While the federal government’s decision of general sales tax exemption for all kinds of seeds and agricultural implements has been appreciated by representatives of Sindh’s leading grower bodies, they still have a word of caution for the budgetary initiatives.

“It’s good that the government is opting for import substitution of edible oil and that the general sales tax is withdrawn on seeds and farm implements. We, however, think the government needs to have allocations for research-based initiatives at the federal and provincial levels to boost this sector,” says Mahmood Nawaz Shah, vice president of Sindh Abadgar Board a vibrant growers’ body.

Sindh has vast potential for sunflower and palm oil cultivation but policymaking decisions and research issues elude its growth unendingly,” he says.

“What about diammonium phosphate (DAP) and urea that are main farm inputs? Their prices keep increasing. No direction is seen in the federal budget,” he says.

The initiatives are good but lack proper research

The wheat crop has been facing issues related to its seeds, which is why this year’s production target dwindled. He calls for long-term planning of agricultural commodities. “We panic when prices of commodities jack up,” he said.

Vice president of Sindh Chamber of Agriculture Nabi Bux Sathio also welcomes tax exemptions but is critical of the three-year Rs21 billion ‘zaraat initiative’, saying it should be year based with clear achievable targets. He was also critical of the decision to withdraw the tractor scheme in which the federal government had absorbed the Kibor (Karachi interbank offered rate) component while growers bore 5 per cent service charges with 80pc cost over seven years through 14 instalments.

Despite the myriad of challenges and the dearth of fertiliser early this year, the farm sector’s growth rose from the targeted 3.5 per cent to 4.4pc.

He lauded allocations for water resources but strongly recommended that Manchhar and Keenjhar lake should serve as a reservoir. “For this to happen Sindh government should come clean to fix the issue of Right Bank Outfall Drain (RBOD-II) that has been pending for two decades,” he says.

The general sales tax withdrawal would be somewhat meaningless as a subsidy was not given for DAP and urea. Despite the dearth of fertiliser early this year, the farm sector’s growth rose from the targeted 3.5 per cent to 4.4pc.

Published in Dawn, The Business and Finance Weekly, June 13th, 2022