Objectionable clause in Fertilizer subsidy notification

The fertilizer industry has appreciated the recent issuance of a notification by the government.

However, some objections are still being raised against a clause; where the government asks for National Tax Number (NTN) of every fertilizer dealer.

This clause is certainly not viable, because it restricts the subsidy payments to only those dealers who are registered with the Taxation authorities. The government must consider the fact that; A big majority (over 90 percent) of the smaller dealers are unregistered and do not have NTNs. Hence, they will not be able to pass on the subsidy-benefits to the farmers.

It should be noted that; the initial announcement of this subsidy was based on a very simple verification process. But, later, the Ministry of National Food-Security and Research (MNFS&R) has been unnecessarily tampering this process. Several complexities have now been added, causing long delays in payments. As a result, a cumulative amount of 16.7 Billion Rupees is now outstanding and the industry is suffering with big financial challenges due to this subsidy-crisis.

Instead of resolving this matter after mutual consultation, the authorities have maintained this restrictive clause that increases the procedural-complexity of this scheme. Hence, the effectiveness of this subsidy will remain low, as a big majority of unregistered traders will not be able to participate and pass-on the advantages to the farmers. The primary aim of this scheme was to reduce the prices of fertilizers, but under the current circumstances and complexities, the objectives of this scheme cannot be achieved.

The Federal Board of Revenue (FBR) has demanded that: The Urea manufacturers should provide invoice-wise details of the subsidized fertilizer being sold. They have to specify names of buyers, NTN number, description, number of bags sold and other relevant information as declared in electronically bifurcating the information on provincial basis.

After that; the government promises to immediately authorize payment of 80% of the amounts through SBP, while 20% of the claims will be created after third-party validation of the claims. Amounts paid will be secured through Indemnity Bond, to be released after third party validation. The remaining 20% of the claims will be settled within 90 days, after third party validation.

Mutual co-operation and consensus between the government and industry must prevail in such matters of national importance. Timely payments of this subsidy programme must be ensured. A support-mechanism for the fertilizer industry and stronger agricultural policies will enable economic stability and wellbeing of the farmers.