It has been disappointing to see that; over the past two years, the government of Pakistan has not been able to deliver the real advantages of the Subsidy on Urea and fertilizer prices.
Recently, as the government has once again announced the subsidy on Fertilizers in the new national budget 2017-2018 – it appears that this will again prove to be a mere ‘Political Stunt’ rather than offering any significant relief for the farmers. It will fail to deliver results again, because the government has not made any major policy-amendments for the relevant institutions or ministries.
After the subsidy announcement in the new budget, none of the ministries is practically willing to take up this crucial responsibility, without sufficient regulatory support. The relevant officials already know that the government has been unable to resolve and clear the major backlog of previously submitted subsidy claims, which are worth nearly 20 billion. This major burden of delayed payments has already made the fertilizer industry suffer badly. So, these companies will also refuse to participate in a subsidy, which is channeled to reach the farmers through the fertilizer producers and importers
Beside this challenge, an alarming situation has arises where neither Ministry of Food & research nor Ministry of finance is willing to issue notification for newly announced subsidy on Fertilizer. Previously announced subsidy is going to complete its period by 30th June 2017. With delay in further notification from concern Ministry will result in withdrawal of subsidy amount of Rs. 156. Fertilizer prices in Pakistan remained highest in the region, despite the subsidy programme – a costly and tedious exercise for the government and the fertilizer industry.
It is important to note that, This time of the year is considered to be the peak season to best utilize Fertilizer to increase the yield. Due to the price increase, farmers will be reluctant to buy urea. This whole scenario reflects weak planning by the ‘Finance Ministry’ and poor performance by the ‘Ministry of National Food Security & Research’ (MNFS&R), which are having a conflict of ownership and cannot devise a simple, fast and effective process for verifying the subsidy-claims, submitted by the fertilizer companies. This led to long delays in payments, creating major financial challenges for the fertilizer producers and importers.
Under these circumstances, the Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC) had also approached the relevant Ministry and concern department with viable Proposal to effectively launch newly announced subsidy by avoiding mismanagement happened in previous scheme. The aim is to support the Government initiative and provide relief to already suppressed farmer community of Pakistan. If Government failed to work out any feasible plan for this scheme it will prove to be a disaster for Farmer community besides providing any relief to them. It is advisable to take decisive actions for implementation of this scheme to take maximum advantage.
If Ministries are steering away from it now, how can the Fertilizer producers be expected to take ownership of this scheme. The government must quickly find a way to take ownership of this scheme and promptly issue notification to avoid surge in urea prices locally. Thus, the wellbeing of the deprived farmer can be ensured.