LAHORE – Imposition of new taxation has started producing inflationary impacts on various sections of economy. Pakistan Agriculture Scientists Association (PASA) has disclosed that imposition of General Sales Tax (GST) has resulted in a 25 percent, 17 percent and 20 percent in the prices of pesticides, tractors and fertiliser, respectively. PASA Chairman Jamshed Iqbal Cheema made these remarks while addressing members of the Agriculture Journalists Association. Cheema claimed that increased food prices had proved to be a catalyst for the cultivator community to raise production levels and it was expected that the agricultural economy might have achieved 12 percent growth during 2011.
He, however, lamented that the new taxation measures introduced by the federal government would completely reverse the trend. He said that the country’s economy was dependant on agricultural and foreign remittance. ‘The country’s biggest industrial sectors, including textile, sugar, flour, rice and leather are dependant on agricultural and only agriculture growth could save industry and economy in the country,” he added. PASA chairman said that he had previously highlighted to parliamentarians headed by Fauzia Wahab that the government instead of taxing agricultural inputs, should tax agricultural income. Same heads could be introduced on agricultural income as applicable on salaries and other incomes. He was of the view that taxing agricultural inputs denied farmers profits. The committee was briefed that we were already behind in yield gap from even developing countries like India, Bangladesh and Sri Lanka.
‘We are around 40 percent behind in yield per acre from other countries. In Egypt farmers use fertiliser at the rate of 500 kilogrammes per acre, Europe consumes at 380 kilogrammes per acre and in Pakistan it is the paltry rate of 132 kilograms per acre,’ Cheema claimed.In terms of seed, the US was using 100 percent maize hybrid seed in 1938. India is using 88 percent hybrid cotton seed today while the utilisation ratio of hybrid seed of canola, sunflower, vegetables and fodder stands at 100 percent. In Pakistan, however, we are only using 15 percent hybrid rice seed, 40 percent maize and below 50 percent for vegetables. ‘As we are applying fewer inputs and even those of low quality, our yield per acre also suffers consequently,’ he opined.
He stressed that we should have encouraged farmers to raise input levels to boost output. Talking about the global rise in commodity prices, he said that commodity prices had registered average price increase of 168 percent after 2005. Every crop has become lucrative for farmer whether it is maize, wheat, rice, edible oil or cotton. He said earlier it was customary that farmers to increase area under cultivation of that crop which registers an increase in price. But now, he noted, the price of every crop has increased by virtually the same ratio, so there is still little or no chance of an increase in area under cultivation.
