Latest news with #Rs129.8
Business Recorder
3 days ago
- Business
- Business Recorder
PKI for establishing transparent pricing mechanism
ISLAMABAD: As Pakistan's agriculture sector faces one of its worst downturns in recent years, the Pakistan Kissan Ittehad (PKI) has called on the government to establish a transparent pricing mechanism and create an Agri Export Authority (AEA) to stabilise local markets and ensure food security. PKI President Khalid Mahmood Khokhar urged the federal government to form an Agriculture Commodities Price Commission (ACPC) that guarantees a minimum 25 percent Return on Investment (ROI) to farmers. He said that the move is vital for addressing the growing imbalance between domestic supply and demand while also creating incentives for future agricultural growth. In order to ensure stability in local markets and promote sustainable marketing operations, the creation of an AEA is inevitable, Khokhar said. He added that such an authority would help manage surplus production, balance domestic prices, and pave the way for consistent export strategies. He also called for the immediate abolition of the 18 percent GST on seed cotton, as well as the removal of the 14 percent GST on tractors and 18 percent on tractor-mounted implements, to encourage mechanised farming and improve productivity. Furthermore, Khokhar demanded a uniform electricity tariff of Rs10 per unit for irrigation tube wells to ease farmers' costs. Highlighting the gravity of the situation, he noted that the agriculture sector's growth contracted sharply by 5.84 percent in the last year, dropping from 6.4 percent to just 0.56 percent, while the production of major crops declined by 13.49 percent compared to the previous year. Cotton production fell drastically to 5.55 million bales, 50 percent below the target and 34 percent lower than last year, causing the cotton import bill to surge to an expected $4.45 billion 178 percent higher than last year's $1.6 billion. Wheat output also dropped by 8.91 percent to 28.98 million tons, representing an opportunity loss of approximately Rs250 billion in the international market, while maize production declined by 15.4 percent to 8.24 million tons, and sugarcane production decreased to 84.24 million tons from 87.64 million tons. Khokhar further pointed out that maize farmers are facing a severe crisis due to a sharp fall in market prices, with rates plunging by Rs1,200 per 40kg within a month following the arrival of fresh crops. Despite these alarming trends, the Punjab government's agriculture budget for the financial year 2025-26 increased only marginally by 10.75 percent to Rs129.8 billion, which Khokhar described as a token increment insufficient to tackle the multi-thousand-billion-rupee crisis facing the sector. He warned that such inadequate measures fail to address the depth of the problem and urged immediate structural reforms to safeguard farmers' livelihoods and ensure long-term food security for the country. Copyright Business Recorder, 2025
Express Tribune
3 days ago
- Business
- Express Tribune
Agri-budget fails to match damage
Listen to article Agricultural experts and farmer representatives have urged both federal and provincial governments to implement immediate and concrete measures to rescue Pakistan's struggling farming sector. Among the proposed measures are the establishment of an Agriculture Commodities Price Commission (ACPC) to guarantee farmers a minimum 25% return on investment, the formation of an Agriculture Export Authority (AEA) to stabilise local prices and boost exports, abolishment of the 18% GST on seed cotton, removal of GST on tractors and implements, and the setting of a uniform electricity tariff of Rs10 per unit for irrigation tube-wells. Representatives said recent data reveals the sector is in freefall, while provincial budget allocations have been widely condemned as grossly inadequate. The scale of the crisis is staggering. Pakistan's agricultural sector contracted by 5.84% in just one year. Major crop production shrank by over 13%, with wheat production dropping 8.91% to 28.98 million tonnes in 2025. Farmers have endured massive cumulative losses of Rs2,200 billion on wheat alone between May 2024 and May 2025. Cotton production fell to 5.55 million bales — 50% below target and 34% lower than last year — forcing a projected import bill of $4.45 billion, a 178% increase that severely strains foreign reserves. Maize production declined by 15.4%, and sugarcane fell to 84.24 million tonnes from 87.64 million tonnes. The collapse extends beyond production. Agricultural export performance also deteriorated alarmingly in 2024-25. Maize exports dropped 86% to just $58.9 million. Rice exports fell 15% to $3.3 billion. Onion exports dropped 48%, mangoes by 16%, and potatoes by nearly 4%. The downturn reflects deeper structural issues, including declining productivity and a critical lack of support for export infrastructure, quality control, and supply chainsthreatening Pakistan's trade balance and economic stability. In this context, the Punjab government's 2025-26 budget allocation of Rs129.8 billion for agriculture — only Rs12 billion (10.75%) more than last year's Rs117.2 billion — has been met with disbelief and anger. Farmer leaders argue this token increment fails to address a crisis involving multi-trillion-rupee losses. "Allocating only Rs129.8 billion for agriculture in the face of Rs2,200 billion in wheat losses alone is not just inadequate — it's an insult to the farming community," said Khalid Khokhar, President of the Pakistan Kissan Ittehad. "It demonstrates a complete failure to grasp the existential threat facing our food security and rural economy. This budget offers Band-Aids for bullet wounds." Adding to the frustration is the Punjab government's proposal to tax agricultural income by aligning tax slabs with those for established businesses. Critics see this move as dangerously disconnected from the realities on the ground. Small and medium-scale farmers, already reeling from plummeting commodity prices, crop failures, climate stress, and water shortages, view the measure as an unbearable additional burden. "How can they even think of taxing us now?" asked Muhammad Aslam, a wheat and cotton grower from Bahawalpur. "Last year's wheat crop drowned me in debt, cotton failed, and now maize prices have crashed. I sold my wife's jewellery just to buy seeds and urea for the next season." Agricultural economist Dr Fahd Ali described the proposal to tax agricultural income amid this unprecedented financial haemorrhage in the farming sector as "economically illiterate and socially risky." He said it ignores the inherent volatility and risk in agriculture compared to corporate sectors. "This risks accelerating disinvestment, deepening rural poverty, and triggering social unrest," he warned. Signs of severe financial strain among farmers are already apparent. According to Khokhar, sharp declines in the use of essential fertilisers like urea and DAP, coupled with plummeting tractor sales, indicate that farmers simply cannot afford the critical inputs needed for the current Kharif season. "This directly threatens yields, especially for high-risk crops like cotton, and raises fears of severely reduced wheat sowing in the upcoming Rabi season, potentially pushing the country towards a food security emergency. The situation fuels warnings of mass rural migration and widespread protests," he added. Agriculture experts and stakeholders overwhelmingly believe that the gap between the scale of the crisis and the government's policy response is astounding. Farmers, they warn, are being pushed to the brink. Ignoring their plight and the foundational role of agriculture is a recipe for national instability. The implementation of the recommended measures — beginning with immediate tax relief on key inputs and the establishment of price and export regulatory bodies — is now seen as critical to averting a full-blown agricultural and social catastrophe.
Express Tribune
5 days ago
- Business
- Express Tribune
Punjab earmarks Rs130b for agriculture amid scepticism
The Punjab government on Monday unveiled a significant 10.7% increase in its agriculture sector budget for the upcoming fiscal year 2025-26, allocating Rs129.8 billion compared to Rs117.2 billion in FY25. However, the announcement was immediately met with scepticism from farmers' representatives, who argued that financial packages could not help without fundamental reforms to ensure fair crop prices. Provincial Finance Minister Mian Mujtaba Shujaur Rehman, during his budget speech, stated that the total development outlay for agriculture, livestock and dairy development, irrigation and water in FY26 would be Rs123 billion, with an additional Rs56.2 billion being earmarked as non-development funds. This conflicts with the combined Rs129.8 billion agriculture sector outlay presented in budget documents. These papers reveal that the total Annual Development Programme for the agriculture sector will be Rs80 billion. This comprises 37 schemes, where 16 ongoing projects will receive Rs32.4 billion and 21 new schemes will get Rs47.6 billion. Key initiatives include the Chief Minister's Punjab Hi-Power Tractor Programme, for which Rs10 billion has been allocated, the CM's Green Tractor Programme Phase-II (Rs5.5 billion) and the CM's Programme for Water Efficient Agriculture (Rs2 billion). Other notable projects are agricultural farm mechanisation (Rs0.7 billion), Fasal Bema (Rs1.5 billion), transformation of agriculture in Potohar (Rs1 billion), Green Pakistan (Rs20 billion), solarisation of tube wells (Rs8.7 billion) and Kissan Card (Rs6.3 billion). An agricultural subsidy of Rs10 billion has also been set aside. Livestock and dairy development has secured a funding of Rs5 billion, which will support 16 schemes. Of these, nine ongoing schemes will get Rs2.8 billion and seven new projects will receive Rs2.2 billion. The allocation for the CM Punjab Livestock Card scheme is Rs1 billion. Irrigation has received a hefty Rs38 billion that will go to 120 schemes – 65 ongoing projects with Rs24.8 billion and 55 new schemes having Rs13.2 billion. The water sector allocation is Rs6 billion, supporting 47 ongoing schemes (Rs4.95 billion) and a new scheme (Rs1.05 billion). Expressing deep dissatisfaction, Pakistan Kissan Ittehad President Khalid Khokhar said, "We do not need any package from the federal or provincial government; we need prices for our produce." He said that the cost of production was higher than market prices for major crops such as wheat and corn. "Farmers are frustrated due to the absence of support prices as their livelihoods are at stake." Khokhar added that fertiliser sales had shrunk 30% along with tractor demand, which dropped 50% from 18,000 to 9,000 units in the first five months of calendar year 2025. The drop comes despite distribution of around 1,000 tractors by the government, he mentioned. Drawing comparison, he pointed out that farmers in India were in a better position, "who know the price for their next crop before the sowing season". "That is called futures trading; we need to put our house in order."
