Recent media reports suggest that the cabinet has finalized up to Rs1000 subsidy per bag of urea under the PM’s Rabi Package. For the moment let’s ignore the unfortunate reality that package-based management is the only tool of economic management this country has seen for years, instead of focusing on the cogs of governance and addressing the shortcomings across farming value chain. But even measures such as urea subsidy often fall short of the intended benefits. And the reason is the government itself.
BR Research’s channel checks with farmers reveal that the subsidy that famers ought to get, especially the ones announced under Covid-19 schemes, end up being usurped by agents, as used to be the case once with BISP hand outs. When farmers take the scratch cards to the agents to encash their subsidy, they have to prove their identity as farmers, which is rather difficult for many, especially those who are landless farmers. The agent therefore capitalizes on this opportunity and withholds up to half of the subsidy amount, according to BR Research sources.
This clearly calls for federal and provincial governments to develop farmer registries across the country. The move will not only help address the aforementioned challenge but may also help towards bank lending in farm sector. Equally important is to brainstorm for ideas that can help build strong associations of farmers of various types and categories, which will arguably be quite a challenge given the poor state of farming economy.
In its recent review of farm economies of Sindh and Balochistan under EU’s GRASP project, International Trade Centre noted that more than three-fourths of farmers surveyed in Sindh did not belong to any farmer association. Similarly, in Balochistan nearly 89 percent of agribusinesses surveyed had no interaction with business associations. A majority of farms and agri-businesses who were part of these associations either didn’t receive any services from their associations or rated the quality of those services as poor.
If farmers registry are critical for better targeting of various subsidies then effective and well organized farmers’ associations (agriculture, livestock, fisheries, etc) are critical to improving farmers’ connections to markets, for access to timely information on prices, for inclusiveness in agriculture policy and implementation, tailoring of various training and awareness programmes, and gain other forms of synergies. Ergo, think more than just packages and crude price-signals! (Relevant reads: ‘SEZs for food processing?’ Nov 25, 2020 & ‘Agri business: about time to invest in human capital’, Nov 30, 2020)
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