Milk powder import: Chances of increase in regulatory duty drying up
Finance minister reluctant amid fears of rise in inflation.
According to nutritionists, there is significant nourishment value of the skimmed milk powder to address the issue of malnutrition. PHOTO: EXPRESS
ISLAMABAD:
Amid government’s reluctance to increase the tax on milk and its products, the agriculture lobby is seeking 40% additional regulatory duty on the import of skimmed milk powder, which is an important food ingredient.
The representatives of the agriculture lobby tried to push their case for a higher duty just before the winding up of budget debate by Finance Minister Ishaq Dar in the National Assembly on Thursday.
Federal Minister for National Food Security and Research Sikandar Hayat Bosan and Minister for Defence Production Rana Tanveer Hussain met with Dar in the morning.
They urged the minister to increase the regulatory duty on skimmed milk powder from present 20% to 60%, said officials of the finance ministry. However, Dar appeared reluctant and did not give any commitment.
In the outgoing fiscal year, the skimmed milk powder was subject to 25% customs duty.
In the new budget, the government has proposed to reduce the maximum import tariff slabs from six to five and abolished the maximum tariff slab of 25%. This has lowered customs duty on all items that were subject to 25% duty to 20% including the skimmed milk powder.
According to nutritionists, there is significant nourishment value of skimmed milk powder to address the issue of malnutrition.
“The farming community wants that the regulatory duty on import of skimmed milk powder should be at least 65%,” said Bosan while talking to The Express Tribune.
He confirmed that the issue was taken up with Dar and no decision was taken in the meeting.
Higher up the ladder
Bosan said now the issue would be taken up with Prime Minister Nawaz Sharif. He said small farmers who have one buffalo will be the main beneficiaries if the government increases the duty on skimmed milk powder.
Bosan said the milk processing industries are buying milk from farmers at Rs36 per litre and then mix the skimmed milk powder, which cannot be a substitute to fresh milk. His logic dictates that expensive imported powder will force the processing industries to give better prices to the farmers.
Bosan said India has imposed 68% regulatory duty on imported skimmed milk powder while this ratio is 180% in Turkey.
India is a net exporter of skimmed milk powder and it has slapped duties to protect its domestic industry. However, Pakistan is a net importer of the powder and any change in duty rates will have a direct bearing on the prices of packaged milk.
The officials said the PM was reluctant to increase duties on milk and its products amid concerns that this will give a reason to the packaged milk industries and farmers to increase prices of their products.
The fresh milk constitutes roughly 7% of the total Consumer Price Index (CPI) basket and any change in milk prices would fuel inflation.
The finance minister said the federal government has facilitated farmers in the past by taking decisions like providing subsidies on sugar, wheat and agricultural tube wells, according to an official press release issued after the meeting.
It added Dar assured representatives of the agriculturists that all possible steps will be taken to provide relief to the agriculture sector. He said in the new budget the government has proposed measures to boost agricultural production in the country.
Dar said the government was also ready to facilitate those who want to invest and bring new or improved technology for the sector. The minister reiterated that most of the suggestions put forward by the parliamentarians and agriculturists would be considered keeping in view the feasibility and fiscal space available in the budget.
Published in The Express Tribune, June 19th, 2015.
Amid government’s reluctance to increase the tax on milk and its products, the agriculture lobby is seeking 40% additional regulatory duty on the import of skimmed milk powder, which is an important food ingredient.
The representatives of the agriculture lobby tried to push their case for a higher duty just before the winding up of budget debate by Finance Minister Ishaq Dar in the National Assembly on Thursday.
Federal Minister for National Food Security and Research Sikandar Hayat Bosan and Minister for Defence Production Rana Tanveer Hussain met with Dar in the morning.
They urged the minister to increase the regulatory duty on skimmed milk powder from present 20% to 60%, said officials of the finance ministry. However, Dar appeared reluctant and did not give any commitment.
In the outgoing fiscal year, the skimmed milk powder was subject to 25% customs duty.
In the new budget, the government has proposed to reduce the maximum import tariff slabs from six to five and abolished the maximum tariff slab of 25%. This has lowered customs duty on all items that were subject to 25% duty to 20% including the skimmed milk powder.
According to nutritionists, there is significant nourishment value of skimmed milk powder to address the issue of malnutrition.
“The farming community wants that the regulatory duty on import of skimmed milk powder should be at least 65%,” said Bosan while talking to The Express Tribune.
He confirmed that the issue was taken up with Dar and no decision was taken in the meeting.
Higher up the ladder
Bosan said now the issue would be taken up with Prime Minister Nawaz Sharif. He said small farmers who have one buffalo will be the main beneficiaries if the government increases the duty on skimmed milk powder.
Bosan said the milk processing industries are buying milk from farmers at Rs36 per litre and then mix the skimmed milk powder, which cannot be a substitute to fresh milk. His logic dictates that expensive imported powder will force the processing industries to give better prices to the farmers.
Bosan said India has imposed 68% regulatory duty on imported skimmed milk powder while this ratio is 180% in Turkey.
India is a net exporter of skimmed milk powder and it has slapped duties to protect its domestic industry. However, Pakistan is a net importer of the powder and any change in duty rates will have a direct bearing on the prices of packaged milk.
The officials said the PM was reluctant to increase duties on milk and its products amid concerns that this will give a reason to the packaged milk industries and farmers to increase prices of their products.
The fresh milk constitutes roughly 7% of the total Consumer Price Index (CPI) basket and any change in milk prices would fuel inflation.
The finance minister said the federal government has facilitated farmers in the past by taking decisions like providing subsidies on sugar, wheat and agricultural tube wells, according to an official press release issued after the meeting.
It added Dar assured representatives of the agriculturists that all possible steps will be taken to provide relief to the agriculture sector. He said in the new budget the government has proposed measures to boost agricultural production in the country.
Dar said the government was also ready to facilitate those who want to invest and bring new or improved technology for the sector. The minister reiterated that most of the suggestions put forward by the parliamentarians and agriculturists would be considered keeping in view the feasibility and fiscal space available in the budget.
Published in The Express Tribune, June 19th, 2015.