LAHORE, June 23: The Farmers Associates Pakistan on Wednesday welcomed lining of 87,000 watercourses in the next four years at the cost of Rs21 billion.

At a meeting of the Central Executive Committee held to discuss the budget for 2004-05, the FAP noted that though lining was a good process, it could not be taken as a substitute for additional water storage which the country required desperately.

The meeting noted that the government had, so for, failed to develop a consensus to build more dams, and performance of the parliamentary committee on water had been disappointing in this regard.

The house demanded that watercourses should be cemented completely instead of their partial upgradation and the project be expedited. Moreover, the government should recover 20 per cent cost of the watercourses' development from farmers as arrears of abiana in three years as farmers were unable to contribute their share in a lumpsum.

The FAP also maintained that reduction in duty on import of tractors and agriculture implements was not a significant step for small farmers. However, the decision to encourage new entrants in the industry would help in stabilization of the tractor production and prices.

The FAP had been saying for many years that the markup rate on agriculture credit was unviable hence reduction in markup by the Zarai Taraqiati Bank Limited from 14.2 per cent to eight per cent was a relief measure. However, it was still not in line with four to five per cent markup being charged from the industrial sector despite the fact that contribution of agriculture to the GDP was higher than industry.

The meeting also appreciated the withdrawal of powers of ZTBL's officials to arrest defaulters. The FAP urged the government to exclude all agro-industrial loans from the agri-credit portfolio to actualize disbursement of agri-credit funds to farmers instead of industrialists.

It also said Rs210 billion were needed as credit for the agri sector which should be met by the banks and the government. The meeting maintained that a decrease of Rs100 per DAP bag would hardly make a difference as the price of DAP, being an imported product, would depend on international market forces.

The government had given a five per cent relief in the withholding tax which was a relaxation in time of payment and not waiver of the tax itself. The FAP feels that prices of all other fertilizers, including urea, should have been reduced to lower the cost of production.