LAHORE, April 17: The recent increase of Rs10 per bag in urea price will cost growers additional Rs1 billion, claims farmer bodies.
They said the increase was totally unjustified because there was no apparent increase in the cost of production. The main input was that of gas feed in case of urea, and its prices had been constant during the last three years.
They also bemoaned manufacturers policy of ‘go slow on production and go fast on profits’: the production has been constant for the last six years whereas prices have risen by 59 per cent. Their policy of keeping a permanent shortage in the market and reap windfall profits by increasing price was corollary of failure of governance, they said.
An agriculture expert, Ibrahim Mughal, said the gas price had almost been constant during the last three years, which was the main ingredient in case of urea fertiliser. The gas feed had been costing the manufacturers some Rs36.77 per MMBTU for the last three years. Similarly, gas for power production cost them Rs182.09 per MMBTU for the same number of years. This showed that there had been no major change in the cost of production. Then why was an increase, he wondered. This was a system failure. The government had been failing in almost every sector, be it cement, sugar, flour or horticulture, and farmers were made to pay the cost of this failure, he said.
Out of six million tons of fertiliser consumption in the country, 4.7 million tons was urea — 78 per cent of total consumption, he said. That showed how the urea price increase could hurt the farmers. An increase of Rs10 per bag could fetch manufacturer Rs1 billion as around 10 million bags were sold in the country. The prices of agriculture outputs were being kept constant, but the cost of inputs was skyrocketing every year. This had already hurt our agriculture beyond redemption and soon completely devastate it, he warned.
Farooq Bajwa of the Farmers Associates of Pakistan had his own statistics to prove how manufacturers were fleecing farmers. He said during 2000-01, manufacturers produced 2.289 million tons of nutrient urea and national consumption was 2.963 million tons, with a shortfall of 0.665 million tons. In the year 2001-02, the local production was 2.286 million tons and consumption 2.929 million tons — a shortfall of 0.643 million tons. Next year, the ratio was 2.315 million tons and 3.020 million tons and the gap widened to 0.705 million tons. In the year 2004-05, the gap widened further to 0.976 million tons — production 2.718 million tons and consumption 3.694 million tons. The pattern showed that all manufacturers were keeping production at a constant factor and making profits at the so-called demand-supply pressure.
Farmers were forced to consume more and more fertiliser because of deteriorating soil health, he said and added: “The manufacturers are busy increasing price because no one can question it. In the last five years, the urea price has gone up from Rs327 per bag to Rs510 — a phenomenal increase of 59 per cent. This is tantamount to fiscal slaughtering of farmers.”
Zafar Husain Khan, a farmer from Rahim Yar Khan, claimed that prices of agriculture outputs were crashing every season. The wheat price this season was a case in point. The price in southern Punjab was already sliding and hovering around Rs370 per 40kg against the officially declared price of Rs415. It was criminal in these circumstances to increase input prices while keeping a lid on output, he lamented.