Economic Coordination Committee allows import of 200,000 tonnes urea

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet here on Monday reduced the import volume of urea from one million tonnes to just 200,000 tonnes for the remaining Rabi season 2011-12 after a decision of provision of gas supply to the local urea manufacturing plants in the country.

The ECC met here under the chairmanship of Federal Minister for Finance and Economic Affairs Dr Abdul Hafeez Shaikh. The committee has decided to allow import of 200,000 tonnes of urea for the Rabi crop of 2011-12 and constituted two different committees on the summaries moved by Ministry of Industries for removal of levy of 16 percent sales tax on agriculture tractors and purchase of 200,000 tonnes of sugar from Pakistan Sugar Mills Association (PSMA).

The ECC after having detailed deliberations in the light of the urea situation and the supply of gas for its production took the decision of importing 200,000 tonnes of urea for the Rabi crop 2011-12. It may be recalled that on a summary circulated by the Ministry of Industries earlier on September 13, 2011, the ECC had constituted a committee under the chairmanship of the senior minister for industries. In light of the recommendations of the constituted committee, the ECC has now allowed 200,000 tonnes of urea for the Rabi crop of 2011-12.

The ECC had lengthy discussion on the summary moved by the Ministry of Industries, which proposed purchase of 200,000 tonnes of sugar from the local PSMA and constituted a committee in this regard. The committee shall look into the sugar situation in the country, quantity of the sugar from different mills and their respective price, the additional expenses as per tender terms, and to ensure that there should be no violation of the PEPRA condition in finalising the lifting of sugar from the PSMA, and the role of Trading Corporation of Pakistan.

ECC Chairman Dr Abdul Hafeez Shaikh opined that the rest of the sugar mills who are not participating in the tender should also be invited in it so that there may not have any complain in future. The ECC also constituted a committee on the proposal floated by the Ministry of Industries in its summary for the removal of 16 percent sales tax on agriculture tractors. The committee headed by the minister for industries and comprising secretaries revenue, finance, industries and adviser to the prime minister on agriculture shall submit its report to the chair before the next ECC expected this week.

The summary by the Ministry of Industries pleading its case maintained that increase in the prices of tractors has made it difficult for the farmers to purchase new tractors and convert traditional farming into mechanical farming for higher yield, especially when cost of other agriculture inputs has gone up substantially. Furthermore, Zarai Taraqqiati Bank Limited has also not been extending loans for purchase of tractors since April 2010, creating another impediment for the farmers. The production of tractors since March 2011 has also declined drastically from over 72,000 units to around 20,000 units per annum.

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