Inside Financial Markets

Punjab wants Centre to restore subsidy on fertilisers

After the chief minister took notice of withdrawal of subsidy on fertilisers by the federal government on Jan 9, the agriculture department on Wednesday put up a formal request for its restoration for Punjab-based farmers.

Punjab Agriculture Minister Muhammad Naeem Akhtar Bhabha told Dawn by phone that Shahbaz Sharif at a meeting showed his reservation over the withdrawal and ordered the department to write a letter to the federal government for restoration of subsidy.

He said according to information gleaned from the federal ministry of national food security & research, the subsidy was withdrawn because the allocated amount was consumed. The maximum amount of subsidy is Rs390 per bag.

The minister claimed: “The department is ensuring delivery of subsidised stocks of Urea, DAP, NP and SSP to farmers throughout the province.”


Sources say it will be difficult for federal govt to accommodate Punjab farmers alone


Sources in the agriculture department told this reporter that the provincial government had taken the decision only after the farming associations began criticising the Khadim-i-Punjab Kissan package 2016-17 under which the government agreed to share subsidy with the federal government for five fertiliser products.

The Shahbaz-led government in its official leaflet had allocated Rs7 billion for sharing subsidy with the Centre, but the agriculture department had not so far released the amount spent on the subsidy in the first six months of current fiscal year, the sources added.

They said it was the Punjab government that had shown its willingness to share subsidy while no other province made the commitment. They said it would be difficult for the federal government to accommodate Punjab-based farmers alone.

A senior department official, however, said all provincial governments were bound to share subsidy in GST, one of the three major components. He said Punjab had paid Rs3 billion to the federal government under GST.

He said the major reason for withdrawal of subsidy was presence of around 1.3 million bags stock of Urea, which is used maximum, and at present its demand is low.

The official further said the government had not withdrawn subsidy on GST component which is Rs187 per bag.

He said the federal government had allocated Rs42.9bn for Urea and CAN and Rs10.8bn for DAP/NP/SSP for fiscal year and all provinces are bound to share their chunk of subsidy.

He said according to his information, fertiliser companies had withdrawn Rs50 share they had committed under subsidy after official notification which means a 50 kilo bag will become costlier by Rs206.

Baqar Hussain

A Wannabe CFO, just had stepped in the corporate sector, willing to explore every aspect here and learn as mush as i can, awareness for those who dont, get the info where ever possible and stay up to date always.

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