The federal government has released Rs 2 billion fertilizer subsidy to different fertilizer manufacturing companies. According to Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC), the subsidy amounts have been excessively delayed over the past two years, hence the intervention of Prime Minister's Office. The government had pledged to expedite the release of 80 percent of these amounts by July 2017, while the remaining 20 percent amounts were to be paid by October 2017 after third-party validation. However, the subsidy amounts are being released slower than promised.

The new Secretary of Ministry of National Food Security & Research (MNFSR) has finally resumed the payment of fertilizer subsidy amounts that were pending since 2016. "Over Rs 2 billion were recently released against the outstanding amounts of Rs 20 billion, payable to different fertilizer manufacturing companies," the council said.

Hence, only Rs 2 billion, which is just 10 percent of the due amount, has been paid till the end of October despite promise of early release. Industry sources said that one major reason for the continuous delays is the excessively-long process for verification of subsidy claims. Despite clear instructions given by the Prime Minister's Office, this tedious process has yet to be simplified, by relying primarily on GST returns. The process was further complicated due to the unnecessary involvement and resistance of three provincial governments.

According to FMPAC, these delays have created big financial challenges for the urea producers. The authorities must respond urgently to the woes of this essential industry - the biggest contributor to the national exchequer - and ensure higher agricultural productivity.

In spite of the financial hardships, manufacturers have ensured supplies and controlled prices despite rising international rates. However, it must be noted that if this crisis is not resolved, most of the fertilizer enterprises will not be able to continue their participation as facilitator in the government's subsidy-programme, it added.

Fertilizers manufacturers have expressed the hope that the newly-appointed Federal Secretary of the MNFSR, Fazal Abbas Maken will soon be able to resolve this long-standing issue, which is very critical for the growth of agriculture in Pakistan. Maken had recently assured stakeholders that Rs 9 billion of these outstanding subsidy claims will be released on an urgent basis to fulfil the 80 percent pledge.

This reflects the government's seriousness in resolving the subsidy crisis and reduce the cost of soil-nutrition for higher crop yields in the country, they added.

Copyright Business Recorder, 2017