Provinces asked to share 50pc farm subsidy with centre

LAHORE: The federal government has asked of the provinces to share 50 percent cost of agriculture subsidy programmes with it as it was grappling with a widening budget deficit, The News has learnt.

In a meeting of Economic Coordination Committee of the Cabinet (ECC) meeting last week, Finance Minister Shaukat Tarin pointed out the low share of provinces in agriculture programmes being jointly subsidised with financial assistance of centre.

Tarin said as agriculture had been devolved to provinces under 18th Amendment, and provinces been given financial autonomy with huge funds transfers from the federal government plus enhanced revenue generation at provincial levels, the provincial governments must share burden on equal terms. On Finance Minister’s behest, Fakhar Imam, Federal Minister for National Food Security and Research communicated to provincial representatives to pay half of subsidies being given on inputs including fertiliser instead of one-fourth or other low ratios. Meanwhile, in another related development, Sindh government has requested federal government to extend subsidiary disbursement deadline to end of current fiscal year. The Sindh provincial government could not utilise subsidised amount by December 2021 as per timeline of subsidy programme. The main reason was said to be delay in developing payment mechanism for Hari Card.

Under the Sindh government's plan, subsidy for small farmers in the province during the financial year 2021-22 is to be distributed directly through ‘Peoples Hari Card’. Ministry of National Food Security agreed to forward the case of extending subsidy disbursal programme to Finance Minister after getting update about status of similar programmes being carried out by Punjab and Khyber Pakhtunkhwa provinces.

Nearly 0.9 million farmers in Punjab are entitled to get subsidised fertilisers, seeds, and pesticides besides low-interest loans and compensation for damaged crops in case of any natural calamity through Kissan Card.

It may be noted that Punjab recently requested the federal government to enhance the subsidy amount for Kissan Cards in order to achieve the target of distributing one million cards by the end of June 2022. The government of Khyber-Pakhtunkhwa has registered around 124,000 farmers through the Kissan Cards for the disbursement of subsidy.

Moreover, all provincial agricultural departments were also requested to share the total amount of subsidies, keeping their future needs in mind. The federal government has already disbursed Rs400 billion in subsidy for the development of agriculture sector under different Agriculture Emergency Programme initiatives.