Cabinet notices misusing fertilizer subsidy

Aftab Ahmed

Islamabad: The cabinet members have accused the fertilizer manufacturers of misuse of subsidy by denying passing on the subsidy’s impact on the poor farmers and demanding to check it.

The fertilizer industry was given gas at discounted rates, but they pocketed billions from the poor farmers by charging higher fertilizer rates.

Even they have pocketed billions of rupees from the poor farmers on account of Gas Infrastructure Development Cess (GIDC). They charge this tax from the poor farmers, but they did not pass it on to the consumers.

The new fertilizer plants owned by Fatima and Engro were being given gas at the lowest rates. Still, they were charging the same fertilizer price from the poor farmers like those fertilizer plants who were getting gas at higher rates than them.

These two fertilizer power plants did not even book GIDC and distributed the money collected on account of GIDC to their shareholders.

In a recent meeting, cabinet members said that the misuse of subsidy had been observed in fertilizer where the industry was the actual beneficiary as it did not pass on the benefits to farmers. They said that misuse of subsidy should be checked. Similarly, the abuse of subsidy on tube-wells in Balochistan also needed rectification.

The issue of subsidies to the agriculture sector under the prime Minister’s fiscal package was also discussed at length.

Some of the members thought that the subsidy as a relief package should target the small farmers. While an opposing view gave was that the rationale behind agriculture subsidies was not poverty alleviation for other social safety programs but to enhance agriculture productivity.

An across-the-board subsidy irrespective of landholding was therefore in line with the objective.

However, misuse of subsidy, which had been observed in fertilizer where the industry was the actual beneficiary as it did not pass the farmers’ benefit, should be checked. Similarly, the abuse of subsidy on tube-wells in Balochistan also needed rectification.