ISLAMABAD - Prime Minister Nawaz Sharif yesterday ordered continuation of the provision of subsidy on fertilisers for the benefit of farmers.

“Agriculture is the backbone of our economy and farmers must be facilitated to achieve bumper crops for accelerated GDP growth,” the prime minister said, according to a press release issued by the PM’s Media Office here.

It may be pertinent to mention here that an amount of Rs 28 billion was allocated for subsidy on fertilisers, which was shared equally by the provincial and federal governments.

Upon consumption of the entire Rs 28 billion, the Ministry of National Food Security and Research and the Finance Division withdrew further subsidies on fertilisers.

However, the prime minister has said the subsidy on fertilisers should continue for the benefit of the farming community so that they could achieve the targets of major crops.

Meanwhile, a parliamentary committee took notice of the government’s decision to withdraw subsidy on fertilisers, terming it a disaster for the agriculture sector of the country.

The Senate Standing Committee on Finance and Revenue, while taking the notice, has summoned a meeting on this issue in next few days.

The government a few days back withdrew the cash subsidy on fertiliser sales, which was announced in the budget for ongoing financial year 2016-17. The government had given subsidy worth Rs 390 billion on urea, including cash subsidy of Rs 156 billion, reduction in GST worth Rs 184 billion and price reduction of Rs 50 by the manufacturers. The price of urea had been reduced to Rs 1,400 from Rs 1,790 per bag following the announcement of the subsidy.

However, the government, in a recent decision, withdrew the cash subsidy. However, it has not ended the general sales tax (GST) subsidy which would remain at 5 percent against the standard rate of 17 percent.

The government has also withdrawn the cash subsidy of Rs 300 per bag on DAP fertiliser. Now, the DAP price will rise from Rs 2,500 to Rs 2,800 per bag.

However, opposition political parties and farmers have reacted strongly against the decision of subsidy withdrawal. “Withdrawal of subsidy for fertilisers will directly hurt capacity of farmers to use minimum requirement of fertilisers for key crops, fruits vegetable and orchards,” said Senator Saleem Mandviwalla, chairman, Senate Standing Committee on Finance and Revenue. He further said the decision would directly affect productivity and reduce agriculture sector growth rate. The decision would create shortages as a result of which expensive agricultural products would have to be imported, he added.

Farmers also expressed serious concerns over the withdrawal of the subsidy on fertilisers. Pakistan Kissan Ittehad has already threatened to besiege the parliament house against the withdrawal of subsidy. “Farmers need fertilisers for ongoing wheat sowing and for sunflower, corn and sugarcane cultivation in coming weeks. But they have been deprived of the incentive due to withdrawal of the subsidy, which will increase the production cost,” said a representative of the farmers association.