• Affected farmers won’t have to pay interest on bank loans
• Rs30bn subsidy on duties levied on urea import
• Import of used, low-cost tractors to be allowed
• 300,000 tubewells to be converted to solar power; per unit cost fixed at Rs13
ISLAMABAD: In a bid to provide relief to the flood-hit agriculture sector, Prime Minister Shehbaz Sharif on Monday announced the ‘Kissan Package’ to the tune of Rs1,800 billion encompassing at least 600 subsidies to boost the agri economy of the country.
The package announced by Mr Sharif at a press conference at the Prime Minister’s House also provides interest-free loans to farmers and youth, reduces the price of fertilisers and electricity, provides free seeds to flood-hit farmers, sanctions the import of used and low-cost tractors, and conversion of tube wells from electricity to solar power.
The prime minister also promised to fully implement this package to stabilise the flood-hit agri sector within six months.
The government allocated Rs10.6bn to bear mark-up on agricultural loans to be given to the farmers in the flood-hit areas. “Rs10.6 billion were allocated for small farmers across the country while Rs8 billion would be given to the small farmers in the flood-affected areas,” he added.
In rural areas, unemployed youth in the agriculture sector will be given loans to the tune of Rs50bn while Rs6.5bn will be given as a subsidy to waive off mark-up on these loans, the premier said, adding that it was for the first time youth of the rural areas were being given importance. He said these loans would be provided to the youth for agriculture projects so that they could contribute to the uplift of the agriculture sector.
The PM said the price of a 50 kg bag of DAP fertilizer was being reduced from Rs14,000 to Rs11,250 and the government would bear a subsidy of Rs58 billion in this regard. He said the prices of DAP were brought down after tough negotiations with the fertilizer sector to facilitate farmers.
PM Sharif said that for the first time in the country, Small and Medium Enterprises (SMEs) were being introduced in the agriculture sector and a subsidy worth Rs10 billion will be given on loans to be availed by the SMEs. “Landless farmers in the flood-affected areas would be given Rs5 billion and SMEs working in the agriculture sector would also be given loans of Rs10 billion for modernisation schemes,” he said.
Under the package, the government would encourage the import of low-cost tractors as well. Five-year-old tractors would be imported with a relaxation of 50 per cent in duties and the government would also encourage the entry of new tractor manufacturers by decreasing duty on completely knocked down units from 35 per cent to 15 per cent, the premier said.
In order to get maximum yield, 500,000 tons of urea was being imported (200,000 tons has already been received), the PM said, adding that a Rs30 billion subsidy will be given on the import duty.
PM Sharif said 1.2 million bags of certified seeds worth Rs13.20 billion would be distributed among the farmers and the federal and provincial governments would share the funds required for the distribution. In order to meet the local demand for wheat, at least 2.6 million tonnes of wheat was being imported, the premier said, adding that 1 million tonne of the grain has already been imported while 1.6 million tonne will be imported soon.
The government will also convert at least 300,000 electricity tube wells to solar energy, as currently, at least 1 million tube wells were being run on electricity, the premier said. Shehbaz Sharif added that the interest on loans to convert these installations will be borne by the government.
The package also fixed the price of electricity for the agriculture sector at Rs13 per unit and Rs43 billion has been allocated to support this initiative, the prime minister said. The prime minister recalled that the last government of Nawaz Sharif had also given financial support of Rs100 billion to small farmers in the country.
Talking about flood relief and rehabilitation efforts, the PM said financial assistance of Rs88 billion was already given to the flood-affected people, including Rs70 billion through the Benazir Income Support Programme while the remaining amount was given through the National Disaster Management Authority (NDMA).
Published in Dawn, November 1st, 2022
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