power underscored the importance of giving priority to power plants in gas supply which will help mitigate energy shortages.

This winter, gas shortage is estimated at two billion cubic feet per day with demand at around six billion cubic feet and supply at four billion cubic feet. This wide gap is perplexing as the government wavers in taking a decision which industry or sector should get priority including power plants, fertiliser manufacturers and compressed natural gas producers.

Though self-sufficient in urea production after new plants of Engro and Fatima Fertiliser came online, frequent closure of gas supply has dented the efficiency of Engro which has installed the world’s largest single-train plant capable of producing 1.3 million tons per annum.

Farmers say urea is being sold at Rs2,000 to Rs2,100 per bag of 50 kg compared to company price of Rs1,600. Comparing with prices in India, they say urea is available there at Rs400 to Rs425 in Pakistani rupee value while prices of di-ammonium phosphate (DAP) stand at Rs800 per bag against the price of Rs4,200 in Pakistan.

“Fertiliser supply is unsatisfactory as dealers have not received the commodity booked two months ago,” Sindh Abadgar Board Vice-President Nadeem Shah said from Hyderabad.

He said phosphate fertiliser played a key role in wheat production but DAP purchase had gone down by 50 per cent due to high prices. “Yield per acre may fall five to six maunds (40 kg) as lower-than-required quantity of DAP is applied to the crop,” he said.

Wheat has been cultivated on 20.25 million acres in the country and earlier there were expectations that a bumper crop of 25 million tons will be produced this year. But fertiliser shortage has dented these hopes.

Lashing out at the government’s decision to receive imported urea at the Gwadar Port, Shah expressed fears that farmers would not get the commodity at affordable prices due to the long distance as middlemen would lift it and sell at higher prices. “The imported fertiliser should arrive at the Karachi Port.”

In order to address shortages, the government is importing 700,000 tons of urea for the ongoing Rabi crop sowing season.

Farmers also complain about fake fertiliser companies which have sprung up in villages and offer shoddy alternatives to urea and DAP fertiliser.

“Fertiliser prices have not stabilised despite import of urea and this year’s wheat production may fall short of the target,” said Farmers Associates Pakistan Director Rabia Sultan from Lahore.

In order to encourage farmers, she called for an increase in wheat support price of Rs950 per 40 kg. The support price had not been revised as the ministries were devolved to provinces under the 18th Constitutional Amendment, she said, adding high input prices had prompted the need for a revision of the support price.

(the writer is incharge Business desk for the Express tribune and can be contacted at [e-mail])

Published in The Express Tribune, November 21^st, 2011.