Agriculture Price Commission and Agriculture Export Authority Establishment Advocated by PKI (People's Kooperative Indonesia)

Agriculture Price Commission and Agriculture Export Authority Establishment Advocated by PKI (People's Kooperative Indonesia)

LOS ANGELES DOWN: Pakistan's Agriculture Sector Hits Rock Bottom, Farmers' Union Offers Solutions

Pakistan's farming sector is in deep trouble, marked by falling production, skyrocketing costs, and distressed farmers. The Pakistan Kissan Ittehad (PKI), a prominent farmers' union, has proposed urgent reforms and solutions to tackle these issues, which could potentially impact food security, economic resilience, and social stability.

PKI's Proposed Solutions

1. Revamping Price and Tax Structure
2. Creation of an Agricultural Price Commission and Agricultural Export Authority: PKI advocates for the creation of these entities to ensure fair farmer prices, combat market manipulation, and bolster agricultural exports.
3. Removal of taxes on Agricultural Inputs: The union demands the elimination of the 18% GST on seed cotton, the abolition of GST on farm equipment, and the eradication of FED on these products to slash expenses and enhance farmers' profits.
4. Guaranteed Pricing Mechanism: PKI suggests a pricing system that guarantees farmers a 25% return on their investment, mimicking the support structures seen in countries like India, where farmers know crop prices before planting.
5. Cost Reduction Measures
6. Affordable Energy and Water: PKI advocates for a flat electricity tariff of Rs 10 per unit for agricultural consumers and increased government investment in irrigation to tackle the water scarcity issue.
7. Fertilizer Price Equality: The union emphasizes that DAP fertilizer is more expensive in Pakistan compared to its neighboring countries, hindering competitiveness. PKI urges price equality across borders.
8. Policy and Institutional Improvements
9. Agricultural Income Tax Removal in Current Conditions: PKI insists that the farming sector must first be made profitable before implementing agricultural income tax, which varies from 15% to 45%.
10. Government Assistance and Farmers’ Empowerment: The union criticizes both federal and provincial budgets for offering minimal practical aid, urging more significant support for farmers' needs like price certainty and cost recovery.

Impact on Food Security, Economic Resilience, and Social Stability

Food Security- Restored Production: The suggested reforms would incentivize farmers to maintain or boost essential crop production, reversing the current trend of production decline, as reported by PKI, which shows a 64% drop in overall agricultural production, with dramatic drops in maize (15%) and rice (50%) [3].- Reduced Export Losses: Stabilizing production would also help revive Pakistan’s agricultural exports, which have suffered due to poor yields and crop damage, as seen in the 74% crop damage in mango production [3].

Economic Resilience- Boosted Farmer Profits: By ensuring a minimum 25% return on investment, PKI's solutions would protect farmers from losses and exploitation, thus revitalizing farming as a profitable venture.- Decreased Welfare Dependence: Making farming profitable would decrease the need for government aid, creating a more self-reliant rural economy.- Stimulation of Rural Economies: Lower input costs and better prices would spark spending and investment in rural communities, boosting ancillary industries like agro-processing and rural retail.

Social Stability- Reduction in Farmer Stress: With more predictable income and reduced costs, farmer anxiety and protests are likely to subside, as financial pressures ease.- Prevention of Rural Migration: If farming becomes profitable, fewer people will have to leave rural areas for urban work or alternative livelihoods, sustaining rural social structures and stability.- Improved Farmer Trust: Transparent pricing and government support would rebuild trust between farmers and the government, encouraging sustainable agricultural practices.

Conclusion

PKI's proposals address the core reasons behind Pakistan's agricultural crisis: unprofitable farming, high input costs, opaque pricing, and inadequate government support. Implementing their solutions would not only enhance food security and export potential but also bolster economic resilience and maintain social stability in rural Pakistan. Failure to act might deepen the crisis, jeopardizing both national food supplies and the livelihoods of millions [2][3][4].

1. The recommendations by the Pakistan Kissan Ittehad (PKI) include removing taxes on agricultural inputs like seed cotton, farm equipment, and FED on these products to reduce costs and increase profitability for farmers, which could lead to significant growth in the agricultural sector.
2. The proposed solutions by PKI incorporate the establishment of an Agricultural Price Commission and Agricultural Export Authority aimed at ensuring fair farmer prices, combating market manipulation, and bolstering agricultural exports, potentially impacting the growth and stability of the commodities market in Pakistan.
3. Implementing a guaranteed pricing mechanism suggested by PKI, where farmers are guaranteed a 25% return on their investment, could attract more individuals to farming and minimize the risk of economic instability in the agriculture sector due to unpredictable market fluctuations.

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