ISLAMABAD, April 6: The federal government is expected to announce an agricultural package any time soon including flat power rates for tubewells to reduce input costs so that the local produce becomes competitive in the international market.

A senior official of the Agricultural Prices Commission told Dawn that the package would contain many incentives for the farmers’ community, prominent among them being introduction of flat electricity rates for agricultural tubewells and a Green Diesel Scheme.

The proposal has been submitted to the prime minister for approval, the official said. The diesel scheme envisaged supply of highly purified diesel to farmers at lower rates, mainly by reducing taxation on agricultural diesel, he added.

This diesel would be made available in special green gallons meant only for farmers.

Apcom believes that the agricultural sector has become uncompetitive because there have been no coordinated policies for this sector. The result is it could not contribute more than 25 per cent to the national GDP despite Pakistan being an agricultural country.

The cost of production has constantly been increasing over the last 53 years. As a result, small farmers were either giving up farm sector or shifting to cities for seeking employment.

The commission is of the view that on-farm activities are declining by the day.

The sources said the government could consider subsidizing directly the agricultural sector like neighbouring countries but that avenue stood closed due to the various agreements it entered into with the International Monetary Fund and the World Bank.

It was also noted that if Pakistan subsidized the farm sector, other competitors could also follow suit that would render such subsidies ineffective.

It was thus proposed that low-priced diesel should be introduced through reduced taxation than is applicable on commercial diesel, the way the European countries were doing currently.