Welcoming the issuance of fertilizer subsidy notification by the federal government, the fertilizer industry has expressed its reservation over a clause where the government asks for National Tax Number (NTN) of every fertilizer dealer. This clause is certainly not viable because it restricts the subsidy payments to only those dealers who are registered with the taxation authorities. The government must consider the fact that a big majority (over 90 percent) of the smaller dealers are unregistered and do not have NTNs. Hence, they will not be able to pass on the subsidy benefits to the farmers, industry sources said on Wednesday.
They said the initial announcement of this subsidy was based on a very simple verification process. But, later, the Ministry of National Food Security and Research (MNFS&R) has been unnecessarily tampering this process, they alleged. Several complexities have now been added, causing long delays in payments. As a result, a cumulative amount of Rs 16.7 billion is now outstanding and the industry is suffering big financial challenges due to this subsidy crisis.
Instead of resolving this matter after mutual consultation, the authorities have maintained that this restrictive clause increases the procedural complexity of this scheme. Hence, the effectiveness of this subsidy will remain low as a big majority of unregistered traders will not be able to participate and pass on the advantages to the farmers.
The primary aim of this scheme was to reduce the prices of fertilizers, but under the current circumstances and complexities, the objectives of this scheme cannot be achieved, the sources observed. They further said that the Federal Board of Revenue (FBR) has demanded that the urea manufacturers should provide invoice-wise details of the subsidized fertilizer being sold. They have to specify names of buyers, NTN number, description, number of bags sold and other relevant information as declared in electronically bifurcation information on provincial basis.
After that the government promises to immediately authorize payment of 80% of the amounts through SBP, while 20% of the claims will be created after third-party validation of the claims. Amounts paid will be secured through Indemnity Bond to be released after third party validation. The remaining 20% of the claims will be settled within 90 days after third party validation.
Mutual cooperation and consensus between the government and industry must prevail in such matters of national importance. Timely payments of this subsidy programme must be ensured. A support-mechanism for the fertilizer industry and stronger agricultural policies will enable economic stability and well-being of the farmers, the fertilizer industry sources concluded.