DAWN.COM | Economic & Business | Khyber Pakhtunkhwa farmers await relief

DAWN.COM | Economic & Business | Khyber Pakhtunkhwa farmers await relief
Khyber Pakhtunkhwa farmers await relief

By Tahir Ali
Monday, 25 Oct, 2010

PADDY growers in Khyber Pakhtunkhwa, particularly in Malakand division, hit hard by floods and soil erosion, are waiting for government support.

The loss to rice crop and land, farmers say, carries risks of food security, price-hike, decreased exports, low incomes and increased poverty. The worst hit are the subsistence farmers.

The government would have to reclaim the fields and canals to facilitate cultivation of Rabi crop. KP agriculture minister has said the provincial administration would do everything possible to reclaim the 35,000 acres which had been rendered uncultivable by the floods. But farmers are skeptical of seeing it done any time soon as the task requires huge funds, machinery, personnel and strong commitment on the part of the government.

Abdur Rahim Khan, secretary general of the KP chamber of agriculture, said rice farmers were badly hit. “They should be provided free or subsidised agriculture inputs. Their agriculture loans should be written off or at least the interest thereon should be waived. Easy farm and non-farm loans to small farmers should also be arranged,” he said.

The Food and Agriculture Organisation says rice is the worst-hit crop in KP. An official from the agriculture ministry said 71 per cent rice crop standing over 55,000 acres was washed away by floods, inflicting loss of over Rs2 billion to farmers. The loss will have serious implications for the impoverished farmers.

Four districts of Malakand division - Swat, Dir upper and lower and Malakand - were home to 68,000 acres or 88 per cent of province-wide paddy crop. But the destroyed crop of Malakand Division constituted 95 per cent of the total devastated crop. The floods also washed away 90 per cent of paddy crop in Peshawar, Nowshera and Charsadda but due to mere cumulative acreage of around 1,500 acres, its impact was very little.

“Around 35,000 acres in Swat and Dir districts have been rendered uncultivable by around three feet of sand and mud and concentration of pebbles and stones. While the loss of standing crops is also huge, the soil-erosion caused by the floods has been especially horrific. The affected farmers need immediate relief,” said Muhammad Khan, a resident of Batkhela.

Rice is of an important diet for people in MD who use Begumay variety in their evening meals daily.

“Rice is the favourite food and one of the biggest businesses of farmers in Swat, Malakand, lower/upper Dir and Chitral. The low-intensity monsoon floods in the last century had made this land more fertile and suitable for growing rice. Unfortunately, the mud layer is no more there on the fields situated on river banks. It will take 15 to 20 years to spread another layer of fertile mud over the bald land surface,” he added.

Muhammad Naeem from Swat said rice fields on river and stream banks in Dir, Swat and Chitral have been made uncultivable by floods. “Floods have eroded vast lands. I have lost paddy crop on 102 canals on my land. Rich farmers may bear the loss but where will the poor go? They need immediate relief and a vigorous rehabilitation plan and immediate reclamation of their lands,” he said.

“While rice crop in other areas has matured and is being harvested, it is still unripe in Malakand Division and the government should work closely with farmers to save the crop,” added Naeem.

For lack of rice mills in the area, most of the work in different phases of paddy cultivation, harvesting and milling are done manually. It consumes more time, energy, resources and lessens the profit margin for growers.

Haji Niamat Shah, a farmer leader in KP, said per acre yield in most of KP was just around 400kg which was less than the potential of 800kg. “This is because no quality local/hybrid paddy seed is provided to farmers. While the crop requires abundant water, the destruction of irrigation network and soil erosion in the area means still lesser per acre yield in the region,” he said.

Rice growers also face shortage of paddy seed for next year crop as a huge quantity of their stored seed was washed away by the floods.

“The KP seed industry should provide the far

DAWN.COM | Economic & Business | Boosting pharma exports

DAWN.COM | Economic & Business | Boosting pharma exports

Boosting pharma exports

By Tahir Ali
Monday, 18 Oct, 2010 | 01:14 AM PST |

PAKISTAN’S low exports of pharmaceutical products at about $100 million can be significantly increased provided the local pharma sector is given incentives and relieved of regulatory burdens, industry sources say.

Though pharmaceutical exports have become the seventh largest manufacturing-based export segment, highest infrastructure and operating cost, inconsistent government policies, high duties, lack of research and development facilities, high interest rates, energy shortage and the poor security situation have obstructed efforts to raise exports to their potential.

Khalid Mehmood, chief executive of a national pharmaceutical company says the pharma industry was made to pay one per cent of its profit before tax (PBT) for the central research fund (CRF).

“We have been paying CRF for years without getting a single short or long-term benefit. No such thing is being levied on any other industry. Conversely, they are given support for setting up laboratories and R&D centres. The CRF must be eliminated if the industry has to grow,” he said.

Export insurance policy is required for protecting exporters from payment risks. While governments of the competing countries have devised protection mechanisms for their exporters, Pakistan has not. This should be done immediately,” he added.

Exports of pharmaceuticals are dependent on the capability of the manufacturer to obtain certification from WHO and other regulatory agencies of the importing countries.

“A pharmaceutical facility to qualify for accreditation by these agencies, requires at least Rs3-5 billion of capital expenditures and Rs200-300 million of operating expenses annually. This necessitates huge capital and profitability for the company,” he said.

“To be able to do that, prices of medicines should be deregulated. Ever since the Indian and the Bangladeshi authorities have done that, manufacturing plants in India and Bangladesh have gone up to 90 and four respectively while none has been set up in Pakistan, ” he informed.

Pakistan’s pharmaceutical exports are just around $100 million as against India’s exports of $11 billion which are expected to surge to $40bn by 2012.

To the fear that deregulation will increase the prices of medicines, he said, essential drugs, recommended by the WHO, should be regulated and their prices controlled. “This is being done in India and Bangladesh where only 74 and 109 molecules are on the controlled list of drugs. For all other products, the price is deregulated. Standard pricing should be adopted in the country,” said another expert.

“Some importing countries require a certificate of prices from the exporting country to establish price for imports. It harms exporters who cannot charge the higher prices prevailing in the external markets as the prices of drugs are low here and are mentioned on the registration letter. Higher price certificates should be provided to exporters only for exports,” he suggested.

Sources said exports can be increased if the quality of the products and the country’s regulatory framework are in line with the global and regional practices. “Drug regulatory requirements must be harmonised with those in ASEAN region provided prices of locally manufactured drugs are increased to their level and are deregulated. But how does Pakistan formulate a regulatory policy which is in line with the international best practices and yet it does not penalise the industry? One way is to form a pharmaceutical regulatory authority,” he suggested.

Pharmaceutical exporters need one-window fast-track facility.

“About seven days and sometimes weeks, are required for getting NOC for a consignment. Exporters would greatly benefit if one-window operation for export clearances and to expedite drug registration and clearance process is introduced,” he added.

The pharma industry also complains they have to pay five per cent workers’ profit participation fund (WPPF), and two per cent workers’ welfare fund (WWF). “Though it was meant for benefiting workers, they have least benefited from it. Industries in other countries are not taxed with the WPPF or the WWF. These should be eliminated as the tax slabs for the industry are already the highest in the world- around 35 per cent. On an emergency basis, at least the export revenue should be exempted from the two levies,” he added.

The industry will also benefit if the export freight subsidy (EFS) is introduced for it. “The EFS has been introduced for other industries in the trade policy but pharma industry has been ignored. Export development surcharge at 0.25 per cent should also be withdrawn immediately. Export refinance facility is currently in the ratio of 2:1. Performance requirement should be 1:1 as a number of countries in the region have this facility,” he desired.

As per regulation of State Bank of Pakistan vide circular No15 of August 15,, 2003 and subsequent circular No.9 of August 28, 2008, every exporting pharma company can retain 15 per cent of its sales proceeds in foreign currency account which can subsequently be used for foreign remittances and reimbursement of expenses etc.

“It is impossible to cater to huge international expenses with this amount. This is practically impossible in the initial years when expenses are high as against returns. Hence retention from 30—40 and 25—30 per cent of sales proceeds should be allowed for an exporting company having sales up to $10 million and more than $10 million respectively. This extension will not only help local exporters compete and survive in international market but also boost their exports,” he added.

As per regulation of FBR vide Sec No 152 (2), reimbursement of expenses by an exporting company to its representative office abroad is subjected to withholding tax at the rate of 30 per cent on every payment and in the case of double taxation treaty between Pakistan and exporting country, at 15 per cent of payment.

“Being reimbursement of expenses, these payments should be exempted from withholding tax and an appropriate provision be inserted in relevant section of the income tax ordinance to this effect,” he argued.

Pharmaceutical industry is providing direct and indirect employment to nearly four million people. It fulfills over 90 per cent of the country’s drug requirements. It saves huge foreign exchange as only less than 10 per cent of the medicines need to be imported. And it is fast moving towards 100 per cent self-sufficiency.

Dr Muhammad Farooq Khan: The man and his works

Death of the man:
http://tahirkatlang.wordpress.com/2010/10/03/dr-farooq-khans-death/

Life profile and works:

http://tahirkatlang.wordpress.com/2010/10/03/dr-farooq-khanthe-man-and-his-works/

And his Interviews:
http://tahirkatlang.wordpress.com/2010/10/03/interviews-of-dr-muhammad-farooq-khan/