KARACHI: The Fertiliser Manufacturers of Pakistan Advisory Council (FMPAC) said on Tuesday despite the directives of the Prime Minister’s Office to the Ministry of National Food Security and Research (MNFSR) almost a month ago, so far no headway has been made in the release of pending amounts.

In a statement, the council said billions of rupees in subsidy payments are stuck due to red tape and institutional lethargy.

On July 24, in a high-level meeting chaired by Secretary to PM, Fawad Hassan Fawad, it was directed that 80 per cent of the total subsidy claims would be immediately released and remaining 20pc would be paid within three months after third party validation.

The Finance Division has already released the requisite amount. However the payments are still pending with the official excuse being ‘non-availability of funds’, the statement added.

Similarly, for future subsidy mechanism, the government has included an unnecessary restrictive clause in the scheme where the National Tax Number (NTN) of every fertiliser dealer is required, the statement said.

This clause makes the scheme non-viable as it ignores the fact that majority (over 90pc) of smaller dealers are not registered with the taxation authorities and do not have NTNs, the association maintained.

“Moreover, the subsidy claims are based on sales tax which has no relationship with the NTN. Hence, such a step may ultimately hamper the distribution of urea denying the subsidy-benefits to the farmers,” the council statement added.

The ministry has still not issued the Terms of Reference (ToRs) about this external audit of the fertiliser industry, the statement said.

The FMPAC said that although the fertiliser industry is facing numerous cash-flow challenges created by more than Rs 20 billion of outstanding subsidies, urea prices are being kept lower.

Fertiliser producers are cooperating with the government by absorbing Rs106 per bag to keep the prices low, although, the government has promised to pay Rs100 per bag as subsidy.

Published in Dawn, August 30th, 2017