ISLAMABAD: The Federal Committee on Agriculture (FCA) in a meeting on Thursday discussed the imposition of general sales tax (GST) and duties on agricultural inputs, terming these as key factors resulting in increasing the cost of production.
FCA discussed the duty structure on inputs and measures that would help the government in reducing duties on agricultural inputs.
Speaking to provincial agricultural ministers and key officials from the federal and provincial agricultural and related departments, the Federal Minister for National Food Security and Research Sikandar Hayat Khan Bosan, said the agricultural sector for the last few years has not been profitable for resource-poor farmers who are suffering from economic losses in almost all crops.
The cost of production of all crops has never been in favour of farmers and it has gone up sharply whereas the output prices remained very low, he said. The price of wheat is seemingly crucial at this stage of crop harvest, he added He said the government is trying its best to help the farmers by providing affordable inputs and is making efforts for better pricing of their produce to bridge the gap between cost of production and output prices.
“To ensure food security, we must enhance domestic agricultural production through increasing yield per acre. Generally, availability of food commodities in the country is satisfactory. However, affordability for the poor segments of society is a major issue,” Mr Bosan said.
He emphasised the agriculture sector requires ‘ownership’ from the provincial governments. The investment in agriculture has been declining in all provinces, he said.
He urged provinces to increase investment in the agriculture sector as a major share and assured the federal government would help to fill the gap.
The food ministry is striving to enhance productivity of the agriculture sector. The FCA should come up with strategic recommendations to help find solutions for problems farmers face due to lack of resources, he added.
As from the previous year when the historic ‘Kissan Package’ was announced by the prime minister on the recommendation of the ministry, this year a subsidy of Rs 27.96 billion has also been announced in fiscal year 2016-17 budget for reduction of the cost of production in agricultural sector. The subsidy included allocation of Rs17.16bn for urea and Rs10.80bn for diammonium phosphate and other fertilisers.
He informed that in addition, an export rebate on wheat has been provided since the last two years for creating physical and fiscal space for public sector food departments. The scheme of $120 per tonne of wheat and wheat products has ended on March 15 this year. For further extension of export of wheat, the matter is in process with the prime minister’s office, he said.
“Pakistan has rich production potentials in agriculture, livestock and fisheries sectors ,hence it will not face a menace of hunger. However, for sustainable economic growth and prosperity the development of these sectors and food security on long-term basis is of fundamental importance,” he said.
This calls for efficient use of production resources by adopting modern technologies and establishing a realistic marketing system, well-linked with domestic and international markets.
Published in Dawn, April 21st, 2017