Fertilisers play a vital role in helping farmers achieve their high production levels. These components increase plant productivity and development and help soil fertility rise, thereby promoting growth. With the help of fertilisers, plants become resilient against harmful pathogens, pests, and weeds, increasing the plant’s value in the harvest.
In Pakistan, farmers have become dependent on fertilisers for their crop production that they have been left with no other option. However, with increasing prices, the farmers cannot continue to afford them.
Last year, the government increased the prices of fertilisers that compelled farmers to cut down on the application of nutrients to crops, posing a threat to the production yields. However, instead of making agricultural inputs cheaper, sales tax on fertilisers has recently been increased. The recently announced budget has also proposed an increase in sales tax on fertiliser and has made the commodity more expensive for small and medium-sized farmers.
Sales tax on fertilisers has now increased from 2 to 10%. A majority of Pakistan’s population is employed in the agriculture sector and this hike in sales tax will lower crop production and increase food inflation in the country.
It is a regressive decision as small and medium farmers were already reeling from the expensive fertiliser, and the country’s crops are not getting enough nutrition. Therefore, the proposal of increased tax will exacerbate the situation. There is a dire need to introduce a special relief package to reduce the production cost of the agriculture sector so that foreign exchange can be earned through the export of commodities while meeting domestic demand.
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