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Fertiliser subsidy announced ahead of winter crops

Business

October 30, 2020

ISLAMABAD: The government on Thursday announced subsidy on fertilisers to encourage farmers to increase production during the upcoming winter crops as wheat shortfall brought the prices of the staple up to a historical high.

The decision was taken during a meeting of the Economic Coordination Committee (ECC) of the cabinet presided over by Adviser to the Prime Minister on Finance Hafeez Shaikh.

The meeting approved the package for rabi crops, especially wheat. The package will be presented in the next cabinet meeting on Tuesday for approval by the federal cabinet. Under the package, Rs1,000 per 50 kilogram bag will be given as subsidy on diammonium phosphate, and potassium and other fertilisers.

The federal and provincial governments will share the subsidy in 70 and 30 percent ratio. The federal government approved subsidy on weedicides at Rs250 per acre and fungicides at Rs150.

The federal cabinet on Tuesday constituted a special committee to design the package to reduce the input cost for the farmers with the special intent to increase the production of wheat in the country.

The country is facing 1.6 million tons of wheat shortage this year. It plans to import 1.5 million tons of wheat through Trading Corp. of Pakistan, while more than a

million tons of the grain will be imported by the private sector.

Pakistan, the world’s eighth-biggest wheat producer, has already imported about 430,000 tons so far this year to build strategic reserves of the grain and plug the shortage, caused in part by damage to crops after

heavy rains. Private importers have booked 1.09 million tons of wheat, which will be shipped in 18 vessels until January.

Wheat is the staple crop and pillar of food security in order to meet 80 percent of the dietary needs with 38 percent share in calorie intake. It accounts for 8.9 percent of the value-addition in agriculture sector and 1.6 percent of the GDP.

The provinces will distribute the fertiliser subsidy in their already prevalent manner and will be responsible for ensuring transparency.

The federal funds for the subsidy will be directly disbursed to the provinces by the finance division on the basis of their share, keeping in view their system strength and overall outreach.

The ministry of national food security would examine the provinces’ demand for funds and after its recommendation Finance Division shall transfer the funds to the provinces.

The ECC decided that the provinces would expand, improve and up-grade their subsidy disbursement systems.