THIS is with reference to the article ‘Fertiliser subsidy’ (Jan 2) which talked about the challenges surrounding the fertiliser subsidy system in Pakistan, particularly with regard to wheat cultivation. The call for a liberalised fertiliser import and export system is worth considering, given the potential benefits it entails for both farmers and the agricultural sector. However, gas availability as well as foreign exchange situation may constrain the ability to put it into action.

I have a rather different point of view regarding the current subsidy structure. It plays a crucial role in ensuring the availability of affordable fertilisers. Subsidies on gas enable fertiliser manufacturers to offer their products at affordable rates to farmers, contributing to agricultural productivity.

Moreover, the domestic prices of urea have always been substantially lower than those available in the international market, thus benefitting the farmers and the nation through import substitution.

Additionally, the issues of black marketing and inflated prices beyond the maximum retail price (MRP) are, indeed, concerning, and require immediate attention. It is reassuring to learn that the industry is providing daily sales details to district administrations, facilitating transparency and accountability. Add- ressing lapses in administration and enforcing stringent measures against malpractices can help maintain the integrity of the subsidy system.

The proposal for a direct fiscal transfer to small and medium farmers is a commendable idea for poverty alleviation, but not as a measure to support the agriculture sector as a whole. However, implementing such a system poses challenges in ensuring that the subsidies reach deserving beneficiaries without unintended consequences. Collaborative efforts among stakeholders, farmers, industry and government bodies can lead to a more efficient and equitable system.

Brig (retd) Sher Shah Malik
Executive Director
Fertiliser Manufacturers of Pakistan Advisory Council (FMPAC)
Islamabad

Published in Dawn, January 9th, 2024