Subsidy system: Fertilizer makers concerned over procedural snags

Fertilizer manufacturers have voiced concern over the procedural issues in the disbursement of subsidy offered by the government, during a meeting of Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC). The meeting was chaired by Lieutenant General Shafqat Ahmad (Retd) MD FFC and Chairman FMPAC and attended by the CEOs of Engro, Fatima, Agritech and representatives of other member companies.
Members of the council expressed their concern over the procedural complexities in the existing fertilizer subsidy disbursement mechanism, resulting in stuck up of substantial amount, already passed on to farmers. The council also reviewed the last year's results that reflect negative trends due to higher costs of inputs. The council also discussed the export of 0.3 million tons of urea and appreciated the government decision which the council feels will not only reduce the surplus fertilizer inventory but also earn foreign exchange. However, it was pointed out that the export procedure of sugar cannot be replicated for urea due to different logistics and international markets. They suggested that the time and quantity approved for export also needs to be reviewed.
The council expressed the industry's resolve to extend full support to the government's initiative to provide fertilizer at affordable prices to improve farmers' economics and hoped that in 2017 the government will address genuine concerns of the industry and come forward with more imaginative ways for benefit of farmers and fertilizer industry which are the main contributors to the national economy.
Over Rs 27 billion had been allocated in the budget FY17for the fertilizer subsidy besides reduction of the GST on Fertilisers from 17 percent to 5 percent. The manufacturers also came forward in support of this positive initiative and voluntarily absorbed the costs by Rs 50 per urea bag. The Ministry of National Food Security after eight months has released around Rs 6.5 billion rupees against claims of over Rs 21 billion since July 2016, while similar amount was released in the beginning of the scheme.