THE tax relief and incentives announced by the federal government in the budget for 2018-19 have failed to find buyers in the agriculture sector, as stakeholders term the measures too few and vague. Most players in the sector do not like the step of devolving the issue of deciding subsidy regimes to provinces and also doubt sincerity of the government for the cause of agriculture.

Farmers, the main stakeholders, are also not satisfied with the relief package announced in the budget. The say this is not what the government promised during recent meetings with the authorities concerned.

“Prime Minister Shahid Khaqan Abbasi, his adviser [now finance minister] Miftah Ismail and National Food Security and Research Minister Sikandar Bosan did not keep their promise made in the April 12 meeting of introducing zero regime for farm inputs for reducing cost of production and bringing it on a par with neighbouring India,” claims Pakistan Kisan Ittehad Chief Khalid Mahmood Khokhar.

“The government did introduce uniform and reduced sales tax rate for all fertilisers on our demand, but we are afraid what kept it from not announcing a flat tariff rate of Rs4 per unit for agriculture tubewells and minimum support prices of at least four major crops,” he laments.

Some doubt the sincerity of the government in announcing the budget early. “We have apprehensions about the earnestness of the government, whose tenure is going to end in just one month,” says Ibadur Rehman of the Farmers Associates Pakistan. “What if the incoming government is formed by PML-N’s rivals? The situation will remain volatile and none of the stakeholders will be ready to take a serious step.”

There is a general complaint that the government fails in ensuring that benefits of its measures reach the target community. Some argue that seed, pesticide, fertiliser and other farm input companies recover money from farmers whenever the government imposes taxes, but they do not return the benefit when the taxes are reduced or abolished altogether.

Mr Rehman recalls that the government halved sales tax on pesticides a couple of years ago, but the benefits did not trickle down to farmers because the companies dealing in the business either maintained or increased prices on various excuses.

Some agriculturists also believe that rising per-acre cost of production and lower commodity prices have made farming unviable. They say Economic Survey 2017-18 wrongly links 3.8pc growth in the farm sector with better commodity prices, which were never encouraging for farmers. “We sold our sugar cane for lower prices this season owing to exploitation by sugar millers,” says Rizwanullah, provincial president of the Kissan Board Pakistan’s Khyber Pakhtunkhwa chapter.

Sindh Abadgar Board Vice President Mahmood Nawaz Shah also contests the government view that commodities prices remained adequate during the previous fiscal year.

Mr Shah appreciates 2pc duty on fertilisers which he says is in line with Sindh farmers’ demands. But he is sceptical about the announcement of Rs5bn allocation for agriculture fund and another Rs5bn for agriculture technology. “Unless backed by a proper mechanism, it is just an announcement,” he says.

Furthermore, the government’s initiative of increasing agriculture credit disbursement to Rs1.1 trillion has also failed to impress growers, who allege that the disbursement procedure remains cumbersome.

Naseer Shahwani, general secretary of Balochistan’s Zamindar Action Committee, points out that the province does not feature anywhere in credit disbursement and hardly 40 to 50 such cases can be found across Balochistan. He adds that credit availability can help overcome the cost of production of farmers to some extent.

He observes that Finance Minister Miftah Ismail did not make any announcement for converting 30,000 tube wells to solar energy in Balochistan despite commitment by former prime minister Nawaz Sharif and incumbent premier Shahid Khaqan Abbasi.

Mr Shahwani also blames the federal government for not harnessing the potential of Balochistan’s horticulture sector despite the fact that the province has been seeking to import new seed varieties of grapes or pomegranate and their cultivation on a trial basis to encourage an average grower.

Published in Dawn, The Business and Finance Weekly, April 30th, 2018