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Agriculture sector remains worst hit in last 5 years




  • Despite having an agricultural economy, Pakistan’s agriculture sector remained the worst hit and most neglected area of the economy in the last five years. 

    Fertilizer Manufacturers Pakistan Advisory Council (FMPAC) while congratulating Pakistan Muslim League-Nawaz (PML-N) and its leadership Nawaz Sharif and Shahbaz Sharif for securing majority in general election hoped their government would revive the agriculture sector of the country to ensure farmers’ well being and food security of 190 million countrymen.

    FMPAC Executive Director Shahab Khawaja said, “PML-N leadership fully understands the importance of agriculture sector for the quick revival of the economy and fertilizer sector being an integral part of agriculture sector would be given due importance while allocating the precious gas resources.” 

    He hoped PML-N government would ensure early revival of the agriculture sector through better and long-term policies. 

    Due to worst-ever gas curtailment to fertilizer sector in last three years, the country spent foreign exchange of $1.5 billion and also paid a subsidy of around Rs 80 billion on the imports of 3.4 million tonnes during 2010-12. 

    He said fertilizer sector was the only sector bringing in direct investment and now this investment was at the verge of risk as severe gas curtailment of the industry has resulted in closure of these plants risking billions of dollars of investment in the sector. 

    Fertilizer plants invested $2.3 billion in last four years making Pakistan self-sufficient in urea production and with consistent gas supply to these plants, the government can ensure timely availability of this key farm input to farmers at the cost effective rates and would also help government reduce its fiscal deficits as well as subsidy spent. 

    Pakistan cannot afford to spend hundreds of millions of dollars on urea import and we are hopeful that PML-N government would ensure judicious distribution of gas among all the sectors of economy. 

    He said all other industries have alternative fuel options except fertilizer sector that uses gas as raw material to produce the key farm input urea for the farmers that ensures food security of the masses as well as provides raw material to important industries like textile and food processing. 

    Sui Northern Gas Pipelines Limited-based four plants faced more than 300 days of gas curtailment in 2012. If gas is discontinued to fertilizer plants in 2013, Pakistan would have to import 1.0 million tonnes of urea which can cost the national exchequer $450 million and a subsidy of Rs 21 billion to match the imported urea price with domestic urea prices. 

    Fertilizer sector is not burning gas to run plants, it offers maximum value addition by converting raw gas into precious urea grains and country hugely benefits from the fertilizer industry. 

    He informed by not producing urea locally we are not only hurting the interest of poor farmers, who ensure food security of 190 million people of this country, “but we have to import urea which is the most expensive form of energy on million British thermal unit (MMBTU) basis, costing around $23 per MMBTU, whereas RFO and LNG would be 30-50 percent less expensive than urea on MMBTU basis.

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