Rising fertiliser prices

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Growers` concern over rising fertiliser prices

December 20, 2010
By Tahir Ali


THE dearth and rising prices of fertilisers could adversely impact cultivation of Rabi crops, especially wheat and vegetables in the province, say farmers in Khyber Pakhtunkhwa.

Low DAP and urea consumption, according to them, would lower wheat acreage and per acre yield. Growers have demanded of the government to withdraw general sales tax on fertilisers to bring down the prices and to restore the erstwhile public stores at districts level for easy availability of farm inputs.

According to Gul Nawaz Khattak, chief planning officer of provincial department of agriculture, the total off-take of urea and DAP for Rabi season is around 250,000 and 150,000 metric tons respectively.

The price of one bag of DAP has jumped by around 25 per cent while some other fertilisers have registered bigger increase. Haji Niamat Shah, vice-president of the Anjumen-i-Kashtkaran, Khyber Pakhtunkhwa, said the price of DAP has gone up to Rs3,300 from Rs2,600 per bag.

Consequently the farmers will have to bear an additional burden of over Rs2 billion on DAP alone. And if the average increase of Rs100 per bag in urea prices is taken into account, it will require an extra payment of Rs3 billion, he said.

He lamented that the farmers` community was hit by high prices and fake, substandard and under-weight varieties of fertilisers that were badly affecting agricultural productivity.

“Printed fertiliser bags of quality products are available in tribal areas and the unscrupulous fertiliser traders are stuffing them with fake fertilisers and selling them in the market, which is adversely affecting agricultural yield and harming farmers financially and damaging productivity of their land,” Shah said. “The government will have to ensure availability of quality fertilisers to the farmers. The role of public sector needs to be expanded to bring prices down and eliminate the role of fertiliser mafia which has been minting money. This is vital to save the money, time and hard work of farmers from going waste,” said Ghulam Hussain, a farmer.

Shah said the government should ponder as to why the commodity disappeared from the market when it was direly needed. “The fact is that the government has failed to check hoarding and smuggling and ensuring quality and weight of the commodity,” he said.

Prices of the commodity have registered manifold increases ever since the sector was deregulated, farmers say. They want regulation of the sector or some mechanism that could save farmers from artificial shortage and resultant hike in prices..

“Various mechanisms adopted for smooth supply of the commodities, like utility stores, MFSCs and private dealerships, have miserably failed. Therefore, there is a need to restore the old mechanism of governmental stores in the districts. Officials, farmers` representatives and other stake holders should sit together to work out a viable solution to the problem.

The agriculture department has sufficient staff, resources and capability to ensure timely availability of quality fertiliser. The private sector handles about 90 per cent of urea and 100 per cent of DAP. This equilibrium needs to be tilted on the public sector,” Shah argued.

Noor Rehman, another office-bearer of the AK, said village/union council- based old distribution is the only way to resolve the problem. “The province should also negotiate with fertiliser companies to devise a price mechanism for DAP in their respective domains as urged by the federal industries minister recently,” he added.

Khatak said under the Fertiliser Act, officials of the agriculture department were authorised to check and monitor the supply and quality of the commodity in the local market. “We conduct routine and monthly surprise visits throughout the province. If anyone is found guilty, first information report is lodged against him and he is arrested. If convicted, his dealership is cancelled and he is blacklisted for good,” he added. “Despite our demands and ban on export of fertiliser, 10,000 to 20,000 bags of DAP and other fertilisers are smuggled to Afghanistan. And more lamentable is the fact that while urea price is around Rs650 per bag there, it is being sold at Rs1000 per bag here in the province,” said a farmer.

Being a de-regulated industry, prices of fertilisers are determined by the forces of demand and supply. But farmers allege that while importers quickly pass on the increase in prices to consumers, it has been witnessed that farmers are mostly given little benefit for cut in international prices.

The government in November 2010 announced that total availability of urea and DAP fertilisers would be 3.4 million tons and 799,000 tons which would be sufficient to meet the local requirement and hence there was no need for imports. But then in first week of this month, it said, imports were needed.

The federal government will import 0.25 million tonnes of urea and 0.23MT of DAP but the stocks will not be available before March which will certainly cause shortage of the commodity in the market, leaving the farmers at the mercy of hoarders and profiteers.

National Fertiliser Marketing Limited`s total storage capacity is just 180,679 metric tons. It cannot import enough fertiliser for shortage of space. The government needs to augment the storage capacity besides opening its more bulk stores in central and southern parts of Khyber Pakhtunkhwa as there are only two such stores at present.

The private fertiliser companies should ensure a strict supervision of their dealer network. This, of course, should be done when the dealers are provided enough stock of the commodity.


About Tahir Ali Khan (Official)
I am an academic, columnist, and a social worker.

2 Responses to Rising fertiliser prices

  1. Shuja khan khattak says:


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    Shuja khan khattak…

    e-mail> shuja107@yahoo.com


    • thanks for your appreciation sir
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