ECC okays Rs50bn for agriculture sector.

Byline: Khaleeq Kiani

ISLAMABAD -- The government on Wednesday approved a Rs50 billion package for the agriculture sector and about Rs17bn additional funds to defence forces to foot extra fuel bills.

The decisions were taken at a meeting of the Economic Coordination Committee (ECC) of the Cabinet, presided over by Finance Adviser Dr Abdul Hafeez Shaikh, that also approved in principle a cell phone assembling policy.

The ECC was given a demand of Rs56.6bn agriculture package to provide the farmers subsidy on fertilisers, reduction in bank mark-up on agriculture loans, subsidy on cotton seed and white fly pesticides and sales tax subsidy on locally manufactured tractors as part Rs100bn earmarked for farmers and small and medium enterprises (SME) out of the Rs1,200bn coronavirus relief package.

However, Shaikh asked the food security ministry to rationalise it to Rs50bn as per its share in the overall Rs100 package announced for the SMEs and the agriculture sector.

He said the ECC had already approved a Rs50bn package for the former to provide indirect cash flow support to nearly 3.5 million people through pre-paid electricity.

Rs17bn set aside for defence forces' fuel bill

Under the agriculture package, about Rs37bn subsidy would be offered to farmers on the purchase of fertilisers. The amount would include a subsidy of Rs925 per bag on DAP and other phosphatic fertilisers and Rs243 per bag on urea and other nitrogen fertilisers.

The ECC was told that the estimated urea offtake would be around 3.04m tonnes while DAP was estimated at 0.95m tonnes for the Kharif season. The subsidy scheme will be implemented by the provinces and the amount will be disbursed through a scratch card scheme already in place in Punjab.

It was also informed that the fertiliser share in the cost of production for major crops was around 10-15 per cent and the provision of subsidy would increase their affordability to adopt the recommended level of fertiliser nutrient use and best agricultural management practices.

Similarly, under the agriculture package, a reduction in mark-up of agri loans at the total cost of Rs8.8bn, subsidy on cotton seed worth Rs2.3bn and white fly pesticides at Rs6bn were also approved.

Furthermore, the ECC called for inclusion of other banks along with Zarai Taraqiati in the scheme to enhance outreach of farmers with focus on subsistence farmers with a land holding of 12.5 acres. It was suggested that since markup had been reduced by the State...