The government announced on Friday a subsidy of Rs 500 on each 50 kg bag of diammonium phosphate (DAP), Rs 218 on a bag of nitrophosphate (NP), nitrogen phosphorus and potassium.
Addressing a press conference on Friday, Minister for National Food Security and Research Sikandar Hayat Bosan said that the amount of the subsidy would be paid to the importers and the local producers who would sell these agriculture inputs at subsidized rates to the farmers.
He said the scheme would continue till the total subsidy of Rs 20 billion was spent. He said under the mechanism, the finance ministry would provide the amount to the Federal Board of Revenue (FBR) against the GST levied on imported fertilizers by an importer, while for the local manufacturers, they would claim the subsidy after manufacturing this important agricultural input.
The minister said the federal government had fulfilled the long-standing demand of the farmers as they were suffering due to low commodity prices and high prices of inputs. Bosan said the government wanted to encourage the farmers to use nitrophosphate fertilizer in order to boost their yield. He said out of total subsidy of Rs 20 billion, the federal government would provide Rs 10 billion to the Punjab government; and Rs 7 billion to Balochistan. Whereas, he said, Sindh and Khyber Pakhtunkhwa governments would be approached again for their due share.
To a question, the minister said to avoid manipulation of prices, ex-Karachi price would be printed on each bag of DAP which did not include freight.
However, he added, that in other parts of the country, the freight charges would be included in the total price of a bag. To another question, the minister said that the importers and manufacturers would immediately cancel the dealership if a dealer or his sub-dealer was found guilty of overcharging or tying the product with other fertilizers.
“They will also ensure wider public awareness about the fertilizer prices,” he said, adding they would also launch mega media coverage through print and electronic media.