There have been reports in newspapers regarding the fertiliser subsidy which are misleading. Fertiliser subsidies are not granted to the fertiliser industry but to the deprived farming community in Pakistan. In the current scheme, a subsidy of Rs 156 per bag is provided to the farmers through manufacturers. These manufacturers have given the fertilisers to the deserved farmers and the cost has to be paid by the government. While absorbing the impact of GIDC to the tune of Rs 400 per bag, the industry is also contributing Rs 50 per bag. The government may devise a mechanism to directly pass-on the subsidy to the farmers to address the issue. Alternately, reduction in fertiliser prices may be affected through lowering of prices of inputs i.e. gas prices and abolition of GST on inputs and outputs.
The other misperception is regarding permission to export limited quantity of surplus urea. The fertiliser industry is finding it hard to export the locally manufactured Urea as the high cost of production in Pakistan makes it uncompetitive with lowering international prices. The myth about provision of cheaper gas for fertiliser industry also needs a clarification. In Pakistan, gas is provided at average price of USD 4.65 per MMBTU as compared to international average of USD 2.64. Unfortunately, people are not able to perceive this fact correctly, thus leading to misinterpretation of the government’s decision. The export will not earn any profits but foreign exchange for the country. It will only help the manufacturers to liquidate the piling up inventory. Therefore, exporting urea won’t be a lucrative deal for local producers. It may also be noted that international prices are almost at par with the local prices; therefore credit must be given to the industry for keeping the prices low in spite of higher cost of production. Also, the export of such meager quantity will not have any impact on local prices.
For the sake of national interest, misinformed individuals should not be airing personal views on the strategic sector of national economy. As it has played an important role in development of agriculture sector and saved huge amount of foreign exchange, while providing fertiliser to farmers at rates much lower than the international market.
SHAHID SALEEM
(A stakeholder of agricultural sector)
Lahore
