The Economic Coordination Committee of the cabinet on Wednesday approved a Rs50 billion relief package proposed by the Ministry of National Food Security and Research for agriculture sector.
The ministry had recommended Rs56.6 billion package but the ECC directed for restricting it to the limit set in the Prime Minister’s Economic Relief package.
RecommendedMust Read
The ECC also approved the local manufacturing of mobile phones after it was warned that India could spy on Pakistani citizens through handsets being manufactured in India but shown as manufactured by a third-country.
The ECC asked the ministry to rationalise the farm sector package as per its share in the overall Rs100 package announced for the SMEs and the agriculture sector, the finance ministry. The government has already approved a Rs50 billion package for the SMEs to provide indirect cash flow support to nearly 3.5 million people through pre-paid electricity.
The agriculture package has been offered to provide subsidy on fertilisers to the farmers, reduction in bank mark-up on agriculture loans, subsidy on cotton seed and white fly pesticides, and subsidy on sales tax on locally-manufactured light tractors.
The food ministry recommended Rs37 billion subsidy to farmers on the purchase of fertilisers. The amount would include a subsidy of Rs925 per bag on DAP and other phosphatic fertilisers and Rs243 per bag of urea and other nitrogenic fertilisers.
The ECC was informed that the estimated offtake of urea would be around 3.04 million tonnes and 0.95 million tonnes of DAP for the Kharif season. The subsidy scheme will be implemented by the provinces and the amount will be disbursed through scratch card scheme already being implemented by Punjab.
The ECC was told that the fertiliser share in the cost of production of major crops was around 10 to 15 per cent and the provision of subsidy would reduce the cost and increase the farmers’ affordability and help them use the recommended levels of fertiliser nutrients and the best agricultural management practices.
The ministry had proposed Rs8.8 billion for picking up to 10 per cent of interest cost of loans being obtained by the small farmers. This Rs8.8 billion allocation is likely to cut down in the light of the ECC’s observations.
The ECC approved Rs2.3 billion subsidy on cotton seed and Rs6 billion for white fly pesticides. The package would also include Rs 2.5 billion subsidy on sales tax on the locally-manufactured light tractors for a period of one year. The food ministry had proposed the abolition of 5% sales tax on light tractors.
The ECC directed to include other banks along with the ZTBL in the scheme to enhance outreach of the farmers with focus on subsistence farmers with a land holding of 12.5 acres, the finance ministry said.
The ECC also called for the implementation mechanism, especially through the scratch card system, to be monitored carefully to ensure that the actual beneficiaries of the package were the genuine farmers.
