High Taxes Reduce Pakistani Ag Output

ISLAMABAD - May 6/03 - IRIN -- Farmers in Pakistan say an 18% General Sales Tax (GST) imposed on pesticides and fertilizers by the government early last year is putting them out of business.

"Pesticides are one of the main components of agriculture that we can't do without, but this tax means that many farmers cannot afford to use them, and their crops are suffering as a result," the general secretary for the Farmers' Association of Pakistan, Mohammad Idris, told IRIN from the eastern Punjabi city of Lahore on Tuesday.

He added that the usage of pesticide had decreased significantly on cotton farms. "Eighty percent of pesticides are used by the cotton farmers, and they have really suffered since the tax was imposed," he said. This year's cotton yield was 10 million bales compared to 12 million last year. The price hike has also encouraged people to cash in by offering cheaper but ineffective pesticides, according to Idris.

The imposition of GST on pesticides and fertilizers has brought all farm inputs, except tractors, under the tax net, which has been a major IMF demand over the last few years. This was prior to the approval of the fourth and final tranche under a short-term US $596 million Stand By Arrangement agreed on in 2001.

The government, meanwhile, has dug its heels in on the price hike on pesticides, following a survey in 2001, in collaboration with the United Nations, which had showed that the chemicals used on crops in the southern Punjabi city of Multan were having a detrimental affect on farm workers.

"Eighty percent of women picking crops who were coming into contact with these pesticides were falling ill from nausea and headaches and even vomiting, forcing them to take time off work," Dr Iftikar Ahmed from the government's Integrated Pesticide Management department told IRIN in the capital, Islamabad.

Blood samples were taken from crop pickers and results showed that enzymes were severely reduced when they came into contact with the pesticides. "It is a difficult issue, as both sides are suffering, but human suffering is more important," Ahmed added.

Copyright (c) UN Office for the Coordination of Humanitarian Affairs 2003

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