Govt urged to deregulate fertiliser sector

Published October 21, 2021
Engro Fertilisers CFO says if the feed gas subsidy to the fertiliser sector is abolished, the gas revenue would go up by around Rs89 billion. — Reuters/File
Engro Fertilisers CFO says if the feed gas subsidy to the fertiliser sector is abolished, the gas revenue would go up by around Rs89 billion. — Reuters/File

ISLAMABAD: The fertiliser industry has called upon the government for a complete deregulation of the sector without gas subsidies or any other benefits because urea manufacturers are internationally competitive and can operate without any government support.

It is, however, expected that deregulation would eventually enhance the cost of urea and other nutrients, hitting the agriculture sector and even increasing the cost of food produced in country.

“To mitigate this adverse outcome, the government should implement the smart subsidy mechanism for small farmers, with the help of already applied mechanism, including the ‘Kissan Card’, Imran Ahmed, CFO Engro Fertilisers, told media here on Wednesday.

He referred to the figures released by the Federal Bureau of Statistics that only 10 percent of people owned around 52pc of agricultural land across the country.

Mr Ahmed said that around 90pc of the farmers own around 48pc agricultural land, with a size of less than 12.5 acres.

“This implies that the majority of the government subsidies was going to the large land owners and not only that but the fertiliser sector is also facing business restrictions in the wake of this policy to keep the prices of urea low in the country,” he said.

He said the government was providing the industry a feed gas subsidy of Rs842 per bag, if the subsidy to the fertiliser sector was abolished, the gas revenue would go up by around Rs89 billion, and the total financial impact of providing targeted subsidy to the small farmers having less than 12.3 acres would be around Rs65bn.

Published in Dawn, October 21st, 2021

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