The government of Pakistanuses a minimum price support program for major crops produced in the country.Under this program, the government agrees to make purchases when the marketprice falls below an announced level. In addition, the government subsidizes agricultural production creditthrough both government and private banks for the purchase of seeds,fertilizers, pesticides/insecticides, animal feed, labor, fuel, irrigationwater charges, and agricultural machinery. Input subsidies are offered forelectricity and fertilizer and development loans are also provided formachinery purchases. Thegovernment also subsidizes natural gas purchases for fertilizer production ataround $200 million/year.
á A Minimum Support Price(MSP) for seed cotton is announced at the start of each marketing season. TheTrading Corporation of Pakistan (TCP) intervenes in the market if the pricesfall below the MSP. For 2006/07 the support price is Rs.1025/40kg (a lintequivalent of $0.59/lb).
á Bound import tariff forcotton is 100%. Applied tariffsrange from 37.5% for non-carded cotton to 65% for carded.
á MSP for 2005/06 was Rs300/40kg ($5.72/cwt) for paddy rice.
á There is a 10% importduty and 15% sales tax on rice imports.
á The MSP for sugarcanevaries by region. In 2005/06 itranged from Rs 45/40kg ($0.07/lb raw sugar equivalent) to Rs60/40kg ($0.09/lbraw sugar equivalent).
á PakistanÕs bound tariffon raw sugar is 100%. Its averageapplied tariff is 35%.
á The government ofPakistan offers no price support mechanism for soybeans nor engages in anystate procurement programs.
á The bound tariff ratefor soybean imports is 100%. Theapplied rate is 10%.
á The MSP for wheat for2005/06 was Rs.415/40kg ($4.74/bu).
á The government nowallows duty free imports of wheat and wheat flour by the private sector,conditional on meeting prescribed specifications. Wheat and wheat products canbe traded freely and banks can finance such trade.