Punjab Rural Economy in Danger, Fruit Farmers Suffer from 20% FED

The agricultural sector, already burdened by an ongoing wheat crisis, is facing additional challenges as juice and nectar producers reduce their fruit purchases. This downturn is linked to the recent implementation of higher taxes on the industry, reports surfaced on Tuesday.

The report highlights that juice companies have scaled back their operations in fruit markets by lowering their procurement and contract-farming objectives. Historically, the formal juice sector annually purchased over 100,000 tonnes of fruit from local farmers, but these figures have significantly decreased.

Fruit pulp processors typically reached out to orchard owners and exporters months before harvest to set up informal contracts for purchasing fruits that didn’t meet export standards. This year, however, there has been a marked reduction in such contracts, leaving orchard owners anxiously awaiting buyers.

Shahzad Goraya, a mango farmer from adjoining district of Multan, observed a shift in the industry’s approach. “This year, no company has approached me to buy the surplus mangoes,” he said. “In the past, they would overcontract to ensure they met their needs even if some suppliers failed to deliver.”

Previously, the purchases made by pulp, nectar, and juice producers helped stabilize the local market and provided fair compensation to growers. Now, with their decreased participation, fruit prices are falling, adversely affecting orchard owners.

Goraya also pointed out additional pressures from restricted fruit exports to Central Asian nations, exacerbated by trade route complications through Afghanistan and Iran. “With the juice industry fading from the market and fruit prices dropping, we may have to stop planting and even remove existing trees to sell as firewood, as we cope with rising costs for power, diesel, fertilizer, and labor,” he added.

Ahsan Ali, a guava farmer from Sheikhupura, criticized government policies for harming rather than aiding the fruit value chain, which is crucial for improving agricultural productivity and supporting the rural economy, now struggling with unemployment-induced urban migration. “Value addition is the only way to rescue our economy. Otherwise, we will remain merely producers of raw materials, reliant on other countries for finished products,” he remarked.

“We appeal to Chief Minister Punjab Maryam Nawaz to ensure that regressive tax policies by federal government does not endanger agriculture sector,” he added.

Published by
Nazzir Zaidi