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Fertiliser subsidy claims: FBR stays away, food ministry steps in

The Federal Board of Revenue (FBR)’s decision to distance itself from the verification process of subsidy claims filed by diammonium phosphate (DAP) importers, has spelt trouble for the Ministry of National Food Security and Research because of its lack of expertise in the area. The payment of subsidy claims has already been delayed for months in the wake of less coordination among government departments and absence of cooperation from some provinces. Under the fertiliser subsidy package announced in the federal budget for 2016-17, the FBR was initially tasked to verify the claims to be submitted by the DAP importers, but the recent FBR decision to sideline itself posed a new challenge to the food ministry to undertake the task. The FBR had earlier failed to establish a mechanism for processing the fertiliser subsidy for more than three months, a responsibility entrusted by the federal government through a notification on June 25, 2016.

The FBR will now play the role of a post office by receiving the subsidy claims and forwarding them to the food ministry for verification. The Ministry of National Food Security and Research has given this task to one of its wings, the Agriculture Policy Institute (API), but it has no previous experience of dealing with this matter as well as the complications that arise from over and under-invoicing. It has been learnt that API officials have started working on the verification process, but challenges remain. Questions will be raised over transparency of the claims being submitted by more than 15 fertiliser companies as the food ministry has found some unrealistic figures received from a few companies.

The Punjab agriculture minister wrote a letter to Finance Minister Ishaq Dar, asking him to address the matter at the earliest as he feared DAP shortage for the staple wheat crop. He also asked the centre to ensure that all provinces deposit their due share as they had not met their commitment last year and only Punjab contributed its share of Rs3 billion. Not only this, the fertiliser importing companies have also asked the government to stop the marketing of subsidised DAP as the outstanding payments for the last three months as well as from last year have not been made to them.


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