Artificial shortage of fertiliser

Published February 16, 2009

SHORTAGE of fertiliser because of hoarding and smuggling to Afghanistan, is expected to hit wheat production in North West Frontier Province, officials and farmers said.

NWFP is a food-deficient province. This year more areas have been brought under wheat cultivation after increase in its support price by the federal government.

Official statistics indicate that the area under wheat crop has gone up from 747,365 hectares to 751,581 hectares against the target of 748,000 hectares for the current year. Peshawar, Charsadda, Swabi, Mardan and Nowshera are the major wheat-growing areas of the province. The annual production target for this year has been set at 1.221 million tons. Last year it was 1.01 million tons.

It is generally believed that achieving the wheat target is next to impossible in the prevailing circumstances in NWFP, particularly because of fertiliser shortage despite official subsidy of Rs530 per bag.

Murad Ali Khan, provincial president of the Kissan Board, holds the government responsible for the fertiliser shortage. He says the government failed to pass on the benefit of subsidy to poor farmers, which will result in decline in per hectare yield of wheat.

According to official estimates, the requirement of urea per annum is 5.4 million tons. Domestic production of fertiliser is 4.8 million tons, which shows a deficit of 0.6 million tons which the government is trying to meet through imports.

The federal government has fixed a quota for provinces in the procured fertiliser based on the area under wheat cultivation for the coming Rabi season. As per quota, the share of Punjab and Sindh, the main wheat producing provinces, is 60 and 35 per cent respectively, while the share of NWFP is four per cent and the rest one per cent is for Balochistan.

Despite the fact the demand for urea for Rabi season is 3.6 million tons and the market has been pumped with over 3.8 million tons, the country, particularly NWFP, is facing acute shortage of the commodity, which is going to adversely affect the per hectare yield.

The NWFP Agriculture Department forecasts that average per hectare yield would be 1,632.35 kg in the current season, but farmers negate it on account of shortage of urea.

”The yield per hectare will drop by 40 per cent in the current season because the farmers are unable to apply fertiliser to their crops well on time,” says Mr Khan.

He says this time a large number of farmers had opted for wheat avoiding other cash crops to get a better return.

At the sowing time, farmers were unable to find Diammonium Phosphate (DAP) and now it’s the turn of urea and the commodity is nowhere, he says.

The federal government is using Utility Stores Corporation (USC) outlets for distribution of subsidised urea in different wheat-growing areas of NWFP. But, according to Mr Khan, these outlets are not supplying urea either on the pretext of lack of stocks or providing farmers less than their requirement.

The fertiliser, he says, has become a rare commodity in open market and wherever available it is being sold at an exorbitant rate of Rs1,100 per bag against the official price Rs670 per bag. The purchase of even one bag of urea requires recommendation of either a member of the National or provincial assembly, he says.

When contacted, Mehtab Binori, a Peshawar-based manager of USC, rejected the involvement of elected representatives in the distribution of subsidised urea at the USC outlets.

He says urea is sold at the USC outlets in the presence of representatives of agriculture department and district administration after verifying the identity cards of the buyers. He claims that urea distribution is made in a transparent way and there is no possibility of its pilferage or hoarding.

Sources in the market, however, say hoarding of urea is being done in an organised manner, and influential groups are involved in this business. This is creating artificial shortage.

The price of urea in Afghanistan is higher than what it is in Pakistan, resulting in smuggling. Market sources say prices of urea in Afghanistan range between Rs1200-1500 per bag against local market rate of Rs670 per bag.

Since Pakistan shares a porous boarder with Afghanistan, there are many points that facilitate illicit trade on both sides. Mohmand and South Waziristan tribal areas are the major routes for smuggling.

To counter smuggling, the district administrations of Charsadda and Tank, the two districts sharing boundaries with tribal regions, have imposed section 144 on movement of fertiliser besides conducting a number of raids on warehouses. But the availability is still a matter of concern to the farmers.

Mr Khan believes that smuggling can be stopped only, when the government will feed the open market with the subsidised fertiliser instead of making it available at specified outlets.

Some others in official circles believe that the issue can be tackled by rationalising the prices.

”The government should increase the price of urea from Rs670 per bag to Rs1,000 per bag, making it in line with the prices in Afghanistan,” says an official at the NWFP Agriculture Department, adding: “This will eliminate the role of middlemen, who are getting urea at the rate of Rs670 per bag and selling it to farmers between Rs1000-1100 per bag in the open market.”

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