Taxatio reforms in Khyber Pakhtunkhwa

Taxation reforms in KP
By Tahir Ali
The Khyber Pakhtunkhwa government several has suggested several amendments to the relevant laws and revised the ratio of taxes in the 2014-15 budget.
It wishes to amend the first schedule of the sales tax act which will enable it to bring some more sectors in the tax net.
Rather than going for robust industrial revival and economic growth to increase its revenue, KP has opted for raising the ratio of tobacco development cess, land tax, agriculture income tax, professional tax and other taxes, levies, fees, duties and royalties such as the stamp duty, parking fees, route permits and royalties on forests for the purpose.
KP will generate provincial own receipts (PORs) of Rs28.78bn against current year’s Rs20bn. The PORs consist of tax receipts of Rs19.45bn (67.6%) and non-tax receipts of Rs.9.327bn (32.4%). Tax receipts include 11.8% direct taxes and 88.2% indirect taxes.

However the PORs will only be seven per cent of the total revenue receipts of the province as usual. PORs are projected to increase to Rs32.5bn and Rs36.6 in the next two years.

PORs include direct taxes like taxes on agriculture, property, land revenue etc, indirect taxes like GST on services, provincial excise, motor vehicle tax, stamp duties etc, and non tax receipts like income from property and enterprises, civil administration and economic, community and social services.

To improve tax collection, tax facilitation centres to be set up in Peshawar and other big cities. And Patwaris, who play pivotal role, have been given 50 per cent pay raise and Rs500 stationary allowance to discourage corruption and improve agriculture/land tax collection.

Agriculture tax
KP has been collecting direct taxes -Land Revenue (water tax or Abiana), agriculture income tax (AIT) and Land tax (LT) –and non tax heads (user charges) from farming community.

AIT/LT is collected by the Revenue and Estates department while LR is collected by the irrigation department through the patwaris from the farmers.

The AIT is collected on different rates from the owner, mortgagee or lessee or the tenants and levied on income from cultivated land while LT at a fixed rate over and above the exempted 12/5 acres of land under crops and orchards. Their rates have however been revised.

Target for AIT/LT and LR has been fixed at Rs79mn and Rs1.4bn against Rs22mn and Rs1.1bn budget estimates of the current year.

The exemption from AIT has been raised from Rs0.1mn to Rs0.4mn. 5 percent AIT would be collected from every owner of agriculture land if his income is over Rs0.4mn but doesn’t exceed Rs0.55mn. Where income exceeds Rs0.55mn but not Rs0.75mn, land owners will pay Rs7,500 plus 10 percent on the amount over Rs0.55mn. And when the income goes above Rs0.75mn but not Rs0.95mn, the owner will pay Rs22,500 plus 10 percent tax on the amount exceeding Rs0.75mn.On agriculture income between Rs0.95mn and Rs1.1mn, Rs42,500 plus 15 percent tax on the exceeding amount. And a land owner will pay Rs65000 tax plus 17.5 percent if his income exceeds Rs1.1mn.

Similarly, the rate for LT has been increased from Rs72 per acre over and above the exempted 12/5 acres of land under crops to Rs225-340 and to Rs900 from Rs300/acre for orchards.

Urban immoveable property (UIP) tax

The government has also revised and extended the scope of property tax. A proper survey will be conducted to properly determine property tax.
Earlier, 2 per cent capital value tax had been imposed on the transaction of UIP (residential flats and multi-storey buildings) but the 2 per cent tax had not to be less than Rs10 per square feet of constructed area. The condition has been waived and it will now be levied according to the classifications of constructed area.
Similarly, the ‘low’ ratio of UIP tax on houses of 15-20 marlas will be increased for houses on 18 marla or above.
Immovable properties have been divided into 12 categories. An owner of upto 5 marlas house (other than self-occupied) in category A, B and C (townships) in Peshawar will pay Rs1000, Rs 900 and Rs750 in UIP respectively. Owners of over 5 marlas will pay UIP tax of Rs1700, Rs1600 and Rs1500, owners of 10 marlas will pay Rs2200, Rs2100 and Rs2000, owners of 15 marlas house will deposit Rs3300, Rs3200, and Rs3000 while those with 18-20 marlas houses and flats will pay UIP tax of Rs10000, Rs9000, Rs8000 the three categories respectively.
Any land or building used for mobile towers or antennas which pays UIP tax at flat rate of 20 per cent of their annual rent will give Rs40000 annual tax in provincial, Rs30,000 in divisional and Rs20000 in district headquarters.
Critics opine that for the first time in the history of Pakistan, UIP tax will be extended to the suburbs at the district level in the KP budget (however this decision has been withdrawn in the finance act, 2014-15 passed by the provincial assembly)
The employees of grade 1-5 have been exempted from the tax. All government employees from scale5-22 will be giving annual tax between Rs100 and Rs2000.
Professional tax
Almost all professionals, business and services, with exclusion of lawyers, like chartered accounts, transporters, money changers, jewellers, cable operators, tobacco whole sellers, and businesses like petrol/diesel/CNG stations, real estate shops/ agencies vehicle service stations, printing presses etc will be in the tax-net now.
The professional tax threshold has been increased from Rs6000/pm to Rs10000 a month but as minimum monthly pay has also been fixed at Rs12000/pm ( as per the finance act, the minimum pay has been increased to Rs15000), practically all are to be taxed.
Those earning Rs10,000-Rs20,000/month will pay professional tax of Rs330 while the tax will be Rs435, Rs600, Rs800 and Rs1,000 respectively for those earning Rs20,000-Rs50,000, Rs Rs50,000-Rs100,000, Rs100,000-Rs200,000 and Rs200,000-Rs500,000/month.
The private limited companies, modarbas and mutual funds etc with paid-up capital and income of Rs10mn per annum in the previous year will pay tax of Rs18000 and Rs100000 if their income is over Rs200mn.
Persons owning factories, commercial establishments, private educational institutions and private hospitals will also pay tax. Any commercial establishment having 10 or more employees will pay tax of Rs10000 and private hospitals with 50 employees will pay Rs50000 tax a year.
Private business education institutes with 100 students will pay Rs70000 tax. Private law, medical and engineering colleges running degree programmes will pay Rs100000 tax, while educational institutes taking Rs5000 monthly fee from students have to pay Rs100000 annually.
Holders of import/export licence who earn Rs50000 in previous year will pay Rs4000 tax. A clearing or custom agent will pay Rs10000 and restaurants/guesthouses owners, professional caterers, travel agents and hajj/tour operators will pay Rs15000 tax while wedding halls owners Rs30000 annual tax.
Specialist doctors will pay Rs20000 while dentists Rs15000 professional tax a year. Diagnostic and therapeutic centres and pathological and chemical laboratories will also be taxed.
Experts say by directly collecting income tax from professionals and commercial entities, the KP government is intruding into the domain of the federal government which is exclusively authorised to collect income tax.
It is still not clear whether these taxes on employees and professionals would be in addition to the income tax?
It is merits mentioning that under the Finance Act 2013, KP had finalised arrangements to impose the infrastructure development cess but could not do so following objections from the federal government.
After the 18th amendment, excise duty on oil was to be imposed under Article 161(1)(b) of Pakistan’s constitution but it is yet to be levied. Khyber Pakhtunkhwa could receive Rs14.6bn on this count.
While the government claims it wishes to provide relief to the poor and collect tax only from the rich, these measures may ultimately burden the common men and will be resisted by the businessmen, farmers and the working class impacted by slump in business and price-hike.

 

 

Dawn-KP budget 2014-15

Progressive taxation of farm incomes

By Tahir Ali

Published Jun 23, 2014 06:11am

http://www.dawn.com/news/1114457/progressive-taxation-of-farm-incomes

The Rs404.8bn Khyber Pakhtunkhwa balanced budget for 2014-15, with a Rs139.8bn annual development programme, is aimed at addressing economic, social and industrial woes of the impoverished province, but falls short of business expectations.
“It is a status-quo budget devoid of any change, vision and reform agenda, and neglects the potential sectors. KP is beset with flight of capital, rising unemployment, terrorism and energy shortage. Joblessness is on the rise — there is 14.8pc unemployment in Khyber Pakhtunkhwa.
“Emergency steps are needed for economic growth, industrial revival, infrastructure development, energy supply, revival of sick industrial units and improvement in law and order and technical and IT education. But there is no proper roadmap for these areas.
“The government has failed to give new mineral, industrial, hydro, oil/gas and tourism policies reflective of its agenda for change,” says KP Chamber of Commerce and Industry President Zahidullah Shinwari.
The new budget is bigger by Rs69bn than the current budget of Rs344bn, while the ADP is higher by Rs21bn over this fiscal’s Rs118bn.
Major revenue receipts include Rs227.12bn from federal tax assignments, Rs12bn in net hydro profit, Rs32.27bn as NHP arrears, Rs29.26bn from oil/gas royalty, Rs27.29bn as war on terror grant and Rs35.35bn as foreign assistance etc.
KP’s own revenue receipts are estimated at Rs29bn (up by 70 per cent against the current year) and include Rs19.45bn in tax receipts and non-tax revenue of Rs9.3bn. This includes Rs12bn as GST on services. The province also earns Rs2.85bn from its own power plants.
The budget suggests insufficient measures to check the current expenditure which has reached around 70 per cent of the total budgeted outlay.
The finance minister promised to provide 15,000 more jobs in the public sector, but admitted that joblessness cannot be eliminated by the government alone. Without support of the private sector, and for that matter, economic growth, the problem cannot be solved.
There seems to be a genuine attempt to raise provincial revenues. The PTI-led KP government has proposed a progressive tax on agriculture income, as well as land tax and property tax. The KP revenue authority will conduct a proper survey to determine the property tax.
It intends to raise fees on stamp duty, professionals and professional institutions, business establishments etc. Strangely, a PTI-led government is to tax educational institutions, including medical, engineering and law colleges.
The finance minister says the province is replete with abundant human and natural resources, but its population is living in poverty and backwardness owing to unfair distribution of resources, flawed planning, joblessness, illiteracy, corruption, nepotism, weak accountability system and lack of good governance. He vowed to root out these evils.
Prepared under the ‘Integrated Development Strategy’, the budget aims at good governance, responsive social services delivery, economic prosperity, peace, economic growth and job creation, improved transparency and accountability, enhanced fiscal space and gender equity.
The minister said the private sector would be involved in the construction and maintenance of public sector development projects in partnership with the public sector.
However, important sectors have been allocated higher but yet paltry sums: Rs3.4bn for power sector against Rs1.4bn in the current year; Rs4.7bn against Rs3.28bn for irrigation and Rs1.58bn against Rs1.53bn for agriculture. Agriculture is the backbone of the economy as 70 per cent people in KP are dependent on it for their survival.
A Board of Investment and Trade has been formed to ensure an investment- friendly environment and for economic revival. The KP oil and gas authority has been constituted for better use of existing resources and for exploring new ones. But the impact of the two bodies is still not yet visible.
The finance minister says KP’s industrial sector is hit by lawlessness, energy crisis, limited market, high cost of production, dilapidated infrastructure and inadequate technical knowhow.
For this, technical education is to be promoted and has been allocated Rs3.7bn.
A self-reliance scheme with a Rs2.7bn rolling fund has been proposed to give interest- free loans of Rs50,000-200,000 to jobless youth.
He said the mineral sector could be used for poverty alleviation but earmarked only Rs0.62cbn for the sector.
The government intends to set up a stock exchange in Peshawar and is seeking support of the federal government in this regard.
Several austerity measures have been proposed to bring down expenditure. No treatment/training abroad, no new cars and no new posts are to be allowed unless approved by the chief minister. The construction of houses for officials and ministers on 20 marlas and 110 per cent raise in salaries of ministers, advisors etc. This is, however, being resented.
A sum of Rs7.9bn has been allocated for a pro-poor initiative under which various welfare programmes such as health insurance and provincial youth technical education etc will be launched. A Rs6bn special relief package programme for giving subsidised edible items to the poor has been proposed in the budget.
Various hydro and alternate energy projects being launched include the construction of 350 small dams.
Published in Dawn, Economic & Business, June 23rd, 2014

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ORIGINAL TEXT OF THE ARTICLE AS IT WAS SENT TO DAWN
KP budget 2014<br
By Tahir Ali
The Rs404.8bn Khyber Pakhtunkhwa balanced budget for 2014-15 with Rs139.8bn annual development programme addresses almost all the problems the province is faced with but gives only partial remedies to the economic, social and industrial woes of the impoverished province.
“The budget is a status-quo budget devoid of any change, vision and reform agenda and neglects the potential sectors. KP is beset with flight of capital, rising unemployment, terrorism and energy shortage. Joblessness is on the rise –there is 14.8 percent unemployment in Khyber Pakhtunkhwa against around 9.5 percent at national level. Province own revenues have remained stagnant. Real estate not taxed. Emergency steps were needed for economic growth, industrial revival, infrastructure development, energy supply, revival of sick industrial units, improvement in law and order, focus on technical and IT education but there is no proper roadmap for the areas. The government has failed to give a new mineral, industrial, hydel, oilg/gas and tourism policies reflective of its change agenda,” says the KP chamber of commerce and industry (Kpcci) president Zahidullah Shinwari.
Agonizing further is the fact that around 70 percent of the development funds lapsed in the current fiscal, he added.
The new budget is bigger by 69bn from the current year budget of Rs344bn while the ADP is higher by Rs21bn from this fiscal’s ADP of Rs118bn.
Major revenue receipts include Rs227.12bn federal tax assignments, Rs12bn net hydel profit plus Rs32.27bn as NHP arrears, Rs29.26bn oil/gas royalty, Rs27.29bn war on terror grant Rs35.35bn as foreign assistance besides some others sources.
KP’s own revenue receipts are estimated at Rs29bn (up by 70 per cent against the current year) include Rs19.45bn tax receipts and non tax receipts of Rs9.3bn. Rs12bn as GST on services which rose by 100 per cent is inclusive of tax receipts. The province also earns Rs2.85bn from own power plants.
The PORs target may be easily met in next fiscal and the years to come as new power plants get operational and sales tax collection targets is met for being easy,
Unlike other provinces, the budget has been divided into welfare, administrative and development sections but it is insignificant as welfare and administrative is the current budget having an outlay of Rs265bn while development budget is Rs139.8bn with Rs100bn local and Rs39bn foreign component.
The budget suggests insufficient measures to check current expenditure which has reached around 70 per cent of the total budget.
The expansion of the public sector must be a matter of concern for the subsequent government. The rising pay and pension bill of Rs176.5bn (66 percent of total current expenditure of Rs265bn) will squeeze space for development budget in future if not tackled. Industrialisation and Private sector
The finance minister promised to provide 15000 more jobs in public sector but he agreed that joblessness cannot be eliminated by government alone. Without support of private sector and for that matter economic growth, the problem couldn’t be achieved.
There seems to be a genuine attempt this time round to raise the provincial revenues locally and reduce dependence on federal and foreign funds. The PTI-led KP government has proposed a progressive tax on agriculture income, land tax and a progressive property tax.
KP has established KP revenue authority. This year a proper survey will be conducted to properly determine property tax.
It intends to raise the ratio of provincial taxes and fees on stamp duty, professionals and professional institutions, business establishments, agriculture income and salaries.
The rise in taxes/fees is expected to hit the consumers ultimately for it will be passed on to them. Strangely, a PTI-led government is to tax educational institutions including medical, engineering and law colleges.
The minister said KP is replete with abundant human and natural resources but its population is living under poverty and backwardness for unfair distribution of resources, flawed planning, joblessness, illiteracy, corruption, nepotism, weak accountability system and lack of good governance and vowed to root out these evils.
Prepared under the “Integrated Development Strategy”, the budget aims at good governance, responsive social services delivery, economic prosperity, peace, economic growth and job creation, improved transparency and accountability, enhanced fiscal space, gender equity and donor harmonization.
The minister said public private partnership act has been approved. The private sector would be involved in the construction and maintenance of public sector development projects.
Education has proved to be its biggest priority. However, important economic sectors have been allocated paltry sums: Rs3.4bn for power sector against Rs1.4bn in current year, Rs4.7bn against Rs3.28bn for irrigation and agriculture Rs1.58bn against Rs1.53bn in current year. The detailed expenditure report for the current year reveals that vital social and economic sectors of the ADP like social welfare, education, agriculture, energy/power and industries had been allocated Rs0.6bn, Rs24bn, Rs1.53bn, Rs2.2bn and Rs4.4bn respectively but actual utilisation remained at Rs.2bn, Rs3.72bn, Rs0.63bn, Rs0.65bn and Rs1bn could be utilised in this fiscal in that order.
Agriculture is the backbone of the economy as 70 per cent people in KP are dependent over it for their survival but only Rs1.5bn has been allocated for the sector. The poverty and inability of farmers to use enough quality inputs to raise their produce but the government comes up with only loans on easy terms for them.
A Board of investment and trade has been formed to ensure investment friendly environment and for economic revival. KP oil and gas authority has been constituted for better use of existing resources and to explore new ones but its impact is still not discernable.
To bring down poverty and accountability, the government has promulgated the right to information law and established a commission for access to information, access to services’ commission and conflict of interest commission, ihtesab commission, a complaint cell in CM secretariat. And a public procurement regulatory authority established to make the procurement system of hiring of services, goods and construction transparent and corruption free and introduced the market rate system instead of the composite scheduled rates to ensure transparency in development schemes.
The minister said KP industrial sector is hit by lawlessness, energy crisis, limited market, high cost of production, dilapidated infrastructure and lack of technical knowhow.
For this technical education is to be promoted which has been allocated Rs3.7bn. Technical University will be established.
Under the self-reliance scheme with a Rs2.7bn rolling fund has been proposed to give interest free loans of Rs50,000-200,000 to jobless youth on their personal guarantee.
He said the mineral sector could be used for poverty alleviation but then only allocated Rs0.62cbn in ADP for the sector.
The government intends to set up stock exchange in Peshawar to support the progress of industry and trade sectors and wishes the federal government to take further measures in this regard.
The government proposed ‘several austerity measures’ to bring down expenditure. No foreign treatment/training, no new cars and no posts to be allowed unless approved by CM. But he didn’t specify what happened to similar measures in the current budget. The minister said the government has formed committees for monetization and economy which are working with far reaching consequences, though he failed to identify any.
The construction of houses for officials and ministers on 20 marlas and 110 per cent raise in salaries of minister, advisors etc however is being resented.
Rs7.9bn has been allocated for a pro-poor initiative under which various welfare programs, such as health insurance, long-term loan for development of industries, and provincial youth technical education scheme etc would be launched. Rs6bn more allocated for a special relief package program for giving subsidized edible items to the poor.
Various hydel and alternate energy projects being launched. Rs7bn have been allocated to construct 350 small dams. 400 megawatts of electricity will be produced through gas whose cheap energy will be given to industries.

KP Development budget 2014-15

No change in sight

Will the KP government be able to meet ambitious development targets set in the budget?

 
No change in sight
 
The Khyber Pakhtunkhwa government presented its budget for 2014-15 with an outlay of Rs404.8 billion last week. The Rs139.8 billion annual development programme is 20 per cent higher than the current year. It also includes Rs39 billion foreign component of which 79 per cent are grants.

KP Finance Minister Sirajul Haq says the province has abundant human and natural resources but its population is living under poverty and backwardness due unfair distribution of resources and lack of good governance.

Major revenue receipts include Rs227.12 billion federal tax assignments, Rs12 billion net hydel profit plus Rs32.27 billion as NHP arrears, Rs29.26 billion oil/gas royalty, Rs27.29 billion war on terror grant, Rs35.35 billion as foreign assistance besides some others sources.

KP’s own revenue receipts estimated at Rs29 billion (up by 70 per cent against the current year) include Rs19.45 billion tax receipts and non-tax receipts of Rs9.3 billion. Rs12 billion as GST on services which rose by 100 per cent is inclusive of tax receipts. The province also earns Rs2.85 billion from own power plants. Current expenditure (welfare and administrative) will be Rs265 billion.

The government’s development priorities are right, people say, but they doubt it will be able to meet its defined goals. Our successive governments have failed to create jobs thus leaving Pakhtuns searching for even menial jobs in other provinces or abroad, they argue. Most of the development funds for the outgoing year largely remain unutilised, claims an industrialist.

Various hydel and alternate energy projects are being launched — Rs7 billion have been allocated to construct 350 small dams, while 400 megawatts of electricity will be produced through gas whose cheap energy will be given to industries.

The public-private partnership act has been approved. The private sector would be involved in the construction and maintenance of public sector development projects. New industrial zones will be established but there is no plan for the revival of the sick industrial clusters like Gadoon Industrial estate.

Various hydel and alternate energy projects are being launched — Rs7 billion have been allocated to construct 350 small dams, while 400 megawatts of electricity will be produced through gas whose cheap energy will be given to industries.

Zahidullah Shinwari, the president of the KP Chamber of Commerce and Industry, terms the budget a status-quo budget devoid of any vision and reform agenda. “KP is beset with flight of capital, rising unemployment, terrorism and energy shortage. Joblessness is on the rise — there is 14.8 per cent unemployment in Khyber Pakhtunkhwa against around 9.5 per cent at national level.”

“Emergency steps were needed for economic growth, industrial revival, infrastructure development, energy supply, revival of sick industrial units and improvement in law and order, but there is no proper roadmap. The government has failed to give new mineral, industrial, hydel, oil/gas and tourism policies reflective of its change agenda,” he said.

There is contradiction in the figures. The finance minister said the current ADP has 611 on going and 378 new projects of which 209 will be completed this fiscal. The remaining and ongoing project are therefore 780. But he said the next budget will have 1251 projects including 611 ongoing and 540 new projects.

In education sector, the government will upgrade schools, establish IT laboratories in high schools, provide furniture to 2300 schools, provide sports facilities in 2400 schools, provide scholarships to talented students and offer free education to special persons in all colleges of the province.

Agriculture is the mainstay of livelihood for over 70 per cent of KP people, acknowledges the minister, but for 46 projects, only Rs1.58 billion have been allocated. While the allocation has been marginally increased, it has in fact come down as percentage to the ADP — while the current year’s allocation was 1.8 per cent of local ADP, the new apportionment is 1.5 per cent.

In Rs39 billion foreign component of ADP, education again was the major beneficiary with Rs11.7 billion, followed by Rs7.6 billion for roads for five projects but agriculture gets only Rs0.8 billion, energy Rs2.6 billion and industries Rs1.6 billion.

The poverty and inability of farmers to use enough quality inputs to raise their produce is the biggest hitch, the minister says, but he comes up with only loans on easy terms for them.

The PTI fans and even some ministers are taking pride in ‘a record increase’ in education spending to Rs111 billion but critics say most of the allocation (over Rs80 billion) comprises current budget which is but natural for being the biggest employees-wise department of the province.

The detailed expenditure report for the current year also reveals that vital social and economic sectors of the ADP like social welfare, education, agriculture, energy/power and industries had been allocated Rs0.6 billion, Rs24 billion, Rs1.53 billion, Rs2.2 billion and Rs4.4 billion respectively, but actual utilisation remained at Rs.2 billion, Rs3.72 billion, Rs0.63 billion, Rs0.65 billion and Rs1 billion in this fiscal.

In a bid to increase KP’s own revenue receipts, the government intends to raise the ratio of provincial taxes and fees on stamp duty, professionals and professional institutions, business establishments, agriculture income and salaries. The rise in taxes/fees is expected to hit the consumers ultimately for it will be passed on to them. Strangely, a PTI-led government is to tax educational institutions including medical, engineering and law colleges.

As per the Finance Bill 2014-15, an annual tax of Rs330 will be levied on a person in any profession and trade who earns between Rs10,000-Rs20,000. While a person earning between Rs200,000-Rs500,000 will pay tax of Rs10,000.

The employees of grade 1-5 have been exempted from the tax and the minimum professional tax threshold has been increased from Rs6000/pm to Rs10000 a month which, the finance minister said, will provide relief to low income class. But does the assertion hold any ground on the face of the fact that minimum monthly pay has been already fixed at Rs12000/pm.

Twelve categories are suggested for urban immovable property (UIP) tax. For technical education, Rs3.7 billion have been allocated and a technical university will be established. Rs2.7 billion have been earmarked to give interest-free loans of Rs50,000-200,000 to jobless youth on their personal guarantee.

The government proposed ‘several austerity measures’ to bring down expenditure. No foreign treatment/training, no new cars and no posts to be allowed unless approved by the chief minister.

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ORIGINAL TEXT OF THE ARTICLE AS IT WAS SENT TO THE NEWS

KP budget 2014-15

By Tahir Ali

The Pakistan Tehreek-e-Insaf-led Khyber Pakhtunkhwa government presented its balanced budget for 2014-15 with an outlay of Rs404.8bn last week.

The Rs139.8bn annual development programme is 20 per cent higher than the current year. It also includes Rs39bn foreign component of which 79 % are grants.

The KP finance minister Sirajul Haq says KP has abundant human and natural resources but its population is living under poverty and backwardness for unfair distribution of resources, flawed planning, joblessness, illiteracy, corruption, nepotism, weak accountability system and lack of good governance. He pledged making KP free of social, political and economic exploitation.

Major revenue receipts include Rs227.12bn federal tax assignments, Rs12bn net hydel profit plus Rs32.27bn as NHP arrears, Rs29.26bn oil/gas royalty, Rs27.29bn war on terror grant Rs35.35bn as foreign assistance besides some others sources.

KP’s own revenue receipts estimated at Rs29bn (up by 70 per cent against the current year) include Rs19.45bn tax receipts and non tax receipts of Rs9.3bn. Rs12bn as GST on services which rose by 100 per cent is inclusive of tax receipts. The province also earns Rs2.85bn from own power plants.

Current expenditure (welfare and administrative) will be Rs265bn. It needs to be checked or it will in future restrict room for development portfolio.

The government’s development priorities are right, people say, but they doubt it will be able to meet its defined goals. Our successive governments have failed to create jobs thus leaving Pakhtuns searching for even menial jobs in other provinces or abroad, they argue.

Most of the development funds for the outgoing year largely remains unutilised, claims an industrialist.

The public private partnership act has been approved. The private sector would be involved in the construction and maintenance of public sector development projects.

New industrial zones to be established but there is no plan for the revival of the sick industrial clusters like Gadoon estate.

Various hydel and alternate energy projects being launched. Rs7bn have been allocated to construct 350 small dams. 400 megawatts of electricity will be produced through gas whose cheap energy will be given to industries.

To bring down poverty and accountability, the government has promulgated the right to information law and established a commission for access to information, access to services’ commission and conflict of interest commission, ihtesab commission, a complaint cell in CM secretariat. And a public procurement regulatory authority established to make the procurement system of hiring of services, goods and construction transparent and corruption free and introduced the market rate system instead of the composite scheduled rates to ensure transparency in development schemes. .

Zahidullah Shinwari, the president of the KP chamber of commerce and industry terms the budget a status-quo budget devoid of any vision and reform agenda.

“KP is beset with flight of capital, rising unemployment, terrorism and energy shortage. Joblessness is on the rise –there is 14.8 percent unemployment in Khyber Pakhtunkhwa against around 9.5 percent at national level. Emergency steps were needed for economic growth, industrial revival, infrastructure development, energy supply, revival of sick industrial units, improvement in law and order, focus on technical and IT education but there is no proper roadmap for the areas. The government has failed to give a new mineral, industrial, hydel, oilg/gas and tourism policies reflective of its change agenda,” he said.

There is contradiction in the figures. The finance minister said the current ADP has 611 on going and 378 new projects of which 209 will be completed this fiscal. The remaining and ongoing project are therefore 780. But he said the next budget will have 1251 projects including 611 ongoing and 540 new projects.

In education sector, the government will upgrade schools, establish IT laboratories in high schools, provide furniture to 2300 schools, provide sports facilities in 2400 schools, provide scholarships to talented students and offer free education to special persons in all colleges of the province.

In Rs100bn provincial ADP, Education got Rs15bn but important economic sectors have been allocated paltry sums: Rs3.4bn for power sector against Rs1.4bn in current year, Rs4.7bn against Rs3.28bn for irrigation and agriculture Rs1.58bn against Rs1.53bn in current year.

Agriculture is the mainstay of livelihood for over 70 per cent of KP people, acknowledges the minister, but for 46 projects, only Rs1.58bnn have been allocated. While the allocation has been marginally increased, it has in fact come down as percentage to the ADP – while the current year’s allocation was 1.8 per cent of local ADP, the new apportionment is 1.5 per cent.

In Rs39bnforeign component of ADP, education again was the major beneficiary Rs11.7bn, followed by Rs7.6bn for roads for five projects but agriculture gets only Rs0.8bn, energy Rs2.6bn and industries Rs1.6bn.

The poverty and inability of farmers to use enough quality inputs to raise their produce is the biggest hitch, the minister says, but he comes up with only loans on easy terms for them.

The PTI fans and even some ministers are taking pride in ‘a record increase’ in education spending to Rs111bn but critics say most of the allocation (over Rs80bn) comprises current budget which is but natural for being the biggest employees-wise department of the province.

The detailed expenditure report for the current year also reveals that vital social and economic sectors of the ADP like social welfare, education, agriculture, energy/power and industries had been allocated Rs0.6bn, Rs24bn, Rs1.53bn, Rs2.2bn and Rs4.4bn respectively but actual utilisation remained at Rs.2bn, Rs3.72bn, Rs0.63bn, Rs0.65bn and Rs1bn could be utilised in this fiscal.

In a bid to increase KP own revenue receipts, the government intends to raise the ratio of provincial taxes and fees on stamp duty, professionals and professional institutions, business establishments, agriculture income and salaries. The rise in taxes/fees is expected to hit the consumers ultimately for it will be passed on to them. Strangely, a PTI-led government is to tax educational institutions including medical, engineering and law colleges.

As per the Finance Bill 2014-15, an annual tax of Rs330 will be levied on a person in any profession and trade who earns between Rs10,000-Rs20,000. While a person earning between Rs200,000-Rs500,000 will pay tax of Rs10,000. There are such slabs.

The employees of grade 1-5 have been exempted from the tax and the minimum professional tax threshold has been increased from Rs6000/pm to Rs10000 a month which, the finance minister said, will provide relief to low income class but does the assertion hold any ground on the face of the fact that minimum monthly pay has been already fixed at Rs12000/pm.

Twelve categories are suggested for urban immovable property (UIP) tax. An owner of upto 5 marlas house (other than self-occupied) in category A, B and C will pay Rs1000, Rs 900 and Rs750 in UIP respectively. Owners of over 5 marlas will pay UIP tax of Rs1700, Rs1600 and Rs1500, owners of 10 marlas will pay Rs2200, Rs2100 and Rs2000, owners of 15 marlas house will deposit Rs3300, Rs3200, and Rs3000 while those with 18-20 marlas houses and flats will pay UIP tax of Rs10000, Rs9000 and Rs8000 in the three categories respectively. Similarly other eight categories have different tax slabs for the immovable properties.

For technical education Rs3.7bn have been allocated and a technical University will be established. Rs2.7bn have been earmarked to give interest free loans of Rs50,000-200,000 to jobless youth on their personal guarantee.

The mineral sector could be used for poverty alleviation but only Rs0.62cbn have been allotted to it in the ADP.

The government intends to set up stock exchange in Peshawar to support the progress of industry and trade sectors.

The government proposed ‘several austerity measures’ to bring down expenditure. No foreign treatment/training, no new cars and no posts to be allowed unless approved by CM. But he didn’t specify what happened to similar measures in the current budget. The minister said the government has formed committees for monetization and economy which are working with far reaching consequences, though he failed to identify any.

The construction of houses for officials and ministers on 20 marlas and 110 per cent raise in salaries of minister, advisors etc however is being resented.

Rs7.9bn has been allocated for a pro-poor initiative under which various welfare programs, such as health insurance, long-term loan for development of industries, and provincial youth technical education scheme etc would be launched. Rs6bn more allocated for a special relief package program for giving subsidized edible items to the poor.

The education budget was Rs13.87bn in current fiscal while this year it will be Rs14.31bn for the next year.

 

 

gur-making up in KP

Bitter realities of a sweet crop

http://tns.thenews.com.pk/bitter-realities-of-a-sweet-crop/#.Uq7hS6xsS1s

Sugarcane growers prefer making gur rather than selling the crop to mills owners

Bitter realities of a sweet crop

It is gur-making season in Khyber Pakhtunkhwa, especially in Peshawar, Charsadda, Mardan and Nowshera. The estimated sugarcane production in KP is around 1.3 million tonnes. Almost half of it is used for gur making. Gur produced in Charsadda and Mardan is very popular countrywide. Gur is the main sweetener for around 60 per cent people in KP and Federally and Provincially-administered tribal areas (Fata and Pata). It is exported to Afghanistan, Middle Eastern and Central Asian states where it is believed to be used as a sweetener and in winemaking.

Mardan and Peshawar are the hubs of gur trade. Around ten to twelve thousands of purs are traded in the Pipal Mandi gur market when the trade is in full swing. Gur commission agents are also very active these days.

Thousands of tonnes of gur is traded in the province or taken out of the country daily. Majority of the sugarcane growers prefer using their cane-produce for gur-making rather than taking it to mills for its comparative advantages. It fetches them good prices. They have to feed their animals with cane-grass which necessitates intermittent cutting of crop as allowed by gur-making and not simultaneous harvesting of the entire crop as demanded by the mills option. And they usually use gur in their homes. Gur is used in juices, sweets and eaten with bread as curry with bread by the poor.

In Punjab, a kind of gur, named Duplicate, is prepared by mixing gur, glucose and other ingredients. It is good-looking as well as cheaper and tasteful, according to some farmers.

While sugar-mills began crushing season in early November, gur-making is usually started in late September or early October. It lasts till April next year.

Gur prepared in the initial stage is of inferior quality but can fetch more. Late production increases yield and standard. The gur made in January, February and March is much better in quality and is liked the most. Similarly, gur without alteration is the best for human consumption while that mixed with artificial colour tastes bad, though people residing in remote areas prefer it for its bright colour. Again, the gur made from the roots of the last year’s crop is good in quality while that from fresh canes is not that good.

According to Murad Ali Khan, a farmers’ leader from Charsadda, gur is more competitive for the farmers at the current rate.

“A pur of gur (having 75-80 kilograms) fetches a price up to Rs5000 depending upon its colour, taste and quality in the local market. Sugarcane yield per acre is around 400 maunds which can produce 20 purs (a pur consumes 20-25 maunds of cane). These can earn a farmer Rs100,000 or more. It exceeds the price offered by sugar-mills these days,” he says.

According to another farmer, quality sugarcane can give as much as 40 purs per acre. But, he says, farmers in KP will only benefit from the crop when its per acre yield of 350-400 maunds is increased to that of 650-700 maunds in Punjab. At present, gur-making through rented gur-ganee (machines) is less beneficial for farmers while those who own ganees are the real beneficiaries,” he opines.

Muhammad Zahir Khan, another growers’ representative, says hitches in supply of gur to Fata, Pata and the ban on export of gur to Afghanistan and the central Asian states, however, have lowered gur prices of late to the detriment of gur farmers. “Gur can be a healthy addition to the countries’ depleting export earnings if its export is allowed after value addition.”

Masud Khan, the manager of the Premier Sugar Mills Mardan, says though the minimum sugarcane support price is Rs170 per 40 kilogrammes in other provinces, the local sugar mills offer Rs180. “We have to compete with gur-ganees. While our per kg cost of production has increased for higher prices and wages offered to farmers and employees, escalating fuel prices and various taxes, gur-ganees have no such taxes and responsibilities. How can we compete with them? Sugar industry will be on verge of closure if not supported,” he says. The industry has been campaigning for ban on gur export, taxes on gur industry and eventual moratorium on gur production.

Rizwanullah Khan, the president of the Kissan Board KP, however, says prices of all the things are on the rise while last year’s cane price has remained unchanged. “In 2010, mills had offered Rs240 per 40kg. Cane price be increased as per cost of production. We have planned agitation to press for good cane-prices.”

Gur was once the food of the poor. Though it has become costlier than sugar for few years now, the poor still prefer it for its taste and health benefits.

A farmer said gur agents and big farmers have installed generator-run modern gur-ganees with several furnaces which help prepare plenty of purs daily.

In 1996, average retail gur price was 14 rupees a kilo. Currently, it is sold at Rs66-75/kg. The sugarcane growers, unfortunately, haven’t been able to get advantage of this hike. Growers say the gur commission agents have devoured most of the surplus value in the shape of huge commission or deduction of 5-8kg gur/a pur.

Mardan and Peshawar are the hubs of gur trade. Around ten to twelve thousands of purs are traded in the Pipal Mandi gur market when the trade is in full swing. Gur commission agents work pretty much like the property dealers or motor vehicle bargainers who are only concerned with their commission.

“The gur agents enter advance agreements with farmers by making payments for standing crops. They provide farmers seasonal/crop-based loans which they use for buying inputs and fulfilling their domestic needs,” a farmer says.

An official of the Sugarcane Crops Research Institute said though KP’s cane has better quality and sucrose content, its average yield is between 16-24 metric tonnes, much less than that of Sindh and Punjab. He cited insufficient use of fertiliser and pesticides, non-attractive price given by mills, intercropping, use of less than recommended seed (4 ton/acre) and shortage of irrigation water as reasons for lesser acreage and production.

Damming conflicts

Damming conflicts
With prices of land rising up in South Waziristan Agency after Gomal Zam Dam’s construction, new tensions among tribesmen are flaring up
By Tahir Ali

http://jang.com.pk/thenews/Mar2013-weekly/nos-31-03-2013/pol1.htm#4

As Gomal Zam Dam being built in South Waziristan Agency nears completion and is expected to get operational by the end of the year, new opportunities and challenges have emerged that necessitate a comprehensive governance and execution model for conflict resolution, optimum utilisation of resources and smooth implementation of the project.

The GZD is a multi-purpose project consisting of three components — dam and spillway, power house and irrigation system. It is being completed by Wapda and Frontier Works Organisation with financial assistance from the USAID which had provided $80 million to help complete the work which was expected to hit snags for shortage of funds.

Secretary Planning and Development Khyber Pakhtunkhwa, Dr Asad Ali Khan, said that as per the contractors’ report, the dam component is 90 per cent complete. Main canal has been completed while tributaries and irrigation channels are being constructed. The hydro power component is almost complete and will shortly start electricity generation.

He said all stakeholders — the concerned government departments, community representatives and donors — should join hands to make it a success. “The P&D department KP has formed a review committee to supervise and support the advocacy project and to ensure transparency in the project,” he added.

The project has huge financial impacts. Vast tracts of land in the fertile command area in the South Waziristan agency and the districts of Tank and Dera Ismael Khan (DIK) in Khyber Pakhtunkhwa, mostly rain-fed or irrigated by the traditional Rod Kohi system, would benefit from the scheme.

“It will benefit over 0.3mn farmers in 81 villages in Tank and DIK and would provide irrigation water for 191000 acres of land. It will help reduce flood damage of around $2.6mn and will also generate electricity. It would store 1.14 million acre feet of water for irrigation and drinking purposes, generate around 20 megawatts, sufficient for 25,000 households in the command area,” according to an official.

Earlier land prices were low and agriculture fetched little. Hence many lands had been abandoned by the absentee landlords. Life standard was low in the project area. The areas either witnessed severe drought or floods that inundated vast areas and flattened crops. But now with prices of land rising up after dam’s construction, new tensions are flaring up.

“As land prices and potential for agriculture incomes have increased, there is discomfort in the command area. Conflict of interest is expected to get deeper. Though I can’t say whether there would be tenants-owners wars that happened in the country in 1970s, as reported tenants-owner tensions are likely to rise in number and depth. This could be a potential threat to the area peace. The government should nip the evil in the bud,” said Ahmad Zeb, a community representative from DIK. Zeb said the problems of collective land ownership and absentee landlordism could be pestering problems in future if not checked.

“The absentee landlords, who had left their lands unattended or to tenants for decades, are returning to take possession of their lands, a move being resisted by the tenants. Resultantly, tenants-landowners tensions are on the rise. Before this becomes a menace for this volatile region bordering the militancy-hit tribal belt, the government needs to proactively check this menace. There is a need for new land resettlement and subsequent distribution amongst their virtual owners,” Zeb said.

As the work on the project began in 2001, the trend of buying or snatching lands from the ignorant farmers started. However, in October 2001, the provincial government banned the sale, purchase, registry, Hiba, settlement of property and transfers of land under the Gomal Zam Dam Speculation Ordinance, in the project area till completion of the dam.

Humyun Khan, a Tank community representative, also seconded Zeb’s thoughts and urged involvement of the administration to overcome this menace.

According to another farmer from the area, main canal has been established and irrigation channels are now being prepared but farmers are reluctant to allow irrigation channels on the paltry amount being offered. Worse, payment is being delayed under one pretext or another.

Again, farmers are unhappy over the division of irrigation water in the 393 morgahs on the basis of different cropping intensities in the command area. A farmer said that some areas have been allotted less water on the basis of low cropping intensity. Coupled with this is the expected huge gap between the water availability at the head and tail-end with the result that the farmers in the tail-end will suffer. This discrepancy needs to be removed.

Considering this, the Gomal Zam Command Area Advocacy Project (GZAP), launched recently, is of vital importance as it plans to ensure a hassle-free execution of the project to make it advantageous for the impoverished farming community in the command area of the Gomal Zam.

The Small Grants Ambassadors’ Funds Programme of the USAID has provided Rs20mn for the advocacy project. It is being implemented by the Regional Institute of Policy Research and Training (RIPORT), a local think tank.

“With civil work almost complete in most components of the GZ project, there is a need to build an institutional mechanism to ensure hassle-free execution of the project. We intend to set up a consultative institutional mechanism based on community and government stakeholders’ interaction for addressing agriculture/irrigation related challenges including conflict mitigation. It will also undertake research for identifying the agriculture/irrigation threats and opportunities in the project area. A project review committee composed of representatives of P&D, agriculture, irrigation, Wapda, SWD and the donors needs to be formed,” said Khalid Aziz, the chairman of RIPORT. “All these steps would help develop a governance model for smooth implementation of the irrigated agriculture in GZ command area.”

“Community awareness and participation is to be ensured. They need to be informed of the challenges and opportunities of shifting from Rod Kohi to canal irrigation system. Awareness sessions in 131 villages regarding canal distribution system and its challenges would be arranged. Village committees would be formed and training for each village committee on on-farm water management, sustainable cropping patterns etc would be provided. Learning visits will be arranged for farmers to the Chashma right bank canal,” he explained.

Aziz said, “The project activities include optimisation of agriculture incomes, land levelling, soil conservation, reclamation of lands, on-farm water management, utilisation of canal water for drinking purposes, awareness about water and land rights, optimisation of cropping patterns, preparation of manual of best agriculture and irrigation practices and identification of reforms and legislation.”

Officials from agriculture and livestock departments also want a role for the departments and warned against duplication of farmers’ organisations to be formed in the project areas. They advocated close coordination between the concerned departments.

Plantation of locally sustainable plants on the canal side and orchards and rangeland development should also be considered.

Gomal Zam Dam: potential and challenges

By Tahir Ali

As Gomal Zam Dam being built in South Waziristan Agency nears completion and is expected to get operational by the end of the year, new opportunities and challenges have emerged that necessitate a comprehensive governance and execution model for conflict resolution, optimum utilisation of resources and smooth implementation of the project.

The GZD is a multi-purpose project consisting of three components –dam and spillway, power house and irrigation system. It is being completed by Wapda and Frontier Works Organisation with financial assistance from the USAID which had provided $ 80mn to help complete the work which was expected to hit snags for shortage of funds.

Secretary Planning and Development Khyber Pakhtunkhwa Dr Asad Ali Khan said that as per the contractors’ report, the dam component is 90 per cent complete. Main canal has been completed while tributaries and irrigation channels are being constructed. The hydro power component is almost complete and will shortly start electricity generation.

He said all stakeholders –the concerned government departments, community representatives and donors – should join hands to make it a success. “The P&D department KP has formed a review committee to supervise and support the advocacy project and to ensure transparency in the project,” he added.

The project has huge financial impacts. Vast tracts of land in the fertile command area in the South Waziristan agency and the districts of Tank and Dera Ismael Khan (DIK) in Khyber Pakhtunkhwa, mostly rain-fed or irrigated by the traditional Rod Kohi system, would benefit from the scheme.

“It will benefit over 0.3mn farmers in 81 villages in Tank and DIK and would provide irrigation water for 191000 acres of land. It will help reduce flood damage of around $2.6mn and will also generate electricity. It would store 1.14 million acre feet of water for irrigation and drinking purposes, generate around 20 megawatts, sufficient for 25,000 households in the command area,” according to an official. 

Earlier land prices were low and agriculture fetched little. Hence many lands had been abandoned by the absentee landlords. Life standard was low in the project area. The areas either witnessed severe drought or floods that inundated vast areas and flattened crops. But now with prices of land rising up after dam’s construction, new tensions are flaring up.

“As land prices and potential for agriculture incomes have increased, there is discomfort in the command area. Conflict of interest is expected to get deeper. Though I can’t say whether there would be tenants-owners wars that happened in the country in 1970s, as reported tenants-owner tensions are likely to rise in number and depth. This could be a potential threat to the area peace. The government should nip the evil in the bud,” said a community representative.

Ahmad Zeb, a community representative from DIK, the problems of collective land ownership and absentee landlordism could be pestering problems in future if not checked. “The absentee landlords, who had left their lands unattended or to tenants for decades, are returning to take possession of their lands, a move being resisted by the tenants. Resultantly, tenants-landowners tensions are on the rise. Before this becomes a menace for this volatile region bordering the militancy-hit tribal belt, the government needs to proactively check this menace. There is a need for new land resettlement and subsequent distribution amongst their virtual owners,” he said.

No sooner did work on the project begin in 2001, the trend of buying or snatching lands from the ignorant farmers started. However in October 2001, the provincial government banned the sale, purchase, registry, Hiba, settlement of property and transfers of land under the  Gomal Zam Dam Speculation Ordinance, in the project area till completion of the dam.   

Humyun Khan, a Tank community representative, also seconded his thoughts and urged involvement of the administration to overcome this menace.

According to another farmer from the area, main canal has been established and irrigation channels are now being prepared but farmers are reluctant to allow irrigation channels on the paltry amount being offered. Worse, payment is being delayed under one pretext or another.

Again, farmers are unhappy over the division of irrigation water in the 393 morgahs on the basis of different cropping intensities in the command area. A farmer said that some areas have been allotted less water on the basis of low cropping intensity. Coupled with this is the expected huge gap between the water availability at the head and tail-end with the result that the farmers in the tail-end will suffer. This discrepancy needs to be removed.

Considering this, the Gomal Zam Command Area Advocacy project (GZAP), launched recently, is of vital importance as it plans to ensure a hassle-free execution of the project to make it advantageous for the impoverished farming community in the command area of the Gomal Zam.

The Small Grants Ambassadors’ Funds Programme of the USAID has provided Rs20mn for the advocacy project. It is being implemented by the Regional Institute of Policy Research and Training (RIPORT), a local think tank.

“With civil work almost complete in most components of the GZ project, there is a need to build an institutional mechanism to ensure hassle-free execution of the project. We intend to set up a consultative institutional mechanism based on community and government stakeholders’ interaction for addressing agriculture/irrigation related challenges including conflict mitigation. It will also undertake research for identifying the agriculture/irrigation threats and opportunities in the project area. A project review committee composed of representatives of P&D, agriculture, irrigation, WAPDA, SWD and the donors needs to be formed. All these steps would help develop a governance model for smooth implementation of the irrigated agriculture in GZ command area,” said Khalid Aziz, the chairman of RIPORT.

“Community awareness and participation is to be ensured. They need to be made aware of the challenges and opportunities of shifting from Rod Kohi to canal irrigation system. Awareness sessions in 131 villages regarding canal distribution system and its challenges would be arranged. They will be informed about water user rights and best irrigation practices. They need to be guided on how to ensure optimum use of the available water for increasing their output, on water conservation practices and on the new water and crop patterns. Farmers’ organisations are to be formed in villages. Village committees would be formed and training for each village committee on on-farm water management, sustainable cropping patterns etc would be provided. Learning visits will be arranged for farmers to the Chashma right bank canal,” he explained.

 “The project activities include optimisation of agriculture incomes, land levelling, soil conservation, reclamation of lands, on farm water management, utilisation of canal water for drinking purposes, awareness about water and land rights, optimisation of cropping patterns, preparation of manual of best agriculture and irrigation practices, identification of reforms and legislation. We will also conduct research on introduction of locally viable new seeds, adopting better usage water practices, threat of water logging if water intensive crops such as sugarcane is sown. A project management unit is to be formed. The irrigation and revenue experts and department will be consulted and involved in monitoring and evaluation,” Aziz added.

Officials from agriculture and livestock departments urged main role for the departments and warned against duplication of farmers’ organisations to be formed in the project areas by different departments. They advocated close coordination between the concerned departments.

A local said not only the establishment of infrastructure but its sustainability also needs to be ensured in

Plantation of locally sustainable plants on the canal side and orchards and rangeland development should also be considered. For this purpose the research of the agriculture university Peshawar and that of the Gomal University could be obtained.

 

Model Achai cow farm

Model cow farming
Under the Achai Cow Conservation and Development Project, KP farmers will get free of cost insemination, vaccination, medicines and advisory services for conserving and developing their cattle
By Tahir Ali

http://jang.com.pk/thenews/Jan2013-weekly/nos-13-01-2013/pol1.htm#5

A Model Achai Cow Conservation Farm has almost been built at Munda in Lower Dir Khyber Pakhtunkhwa. The farm is being constructed under the Rs222 million Achai Cow Conservation and Development Project. Launched in July 2009, the farm was originally scheduled to be completed by June 2012, but it was delayed by a few months for law and order situation in the region.

A senior official said that after completion of the remaining only 2 per cent work, the site will be handed over to the Directorate of Livestock within a few days.

According to Dr Wahid Mir, the project director, 20 canals of land has been purchased for the farm while another 22-24 canals will be bought for fodder production for the animals to be kept there. Khyber Pakhtunkhwa has around 6 million cows of different breeds but none of these have been utilised to produce genetically superior and high yielding species so far.

Though there are several indigenous cattle breeds like Lohani in Kohat and Gabrali in Swat that need conservation and development, the government selected the Achai cow for its characteristics, inter alia, of good weather adaptability, suitability for the area, docility, high fertility and good conception rate.

“The cow is suitable for the area terrain and weather; it can resist cold and warm climate (can withstand both icy and as high as 200 Celsius); it has a small body and thus needs little food but gives more milk as compared to its size and food; it is docile and can be milked by even children; it has double conception rate than other national breeds; it also has better fertility. While other breeds take two to three years after one reproduction, Achai cow usually reproduces after one and a half year and may give birth to three calves against the one or two on part of other breeds; and because it was endangered as according to the livestock census in 2006, only 5 lakh Achai cows were reported province wide,” Dr Mir said.

The best high milk/meat yielding Achai breeds are to be selected for reproductive purposes at the farm and then disseminated to farmers in the area. Even with the beginning of the Achai project, the price of Achai cow, which was until recently looked down upon by market players, has increased to Rs40,000/cow from Rs15,000/20,000 earlier.

Based on a survey of 400 Achai cattle, the average milk yield in 45 per cent Achai cows was recorded by the project officials at only 1 and 1.5 litres a day. Another 20 per cent yielded 2-4 litres. Some other cow groups produced 4-5, 6-7, 8 and 9 litres a day.

“The respective yields of these groups can be easily increased with concerted efforts for dissemination of best Achai breeds, provision of hygienic feed and efficient animal health services,” according to the official.

“There will be a small laboratory that will be used for diagnosing animal diseases. The best Achai cows will be ascertained and later used for reproductive purposes through the artificial insemination and the embryo transplantation technique wherein embryos from best female are collected and implanted in other female animals,” he added.

Asked whether any semen production unit (SPU) is being established at the farm for semen availability for artificial insemination, Dr Mir replied in the negative, but said that there was a big SPU in Harichand Charsadda cattle farm. A state of the art embryo transplant technology is also being established there. Its services will be used for the Dir farm as well.

Side by side, implementation of Achai project has already started in the districts of Charsadda, Swat, Lower Dir, Upper Dir, Malakand and Chitral. Achai-rich Kohistan, Shangla and Buner districts have been kept out from the project, apparently for fiscal and staff constraints though Dr Mir said Buner and Swabi will be included in it in the near future.

Through the project, Achai owners are being registered and Achai cow associations are being formed in every village where 25 households own Achai cattle. “Against our initial target of 48 bodies, 102 Achai associations have so far been enlisted in the project area and more are being formed. These organisations will later be combined into a district Achai cattle owners association. Another association at divisional level is also to be formed.”

Asked as to what benefits would accrue to the registered farmers, the project director said that the registered farmers would get free of cost insemination, vaccination, diagnosis, treatment, medicines and advisory services for conserving and developing their cattle.

“We have already provided training to some farmers at the Cattle Farm in Hari Chand, Charsadda. Farmers will also be taken to model public and private cattle farms in KP and Punjab where they will be acquainted with modern ways of livestock rearing, feeding, milking, feed making, preparation of by-products from milk etc,” Dr Mir added.

Another great benefit of these associations is the farmers-government linkages. “These associations have greatly facilitated the work of the veterinary assistants and benefited the farmers as cattle are being inspected, vaccinated and treated by the former at a pre-determined date with the help of the latter at village level,” he argued.

By raising milk and meat production of Achai cattle, the project is expected to boost the incomes of the area farmers. But staff deficiency may serve to minimise its coverage and impact. There are only 56 personnel at disposal of the project directorate province wide — 5 doctors, 12 veterinary assistants and other staff. Each district is to be looked after by a doctor and two veterinary assistants.

The difficult terrain of the Malakand division, scattered and distant villages, large population of Achai cows and staff deficiency will seriously impact the working and efficiency of the project and harder/farther areas will be left out. Dr Mir said more staff was needed at Tehsil level and locality levels for full coverage of the area.

“Veterinary Assistants will prepare an elaborate record of the conception, birth, calf-sex and its weight, milking duration and the growth and then the conception of the child-cow and its mother. This is a continuous process. They will also have to do other field duties like inspection, vaccination, treatment and counselling services for the farmers,” he added.

Though the livestock sector accounts for over 12 per cent of 25 per cent of provincial gross domestic product from agriculture, the sector has not received enough attention from both the federal and the provincial governments who have been handed over its ownership after 18th Amendment.

Insufficient funds and technology constraints have, inter alia, hampered its growth. Animals in the province are characterised by delayed puberty, low reproductive efficiency and low production of milk/meat and are, therefore, mostly non-profitable for the livestock owners, especially for small ones.

The share of livestock in the agriculture ADP has also decreased to Rs0.379 billion (26 per cent) this year from Rs0.60 billion (44 per cent) in the last fiscal year, reducing its share in total ADP from 0.70 per cent last fiscal to 0.38 per cent in the current ADP. Most of the districts still have no model dairy, beef and poultry farms there. Expansion of animal healthcare system and evolution and promotion of high yielding fodder varieties have also been neglected.

Though the livestock department is better equipped, trained and capable of supervising the veterinary drugs, the task has been left to the health department at both federal and provincial levels.

Achai-cow-conservation-project in Lower Dir

Achai cow conservation project

The government, impressed with the Achai cow breed’s ability to adapt to extreme weather conditions in Khyber Pakhtunkhwa and return on investment, is promoting setting up of dozens of Achai cow associations in selected districts in the province.

These associations are being formed in villages in Charsadda, Swat, Upper Dir, Lower Dir, Malakand and Chitral, where at least 25 households own Achai cows.

“We initially planned to form 48 bodies. However, we have enlisted 102 Achai associations in the project area so far, and continue to enlist more of them. These organisations will later be combined into a district Achai Cattle Owners Association,” said the project’s director, Dr Wahid Mir. He added that cattle associations will also be formed at the divisional level.

Talking about the benefit of these bodies, Dr Mir said that registered farmers will get insemination services, as well as vaccination, diagnosis, treatment, medicines and advisory services for their animals for free.

Some farmers have also been trained at the cattle farm in Hari Chand in Charsadda, and will be taken to modern public and private cattle farms in KP and Punjab, where they will be acquainted with modern ways of rearing livestock animals, as well as proper method for feeding and milking the animals. They will also be taught about preparing by-products from milk.

However, Kohistan, Shangla and Buner districts, which are also home to a sizable Achai population, have been left out of the project. Dr Mir said that the programme will be launched in Buner and Swabi in the near future.

Apart from helping cattle farmers, these associations have trained veterinary assistants, who are supposed to regularly vaccinate the animals and treat them if they contract any disease.

Improving the quality of the livestock breed is yet another goal of the project. Dr Mir said that better animals will help farmers through increased milk and meat production. Achai breeds that give the best milk and meat production ratios will be selected for reproductive purposes, and then disseminated to local farmers.

“As the project started, the price of an Achai cow increased to Rs40,000 from around Rs20,000,” observed the project director.

A survey of 400 Achai cows found that 45 per cent of them yielded an average of one to 1.5 litres of milk a day. Another 20 per cent of the animals yielded 2-4 litres a day, while some groups managed to yield as high as nine litres of milk in a day.

The respective yields of these groups can be easily increased with concerted efforts for disseminating the best breeds, as well as provision of hygienic fodder and efficient healthcare services.

However, Achai is not the only cow breed that is present in the province. Several indigenous cattle breeds, like the Lohani in Kohat, and Gabrali in Swat, can also do with some help.

However, Dr Mir explained that the government selected the Achai breed for its ability to adapt to changes in the weather, as well as its docility, high fertility and overall suitability for the area

“The cow is suitable for area terrain and weather. It can resist cold as well as warm climate (it can reportedly withstand temperatures that range between the freezing point up to 200 Celsius). It has a small body and thus it needs little food.
However, it gives more milk for its size and food intake,” said Dr Mir.

The project director added that milking the Achai cow is a fairly easy job, as, “even children can do it. Its conception rate is double that of other national breeds. And while other breeds take up to three years to reproduce after giving birth, the Achai cow does it after one-and-a-shalf year. It may give birth to three calves, compared to one or two given by other breeds,” he said.

Only 500,000 Achai cows are present in the province, according to a livestock census conducted in 2006, added Dr Mir.

To help farmers realise full well what the cow can offer, a model Achai Cow Conservation Farm has been built in Munda in Lower Dir, at a cost of Rs222 million. Dr Mir said that 20 canals of land had been purchased for the farm, with another 22 to 24 canals will be bought for the production of fodder for the animals.

“Nearly 98 per cent of the construction of the Achai farm has been completed. The site will be handed over to the directorate of livestock within a fortnight, after the work is completed,” said a senior official.

“There will be a small laboratory that will be used for diagnosing animal diseases. The best Achai cows will be ascertained and later used for reproductive purposes, through artificial insemination and embryo transplantation.”

However, after having paid due attention to the livestock and animal rearing activities, authorities now need to turn their attention to the human capital they have available. The project directorate has only 56 personnel at its disposal. This includes five doctors, 12 veterinary assistants, and other staff members. Each district has been assigned a doctor and two veterinary assistants.

Mir conceded that more staff was needed at the Tehsil and locality levels so that the entire project area could be covered.
“Veterinary assistants are expected to keep records of conception, birth, sex of the calves, their weight, milking duration and growth. They also have to do field duties, like conducting inspections as well as vaccinating and treating animals. They are supposed to offer counselling services to the farmers as well,” said Dr Mir.

Khyber Pakhtunkhwa has around six million cows of different breeds, but none of them have been utilised to produce genetically superior and high yielding species. It is expected that this project will change the fate of at least one of these breeds.

2012 in review

The WordPress.com stats helper monkeys prepared a 2012 annual report for this blog.

Here’s an excerpt:

600 people reached the top of Mt. Everest in 2012. This blog got about 8,900 views in 2012. If every person who reached the top of Mt. Everest viewed this blog, it would have taken 15 years to get that many views.

Click here to see the complete report.

The New breed: Pakistan olive plantation intiatives

Pakistan olive projects

By Tahir Ali

http://e.thenews.com.pk/10-7-2012/nos_page4.asp

With high global demand and rising prices in the international market and Pakistan’s annual edible oil import bill exceeding $2bn, the rationale of recent olive cultivation initiatives in the country cannot be overemphasized.

Olive demand globally is on the rise. Germans are using five times more and British ten times more olive than they did in 1990. In America, olive demand is growing by 6% annually for two decades now. Olive prices in world market have doubled to $3,400 a ton recently.

Pakistan has over 0.8mn hectares of wasteland suitable for olive cultivation. An official of the now defunct Pakistan Oil Seeds Development Board (PODB) had told this writer that by covering the area with olive plants, Pakistan can produce around 1.84mn tons of olive oil. This would fetch over $6bn at the current rate of olive in world market.

Olive is used in foods, pickles, medicines, food preservation, textile industry and cosmetic preparation etc. Special restaurants dealing in olive foods have also been opened in various cities of the country.

The Pakistan agricultural research council (PARC) has begun implementing the project “Promotion of olive cultivation for economic development and poverty alleviation” whereby olive plants will be cultivated on 300 hectares in Baluchistan, 100 hectares in KP, 300 hectares in federally administered tribal areas and 100 hectares in the Pothohar region of Punjab.

The Rs382mn project to be completed in three years is being under the Pakistan Italian debt-for-development swap agreement.

The Punjab government has declared the Pothowar region as Olive Valley. It recently distributed thousands of olive plants amongst olive growers and trained them.

The Punjab Agriculture and Meat Company also plans to develop 10 certified nurseries. These nurseries –being opened through private sector in Attock, Rawalpindi, Chakwal, Jehlum and Khushab districts –would have a catchment area of 27000 acres and would have an impact of $78mn.

The potential area suitable for olive cultivation is around 8mn acres in Punjab of which 0.4mn is being targeted though this initiative. Total impact of this land, if covered, would be $1.16bn.

Similarly, in KP’s budget for 2012-13, a Rs100mn project –research and development on European olive and maintenance of model olive farm Sangbhatti Mardan –has been started and allocated Rs15mn this year.

As the PODB stands dissolved, Sangbhatti olive farm, one of its assets, has been handed over to the directorate of agriculture research in KP.

“The department will provide olive plantlets, grafts and buds produced in the Sangbhatti farm to farmers. Though the production of olive nursery is limited at present, it is nevertheless sufficient for the time being,” said an official of KP agriculture ministry wishing anonymity.

“Despite our efforts, mass resort to olive plantation is however unlikely in the immediate future,” the official added.

Pakistan has been unable to increase its olive acreage and yield for indifference by successive governments, lack of private sector’s interest, focus on other cash crops, security situation in KP and tribal belt, too few olive nurseries and marketing worries. It only has 1130 acres of land under productive olive trees and the crop is yet to be inserted into the cropping system.

The question arises: will the new initiatives succeed?

While olive farmers usually grow olive haphazardly, the problem is multiplied by non-availability of standard olive plants and restricted mobility of local and foreign experts in the olive-rich but militancy-hit tribal belt, KP and Baluchistan. This explains why there has been of late a shift of focus to other parts of the country.

Olive acreage and yield could be increased by providing quality seed, polythene rolls for wrapping round the buds/grafts to save them from cold and moisture, modern training and marketing support to olive farmers. Have similar interventions been planned?

Pakistan has over 0.8mn hectares suitable area for olive but as most farmers on fertile lands prefer other crops, the potential area may be around 0.264mh. Even if a third of this area is brought under olive cultivation, around 25mn olive seedlings would be needed (@250 trees per hectare) over the next few years. Has this been considered?

Pakistan need to shift to tissue culture technology, standardise its nursery production and open more germplasm units to provide enough olive seeds, buds and grafts.

Olive tree usually bears fruit after 4-5 years. However, Sultan Ali Khan, a farmer from Swat, said his community had grafted around 40000 wild olive trees but only 5000 of them have been successful and have started bearing fruit after 7-8 years.

Shafeeq Ahmad from Swari Buner said an olive plant could bear over 40-45kg of fruit if sufficient care, protection, pesticides and fertilisers are provided to the plants.

“We planted 600 olive plants on a mountain ridge around ten years ago but it is yet to bear plentiful fruit. Bearing of fruit was late and paltry because the orchards could not be looked after well nor were provided sufficient and timely doses of fertiliser and pesticides as the farmers were not given guidance and help,” he told the TNS.

Another problem is that very ambitious projects are launched but are later forgotten. For example, there is no mention of the projects of establishment of olive orchards in KP and that of research, development and promotion of olive in KP which were allocated funds in the last two budgets but not in this fiscal and have been left out incomplete.

A report on the Malakand olive development prepared by ISCOS, an international organisation, had urged induction of more olive technicians, modern training for them and increase in their salaries, introduction of a system of reward for successful olive farmers, subsidized provision of olive plants, sensitizing farmers against cutting and grazing of animals in olive orchards and an in-depth dialogue and interaction between all the stakeholders in the olive production chain.

The PODB had converted quite a few wild olive plants into fruit bearing trees. That process needs to be continued.

The planners also need to ensure olive production is developed on commercial lines and its enterprises facilitated.

Where and how to plant?

Olives are grown by the methods of budding and grafting of wild olive trees or planting of new trees. However farmers have found the method of grafting the most successful. A research showed that around 80-90% olive trees grown through T-Grafting technique from August to September were successful.

The areas with an altitude between 400 and 1,700 meters, slope of 20°, rainfall between 250 mm and 1,000 mm and having a warm, semi arid, winter rain climate are mostly suitable for olive plants.

Olive production varies on the basis of temperature and rainfall. Rain falls abundantly in March (olive flowering season) and in summer in Pakistan. This rain pattern could pose threats for the olive cultivation –the first may heavily reduce the production and the second –rainfall in summer –could make it prone to various plant diseases. It requires extra care and more use of pesticides.

Olive trees can endure low temperature of even -9° C but these can hardly tolerate it at vegetative stage. It however needs a bit low temperatures in winter to be able to produce good amount of inflorescences and flowers in spring.

Olives require well drained soils for adequate growth. Heavily clayish or sandy soils or one prone to water logging should be avoided.

The common diseases in olive plants are trunk decay, sooty mould and peacock spot, which decay and dry up the tree.

The olive trees need more nitrogenous fertilizer than phosphorous and potash. The latter two fertilizers should be mixed in the soil before planting of trees at the rate of 200 kg and 300 kg per hectare respectively. Best time of nitrogen fertilizer is pre-flowering and stone-hardening stage.

Tobacco pricing process initiated in KP

Tobacco pricing process initiated

THE Pakistan Tobacco Board has started the process for determining cost of production and the price of tobacco for the year 2013.

“The representatives of tobacco growers, dealers and companies had a meeting with the PTB officials last week to discuss issues in pricing for the next tobacco season. Hopefully, the cost of production (CoP) would be acceptable to all stakeholders this year,” an official of the PTB said.

“Tobacco CoP and subsequently its weighted average price — for targeted purchase by companies, and minimum price for surplus tobacco above the target— are determined by a CoP committee with input from representatives of tobacco companies, PTB, Agriculture Policy Institute, and tobacco growers and dealers. After clearance by the PTB members, it is submitted to ministry of commerce, and the federal crop commissioner notifies the new prices,” he added.

Tobacco prices are increased every year as per the law governing the crop. The minimum price was fixed at Rs117/kg last year but growers rejected it. Later a committee headed by the director general of the National Agriculture Research Council Dr Sharif recommended a price of Rs183/kg. The PTB initially resisted this recommendation but finally revised the minimum price to Rs121/kg. Tobacco companies, however, paid up to Rs150, according to the official, and Rs137, according to growers. Private tobacco dealers and middlemen offered a price of Rs150-170/kg.

But growers in Swabi, which accounts for around 38 per cent of Virginia production, and also other areas say recommendations of Dr Sharif committee must be implemented or else they would boycott the crop.

Liaqat Yousafzai, general secretary of Kashtkar Coordination Council (KCD), said the KCD will wait till end of November when wheat sowing starts or seedbeds of tobacco are prepared for subsequent plantation in fields.

“In case the PTB persists with its opposition to implement the Dr Sharif report, we will go for complete boycott of tobacco like we did in 2007. We are distributing affidavits amongst the growers and they are being signed. As an alternative, as cereal crops aren’t economically feasible, growers will either go for opium or for vegetable cultivation,” he added.

Azam Khan, KCD president said the KCD had asked that the interviews must be arranged in government offices, farm services centres or hujrahs of the farmers.“When the CoP interviews are organised at the depots of tobacco companies, the farmers, who are mostly illiterate, get exploited at the hands of companies with the officials conniving with them. They easily get their approval by crowding out growers.

Unfortunately, the process continues in the same way,” he adds.

“When tobacco companies are not ready to allow any role to growers for determining the CoP of cigarette which they produce and farmers buy as customers, why do they participate in the process of tobacco CoP determination?,” he asked.

The role of middlemen has increased considerably in tobacco deals. Legally, tobacco companies cannot purchase tobacco from growers without purchase agreements and the purchase by middlemen, according to Mr Khan, is ‘illegal.’

“Around 10-20 per cent of tobacco purchases is made through middlemen. The private buyers are usually agents of small tobacco companies. The ‘illegal’ purchase deals benefit both farmers and companies. The grower gets good price. This year they sold their tobacco even at Rs180/kg. The companies, through the undocumented deals, evade taxes worth billions of rupees. We have time and again brought this informal trade to the notice of PTB but to no avail. Vis-à-vis private dealers, farmers only benefit when there is surplus production or companies stop purchase,” he added.

Yousafzai lamented that while the companies paid up to Rs180/kg to middlemen in the underhand deals, they were not prepared to increase the price in direct legal deals with growers.

“Middlemen and companies are making huge profits but cause huge tax loss to national exchequer. Obviously when a small company that has authorised quota of, say, 0.35mn kg but buys much more tobacco, it will benefit enormously,” he says.

To a question, he said in 1990 multinationals squeezed the small local companies. “Since then the latter have become the brokers of the MNCs. They are working separately but act as a cartel. They meet regularly every week during the tobacco season and decide together their line of action,” he said.

When asked why farmers don’t prefer to sell tobacco to middlemen when they offer good prices, he said farmers avoided middlemen because of trust deficit.

“If middlemen offer cash payment, farmers will never go to companies but it’s not the case quite often. Vouchers given by middlemen in many cases have bounced back. Hence, farmers prefer for purchase agreements with companies whose voucher is deemed as cash,” he said.

The PTB official said that the federal government, the PTB and the excise department conduct surprise raids on tobacco purchase centres to check ‘illegal’ sale of tobacco and fine the culprits.

“The government has also levied Rs10/kg cess on tobacco dealers to discourage this trend. But this tax cannot be charged from growers,” he added.

The official said after new prices are announced next month, farmers should enter into contracts with tobacco companies before cultivation of tobacco as companies will buy tobacco only from contractual farmers.

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