Fertiliser subsidy ends as Rs27bn fund utilised

ISLAMABAD: The government on Monday discontinued its fertiliser subsidy scheme for 2016-17, according to a notification issued by the Ministry of National Food Security and Research.

The subsidy was being provided on urea, diammonium phosphate (DAP) and single superphosphate.

Secretary National Food Security and Research Abid Javed told Dawn that the allocation of Rs27 billion for the scheme under the 2016-17 budget has been exhausted.

He said the agricultural sector, particularly the farming community, took full advantage of the scheme, hence the allocations were fully utilised.

The government has yet to refund the sales tax against the subsidy and two months bills were in the pipeline, he added.

In response to a question, he said the withdrawal of the scheme would not have any impact on wheat and other crops.

On the other hand, the farming community has lamented the government for withdrawing the subsidy scheme. President of Pakistan Kissan Ittehad Khalid Mahmood Khokhar has described the decision as hostile towards farmers and the agriculture sector, and announced that farmers will gather in front of the Parliament House to launch their protest.

The new measure will not only increase the cost of production but also increase losses to farmers which they are facing for the past three years, he said.

Mr Khokhar believed that sugarcane and maize are the upcoming crops in the next season and would be badly affected. The application of urea fertiliser has yet to be completed for the wheat crop during the current Rabi season, he said.

Meanwhile, the Fertiliser Importers Council informed Finance Minister Ishaq Dar on Jan 5 through a letter that importers of DAP are in a serious financial crisis due to delays in forwarding of subsidy claims by the Ministry of National Food Security and Research to State Bank of Pakistan (SBP).

The council said claims for September, October and November have been received by the food ministry from the Federal Board of Revenue (FBR), but have not been forwarded to the SBP for payment.

This delay by the Ministry in forwarding claims to the SBP for payment is in contradiction of the subsidy notifications issued in June 25 and August 23 last year.

Out of the 2.2 million tonnes off-take of DAP in 2016, around 64 per cent was supplied to farmers through imports. Importers ensured availability of DAP fertiliser at reduced prices, the council said, urging the finance minister to take urgent notice and send subsidy claims from September to November to the SBP for payment to DAP importers.