Agriculture growth: PPP, PML-Q not on the same page

Senior Minister for Industries Chaudhry Pervez Elahi has accused the government of taking anti agriculture growth measures and suggested that price of imported urea be fixed at Rs 1600 per bag with immediate effect, well informed sources in Industries Ministry told Business Recorder.Elahi, who hails from an agriculture community, itemised a number of different reasons for reduction in growth during the incumbent government.

“For the time being the price increase of imported urea may be confined to Rs 300 per 50 kg bag ie from Rs 1300 to Rs 1600,” the sources quoted Pervez Elahi as suggesting to the government.Urea already stood booked at Rs 1300 per bag that would be released only after payment of the differential of Rs 300 per bag, the sources continued.

Official documents obtained from the MoI, reveal that the January 3, 2012 decision of the ECC states the following: “The ECC further decided that price differential between the prices of imported urea and selling price of locally manufactured urea should in no case be more than Rs 50 per kg bag.”According to the documents, Chaudhry Pervez Elahi argued that it was not advisable to introduce increase in one go at this juncture as it would raise the domestic fertiliser price as domestic brands were preferred to imported ones and might also lead to spiral effect on price.

He further argued that increasing price trends in fertiliser, seeds, tube-well electricity and pesticide would affect the agriculture sector which was the back bone of the economy.The urea off take has reduced due to price increase.

In 2009 the annual consumption was 6.5 million tons and was growing at a rate of 5 per cent.

However, in 2010 it came down to 6.2 million tons and further declined to 5.9 million tons in 2011.The price increase issue was discussed at a meeting held with the stakeholders on February 8, 2012.

Participants included manufacturers, representatives of Finance, National Food Security and Research, Planning and Development and Commerce Divisions as well as provincial agriculture departments.

There were divisive options on raising price of imported urea to match domestic urea price.Ministry of Industries revealed that it was confirmed by a committee that the price of Kisan urea was weekly recorded in Pakistan Bureau of Statistics (PBS) but data about the price of imported urea was not available.

Kisan urea is no longer in the market.

The plant that produced it was privatised more than ten years ago.The PBS is not reporting price of imported urea at all.

PBS has been requested to report imported urea NFML 50 kg bag which is sold in white bags with red marking on “NFML”.

According to MoI, increase of Rs 440-450 per bag necessitated by keeping a Rs 50 differential is as follows: Domestic urea brands- factory price/ 50 kg is Rs 1790- market price-Rs 1800 and subtract is Rs 50 per bag.However, the price of new imported urea was Rs 1740 per bag, market price was Rs 1750.

Old imported urea price was Rs 1300 per bag and its price was also Rs 1300.

This shows increase of Rs 440 per bag in factory price and Rs 450 in market price.

Senior Minister further stated that this could have a severe backlash in terms of low application per acre and low productively apart from vociferous complaints from farmers