Government failed to announce package for revival of agro-based industries: FPCCI chief

Chairman Standing Committee on Agriculture Produce & Horticulture of Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Ahmad Jawad has said the federal finance minister also failed to announce positive measures for promotion of agriculture exports, such as a freight subsidy. Nor did he announce any package for the revival of agro based industries, he added.
He said the increase in the volume of agriculture loans to Rs 600 billion for the new fiscal year (2015-16) from Rs 500 billion in 2014-15 would benefit banks, not farmers. Farmers are still paying an interest rate of over 10 percent on agricultural credit, Jawad added. He said no concrete measures were taken in the budget for the transformation of agriculture, horticulture sector and its exports, except tax incentives and addition in the agri credit.
Despite the fact agriculture sector, which accounts for 20.9 percent of the Gross Domestic Product (GDP), has posted a growth of only 2.9 percent in the outgoing fiscal year 2015. We cannot achieve the GDP target without investing in agriculture sector. History showed that whenever country achieved that the GDP growth rate that was only happened due to agri sector.
International surveys showed that every dollar invested in agri sector may get profitable ventures. Commenting on the budget speech, Jawad said the minister should have announced a cut in interest rate on agricultural credit, instead of increasing it. Most of the incentives on exports and on import of machinery are related to textiles, instead the equally crucial agriculture sector, he said.
He said the government has allocated only Rs 1.72 billion for the Ministry of National Food Security and Research, he pointed out. The amount is insufficient for the ministry, which has several major departments. He said, "The government's three to four-year tax holiday allowed for the establishment of halal meat production units, cool chains infrastructure with the condition of setting up these projects in a period of almost 1 year.
"We knew that setting up of new projects in any sector of the economy is not an easy task", he conceded, it takes time to acquire land for projects, and importing machinery. In addition, he added, the halal meat sector lacks a concrete policy as well. Though, on import of agricultural machinery proposed to reduce Customs duty, sales tax and withholding income tax cumulatively to 9 percent from 28 percent would a good initiative indeed; he added. Further, he welcomed the facilitation for the KPK fruit and vegetable exporters in the budget.