NFC’s role redundant after privatization of all fertilizer factories

Staff Reporter


Several experts and the media have been reporting the poor performance and corruption at large institutions like PIA or Pakistan Steel. Unfortunately, most of the government sector organizations in Pakistan have failed to perform well, while many of them are actually causing perpetual losses to the economy. However, the economic damage done by some other government organizations like; National Fertilizer Corporation (NFC) or National Fertilizer Marketing Ltd. (NFML) is not clearly highlighted, so the masses are not aware of their incompetence.
The Government had incorporated NFC to manage several public-sector fertilizer factories across the country. NFC was supposed to build capacity, improve productivity & performance and ensure ample availability of fertilizers throughout the country, at uniform prices. However, over the years, it had failed to get substantial results from these factories including; Pak-Arab, Pak-Saudi, Pak-American Fertilizers and others which have been running in losses. Hence, eventually these factories were privatized, whereby NFC’s role has now become completely redundant. Now besides running some training facilities this organization has hardly any usefulness. There are other organisations like NFDC which are efficiently monitoring demand supply, quality, development and prices, thus precluding need of duplicate organizations taxing the national budget.
Similarly, NFML was established with the objective of minimizing the build-up of surplus inventories, caused by the seasonality of fertilizers demand. NFML established bulk-warehouses at strategic locations, with a capacity of more than 115,000 Metric Tons, to improve the logistics and storage, but this institution has also been causing big losses to the nation. The scope of NFML is now limited to timely sales of imported fertilizers, but it is not even able to achieve this task successfully, despite the generous subsidy support by the government. To prove their relevance the NFML keeps floating ideas of import and creating alarms of shortage in spite of national self sufficiency.
The key objective of creating large organizations like; NFC and NFML was to support and enrich the fertilizer sector. But, the government has been suffering big losses due to their poor performance, so they are now acting like parasites on the country’s exchequer. Therefore, it is advisable to dissolve such incompetent organizations. This heavy burden must be urgently removed from the government’s shoulders. Moreover, the domestic fertiliser manufacturing capacity precludes any possibility of imports of Urea. Even if it has to be imported then more economical option has to be exercised in distribution, as invariably the Govt has to subsidise the imported Urea.
An alternative strategy can be; to distribute imported fertilizers, through the large distribution networks, established by the more efficient Fertilizer Manufacturers. Thus, the government’s expenditure can be drastically reduced. The government can save a lot of money, by closing down redundant institutions like the NFC and NFML. The fertilizer sector is totally private and apolitical unlike sugar, cement and textile, which have political clouts. Hence, it needs a better regulatory-support, with more incentives and efficient deployment of resources, for higher agricultural productivity, because this sector is playing a vital role in economic growth.

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