ISLAMABAD: The proposal for the duty-free import of 200,000 metric tonnes of potatoes to stabilise its prices in the local market is opposed by the Federal Board of Revue (FBR).
The Ministry of National Food and Security Research’s (MNFSR) proposed the duty-free import of potatoes to bring down its price in the local market during the holy month of Ramazan.
The Ministry put the proposal to the Economic Coordination Committee (ECC) of the Cabinet on the grounds that without imports the hoarders would be encouraged to raise potatoes prices to Rs100 per kg to ensure windfall profits.
The ministry sought permission for import of potatoes at zero duties and levies for a period of two months, (May to July 2014), arguing that it would help bring down the prices during the month of Ramadan. However, the FBR did not support the proposal on the grounds that it would have adverse revenue implications.
The FBR was of the view that any reduction in duty and taxes would have to be made through SROs which would be contrary to the efforts being made to do away with the concessionary SROs. However, the board proposed to the ECC to impose 15 percent duty on export of potatoes to stabilise the domestic market.
According to MNFSR, Pakistan is self-sufficient in potatoes and relies for more than 99 per cent on locally produced potatoes. However, the total annual production of potato has declined during the current fiscal year as compared to previous year. During 2013-14 the area under potato crop decreased by 10.71percent compared to last year due to non -availability of sufficient potato seed at the time of sowing and damage by heavy frost and premature harvesting.
It is to be noted that the next crop from Khyber Pakhtunkhwa would arrive in the market around end May which is around 7 to 10 percent of the total requirement of the country. The total annual domestic requirement of potatoes is 2.662 million tonnes as per Pakistan Bureau of Statistics. According to FBR and PBS, around 80,207 tonnes of potatoes were exported from January, 2014 to March 20, 2014.
