Dr Rana Muhammad Ayyub
The Agriculture sector is the lifeline of Pakistani economy as it contributed 19.5 percent to the total GDP of the country. The Livestock is a subsector of agriculture and it contributed 58.3 percent to the value added by agriculture sector. Hence, the importance of Livestock sector must be realised to give real boost to Pakistani agriculture sector. However, the irony of the situation is that this Livestock was apparently ignored in recent Federal Budget 2017-18 by virtue that no particular scheme was announced for livestock farmers. Though, the recent federal budget has addressed some issues of Agriculture sector as a whole by giving relaxation on import duties and sale tax of some of the agricultural products. However, the stakeholders were expecting a lot more from the government based on the changing dynamics of this sector. The subscript critically examines the repercussions of the proposed changes of this budget and brings point of view of related stakeholders from poultry, fisheries, dairy and meat subsectors.
The government has reduced sales tax on seven different kinds of imported machinery for control poultry sheds. Likewise, 5pc regulatory duty on import of Grandparent (GP) was withdrawn. In fact, the benefit of this relaxation will be only to a handful of people as Grandparent import makes 1pc of the whole poultry industry. Whereas, the poultry stakeholders were expecting and demanding zero rate status, which could bring benefit not to farmers and businesspersons but also to consumers. Likewise, since 2013, a lot of taxes and import duties have been imposed on poultry feed ingredients which has resulted in drastic increase of poultry feed cost. It has increased the cost of overall poultry farming business. As around 80pc of poultry rearing cost is incurred on poultry feed, so some tax relaxation measures should be announced to reduce its cost which will ultimately benefit small as well as large farmers and ultimately to consumers. Now a days, the raw poultry meat industry is rapidly shifting to processed poultry meat industry, thus a lot of prudent policy measures are required for this changing scenario. But the current budget is silent in this respect.
The Dairy industry is another important industry of Pakistan but there was nothing for this industry. Some professionals of this industry are of the view that a big loss has been done to this industry for the last several years and it is now at the verge of its death. This industry has not been able to attract foreign direct investment (FDI) even in view of CPEC. On the other hand, there was nothing for poor Dairy farmer who is the main source of milk for processed milk industry. It should be eye opener for the people in policy parlors that this budget has not talked about the poor dairy farmers. It must be kept in mind that the poor farmer gets only a penny out of his or her round the clock efforts of dairy farming business. The dairy processing companies buy milk from these poor farmers at a price of Rs45 to Rs55 and sale at around Rs90-120 per liter after processing. Thus the poor farmer who is bearing all the cost and risk of dairy farming business is not getting anything out of hectic struggle. The writer is of the view that it is the high time that government should fix the support price of farm gate milk price at Rs75-85 per liter at least. Based on this low profitability and heavy cost of rearing Dairy animals, small farmers who make 95pc of total dairy farming community are being alienated towards this business and leaving it. Such suggested measures can bring a ray of new life for the poor farmers who will come back to dairy business and will make milk supply for consumers and dairy processors sustainable.
It should be noted that the volume of Agriculture credit has been increased to Rs1001 billion but there is no loan scheme for Livestock farmers. Likewise the animal insurance scheme which was launched a couple of years ago has become ephemeral. Thus it will be sheer injustice if the government will not announce any loan scheme for a sector ie Livestock sector which has been contributing around 58.3pc in whole agricultural sector over the years with plus and minuses.
These things were discussed in a discussion session of Federal Budget 2017-18 at University of Veterinary and Animal Sciences, Lahore. This discussion was organised by CAPRIL (Center for Policy Research in Livestock) and UVAS Business School. The chairpersons of teaching departments, faculty members and stakeholders from poultry, dairy and farming community participated in this discussion and shown their concerns and gave some recommendation to be incorporated.
Speaking on the occasion, Vice Chancellor UVAS, Prof Dr Talat Naseer Pasha expressed the importance of such discussion and said that it is the responsibility of universities to explore and debate on such aspects of budget for the larger benefit of society. He said that livestock is major source of livelihood of poor farmers and key to revival of the crisis-hit agriculture sector, therefore we need to focus on the profitability of small holder farmers. Furthermore, the house gave a couple of other recommendations. It was recommended that three sub-sectors including red meat, fisheries and poultry must also be added in the list of zero rating sectors.