Within Pakistan, there’s a diverse nation with an approximate population of around two hundred and fifty
million. The population is steadily increasing, and one of the significant challenges faced in Pakistan is
food security. Among the upcoming challenges, tackling food security is so crucial. The government needs
to formulate long-term policies to address the challenges posed by food security in the coming days
effectively. In the context of fertilizer issues, the Pakistan government heavily subsidizes fertilizers especially Urea for its production, providing significant subsidies for importing as well. Additionally, taxes in the form of indirect subsidies, like lower rates on DAP (Diammonium Phosphate) and other fertilizers, extend up to the provincial level, such as the 10% of bag value subsidy on DAP in Punjab under the Scratch Card initiative. While government interests may lean towards supporting agriculture, the practical
implications reveal a bias towards specific types of fertilizers, potentially neglecting the broader spectrum of agriculture in favor of phosphatic fertilizers.
The subsidy mechanism, especially concerning urea, operates in a unique context due to the consistently
high international market prices, a trend observed over the past ten years. While international markets
maintained their high trajectory, Pakistan’s local market didn’t witness a proportional increase. This
significant gap became more pronounced when the Pakistani Rupee experienced a sudden jump from one hundred to three hundred against the Dollar. This divergence in pricing strategies between Diammonium Phosphate (DAP) linked to international market rates and locally produced urea priced in Pakistani Rupees
has led to a substantial gap, reaching approximately twelve thousand rupees per bag. The gap between international and local fertilizer prices has opened up new challenges in Pakistan’s policy landscape.
Despite the government’s intentions to support agriculture, the practical implications show a preference
for certain fertilizers, neglecting the broader agricultural culture. This pricing dynamic has not only
affected the agricultural sector but has also triggered issues like smuggling.
The weak regulatory systems in Pakistan have compounded the problem, leading to an increase in malpractices and smuggling activities. The gap between international and local prices, coupled with weak regulatory systems, creates an environment where individuals resort to illegal practices for livelihood,
further highlighting the need for robust policies to address these challenges. In a country like Pakistan, grappling with significant issues in agriculture, employment, and weak systems, there is an attempt to address these challenges holistically. Efforts are being made to control the pricing issues, especially
concerning urea, while also addressing the dynamics that lead to uncertainty. Unfortunately, the lack of clarity in the proper dynamics raises concerns, and there seems to be an expression of ignorance in handling these dynamics effectively. We aspire to ideologically solve all issues, but practical challenges persist. Whether it’s any problem or disease, adapting and addressing it according to its nature is crucial.
In the midst of all these efforts, we inadvertently create formidable challenges for our food security and
the upcoming days in our own country. Recognizing and addressing these challenges is of utmost importance. In the current scenario of fertilizer handling across the country, if we talk about agricultural experts or governments worldwide that are policy-makers in agriculture, they provide strategies to their farmers for maximizing input utilization. They strive to streamline agricultural interventions to reach the farmers efficiently. However, in our context, we are witnessing a hindrance where the entire machinery and administrative setups are focused on preventing agricultural interventions from reaching the farmers.
A glaring example of this is the issues related to zoning, provincial restrictions, regionalization, and local
administrative barriers that impact agricultural project implementation. The fertilizer distribution system In Pakistan, especially its management over the last three to four years, poses the most significant threat to food security. It’s essential for all of us to consider this, and it should be a matter of concern.
Surprisingly, in Khyber Pakhtunkhwa, especially in approximately sixty percent of the area, there is no
established system for fertilizer distribution. Particularly, when we talk about the erstwhile FATA, which
is now part of Khyber Pakhtunkhwa, the concept of acquiring fertilizers is virtually nonexistent, meaning
farmers are either conducting agriculture without using fertilizers or resorting to unconventional methods
to obtain them. For this, they have to pay an additional four to five thousand rupees. It is known to all that in FATA and the merged areas of KPK, agriculture exists; there are orchards, wheat cultivation, and even fruit orchards. However, we need to consider whether we are supporting our agriculture in such
scenarios or creating hurdles for it. Similarly, in areas like Azad Jammu and Kashmir, Pakistan’s sensitive regions, and Balochistan, approximately ninety percent of the areas lack any system for fertilizer distribution. Consequently, farmers there either engage in agriculture without fertilizers or resort to unconventional means to obtain them.
Considering the concerns over smuggling threatening our urea production, it’s imperative to emphasize
not just subsidizing urea but also enhancing our internal scrutiny systems. Strengthening border controls
and tackling smuggling practices becomes crucial. We need a comprehensive approach that supports farmers, addresses agricultural needs, and curtails smuggling, ensuring a balanced and sustainable solution. We need to decide whether to support our agriculture or create obstacles for it. The subsidy conundrum needs a thorough examination – whether to control it by improving the board system or phase
it out for the betterment of domestic agriculture. Farmers deserve transparency in fertilizer prices; pricing should be secondary. Addressing the significant gap between cheap urea and expensive phosphate
fertilizers is crucial. Achieving a balance will open doors to the optimal use of nutrients, reducing the
dependency on major subsidies. By minimizing this gap, the consumption of urea will decrease, encouraging the increased use of DAP or phosphatic and potassic fertilizers. This shift would render obsolete many of the currently required controls, leading to a more efficient and competitive sector. It’s
a vast field, and by crafting precise strategies aligned with its business dynamics, we can bring about
controlled, sustainable growth without relying heavily on subsidies.