ISLAMABAD: The government on Friday announced new measures in the federal budget for 2017-18 to boost the agriculture sector.

Finance Minister Ishaq Dar announced in his budget speech that all schemes and initiatives announced under the Prime Minister’s ‘Kissan Package’ in 2015 would continue during 2017-18. As a result of these measures, a stagnant agriculture sector has grown by 3.46 per cent.

Credit

Under the new measures, the volume of agriculture credit is being enhanced to Rs1,001 billion from the last year’s target of Rs700bn, showing an increase of 43pc. This target matches the federal development budget of Rs1,001bn.

As many as two million small loans of up to Rs50,000 per farmer will be provided by the Zarai Taraqiati Bank and National Bank, while the State Bank will monitor the implementation of the new scheme.

From July 1, the ZTBL and the NBP will launch the new scheme for farmers with holdings of up to 12.5 acres who will be provided agricultural loans at a reduced mark-up rate of 9.9pc per annum. The rates currently charged range between 14 and 15pc.

Fertilisers

In order to create ease of disbursement of subsidy on DAP (diammonium phosphate) fertiliser, the government decided that it would be subject to fixed sales tax. As a result, general sales tax (GST) was reduced from Rs400 to Rs100 and this measure will have a subsidy impact of Rs13.8bn.

The government has already decided to sell the existing stock of imported urea fertiliser available with the NFML at a concessional Rs1,000 per bag.

Through the reduction in tax rates and subsidy, the price per bag of urea will be maintained up to Rs1,400, with a subsidy impact of Rs11.6bn.

The prices of NP, NPK, SSP and CAN fertilisers will also be maintained at their current levels through tax adjustments.

Machinery

To encourage the import of new machines, the government decided not to charge customs duty and sales tax for five years on up to five-year-old combined harvester machinery. There has been a growing trend of using combined harvesters, but those currently being imported are 20 to 30 years old. As a result, the harvesting losses can be as high as 10pc.

Imported and local agricultural diesel engines of three to 36 horsepower for tubewells were exempted from the 17pc sales tax.

GST on seeds

The government decided to remove GST on imported sunflower and canola hybrid seeds.

Poultry machinery

It decided to reduce sales tax on certain imported machinery and equipment for the poultry sector from 17 to 7pc.

Welfare schemes

Beneficiary families of the Benazir Income Support Programme willing to launch their own businesses will be provided training and a one-time cash grant of Rs50,000.

Initially, the grant will be provided to 250,000 families to help them graduate out of the scheme.

The poverty incidence in the country was previously measured under the food-energy intake methodology in which the headcount that was 34.7pc in 2002 that declined to 9.3pc in 2014.

It has now also adopted a new methodology based on the ‘cost-of-basic needs’ formula of the World Bank. Under this methodology, the poverty headcount was over 64pc in 2002 and has dropped to 29.5pc in 2014.

Off-grid soluions

In order to facilitate provision of electricity to remote areas and small towns where there are no transmission lines, the government, in partnership with the World Bank, will introduce solar-powered off-grid electricity systems for residents of sparsely populated areas with a special focus on Balochistan.

Published in Dawn, May 27th, 2017