Delayed fertiliser subsidy payment irks importers
 

by Shirajiv Sirimane

The Private sector importers are up in arms due to the delay of the payment of fertiliser subsidies by the Government. They claim that a sum of over Rs. 4 billion is outstanding to the importers by the Government for the past six months.

Director A. Baur and Company, N. Niyangoda said that the last payment they received was around Rs. 500 million last August.

The private sector imports nearly 75 percent of the total Fertiliser requirement in the country. He said that if their dues were not paid they would not be able to import fertiliser from next year.

"The Banks are refusing to give further credit and the manufacturing companies in Ukraine, Middle East and China too have indicated that they would not extend further credit facilities.

"We are also unable to open any more Letters of Credit due to this back log and we fear that if this trend continues the international manufacturers would impose a risk tax on Sri Lankan importers," he said. The importers are also incurring heavy losses and they have to pay nearly Rs. 420 million to banks as interest. Niyangoda warned that the fertiliser stocks available in the country and shipments due would be sufficient only up to January. "This would have a major negative impact on the economy and the paddy, tea, coconut and vegetable sectors," he said.

Presently Urea fertilisers imported are subsidised and sold at a subsidised price on the basis that the Government pays a subsidy to the importers at the point of import.

Current subsidy applicable for Urea is Rs. 23,000 per MT which is about 70 of the landed cost of Urea fertiliser imported.

"At present we are experiencing inordinate delays in receiving subsidy money due to us and Government's agreement with us is to pay money due to us on account of subsidy within six weeks of receipt of our subsidy claims," he said.

Joint Managing Director, S. De Silva said that if the Government can issue a voucher to the farmers the subsidy could be taken off. "What we want is a strong pledge that there would be a permanent solution for this," he said.