Aug 102017
Laudable efforts

It was heartening to note that the government has finally responded to the grievances and repeated complaints of the fertiliser industry. After meaningful dialogue, a mutually-agreed method has been devised to resolve the long-standing crisis of fertilizer subsidy. This will provide relief to the industry from major financial challenges created owing to delays in subsidy payments. Despite the political turmoil or changes in the regulatory environment, this much-needed cooperation between the government and industry must continue. The relevant ministries and authorities need to develop a support-mechanism for the fertiliser industry and stronger agricultural policies that can guarantee the smooth business operations of the industry. Adnan Ali Mughal Islamabad Click for detailed story

Jun 062017
Assistance to farmers

Budget 2017-2018 seems quite promising for the agro- economy as compared to the time-barred incentives offered and promised by the government last year. The Kissan Package is one such incentive. It was offered with a positive intention on the government’s part to alleviate the plight of farming community. But it could not be of much help to the agri-sector because of market instability and the somewhat inappropriate timing of announcing the subsidy. As a result, the government’s intention to support and strengthen the agri-sector could not materialise. Another example is the Complex Subsidy Reimbursement Mechanism that burdened the fertiliser sector by causing serious cash flow problems. This made all those who wanted to help the government in its initiative repent. Such unfulfilled promises and commitments by the government resulted in a serious trust deficit between the government and other shareholders. Therefore, the government should consider the suggestions of agri-experts regarding reduction of GST on inputs , providing relief in terms of reducing the cost of production of input and by easing the GIDC to alleviate the long-deprived farming community of additional burden. The government should also come up with corrective measures in the approved budget to reduce the cost of input so that fertiliser prices in Pakistan may be made competitive with the international market. Adnan Ali Mughal Islamabad Click for detailed story

May 182017
Fertiliser industry

One of the challenges currently faced by the fertiliser industry is cash flow problems. This is because of long delays in the reimbursement of subsidy worth billions of rupees. The government commits to pay the amount within 15 days, but it fails to release the payment on time because of the complex verification process practised to verify subsidy claims. At present, the fertiliser industry has outstanding subsidy claims of nearly 15 billion rupees. This is because of unnecessary complexities and overworked staff carrying out the scrutiny of claims at the concerned departments. Since the timely verification and payment of the fertiliser subsidy-claims has not been possible, the government is now being urged to consider the industry’s suggestion to exempt the general sales tax on input and outputs of fertiliser industry. This way, the next budget will pass the same price advantage to the farmers, without putting any financial pressure on the fertiliser companies. The GST is almost equivalent to the current subsidy on urea. At present, Pakistan has an inventory of nearly 1.5 million tonnes of urea. The industry’s experts have suggested to export 1 million tonne by the end of 2017, to earn precious foreign exchange revenues and avoid the financial burden of maintaining a huge inventory. Adnan Ali Mughal Islamabad Click for detailed story

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