Agri sector: all but ignored

[Lahore_Real_Estate]

Budget statement lacks vision in terms of agriculture; Backbone of economy has been overlooked; Farmers to feel brunt of proposed GST

LAHORE - Agriculture experts have underlined the fact that the federal budget 2011-12 has ignored the vital sector of the agriculture. They said that the government did not want to bring the country out from the shackles of International Monetary Fund (IMF) and other agencies, which had their own agenda.
Agri-Forum Pakistan Chairman Ibrahim Mughal expressed his dismay over the federal budget 2011-12 saying that the Federal Finance Minister Dr Hafeez Shaikh was mum on the vital sector of agriculture in his speech. “The Present budget is completely silent on agriculture, which is an astonishing fact for many as Pakistan is primarily an agrarian country.”
He said he had never heard of such a pathetic budget speech with regard to agriculture for the past two decades. He underscored that there was no vision in the budget statement of the PPP government for development of agriculture sector. The present government did not want to address issues of food security issue at all, Mughal lamented.
He pointed out that the federal government had cut the duty on soft drinks, but did not offer any relief for the agriculture, which was backbone of the economy. Instead, he said, GST had been imposed on agriculture inputs and tractors, which clearly represented enmity towards helpless farmers. Kisan Board Pakistan Vice President Sarfraz Ahmad Khan said that rulers were not keen to get rid of shackles of international financial institutions, including IMF and World Bank. That is why, they are not taking steps for reducing cost of production of farming sector, he maintained.
“The levy of GST on agriculture inputs including fertiliser and pesticides have led to increase in production cost of farmers by Rs 4000 per acre,” He added that this unwise step would mean at least 10 per cent reduction in production of crops. “Farmers will not use key fertilisers due to price hike” he asserted and said it is a suicidal step by the government that aimed at reducing productivity of agriculture sector.
These taxation measures have far reaching impact on the whole country,” he warned and added that, owing to less production, there will be a 30 per cent increase in the price of food items. Again, he said, this vicious cycle would hurt the poor, increasing food insecurity manifold. “So farmers will not only suffer from this meagre tax collection but the 40 per cent living below the poverty line will also be hit hard,” he opined. About reported allocation of funds for Basha Dam, he observed that this water reservoir was very difficult to construct. Instead, he emphasised, government should take immediate step for construction of Kalabagh Dam.
He was of the opinion that had we been able to construct KBD, there would have been less destruction of last year’s catastrophic flood. Moreover, he said, we lost more than 36 million acre feet (MAF) water last year which released downstream Kotri into sea. He maintained that this water could be stored in KBD and we could avoid shortage of water.
About fiscal deficit, Sarfraz Ahmad Khan, who is also a retired senior bureaucrat, said that Rs850 billion deficit could be overcome by employing wise policies. He said that government could increase collection by Rs1000 billion from present tax payers. He added that there were leakages in collection system to the tune of Rs500 billion which needed to be immediately plugged. On the other hand, he said, financial burden of Rs300 billion per annum is due to five inefficient public sector enterprises, which should be addressed.
Dr. Tariq Bucha at Farmers Associates Pakistan (FAP) has said that the proposed budget 2011-12 is not a balanced one as total government expenses are estimated at Rs28 trillion against the revenue collection through different resources at Rs25 trillion. There is no mention of agriculture in the budget proposed for the next financial year. It also criticised that the government is talking about reducing duties on cars while imposing General Sales Tax (GST) on agriculture.
Cars are not a matter of concern for the common man but to have a meal two times a day along with the imposition of GST on agricultural inputs will decrease their consumption by 10 to 15 percent resulting in decrease in the per acre yield. This is an anti-farmer budget. Though farmers understand the present difficult financial scenario they regret that their field has totally been ignored in the speech of the Federal Finance Minister.
Dr Tariq Bucha said that developmental expenses have been proposed at Rs452 billion and questioned that if developmental expenditures are not increased then how will the economy grow . It is said that subsidies will be abolished but all these subsidies are non-targeted. Fertiliser manufactures are given subsidy but they never pass it on to the farmers and sell its produce at market price, he added. He also claimed that no money has been allocated for rural areas.
Rs 15 billion have been allocated for flood affected areas but how will the money be generated. Basmati Growers Association (BGA) Chairman and FAP Director Hamid Malhi said that the budget had already hit hard growers when RGST was imposed on agricultural inputs in March this year. In his opinion it would result in an impact of Rs 70 billion on the agricultural sector. He said that it would increase the input cost of the growers an as a result the commodities would also become expensive for the common man.