LAHORE: The budgetary proposal of increasing sales tax on fertiliser has taken aback the farming community which was expecting that the government would take measures to cut down their cost of production.

“The hike proposed in the Finance Bill 2022 of enhancing sales tax from two to 10pc has shocked us as it is against the claims made in the budget speech by Finance Minister Miftah Ismael about giving priority to the agriculture sector to increase its production,” FPCCI standing committee on agriculture’s former chief Ahmad Jawad said here on Saturday.

He feared that the proposed levy would be passed on to the farming community by the compost manufacturers and fertiliser may become more expensive while it was already beyond the reach of small and medium farmers.

He urged the prime minister to strike down the proposed increase as fertiliser was one of the major farm inputs to increase yield and in his address in a pre-budget conference with the business community, Prime Minister Shehbaz Sharif had promised to take steps for increasing agriculture yield.

“We were expecting that the government may announce some concrete package in the budget for the facilitation of the horticulture industry to achieve the government’s set target of claiming a share for the country in the $200 billion global horticulture trade, but no such announcement has been made. Rather, sales tax and petroleum levy may add to the production cost and thus render the local farm produce uncompetitive in the world market,” he said.

He lamented that no relief package was given to cold chain development to prevent post-harvest losses, which were up to 40pc in case of fruits.

Mr Jawad expressed his dismay that on the one hand the government was distressed over rising inflation, but on the other it fell short of addressing the root cause of this alarming trend, which was pushing downward farm productivity because the growers were unable to use expensive farm inputs.

“Irrigation water is a big issue and is increasingly denting farm production but no strategy was mentioned in the budget to tackle it,” he said.

He hailed the prudent decision of withdrawing 17pc sale tax on all kinds of seeds and allocating Rs21 billion to enhance production of agriculture and livestock during the fiscal year 2022-23.

Published in Dawn, June 12th, 2022