Subsidy mechanism for DAP in the offing

Published February 9, 2022
Minister for Industries and Production Makhdum Khusro Bakhtyar chairs the fertiliser review meeting on Tuesday. — PID
Minister for Industries and Production Makhdum Khusro Bakhtyar chairs the fertiliser review meeting on Tuesday. — PID

ISLAMABAD: The federal government on Tuesday decided to devise a subsidy mechanism for the provision of cheap di-ammonium phosphate (DAP) fertiliser to farmers ahead of the Kharif season. However, the plan will only materialise if the approval is granted by the Ministry of Finance.

The decision was taken at a high-level fertiliser review meeting, chaired by the Minister for Industries and Production Makhdum Khusro Bakhtyar. Minister for National Food Security & Research Syed Fakhar Imam joined the meeting via video link. The meeting discussed the availability and demand of DAP and its substitutes for the upcoming Kharif season.

The meeting was attended by the representatives of fertilisers manufacturing industry, importers and officials of provincial departments. The meeting was informed that DAP is primarily imported and Fauji Fertilizer Bin Qasim (FFBL) was its lone producer in the country which contributed to around 30 per cent of the total consumption.

The meeting was informed that the annual DAP consumption in country for both Rabi and Kharif seasons was up to 2.2 million tonnes as opposed around 6.10m tonnes for urea.

On the occasion, fertiliser manufacturers said that due to high prices, DAP offtake witnessed 17.7pc decline compared to urea sales in the outgoing Rabi season.

The meeting noted that the current rate of 20kg DAP bag was hovering around Rs9,000. Mr Bakhtyar and Mr Imam expressed concerns over the frequent fluctuations in DAP prices.

However, the representatives of the fertiliser industry told the meeting that key ingredients used for DAP production – phosphoric acid and ammonia – were expensive in global market which led to the high cost of production in the country. The representatives further said that the DAP rates were also high in international markets.

Addressing the meeting Mr Bakhtyar said the Ministry of Industries & Production and the Ministry of National Food Security & Research have to chalk out subsidy mechanism for the provisions of cheap DAP to farmers. “The incumbent government is committed to the welfare of farmers and would take all efforts to ensure that the farmers do not face the brunt of price increase,” he added.

The meeting was informed that the Punjab government was already providing Rs1,000, subsidy on each DAP bag through the “Kissan Card” scheme.

It was decided that the guidelines for subsidy framework will be discussed in the next committee meeting.

Published in Dawn, February 9th, 2022

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