KARACHI: Manufacturers on Monday said that they will stop urea sales in case the government fails to issue fertiliser subsidy notification.

Earlier this month, manufacturers resumed urea sales after getting assurances by the Ministry of Finance as well as the Ministry of Food Security and Research that a notification will be issued within 10 days.

Fertiliser Manufacturers of Pakistan Advisory Council (FMPAC) in a statement said the government has not issued the notification so far.

“This apathy shown by the government may once again force the industry to stop the sale of urea.

“This crisis may even force the companies to refuse further participation in this important subsidy-programme,” the council said.

“Delay in issuing subsidy notification is causing anxiety among the manufacturers who are already running from pillar to post for release of subsidy pledged in the past,” the statement said.

The government had reduced the fertiliser subsidy to Rs 100 per bag from Rs 156 per bag. The council said the industry, however, has started passing subsidy impact to the farmers, instead of hiking the prices or stopping the sales.

The previous notification envisaged payments on the basis of GST returns submitted by the companies. However, the food ministry had added verification of sales by the provinces against the spirit of its own notification.

While the capacity of provinces was highly questionable, Khyber Pakhtu­nkhwa and Sindh did not display the will to support the initiative of the federal government. This led to highly sluggish processing of claims by food ministry which is not equipped to handle the subsidy disbursement in this complex manner.

In 2005 and 2008, the ministry had been making payments on the basis of audited financial statements of the companies. This time in spite of submitting indemnity bonds by the companies, the officials are not feeling confident to make payments because of unknown fears, notwithstanding their decision making capacity.

The council said this crisis has escalated because an unnecessarily complex verification procedure has been adopted for the payment of fertiliser subsidy. The backlog of unpaid and overdue subsidy amounts has now risen to over Rs 20 billion. The ministries of food security and finance both seem to disown the subsidy programme announced by the government, the council alleged.

Fertiliser makers urged the government to resolve this matter by relying primarily on GST returns submitted by the companies. Delay in notification would lead to a bigger agricultural crisis, the statement added.

Published in Dawn, July 25th, 2017