Dispute drags on: Punjab dismisses subsidy plea of fertiliser producers

Will provide funds only after companies print prices on DAP bags.

ISLAMABAD: The Punjab government has rejected the demand of fertiliser manufacturers for a Rs14-billion subsidy without printing prices on di-ammonium phosphate (DAP) bags as approved in the federal budget for 2014-15.

The matter of subsidy has become a dispute between the government and fertiliser manufacturers as they differ over fixing the price.

In a letter to the Ministry of National Food Security and Research, the Punjab food and agriculture department rejected the proposal of the fertiliser manufacturers for the provision of subsidy without fixing the price and printing them on DAP bags.



“The government of Punjab has stated that the subsidy would only be released if the manufacturing companies agree to print the price,” said the letter.

The letter stressed that the same stance may continue until the finalisation of a mechanism to ensure that the actual subsidy approved by the government was passed on to the farmers.

However, other provinces have not yet revealed their position over the proposal of the manufacturers.

A senior official in the ministry said that due to the differences over the mechanism, those who end up suffering the most are the farmers. They have not received any relief after seven months of the subsidy announcement.

To address this subsidy problem, the government had constituted a six-member committee comprising two representatives from each stakeholder – the local manufacturers, importers and dealers – to come up with recommendations.

The committee finalised wide-ranging proposals in an attempt to reach a solution.

However, the Punjab government rejected all the proposals, refusing to abandon its demand for printing the price on DAP bags.

The federal government had announced a Rs14-billion subsidy on fertiliser in the budget for 2014-15 and out of the total amount, 50% was to be paid by the provinces.

However, the provinces agreed to the condition with the demand that the manufacturers should print the price on each fertiliser bag, ensuring that the farmers would not be overcharged at any stage.

However, the manufacturers disagreed, arguing that it is an international commodity and due to fluctuations in the dollar rate, it is not possible for them to fix a single price and it would vary due to market forces.

Published in The Express Tribune, February 11^th,  2015.

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