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June 12, 2019

Growers plow apart the budget over incentive drought

Business

June 12, 2019

KARACHI: Being insufficient, the agriculture programme announced in the federal budget for the next fiscal is unlikely to boost the growth of the sector, while the government also failed to announce any incentives in the face of high cost of production, an issue which has worsened with the devaluation of currency.

Hammad Azhar, the federal minister of state for revenue, presenting the proposal in his budget speech, said this year agriculture sector registered a decrease of 4.4 percent.

“…an important 5-year programme worth Rs280 billion for uplift of agriculture sector is being launched in consultation with the provinces,” Azhar said.

Mehmood Nawaz Shah, a senior vice president Sindh Abadgar Board, said fertiliser subsidy was not addressed and they (growers) were concerned that it might have been removed and if true then it would add to the burden on growers. “Overall speaking, clear and appropriate measures are not announced to take up the agriculture sector issues,” Shah said.

Under this agriculture programme, Rs218 billion would be spent on the improvement of water conservation projects, while Rs44.8 billion would be provided to increase yields of wheat, rice, sugarcane, cotton, which becomes Rs11 billion a year.

Shah said the speech was also not clear on water conservation technologies besides amount for an increase in the yield was not substantial.

The state minister also announced that in order to harness the potential of fisheries through shrimp farming, cold water trout farming etc, Rs9.3 billion would be spent, while Rs5.6 billion would be provided for backyard poultry and ‘save the buffalo calf programme’.

The revenue minister also proposed for continuation of subsidy to agriculture tube-wells. “Agriculture sector tube-wells would be charged at a subsidised rate of Rs6.85/unit, while in Balochistan, a flat rate of Rs10,000/month is charged from the farmers and excess bill up to Rs75,000/month is shared by the federal and provincial governments,” Azhar said in the speech.

Commenting on this announcement, Shah said it was not clear whether the federal government would take share in this programme from the provinces.

He said support price and research and development budget were the provincial issues but the federal government could have contributed towards subsidy on fertiliser and pesticides.

Furthermore, the state minister also proposed crop loan insurance under which small farmers, who had incurred losses due to damages to their crops, would be provided loan insurance scheme. In this regard, Rs2.5 billion had been proposed in the budget 2019-20.

Shah said that it was a good scheme but the amount was not sufficient, besides insurance companies were demanding premiums as high as 20 percent. “The government might give this amount as subsidy on premium,” he said.

He said the country’s food import bill was around $6.5 billion, of which more than 50 percent was made up by edible oil imports. “However, no scheme has been announced for the import of oilseed for agriculture purposes. It can help cut down the food import bill by a substantial margin,” he said.

Kabool Muhammad Khatian, chairman Sindh Chamber of Agriculture, termed the budget proposals as the worst ever. “They have isolated the farmer. They have given the worst budget ever. It is the destruction of farmers of Pakistan,” Khatian said.

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