Fertiliser fears

06 Jan 2020


THE world of agriculture looks bleak from the fertiliser’s point of view. Higher prices have impacted all crops, and farmers fear worse this year.

Their worries are not unfounded and are based on several calculable factors. The Oil and Gas Regulatory Authority has already recommended a 32 per cent increase in gas prices for the power-generation component of fertiliser manufacturers. The government has yet to decide the price of feed gas in view of distribution companies’ demand for almost 40pc additional revenue for this fiscal year. Moreover, the controversial Gas Infrastructure Development Cess is still being collected, and the rupee’s future stays uncertain, keeping imported fertiliser prices a matter of pure guesswork.

Ibrahim Mughal of the Agri Forum Pakistan sums up these fears: “In the past 18 months, fertiliser prices have gone up by around 40pc on average, adding well over Rs200 billion to the cost of production. It caused a decline in application and almost all crops missed their yield targets.” If prices rise again, it would be unbearable for nearly two-thirds of Pakistan’s people whose lives depend on agriculture, and many would go further down the poverty line, he says.

Jawed Qureshi of Four Brothers Group explains: “Unfortunately, there has been no effort or policymaking (on part of the government) to develop or diversify crops. At the end of the day, only better yields can help recover the cost of production. But, unfortunately, yields have been stagnant for years now, rigging the cost-recovery equation against farmers.”

Published in Dawn, The Business and Finance Weekly, January 6th, 2020