The ruling coalition seems to have attempted to address some of the core issues in the agriculture sector amidst the government’s finance wizard’s claim of bringing about a revolution in agriculture. The budget, which was being billed as a populist budget ahead of general elections slated for the Oct-Nov period, on the face of it, has not evoked much criticism among Sindh’s agriculturists.
Finance Minister Ishaq Dar has put the subsidy portfolio at Rs1.07 trillion, of which the agriculture sector would also be getting its share as the sector had to bear damages of a colossal Rs800bn in the 2022 floods as per Economic Survey of Pakistan.
Sindh was worst hit in terms of flood-related damages in terms of infrastructure and standing summer crops of cotton and rice.
“To me, a realisation is evident on the part of the government to fix the agriculture sector’s economy when the country is struggling to have a stable economy,” stressed Mahmood Nawaz Shah, a progressive grower who also engages in training of government officers on economic issues in national institutions.
‘Punjab gets 100pc credit facility while Sindh gets only 57pc of it’
He was appreciative of the understanding shown by the government to incentivise a couple of things, including subsidies and exemption of duties on solar panels, combined harvesters, value-added industry, five years tax waiver in duties for agro-based industrial units with Rs800m turnover and food processing units (veggies and fruits sectors).
According to him, initiatives announced in the budget must be sustainable and continue to set a direction. Still, he found fault with the government’s much-trumpeted announcement of the Rs2tr Kissan package, as reflected in Mr Dar’s speech.
“The Public Sector Development Programme hovers around Rs950bn, so where this Rs2tr going to come from?” he wonders while underscoring the need for parity-based utilisation of agriculture credit among provinces after it was raised from Rs1.8tr to Rs2.25tr.
“One province should not get a major chunk of farm credit while the smaller provinces keep applying for it,” remarked Mr Shah, Sindh Abadgar Board’s vice president.
Sindh Chamber of Agriculture vice president Nabi Bux Sathio echoed the same concerns on farm credit utilisation. “Punjab gets 100pc credit facility while we in Sindh get only 57pc of it. This disparity must end,” he said.
Welcoming agriculture-related incentives, the federal government subsidises the solarisation of 50,000 tube wells with a Rs30bn allocation instead of a 50-50 sharing formula with provinces. He said that a duty waiver had been given on combined harvesters, dryers, seeders and rice planters to increase rice production. These implements were used by 2pc-3pc growers alone, whereas the Belarus tractor, each costing Rs6m, was used by 80pc growers, yet it wasn’t incentivised.
“It happened in the Rs342bn package by Nawaz Sharif when Sindh didn’t participate in subsidy sharing, the incentives didn’t benefit Sindh,” he said.
He criticised that instead of withdrawing duties on imported seeds, local seed production should be backed by research and development allocations to lessen reliance on imported hybrid varieties.
Similarly, he pointed out Rs6bn was allocated as a subsidy for importing urea. The same should have been utilised for local urea production of 6m tonnes which was more than the local requirement of 4-5m tonnes.
Published in Dawn, The Business and Finance Weekly, June 12th, 2023
