LAHORE: The farming community has demanded that the Pakistan Tehreek-i-Insaf government should give priority to the agriculture sector in the mini-budget to be announced later this month, saying that the allocations for the sector in dollar terms have become negligible because of the rupee devaluation.

In a communiqué sent to the federal finance authorities on Thursday, it was regretted that the delay in announcement of agriculture policy and decisions by the government tantamount to display of apathy towards the farmers.

Issued on behalf of the Pakistan Kissan Ittehad (PKI) president Khalid Mahmood Khokhar, it however admitted that continuation of reduction in electricity tariff for agricultural use, removal of fixed power tariff on tube-well motors, restricting illegal import of cotton from Torkham border etc are some of the steps which indicated that growers were now being heard by the policy makers.

It suggests the federal government and finance minister should consider incorporating their proposals in the finance bill. It also proposes enhancing research allocations to 1.0pc from the current 0.2pc instantly and taking it to 2.0pc in three years for enabling the sector to deal with emerging issues and developing new production and protection technologies.

The farmers want immediate withdrawal of GST on sale of tractors or the government increase the interest rate on bank loans extended for the purchase of tractors and reverse engineering of other imported farm implements for making these affordable for small growers, as well as provision of land levelers at 60pc subsidised rates at least in water-scarce districts.

The letter suggests the government should commit a minimum price for oil seeds and pulses and impose duty on their import so that the growers sow the two crops confidently and help the government save the huge foreign exchange spent on their import.

Calling for increase in the agriculture allocations, it points out that prior to devolution (2008-09), the developmental budget of the Federal Ministry of Food and Agriculture and Ministry of Livestock was around Rs30 billion in addition to provincial spending by agriculture and livestock departments, whereas after devolution (2013-14), the consolidated developmental budget of all four provinces is less than Rs15 billion and of MNFSR is less than Rs1 billion. This shows an overall investment on agriculture curtailed by 50pc. Considering the devaluation of rupee, these figures would be the worst. In 2008, the dollar exchange rate stood at around Rs60 against Rs138 today.

It regretted that the local growers are experiencing the world highest farm input cost. It said though the PTI government recently re-introduced reduced electricity tariff rate for agricultural use and removed the power surcharge on tube-well motors, the benefit was nullified due to 2pc GST on fertilizers and increase in pesticides prices by 50pc because of closure of some production facilities in China.

The farmers proposed discontinuation of the 2pc GST on fertilizers and announcement of 30pc flat subsidy on import of pesticide. This, they said, would cost the government a revenue loss of less than Rs2 billion but increase the agriculture productivity manifold.

They also suggested reduction in tariff on diesel, the main fuel for agriculture, for bringing down the input cost and making farm yield more competitive in the world market.

The letter also recommends giving special priority to fertilizer units in gas allocation for manufacturing high-value specialised fertilizers like Nitrophos and Calcium Ammonium Nitrate (CAN).

It says that keeping in view the government’s target to produce 150 million bales of cotton in 2019, it is naïve to expect farmers to deliver without consistent and affordable availability of this crucial input.

It urges the government to strictly monitor and regulate disbursement of farm loans as commercial banks lack infrastructure and manpower to extend loans to agriculture sector and prefer giving the credit facility to agro-based industries. Loans to small growers must be interest free, it suggests, adding that ‘pre-approved’ loans worth Rs500,000 should be issued through “Insaf Kissan Card” readily available to small growers for six months.

In the livestock sector, it suggests that instead of relying on import of dry milk, the government needs to incentivise the local industry in order to enhance production and promises full support to the government if these demands are met.

Published in Dawn, January 18th, 2019