Govt asked to resolve real issues facing rice industry

June 10, 2015 Off By Web Desk

KARACHI: The Union of Small and Medium Enterprises (UNISAME) thanked the government for giving income tax relief to the rice millers in the budget but regretted the dis-concern of the government to the real impediments being faced by the rice industry and urged the Trade Development Authority of Pakistan (TDAP) to play its role and save the rice industry.

President UNISAME Zulfikar Thaver said in a statement that the rice millers were facing bankruptcy and were unable to repay the loans of the banks due to lack of demand from overseas buyers. He recommended easy repayment facilities for the millers to overcome the difficulties of cash inflows.

Thaver said that we had predicted long ago and kept reminding the ministry of commerce (MINCOM) to work in this direction to overcome this anticipated adverse situation. It is very necessary that the government should have worked on reducing cost of production by removing taxes on farm inputs. Secondly it is also very important for the exporters to enhance sales by promoting brands in global markets. Thirdly it was required that our exporters should have entered new markets and promoted different varieties of rice.

The SME rice exporters who added value to the grains were eliminated by the big rice exporters who supported the Quality Review Committee (QRC) and made transactions difficult for the small to medium sized exporters scaring them of QRC rejection of cargo.

The TDAP needs to act fast and take positive concrete steps to revive the rice industry on war footings. The SME rice exporters must be facilitated, supported and encouraged to re-enter the rice business and re-open their units. The parboiled units in Sindh need to be revived. The situation can only be saved by vigorous efforts of the TDAP to offer free services to SMES who wish to promote their brands in non traditional markets. The SME exporters are unable to export to third world countries and for this the cover of export credit guarantee insurance (ECGI) is urgently required at affordable premium. The banks are not discounting letter of credits of low rating banks and this aspect is very discouraging and again the ECGI could facilitate transactions.

Thaver said the TDAP had formed a steering committee to establish an SME Export House to promote the SMES to sell their goods in overseas markets but shelved the plan for reasons best known to them. All over the world the SMEs are encouraged to sell their goods on the internet and UNISAME had suggested to Small and Medium Enterprises Development Authority (SMEDA) and TDAP to join hands and establish an SME Gallery to exhibit the products and brands of the SMES. The lethargy of the authorities is proving injurious to the cause of the sector.

The other most important aspect which has given a setback to the rice industry is the decline in orders from Iran. The MINCOM needs to take up the matter with Iran and establish framework for payments to and from Iran for mutual benefit.

UNISAME thanked the MINCOM for finally disbanding the QRC and also the ministry of finance for granting relief to the rice units in the budget.