ISLAMABAD: As the country has surplus stocks of wheat, rice and other agricultural commodities, the government is likely to impose duty ranging from 15 to 30 per cent on the import of these products in the budget 2015-16.

The Ministry of National Food Security and Research (MNFSR) has proposed that 30pc duty should be levied on the import of wheat flour in order to discourage its import since the cropping pattern offers employment to a vast majority of farmers and labourers.

Already 1pc duty on the import of wheat flour was imposed this fiscal year.

The government is likely to review the rate of duty on the import of basmati rice which is second largest export of Pakistan. It has been proposed that duty should be increased from 10pc to 30pc in the next budget as import of basmati would counterfeit domestic production.

Similarly, it was proposed that duty on the import of broken rice should be enhanced from 10pc in 2014-15 to 30pc during the next fiscal year since rice is a cash crop and Pakistan earns foreign exchange on the export of rice.

In other policy measures, MNFSR proposed to enhance import duty on wheat starch from the existing 15pc to 25pc in next budget. Duty on the import of beet sugar has been recommended from 25pc to 30pc; white crystalline cane from 25pc to 30pc; and white crystalline beet sugar from 25pc to 30pc. The measure has been proposed since Pakistan has a huge sugar industry that offers sufficient white sugar and offers employment opportunities.

In the case of the import of skimmed milk powder, the ministry felt that the influx of skimmed milk powder and whey powder was hampering the development of dairy sector with no investment over the past three years, and has proposed to the government to impose 65pc duty on both these products in the coming budget.

The ministry observed that by raising duty, the government can attract further investment in the dairy sector, protect the small dairy farmers and to mitigate the use of synthetic milk and recipe products.

In the area of farm mechanisation, it has been proposed that the sales tax levied on locally-manufactured agricultural machinery since 2011-12 should be waived off to ensure availability of farm machinery to the farming community at affordable prices.

To encourage new entrants in agricultural tractors manufacturing, it has been proposed that the ‘Tariff Based System’ that replaced deletion programme may be rationalised and only those entrants should be allowed who are willing to establish Euro-II and Euro-III compliant tractors.

Published in Dawn, June 4th, 2015

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