ECC okays PM’s Rs24bn package for farmers

Updated 30 Oct 2020

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In this file photo, a farmer in Multan spray pesticide in a field. — APP/File
In this file photo, a farmer in Multan spray pesticide in a field. — APP/File

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet approved Prime Minister’s Rs24 billion Package to reduce input cost for farmers for the upcoming rabi season, with the intent of increasing wheat production.

The approval came at a time when farmers were working on sowing rabi crops and the government’s timely intervention is estimated to enhance crop production.

The PM’s package, which focuses on five areas, was prepared by the Ministry of National Food Security and Research (MNFSR). Finance Adviser Dr Hafeez Shaikh chaired the ECC meeting which approved the package.

The first component of the package was minimum support price for wheat which was recommended at Rs1,600 per 40kg from Rs1,400. The cabinet in its last meeting did not approve the recommendation of the ECC and sought a comprehensive package from the MNFSR.

Approves Rs1,000 per 50kg bag subsidy on fertilisers

In order to incentivise farmers for the upcoming rabi season, the federal cabinet in its meeting held on Oct 27 constituted a special committee to design the package to reduce the input cost for farming and increase wheat production.

According to the package, the government will now give Rs1,000 per 50 kg bag as subsidy on fertilisers – DAP, phosphate and potassium fertilisers. The total amount allocated for this subsidy is Rs20bn. The federal and provincial governments will share the subsidy in 70pc and 30pc ratio.

Wheat is cultivated on 21.77 million acres across the country. Of these, the total irrigated area through canals is 18.6m acres, while the remaining is barani.

On weedicides, the government will give a subsidy amount of Rs250 per acre. The total amount allocated for this is Rs2.4bn. The targeted area for this subsidy will be 9.30m acre irrigated area of wheat which is 50pc of the total irrigated areas.

At the same time, the government will give a subsidy amount of Rs150 per acre on fungicides. The targeted area is 50pc of the irrigated area of wheat and an amount of Rs1.4bn is allocated for the subsidy. On weedicides and fungicides, the total subsidy amount will be given by the federal government.

The ECC also discussed an extra water plan for Punjab details of which will be sorted out by the provincial irrigation department.

The provinces will distribute the subsidy in their already prevalent manner but will be responsible for ensuring transparency. The federal funds for the subsidy will be directly disbursed to the provinces by the Finance Division on the basis of their share, keeping in view their system strength and overall outreach.

The MNFSR would examine the provinces’ demand for funds and after its recommendation the Finance Division will transfer the funds to the provinces. It was also decided that the provinces will expand, improve and upgrade their subsidy disbursement systems. The package will be presented in the next Cabinet meeting on November 3 for approval.

The prime minister package is focused on wheat to allow farmers to use maximum fertilisers for better output and encourage more wheat sowing.

Published in Dawn, October 30th, 2020