ISLAMABAD: The National Assembly Special Committee on Agricultural Products met here on Monday with Speaker National Assembly Asad Qaisar in chair. The meeting deliberated at length to incorporate pro-farmers recommendations in the current finance bill, discussed matters of Federal Excise Duty on Tobacco, Minimum Support Price for Cotton, allocations for agriculture research, promotion of olive cultivation and duties on fertilizers and poultry.
The Chairman Federal Board of Revenue announced that the FBR accepts the committees’ recommendation to revert the Advance FED on Tobacco redrying from Rs. 300 to Rs. 10. In line with the recommendations of the Special Committee, the State Minister for Revenue Hammad Azhar agreed to allocate Rs.1 billion for agriculture research in the current budget.
On the sidelines of the meeting the Speaker National Assembly remarked that the farmers particularly tobacco farmers would no more burn their crops for the lack of markets. The meeting held was a continuation of a series of discussions on the recommendations of the Special Committee on Agricultural Products.
The members of the committee stressed that the Special Committee on Agricultural Committee was one of the most powerful committees of the National Assembly as the committee has a broad-based representation from the all the provinces and political parties.
The Speaker National Assembly stated that the rationale for formation of this committee was to transform agriculture in Pakistan and prevent the exploitation of the farmers.
The members of the committee stressed that the recommendations of the committee should be implemented in letter and spirit. The members emphatically stressed that the Resolution of the National Assembly and recommendations of the Special Committee on Agricultural Products recommending the regulatory import duty on cotton import and minimum support price for cotton should be enforced in letter and spirit to enable the farmers to receive international parity price.
MNA Syed Fakhar Imam argued that given the lack of any meaningful incentives particularly the indicative price, not only has Pakistan’s cotton production and land under cultivation has shrunk but also Pakistan continues to cede space to regional competitors.
He added that cotton was Pakistan’s strategic crop with immense potential for competitive advantage, however, the local growers never fetched a fair price for their toil. He added that the lack of regulatory duty on cotton import is tantamount to benefitting the Indian and central Asian farmers and exploiting the local Pakistani growers.
He was seconded by Dr Fehmida Mirza who also stressed the need for support and protection to cotton farmers.The Adviser to Prime Minister on Commerce Abdul Razzak Dawood stated that the farmers should get a fair price for their crops, however, fixing the minimum support price for cotton and the restoration of regulatory import duty would have negative repercussions for the entire value chain of the textile industry.
He further added that the main reasons for failure to fetch international parity price was the quality of seeds, excessive use of pesticides, contamination and artificially maintained high price of sugarcane.
The State Minister for Revenue Hammad Azhar stated that the support price mechanism caused distortions in the market and any support price would affect the entire value chain of the textile industry and may jeopardize the foreign exchange earnings.
The Adviser on Commerce assured to comprehensively engage with the special committee to find viable solution for supporting the farmers after the conclusion of the budget.
In line with the recommendations of the National Assembly Special Committee on Agricultural Products, the Federal Board of Revenue has agreed to revert the Advance Federal Excise Duty on Tobacco from Rs.300 to Rs. 10 imposed on redrying stage at Green Leaves Thrashing Units (GLTs). The stated purpose of this Federal Excise Duty was tracking, tracing and documentation of tobacco,
however, FED could not effectively achieved the desired results. The Committee previously argued that the increase in FED has effectively crippled the Mandiwalas and farmers as their businesses have been closed and a significantly large quantity of tobacco remained unsold. Since this levy was adjustable, therefore, its net impact on cigarette manufacturers was theoretically nil but adversely affected the growers.
It is pertinent to mention that in the amended Finance Act 2018 the rate of advance FED was enhanced from PKR 10 to PKR 300 per Kg. The advance FED was adjustable against the FED payable on manufactured cigarettes and was adjusted by the cigarette manufacturers in their FED returns.
Levying FED at GLT stage had precluded the tobacco dealers, middlemen and manidwalas to effectively engage in tobacco trade and had shrunk the bargaining power of the farmers.
It is pertinent to mention that the withdrawal of FED on GLTs would not affect the prices of cigarettes in Pakistan.The President Pakistan Kissan Ittehad Khalid Khokhar urged the committee to ensure a level playing field to local growers vis-à-vis international growers.
He stated that the realizing Pakistan’s true potential in agriculture was central to reign in Pakistan’s economic decline. Appreciating the endeavors of the Speaker National Assembly to uplift agriculture in Pakistan,
he added that it’s the first time that parliament is thoroughly examining issues and hurdles in agricultural development. He urged the committee to abolish the FPA levied on agricultural tube wells and that the tariff for electricity to agriculture tube wells should not be increased as proposed in the current budget.
The Speaker Asad Qaiser referred numerous issues to the subcommittee of the special committee on agricultural products including the duties on fertilizers, poultry, and electricity tariff and pending dues for agricultural tube wells.(INP)’
