May 6, 2005	Friday	Rabi-ul-Awwal 26, 1426

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LAHORE, May 5: Farmers have termed an official proposal to cut subsidy on urea fertilizer and divert funds to subsidize the import of di-ammonium phosphate (DAP) a ‘wrong decision at a wrong time’. The Industries and Production, Food, Agriculture and Livestock ministries and some fertilizer firms have started a consultation on the issue, and will shortly be making a presentation to the prime minister on the subject.

Farmers claim that by doing so, the government will render the agriculture sector more non-competitive as far as the international market is concerned.

“The government needs to realize that DAP is mostly used in Rabi season,” says Ibrahim Mughal of the Pakistan Kisan Board. Its consumption is around 250 million bags a year. Whereas, the urea consumption is over 850 million bags. “If the government wants to increase the urea price and thinks that it will keep the agriculture profitable, one can only lament this kind of thinking,” he claims.

During Kharif season, urea is needed for 7.5 million acres of cotton, five million acres of rice and 2.5 million acres of sugar cane. Any increase in its price will hit all three crops, he says.

According to an official of the Farmers Associates Pakistan, the government is importing vegetables and fruits from India. It must realize that Indian agriculture produce is competitive in the world market because of cheap inputs.

The officials in Pakistan have failed to realize this simple and basic fact. The import mafia in Pakistan has minted money on each order and rendered the country totally dependable on imports, he laments. “Pakistan, a country with a massive agriculture base, is now importing almost everything; wheat, sugar and now fruits and vegetables. The government officials need to realize their policy mistakes and the cost that the nation is paying for policy preferences of a few,” he says.

The official explanation that subsidizing DAP import and increasing the urea price will encourage the balanced use of fertilizer is a contradictory argument, says an official of the Agriculture Chamber. Any increase in the urea price will discourage its use as most of the farming community is struggling financially.

Any increase in the price will only take urea out of the reach of farmers. The government is also not correct in claiming subsidy on urea. All of its production is local, and there is no subsidy on it. Only imported quantity, which is hardly five per cent of the total consumption, is subsidized. The government, he says, is trying to hide behind a wrong argument.