PM announces mega Rs 341 billion agriculture package

September 15, 2015

ISLAMABAD, Sep 15 (APP): Prime Minister Muhammad Nawaz Sharif Tuesday announced a mega Rs 341 billion relief package for small farmers including direct cash support and provision of soft agriculture loans. 

      Addressing at the Farmers Convention here at the Jinnah Convention Centre, the Prime Minister said the package was aimed at introducing progressive agriculture on scientific lines, reducing production cost of crops and make the small farmers prosperous. 

      The Prime Minister said the country's development was directly related to the uplift of its agriculture sector, particularly farmers.

      He said under the package, small farmers would get the chunk of Rs 147 billion as direct benefit while Rs 194 billion had been allocated for agriculture loans.

      He said the farmers cultivating rice and cotton at up to 12.5 acres of land would be given cash support of Rs 5,000 per acre. The government on this facility will bear the cost of Rs 20 billion each for rice and cotton crops. 

      The Prime Minister said the global cost reduction of agriculture commodities had affected the income of farmers beside increase in prices of seeds, fertilizer and pesticides, which had resultantly enhanced the cost production.

      The Prime Minister announced setting up a Rs 20 billion fund to reduce prices of fertilizers which will lessen Rs 500 per bag of Potassium and Nitrate fertilizers.

      Also, the government was negotiating with local fertilizer manufacturers and gas companies to revert the increase in prices of fertilizers which had gone up by Rs 200 per bag.

      He said it had been decide to provide Liquefied Natural Gas (LNG) to fertilizer companies to overcome the shortage of gas supply.

      Prime Minister Nawaz Sharif said the government would bear the Rs 2.5 billion premium on the agricultural insurance which will benefit 0.7 million small farmers.

      He said solar tubewells would be provided on mark up free loans to the farmers who own up to 12.5 acre of land. The mark up of seven years would be paid by the federal government with a cost of Rs 14.5 billion.

      He said this would ensure a saving of Rs 1,600 and Rs 500 per day for the farmers running tubewells on diesel for five hours daily and on petrol for same duration, respectively.

      He mentioned that the electricity price for running tubewells at peak hours had been fixed at Rs 10.35 per unit and Rs 8.85 at off-peak hours. He said the sales tax on these bills amounting Rs 7 billion would be borne by the federal government.

      The Prime Minister said the custom duty, sales tax and withholding tax on the agriculture machinery had been reduced from 45 percent to nine percent.

      He said rice millers had been given full exemption on the turn-over tax for year 2015-16.

      He said the traders of agriculture commodities, fruits, vegetables and fish would get an exemption of three years on income tax while the sales tax on cold chain machinery had been reduced from 17 to seven percent.

      Sharif said the installation of production unit of Halal meat that will be registered before December 31, 2016 will be given a four-year exemption on income tax.

      He said banks in general show reluctance in giving loans to small farmers due to risks involved, which he said could be overcome through provision of guarantees.

      He said the government would provide Rs 30 billion as the fifty percent guarantee to banks on loans. This will benefit around 0.3 million farmer households through Rs 0.1 million each with collateral loans.

      The Prime Minister mentioned that the time-limit to pay back Rs 34 billion outstanding loan on the rice traders had been extended up to June 30, 2016.

      He said the government and the State Bank of Pakistan were working over reducing the mark-up rate on agriculture loans by two percent which would give a benefit of Rs 11 billion per anum to farmers.

      He said the Zarai Taraqiati Bank Limited and commercial banks would provide one-window facility to the farmers seeking loans.

      He said the value of production unit had been increased from Rs 2,000 to Rs 4,000 which would help farmers get doubled the amount of loan against their land value.

      The Prime Minister said a committee under supervision of Federal Minister for National Food Security Sikandar Hayat Bosan had been set up which would workout the ways to increase per acre yield and reduction of agriculture inputs.

      Federal Minister Sikandar Bosan said the country's 90 percent exports comprised of agricultural commodities, which had also shown a marked increase in recent years.

      He said the government was fully aware of the difficulties faced by the farmers and would take all steps to facilitate them.

      A large number of wheat, rice and sugarcane farmers from across the country attended the Convention.