ISLAMABAD: The government is likely to remove General Sales Tax (GST) on seeds aimed at minimizing cost of production as no such tax is levied on seeds in any part of the world.
This issue was raised at a meeting with farmers presided by President Dr Arif Alvi on February 22, 2022 at Governor House, Lahore. However, Record Note of the meeting has been shared by the President Secretariat (Public) with the Chief Secretaries of provinces and Secretaries of concerned Federal Ministries on March 11, 2022.
During the meeting, President was informed that imposition of GST on seeds escalates the cost of production. Mostly, seed business is amongst the farmers and there is no concept of registered persons.
Farmers also raised the issue of higher electricity rates, which according to them should be farmers’ friendly. The meeting was informed that in the first year of present government, it was Rs 5.35 per unit which has now been increased and farmers are receiving electricity bills with Fuel Charges Adjustment (FCA). Farmers argue that rates should be kept unchanged for farmers. The meeting decided that Ministry of National Food Security and Research (MoNFS&R) will take up the issue of removal of GST on seed with FBR and electricity with Ministry of Energy (Power Division). The meeting also discussed wheat support price and its smuggling due to Russia and Ukraine. Farmers feared that there is possibility of smuggling of wheat as local prices are lower than international price. It was decided that Ministry of Interior and Federal Board of Revenue (FBR) will take measures to control wheat smuggling.
Access to ‘quality seeds’ will be hamstrung by 17pc ST: PHHSA
According to the record note, the meeting was apprised that international prices of fertilizers are increasing and there can be issue of supply of fertilizers during Kharif season and next year urea demand would go up by 7 million tons. Some farmers argued that urea is available but premium is being charged. It was decided that the buffer stock of urea would be maintained and provincial governments will take measures to discourage hoarding and higher prices being charged by dealers. The meeting also decided that smuggling of urea to be controlled by the M/o Interior and customs authorities.
The farmers took up the issue of potatoes and concerned ministries inaction with respect to export of potatoes. The meeting decided that Ministry of Commerce (MoC) will remove bottlenecks in exports of potatoes by quick identification of export markets. MoC would help exporters to identify markets as well as remove loopholes in export of potatoes.
The meeting felt that MoNFS&R needs to revitalize Research and Development (R&D) as presently, only 0.18 percent of GDP of agriculture is being spent on R&D. MNFS&R has been directed to increase investment in seed development to increase yields.
On the issue of fishery, farmers were of the view that it should be part of food security and 17 percent imposed on fish feed be removed as there is no GST on poultry feed. It was also noted that export of fish has strong potential. The meeting decided that fisheries should be extended treatment at par with agriculture as fisheries and agriculture require same ingredients i.e. land, DAP etc. The meeting directed MoC to take necessary measures to encourage export of fisheries.
The representatives of farmers were also of the view that there is no need of subsidy on pesticides. The meeting decided to withdraw subsidy on pesticides.
During discussion on the issue of water pilferage, it was stated that Punjab has been given allowance of 3 cubic/ 1000 per acre whereas Sindh has been given allowance of 10-12 cubic/1000 per acre. It was further stated that in Punjab, water is pumped with electric power tubewells, cost of which is too high. The meeting decided that MoNFS&R will resolve the issue.
The meeting was informed that SS-32 cotton seed is not being approved by the Authorities despite the fact it was harvested on 60 percent areas. The meeting directed MoNFS&R to resolve the issue of seed registration.
Copyright Business Recorder, 2022
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