G2G Urea Import Deal Proposed

Staff Report

Parliamentarians on Friday suggested striking a government-to-government urea import deal to avail exemption from PPRA rules.

This will enable the speedy delivery of urea imports into the country to counter the local fertilizer mafia.

They further proposed that the government expedite the process of importing 0.2 million tons of urea to release into the market as an intervention measure to cut urea prices.

They said that the government should strike government-to-government deals with different countries to import urea, enabling the speedy import of urea. The Prime Minister has constituted an 18-member committee to review fertilizer supply chain and price issues.

The Prime Minister has tasked the committee to review supply chain issues in the fertilizer sector, including but not limited to malpractices by dealers, black-marketing, and smuggling, and to suggest measures to effectively control and curb these malpractices.Billions of Rupees Subsidy in Fertilizer – not Passed on to Farmers

In light of issues in the existing subsidy mechanism, the committee will suggest a foolproof mechanism for the provision of direct subsidies to farmers leveraging technology.

It will also assess the impact of gas price reforms on fertilizer pricing, the agriculture sector, and farm productivity/income, and suggest mitigating measures.

The committee will also identify legal, regulatory, and policy issues affecting the fertilizer sector and propose interventions to synergize with gas price reforms to mitigate the impact on fertilizer prices.

The committee has been tasked with reviewing any other related issues requiring consideration.

The National Fertilizer Development Centre (NFDC) of the National Food Security & Research Division shall provide secretarial support to the committee. The committee shall submit its recommendations within four weeks. The committee will hold its first meeting on Friday.

During the meeting, a spokesperson for the food ministry said in a statement that the purpose of the meeting was to take stock of fertilizer supply chain and pricing issues.

The Chief of the NFDC briefed the committee on urea availability and market price data.

Federal Minister Rana Tanveer said that a high-level committee has been formed on the instructions of the Prime Minister to review the supply chain and pricing, and will present its recommendations.

He said that the government is ensuring the uninterrupted supply of urea during the Kharif season and that an integrated and effective strategy is being formulated to control black marketing.

He said that the government had allowed the import of 0.2 million tons of urea to ensure the supply chain. In this regard, the ECC and the Cabinet approved it.

The Ministry of Industry and Commerce will ensure import at reasonable rates, and federal and provincial governments will ensure joint implementation.

“Protection of farmers’ interests is our agenda and first priority,” said Rana Tanveer, adding that various proposals were presented by the members of the assembly.

He said that complaints are being received regarding urea companies and dealers who are forcing farmers to buy DAP with urea.

The company and the dealer will have to stop this tie-up sale method, the participants of the meeting said, adding that dealers should be bound to ensure transparency in fertilizer delivery.

Parliamentarians said that the fertilizer industry should ensure the uninterrupted supply of urea to farmers at a reasonable price and that the exploitation of farmers is not acceptable in any case.

Rana Tanveer directed the Secretary of Industries to meet with fertilizer companies to ensure the supply chain and to take steps to decouple DAP from urea sales.

The second meeting of the committee will be held soon, in which the final recommendations will be presented.