With fertiliser/pesticide prices set to rise, Punjab, Haryana farmers seethe
Jun. 30, 2017
- GST on raw materials may hit fertilizer output, boost imports
- Higher GST on pesticide to affect Indian farmers
- India GST rollout: GST Council cuts tax on fertilisers to 5 per cent
- India agri input firms' short-term margins to remain under pressure on price cut
- Indian pesticide dealers shut shops to protest proposed high GST rate
- India farmers may be hit by higher GST rate on agro-chemicals
- India GST supply crunch: Fertiliser, pesticide pipeline turns dry ahead of sowing
- India pesticides manufacturers to rollback price increase
Equally worried is Sukhwinder Sekhon, a farmer with a 12-acre farm in Punjab’s Ludhiana district.
Post-GST, farmers in Haryana and Punjab, who currently pay no tax for chemical fertilisers and no value-added-tax on pesticides, will have to cough up more as fertilisers are taxed at 12 per cent and pesticides at 18 per cent.
“I expect their cost of cultivation to go up by roughly ₹1,000 per acre,” says Bahadur Ram, Chief Area Manager of fertiliser cooperative IFFCO, who is in charge of fertiliser distribution in seven districts in Haryana.
In 2015-16, farmers in Haryana and Punjab used 2.77 million tonnes and 3.96 mt of fertilisers, respectively, according to data available from the Fertiliser Association of India.
Farmers have to spray pesticides at least five times and the cost of the agrochemical each time is at least ₹1,000 per acre, said Chandrabhan, a farmer who grows both cotton and paddy as Kharif crops on his 10 acre field in Bhuthan Kalan village, 10 kilometres from Fatehabad.
Prahlad Singh, who owns a seed and pesticide firm in Sirsa town in Haryana, said he has an existing inventory of pesticides worth ₹50 lakh, and has no choice but to pass on the extra tax he may have to pay to the government following GST implementation.
Pesticides in Haryana, as in Punjab, currently attract an excise duty of 12.5 per cent. And with GST on pesticides at 18 per cent from July 1, he is forced to pay 5.5 per cent extra on the existing stock.
Better long-term picture
Singh, however, said he expected the prices of pesticides to come down in the long run as there would be more streamlining of MRP on these chemicals.
Sekhon, who is also the secretary of the Kisan Sabha in Punjab, said his organisation is planning a dharna in Ludhiana on July 15 to protest the inclusion of agriculture in GST.
“This is a double whammy for farmers, who are already suffering because of the low prices that their crops fetch,” Sekhon said.
Apart from fertilisers and pesticides, agricultural implements are also going to be expensive as they attract 12 per cent tax under GST, he said.