Based on the recommendations of the Economic Coordination Committee (ECC), the government is likely to approve 99 percent reduction in Gas Infrastructure Development Cess (GIDC) on fertilizer to decrease urea prices. This decision is all set to accrue benefits to the farming sector. This good decision of the government will have direct impact on development of all segments of agriculture sector which is a vital part of Pakistan's economy.
The approved reduction in GIDC of Rs 400 per bag is applicable to fertilizer manufacturers across-the-board to pass on the whole benefit to farmers and agriculture sector. However, initiation of current debate in media, discouraging those who want to pass on the complete benefit of government decision to farmers in the shape of reduction in prices of fertilizer appears strange and an attempt to distort facts that government's decision is biased. This also amounts to maligning of a particular segment of the industry which supports government's efforts to alleviate pressures on farmer community.
It is an important question, whether or not complete reduction being offered by the government should be passed on to small and medium farmers, who presently are not using fertilizer in the appropriate quantity due to its cost which is affecting the overall yield. For safeguarding the interest of agriculture sector, concerned authorities should not be distracted by misleading attempts of negative forces.
Without prejudice to anyone, the government had put on table the proposal to the fertilizer industry for GIDC reduction. The government expected fertilizer players understand the spirit of decision and will play a positive role in the best interest of the country thereby passing on the total reduction in GIDC to farmers through reduction in the fertilizer prices in equal proportion. But this move by the government is being twisted through creation of fictitious scenarios aimed at maintaining status quo in fertilizer prices.
The circumstances under which any change in fertilizer prices may be admissible, is only in case of increase or decrease in price of natural gas being the main raw material for fertilizer production, now or at any stage. This would not be a novel situation and happens every time such change in price is implemented by the government. In either case, the beneficiary of GIDC reduction is meant to be the farming community or the government, i.e., public at large.
All the concerned sectors should support government efforts to strengthen agriculture sector and discourage attempts portraying negative impact of reduction in GIDC. It should only be seen in the context of advantage to farmers even if the fertilizer sector continues to absorb the GIDC impact now in the shape of absorbing costs in other heads.
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