May 26, 2006	Friday	Rabi-us-Sani 27, 1427

ISLAMABAD, May 25: The ministry of food, agriculture and livestock (Minfal) has proposed withdrawal of general sales tax (GST) on agricultural inputs and a 50 per cent rebate on electricity charges to farm tube-wells in the next federal budget.

The proposals were prepared by Minfal and the National Assembly Standing Committee on Food, Agriculture and Livestock in a meeting here on Thursday and would be forwarded to the ministry of finance.

Some members of the standing committee, however, objected that the meeting was not held on time and that it would be impossible for the ministry of finance to include the proposals of the belated meeting in the budget document.

MNA Dr Attaurehman said: “Some members of the standing committee, including myself, are not even aware of the agriculture sector issues. Then how can we come up with good proposals for the next budget.”

He said they had informed the authorities concerned to put them in another standing committee keeping in view their interest but they were still included in this committee which showed government’s attitude towards the agriculture sector.

The committee proposed that GST should be withdrawn because it was used by profiteers and middlemen as a tool to fleece farmers. This year, farmer paid 172 per cent GST on fertilisers and pesticides compared to the actual rate of 15 per cent and the additional money went to the middlemen.

It asked the government to make the Water and Power Development Authority (Wapda) announce 50 per cent rebate on electricity charges of farm tube-wells from April to October in cotton and wheat zones to compensate the farmers who were at present getting 20 per cent less water compared to last year.

The committee was of the view that indirect subsidies announced by the government for the agriculture sector never reached farmers. It said interest rate on farm loans should be reduced from the present nine per cent to the ratio of interest on industrial loans (four per cent).

Minfal also urged the government to extend the base of agricultural loans’ write-off to Rs500,000 principal amount. At present Zari Taraqqiati Bank Ltd (ZTBL) can write off loans up to Rs500,000 but not the principal amount and only the total amount, including interest.

“Agriculture is a vital sector and the government must deal it the way it deals with industries,” standing committee’s chairman MNA Syed Makhdoom Alam Anwar observed.

The chairman of the Pakistan Agricultural Research Council (PARC) informed the meeting that inadequate and inflexible funding was the main hurdle in the way of research in agriculture, food and livestock.

According to the existing budgetary rules of the finance ministry, 85 per cent of the funds of PARC went to the salaries of staff, while half of the remaining 15 per cent was spent on hiring of houses for employees.

A member of the finance ministry informed the meeting that after the recent three times increase in the salaries of the staff, 87 per cent of the allocated money of each and every department went to the salaries, while half of the remaining 13 per cent was consumed by hiring of houses for workers.

The committee asked the ministry of finance to amend its rules and follow the international formula of allocating at least 40 per cent for operational purposes (which also include research) and the remaining 60 per cent for research.