LAHORE, Feb 18: A recent statement by Federal Agriculture, Food and Livestock Minister Sikandar Hayat Bosan pledging the government’s resolve to continue subsidy on fertilisers drew a mixed response from farmers bodies here on Sunday.

According to them, the government’s decision only deserves a single cheer as it marginally benefits farmers. Two cheers can be spared till the time the government develops a mechanism to fully transfer the subsidy to farmers.

Regarding the statement pledging continuation of the Rs12 billion subsidy, they said one could only say that those getting the so-called subsidy were stronger than the decision-makers and were influencing every decision.

They said indirect subsidy, as being disbursed by the government to manufacturers, seldom reached the intended targets. At least that had been the pattern in Pakistan for the last many decades. Precisely for this reason, the farmers had been pleading for direct subsidy but the officials were avoiding for the reasons best known to them.

“Farmers have always been pleading for direct subsidy,” says Hamid Malhi of Basmati Growers Association.

He said the demand was not unjust if one went through the last year DAP sale pattern where the subsidy was `lost’ between the government and manufacturers, benefitting the farming community partially. “Instead of paying amount to manufacturers, it should have been spent on subsidising loans to farmers, “ he said

“Commercial banks and financial institutions advance some Rs120 billion credit to farmers. The government can cut interest rate by 10 per cent which will benefit the farmers much more than official subsidy. The government should avoid falling in the same trap again and let the farming community benefit directly,” Malhi said.

Before announcing the subsidy, the government had called a meeting of farmers and sought their opinion, said one of the participants of the meeting from Lahore.

He said the government claimed that it had checked stocks of manufacturers before transferring the subsidy amount. But it was transpired later that

stock positions were fake. The manufacturers had received the money, ordered fresh imports and sold the imported fertiliser at new rates on the pretext that the international prices had gone up. They did reduce the price but certainly not to the tune of official promise. Lack of administrative check on dealers only made the matters worse. They sold it at the price of their liking rather than the declared one, he said.

Ibrahim Mughal of Agri Forum said the government should try to develop a mechanism of disbursing subsidy to the entire satisfaction of farming community.

He said there had been glaring lapses in the distribution of the amount and price differential had not been as promised by the government.

“It did bring down the price of the DAP whose 20 million bags were sold at a cost of Rs3 billion. But, at the same, price of urea went up and cost the farmers an additional Rs4 billion. This dichotomy has been too obvious to be ignored by any one,” he said.

The government could subsidise price of wheat, sown by 80 per cent farmers in the country, said an official of the Kissan Board Pakistan (KBP).

It could easily calculate price differential, pass it directly on to the farming community. It could also evolve a mechanism for the rest of 20 per cent, he said.

“But the subsidy should be direct, avoiding procedural hiccups so that farmers could get maximum benefit out of it,” the KBP official said.