$2bn rice export sector ignored in budget

KARACHI: Badly hit by rupee appreciation, the rice sector, which fetches over $2 billion in foreign exchange, has completely been ignored in the budget. Rice Exporters Association of Pakistan (Reap) Senior Vice-Chairman Chela Ram addressing the media at the Karachi Press Club (KPC) on Friday deplored that the sector was overlooked and this was evident from the finance minister’s budget speech wherein he failed to mention the word ‘rice’ at all. If the government fails to provide relief in the form of subsidy or cut in power rates a large number of rice units will close down, he warned. “The rice exporters were expecting some relief package in the budget 2014-15 as they had suffered huge losses owing to rapid appreciation in the rupee value resulting in losing of its traditional markets to Indian and Thai rivals, but the finance minister didn’t come with any relief for this vital sector,” he lamented. Normally rice exporters purchase paddy from growers three months in advance and the price is also set at that time. However, the rupee appreciation was so rapid that it rose to Rs98 to a dollar from Rs108 in a short period of 15 days inflicting millions of rupees loss to rice exporters. Speaking on the occasion, former chairman Reap Javed Ali Ghouri said that Pakistan is an agriculture country with 50 per cent workforce engaged in this sector. He stressed that the government should provide rice seed on subsidised rates. “The sector is badly damaged by poor law and order situation and power crisis and rice processing units are unable to operate normally which increases their cost and renders them uncompetitive in the world market,” he said. Ghouri alleged that shipping companies have formed cartels and when rice season starts they increase their freight charges manifold which are badly damaging rice export trade. The rice export sector, he said, never asked any sort of favour from the government but now the situation has totally changed. “If there is no support, the rice industry will shut down,” he added. He said there had been long demand of the Reap to provide ‘one window’ facility for rice export sector as exporters are not ready to come in direct contact with government departments who harass them. The Reap has been asking the government to deduct all taxes and levies including of EOBI, WWF and social security through banking channels as this will eliminated corruption and also help exporters to concentrate on their exports. Published in Dawn, June 7th, 2014