LAHORE: Irked by the measures taken in the ‘mini-budget’, farmers say these are inconsistent with the government policy to promote agriculture exports and reduce imports.

The withdrawal of sales tax exemption for various crop seeds, agriculture inputs and farm implements will have far-reaching consequences for the already struggling farming community, raising their cost of cultivation by five to 10 per cent, says Pakistan Kissan Ittehad (PKI) president Khalid Mahmood Khokhar.

“It is concerning to note that 17pc taxes imposed on agriculture seed and machinery imports come at a time when the government is looking to promote oil seed crops through subsidies to lessen the burden on imports.”

Talking to reporters here on Monday, he says that the tax on cotton seed and its derivatives in particular will adversely impact cotton growers and allied industries.

The maize crop, he says, is a major contributor towards the growth of the poultry industry, with 70pc of grain going into poultry feed. The dairy industry is also highly dependent on the maize crop, with silage requirements increasing by the day.

In 2020-21, almost 130,000 tonnes of grain and 80,000 tonnes of silage were exported from Pakistan, he claims, fearing that with the imposition of sales tax on maize seed, the export competitiveness of the crop will face a major challenge and hurt the livelihoods of farmers.

Rice and vegetable seeds are also facing the same predicament as the additional tax will discourage farmers from adopting high-yielding hybrid seeds, resulting in overall productivity loss and food security concerns, he apprehends, urging the government to review its decision of withdrawing sales tax exemption on key agriculture inputs and provide relief to the farmers during these testing times.

He says the high taxation will increase the price of these commodities for the end consumers and subsequently add to food inflation.

Published in Dawn, January 4th, 2022

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