Urea shortage to hit agriculture badly

Published January 20, 2003

The government’s decision to suspend gas supply to fertilizer factories could prove a recipe for disaster for the agriculture sector which is already down to negative productivity.

This is bound to affect the supply of urea that would be badly required for wheat, maize, sunflower and canola crops and cause diminished output if their fertilizer needs are not met on time.

Pakistan produced surplus wheat in the last two years but a reduced crop yield would mean using stocks for domestic consumption and, at worst, importing wheat for feeding the populace. The shortage of urea could thus put Pakistan back on the wheat import square.

A number of countries, particularly Australia and the US, that regularly produce wheat in excess of their needs would be happy to sell it to Pakistan or provide it at low interest loans to dispose off surplus crop.

The problems caused for the agriculture sector by the suspension of gas supply to fertilizer plants can be gauged from the fact that farmers across Pakistan would be requiring urea for 200 million acres of wheat, about 200,000 acres of canola and sunflower and 250,000 acres of maize.

Wheat would need two bags of urea per acre, canola and sunflower one bag and maize about one and a half bag in January-February when canal irrigation is restored. Fertilizer plants would not be able to supply this quantity due to suspension of production following non-availability of gas. The argument of the Federal Secretary, Petroleum and Natural Resources, justifying the decision, sounds unconvincing in view of his own admission that some towns “at the fag end are not receiving the full pressure of gas supply.” If a percentage of the populace is not receiving sufficient supply, why accord preferential treatment to the rest at the cost of jeopardizing the food sector’s productivity.

In any case, northern areas of Pakistan that are worst hit by winters and have a genuinely pressing case for gas supply are already deprived of the facility. Winter in other parts of Pakistan is far less severe than northern Pakistan.

Actually, the secretary contradicted himself in his recent press conference by stating that the usual demand increase during winters is three percent while it is four percent this year. A one percent increase does not make for what he called emergency situation. Still if gas shedding was to be undertaken, it should have been extended to the consumer sector instead of the productive sector. It is a case of luxury for the few and a costly deal for the nation because gas is used for heating by only a microscopic minority of citizens. Even if industries were to be subjected to gas shedding, fertilizers plants should have been the last on the governments list in view of their vital role for the country’s agriculture.

The fertilizer industry admittedly uses gas as raw material and is a major consumer. But its importance is not to be measured by a yardstick used for other sectors. There are industries whose loss would have been confined to their sphere while the fertilizer industry has wider and grim fallout.

It is also strange that on the one hand, the government should release an amount of Rs 300 million for boosting agriculture and on the other, adopt measure for stifling it.

While import of wheat is a possibility, the shortage of urea for crops is a certainty. That would have devastating repercussions for farmers as the shortage is bound to lead to black marketing of urea. The farmer’s inputs have already become costlier. This would add to their production expenses. Their misery would be cashed by unscrupulous elements.

Another rake-off possibility is import of urea. Some entrepreneurs may already have placed orders for its import but even they can’t ensure its timely arrival for crops.

Moreover, imported urea would be more expensive than locally produced stuff because of transportation charges. Urea is sold in Pakistan at a higher rate than the commodity’s international price. One bag of urea costs less than Rs 300 in India while it is priced at Rs. 420 in Pakistan. The government would be well advised to review the decision and ensure that fertilizer plants continue functioning. It shoudl also realize that shortage and import of area triggered a scandal not too far back in time and any black marketing or expensive import would emit a foul smell.