Islamabad, the May 22nd, 2019:  The Speaker National Assembly Mr. Asad Qaiser presided over 2nd meeting of a series of pre-budget discussions on budget proposals for agriculture development. The Speaker highlighted that Pakistan’s economic turnaround was contingent upon revitalization of agriculture and that incentives, concessions, reduced cost of production and enhanced farmers profitability should guide the budgetary decisions. He instructed the ministries concerned to extend maximum relief to the farmers. He was chairing a meeting regarding budget proposals for agriculture development here at Parliament House, Islamabad on Wednesday.

The meeting held was a continuation of a series of discussions on the recommendations of the Special Committee on Agricultural Products. The matters of minimum support price for major crops, access to credit, regulatory duties on import, production and distribution of biotechnology seeds, taxation on agriculture machinery, import duties on fertilizers and pesticides, and allocation for agriculture research came under discussion. The panel was comprehensively briefed by the officials from the Ministry of Finance, Commerce and National Food Security & Research respectively.

The members recommended that the regulatory import duty on cotton import may be restored to prevent the massive import and dumping of cotton, and to enable the farmers to receive international parity price. Syed Fakhar Imam argued that given the lack of any meaningful incentives particularly the indicative price, not only has Pakistan’s cotton production and land under cultivation being shrunken but also Pakistan continues to cede space to regional competitors. Advisor on Commerce Mr. Abdul Razzak Dawood submitted that the main reasons for failure to fetch international parity price was the quality of seeds, excessive use of pesticides, and contamination. Endorsing the Committee’s recommendation, the Minister for National Food Security and Research Sahibzada Mehboob Sultan remarked that revival of cotton as Pakistan’s strategic crop was not possible without an assured indicative price in line with the international parity price.   Advisor on Commerce assured the Committee that he will come out with a viable plan after consultation with Ministry of National Food Security and Research.

The Panel expressed serious reservations over the hike in price of fertilizers during the last two years and the subsequent profitability of fertilizer companies. The Speaker questioned as to how Pakistani farmers would compete with the regional competitors when the input cost continue to rise unabatedly in Pakistan and the competitors continue to dole out massive subsidies to the farmers. The Members strongly recommended the need for a stringent price regulation mechanism to control the price of agricultural inputs.  The Ministry of Finance opposed the proposal of the Ministry of National Food Security and Research to tax the supply of imported and locally manufactured tractors as doing so would jeopardize the thriving localization of tractors in Pakistan. On the matter of allocation of fund for agriculture research, Mr. Hammad Azhar remarked that the proposed recommendation should be integrated in the potential agriculture policy of the new government and further added that the multilateral donors and lending agencies would provide sufficient grants for uplifting agriculture research in Pakistan.

On the questions of subsidies and mark up rate on agricultural loans, the State Minister for Revenue Mr. Hammad Azhar remarked that given the limited fiscal space, the provincial government should share responsibility and make concessional allocations to banks for agricultural loans. The Committee also opposed the recommendation of the Ministry of National Food Security and Research to revise taxes on the import of skimmed milk powder (SMP) and whey powder on the grounds that this would raise the price of milk for the poor people in the country.

The Meeting was attended by the Minister for National Food Security and Research Sahibzada Mehboob Sultan, State Minister for Revenue Hamad Azher, Advisor to PM for Commerce, Industries Production & Investment Abdul Razzak Dawood, Asad Umar, Syed Fakhar Imam, Shandana Gulzar Khan, Sana Ullah Masti Khel, Malik Muhammad Ehsan Ullah Tiwana, Riaz Fatyana,  and Faizullah Kamoka.