LAHORE, June 13: The Farmers Associates of Pakistan has rejected new cotton policy announced by the federal commerce minister on Wednesday terming it “irrelevant to new realities”.

FAP chairman Shah Mahmood Qureshi told newsmen after the general body meeting on Thursday that an increase of Rs20 in support price was a joke with farmers given the raise in cost of agriculture inputs after the general sales tax. The increase from Rs780 to Rs800 per maund did not cover even a fraction of their increased expenditure, he said.

He lamented the fact that the commerce ministry was handling import and export of agriculture produce like cotton and wheat. “This process contains inherent contradiction; the ministry, by design, protects industrialists and this is being done at the cost of farmers. Precisely for reason, the government must take handling of these crops from the commerce ministry and hand it over to the agriculture ministry as the case world over. The ministry has lost farmers’ confidence due to its (mis)handling of the crops during the last three years. It must be shunted out of the process,” he said.

The government, he said, had recently negotiated a loan deal with the Asian Development Bank, but farmers had been kept in dark as far as its conditionalities were concerned. It was rumoured that all state corporations would be dissolved. But, he warned, the government must not act in haste in winding up the corporations like the Food Department and the Seed Corporation. It must create mechanism in the private sector before doing away with public facilities. Otherwise, agriculture economy and farmers would suffer irreparably and no one would be able to retrieve the situation.

Mr Qureshi took the occasion to list what he called growers’ demands before budget. The government must include all these steps in the next budget.

He disagreed with a reporter that it was too late for any proposal to be part of the budget as only two days were left before its announcement. “The governments keep changing budget document till very last moments. I know it for a fact as a former finance minister,” he claimed.

The government must not wind up state-owned enterprises without creating their alternatives in the private sector. The GST on inputs should also be postponed till such time agriculture came out of the present recession created by drought conditions and market failure of major crops.

The government should ensure that no cotton was imported before domestic produce was fully consumed. It could be done through duty imposition and other necessary measures. The free import had been creating a glut in the market and leading to price crash.

“Farm loans have been another crisis area for farmers. The growers need Rs260 billion every year, and banks provide only Rs60 billion and another Rs100 billion from informal sector. This still leaves a gap of Rs100 billion. For the purpose, the government should substantially enhance loan portfolio for farmers and reduce markup on them. Otherwise, the agriculture sector will not come out of the present crises,” he said.

He said the farmers from calamity-hit areas must be given a relief in loans besides other facilities. Fiscal incentives were also due for those gadgets improving water quality. Drought conditions had made it necessary for the government to encourage every sort of water saving efforts, he asserted.

All these steps were necessary because according to the government’s own assessments, poverty had increased in rural areas following the imposition of GST. Agriculture growth was stuck at 1.4 per cent after remaining in the negative for the last year. Budget, he demanded, must contain steps to lead agriculture out of its present stagnation.