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Friday March 29, 2024

Subsidy for farmers

By our correspondents
January 16, 2017

Pakistan’s agriculture sector is in a sticky situation, with no obvious long-term solutions to the ongoing decline of the sector. The current wheat crop  has been under risk due to low water supply. In such a context, the prime minister’s decision to restore the subsidy of fertilisers will come as a welcome relief to farmers. The government’s Rs28 billion earlier subsidy had run out. The opposition had criticised the specific mechanism being used to award farmers rebates on fertilizer purchases directly, instead of just paying a cheaper price for the purchase directly. The subsidy scheme was provided with an equal share from the federal and provincial government. Farmers were provided Rs300 subsidy per bag of DAP and Rs156 per bag of urea. The benefit has been that the use of these two kinds of fertiliser has increased by 23 percent and 18 percent respectively. The trouble, though, is that simply increasing the use of fertilizer is not a guarantee for improved crop yields.

After a poor year, all eyes are on how the agriculture sector will perform this time around. If the country faces another poor year, much more serious questions will need to be asked about the potential erosion of Pakistan’s agriculture backbone. This is why it is fair that the government has come under criticism for appearing to use agricultural subsidies and the Kissan Package to play patronage politics. This is why even the attempts to claim a victory for one political party or another must be condemned. The PPP, for its part, must focus on the province its controls, and introduce its own measures to improve the health of its agriculture, instead of focusing its criticism on the centre. Pakistan is currently feeling the effects of falsely believing that the agricultural sector will be able to sustain itself without government input for about two decades. Caught in a competitive international environment and struggling to adjust to the changing weather and flood patterns, Pakistan’s farmers will need more than an agricultural subsidy. They will require serious action from policymakers and politicians at both the centre and provincial levels to come up with medium to long-term steps to stem the agricultural decline. The provision of temporary relief in the form of subsidies should not mean that the more long-term questions are forgotten in all the self-congratulation.