Approval of Urea import may harm farmersMarch 5, 2016
KARACHI: The recent decision on the import of urea by the private sector will open the window of middlemen to charge un-due commissioning before it will reach to the farming community until and unless effective quality and price control may be determined before, said FPCCI Standing Committee’s former chairman and horticulture expert, Ahmad Jawad in a statement.
He criticized the recent approval where the Finance Division and the Ministry of Petroleum has given the go ahead to the Ministry of National Food Security and Research for framing a policy that will allow urea import by the private sector.
This move will open a window of commission agents when it comes at retail level. No private companies have the capacity to enforce a strict mechanism. It’s obvious that importers will import urea on the existing international rates, and then they add custom duty and other taxes and dump in their storages houses and then they sell to the middlemen most likely after adding some profit on it.
At present, the country needs 6 million tons of urea annually, but local manufacturers produce 4.5 million tons and the remaining 1.5 million tons were supposed to be imported by the TCP under subsidy. Under the existing policy, urea is manufactured locally or is imported only by the state-owned Trading Corporation of Pakistan (TCP) if the need arises.
Jawad said we could easily cover the demand supply gap on the competitive rates of urea by providing cheap gas to the local manufactures after singing the 15 years long agreement of LNG import from Qatar. We should understand that local fertilizer companies have already invested billion of rupees in the country and also provide millions of jobs to the Pakistani’s.
He also rejected the notion of government officials where they justified that private sector already buys di-ammonium phosphate (DAP), Potash another type of fertiliser – from the international market, but we should understand that urea is one of the most consumed fertilizer in the agriculture sector in all cultivating crops. When one commodity like urea have huge demand then it is obvious that middleman may also charge good commission out of it when it comes in the retail.
Jawad also said fertilizer is the only sector that consumes gas for value addition and it should be provided more gas, and government must negotiate with the local manufactures to fix the reasonable rates on all the fertilisers to facilitate farmers rather than approving un-justifiable import policy in haste, so that our industrialization could also be saved.