Farmers seek GST removal on agri machinery

LAHORE  -  Farmers’ bodies have demanded increase in agriculture research budget and withdrawal of GST on farm machinery.

As the federal government is presenting a mini budget on Jan 23, the Pakistan Kissan Ittehad and other organisations have called for reduction in price of agriculture inputs and taking practical steps to bring improvement in livestock sector.

PKI President Khalid Kkhokhar talking to journalists here claimed that agriculture budget witnessed almost 50 percent cut since the devolution of powers from centre to provinces.

“Ministry of Food and Agriculture and Ministry of Livestock budget was around Rs 30 billion in addition to provincial spending of agriculture and livestock in 2009-10 but now all provinces’ allocation is less than Rs 15 billion,” he said, lamenting the state of the affairs of agriculture sector which contributes over 19.5 percent in GDP and earns over 70 percent foreign exchange from cotton and other commodities. The sector, he said, was a source livelihood for 48 percent of country’s labour force.

Admitting the PTI government took few steps for the improvement of the agriculture sector in last couple of months, he said if it announced steps for the betterment of agriculture sector in mini budget, the farmers would fully extend their support towards building “Naya Pakistan.”

“India spends 0.4 percent of its GDP on agriculture research, Brazil 1.75 percent, China 0.5 percent but Pakistan only spends 0.2 percent on it. We demand government increase research allocation to 2 percent in the next three years.”

He said sale of tractors has reduced from 70,000 per year to less than 40,000 per year. To revive the sale and lower the prices of tractors and other machinery, the government should announce withdrawal of GST on the machinery in mini budget, he added.

He suggested that considerable land leveler may be given to growers especially in districts where water shortage exists on subsidized rates of 40:60.

The PKI proposed the government to fix minimum price for oilseeds and pulses and take a bold decision on imposing duty on these two commodities, so that growers could have confidence and local industry bound to buy from the local growers. If these steps are taken the import bill of pulses and oilseed will be vanished next year, he claimed.

Saying growers were experiencing world highest input cost of agriculture production, the PKI president suggested the government to discontinue the 2 percent GST on fertilizers and announce a 30 percent flat subsidy on import of pesticide in the mini budget. This step, he said, would cost government a loss of less than Rs 2 billion revenue but increase in agriculture productivity manifold.

Diesel which is the main fuel for the agriculture sector needs to have its prices rationalized. This will considerably bring down farmer’s input cost and make him more competitive keeping in view low international prices for diesel.

In order to control market prices and ensure timely availability of this crucial input to the farmers, it is imperative that all fertilizer units be given special priority in gas allocation, especially to the units producing high-value specialized fertilizers like Nitro-phosphate and Calcium Ammonium Nitrate (CAN). Unfortunately, Pak Arab Fertilizer, a national asset, has been lying to waste due to no gas allocation for the past two years. Giving gas to such industrial complex gives the government increased revenue and reduces its reliance on import of fertilizer.

Bank loans to small growers must be extended interest free to uplift farmers socio-economic status, he said.

Khokhar demanded government make serious efforts towards building capacity and knowledge of dairy farmers.

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