Saturday, 22 November 2014

Agriculture sector: Ministry notifies tariff subsidy for farmers with schedule of outages

The Ministry of Water and Power has issued a notification for supplying electricity at a subsidised rate to agriculture consumers in order to provide relief to the farmers and has asked all electricity distribution companies to immediately implement the tariff.
However, the ministry at the same time announced a schedule of outages for agriculture tube wells, saying the farmers would not be entitled to power supply during peak hours in winter and summer seasons.
“During peak hours, from 6pm to 10pm in winter and 5pm to 11pm in summer, agriculture tube wells will not be entitled to power supply,” it said in a statement issued here on Friday.
In tariff concession to the farming community, all distribution companies (except for Quetta Electric Supply Company) will charge a fixed rate of Rs10.35 per unit and the arrangement will remain in place from July 2014 to June 2015.
Farmers that come under the jurisdiction of Quetta Electric Supply Company are already receiving the subsidy through a separate mechanism. The federal government will bear the cost of the subsidy.
According to the ministry, provincial governments will pay general sales tax to the power distribution companies whereas the cost of fuel price adjustment will be borne by the federal government in order to provide relief to the farmers.
The relief package was approved by the Economic Coordination Committee (ECC) in a meeting held on Thursday.
“The federal government has taken the decision to extend maximum support to the farmers to encourage them to achieve better yields of different crops,” the ministry said.
Last year, it claimed, the subsidy on electricity tariffs had helped in achieving a record wheat harvest.
An amount of Rs22 billion will be required to foot the electricity subsidy bill this year, said the finance ministry. This will be Rs3.5 billion higher than last year.
In September 2013, the government had announced a single electricity tariff slab for the agriculture sector at Rs10.30 per unit, which lasted until the end of June this year.
Before that, the farmers had fiercely resisted a high tariff, arguing that the previous government set the price without taking them into confidence. In a bid to pile on the pressure, the Pakistan Kisan Ittehad launched a protest drive and the farmers stopped paying electricity bills. They did not clear their bills for nine months.
When the previous tariff agreement ended in June, the government and Kisan Ittehad entered into negotiations to forge a new deal. Growers pressed for continuing with the tariff of Rs10.30 per unit, though the government wanted to raise it to Rs12.30.
However, following the threat of protests by the farmers, the government decided to keep the tariff at Rs10.30 per unit for one more year.
Published in The Express Tribune

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