THIS refers to the letter ‘Agriculture tax’ (June 11) in which the writer has suggested imposing an agriculture tax on land-holdings of over 12.5 acres to improve the existing tax net. This I found rather surprising because the Punjab government is already charging tax from every land-owner with a holding of more than 12 acres. And this has been happening since the days of the previous regime.

Moreover, the income tax being collected from the farmers is at the same rate as that from the industrialists. This is in addition to the land revenue and abiana which a farmer pays already. These laws were passed in the assembly in the presence of all the legislators, most of whom were agriculturists themselves.

Having said that, there is no harm doing some rational thinking in this regard. For some very sound reasons, there should, in fact, be no agriculture tax.

Most Pakistani farmers have very small land-holdings of a few acres only. They survive by keeping a few cattle and selling them or their milk, raring a few chickens, goats and sheep and selling them off whenever possible. A few farmers grow vegetables and sell them for a small amount. Now, let us calculate the farmer’s expenditure.

He has to pay for tilling his with a tractor, a rota-vator and and a laser leveller, and they cost Rs1,500 per acre each. He has to pay for expensive seeds — Rs4,000 per bag of paddy and Rs3,000 per bag of wheat – and for expensive fertilisers, weedicides and pesticides as well as for various micronutrients, like boron, zinc, etc. Then there is the cost for diesel or patrol for his farm machines and tubewells.

Besides, he has to pay another Rs2,000-2,500 per acre at the time of harvest for the harvester. Finally, he has to sell the produce rather quickly because of the lack of storage capacity, and this often compels him to sell at a low price.

In the last season, 386 rice paddy was sold at an average of Rs1,700 per maund, while the farmer was hoping for Rs2,000. Super Basmati, the best exportable rice in the world, was sold at Rs1,800 per maund when the farmer was expecting Rs2,500. Later, the prices did rise, but the hike was not beneficial to the farmer who had sold the produce already. The extra profit was raked in by the aarthi, the middleman. The farmer has to pay back most of his earnings to the shopkeepers from whom he buys the inputs on credit earlier in the season.

The government does not regulate the price of any produce except for wheat. The rest is all at the mercy of market forces that are almost always detrimental to the cause of the farmer.

A farmer, like everybody else, needs two meals per day, basic public utilities as well as education and healthcare facilities. He should be able to at least afford a motorcycle, and to have some savings for the education and marriage of his children. Is it too much to ask for?

The farmer should not pay any tax at all for the goods he is providing us. Instead, all his inputs should be subsidised.

The agriculture sector is the biggest foreign exchange earner for our country, but the majority of farmers fail to reap the benefits they deserve. Some of them do raise their voice to get their due rights, while others prefer to suffer silently.

Dr Masood Rashid

Lahore

Published in Dawn, June 22nd, 2021

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