Pakistan has one of the world’s most impressive agricultural systems but its potential still not yet fully utilized. Agriculture could become the main driver of economic growth and poverty alleviation but for that to happen policymakers at the federal level as well as in the provinces will have to appreciate the sector’s potential as well devise public policies to realize it.
From about the late nineteenth century to the present, the state has had a heavy hand in guiding agriculture to produce for the market. The main point I will make in the article today is that the government should ease its hold over the sector and let the private sector have a freer hand.
Agriculture sector is still the dominant sector of the economy with profound impact on rural economy. Its forward and backward linkages particularly with the industrial sector, gives it central place as a useful tool for the economic development of Pakistan. In face of increasing population growth especially in developing countries, limited possibilities of further extension of cultivated land, increasing resource degradation and wide gap between potential and national average yield, productivity growth takes an important place to face the challenges of the future to combat against food insecurity.
Productivity enhancement issue has been focused for every country of the world so as to increase the agricultural supply. The average annual growth attained by Pakistan is attributed to technological progress along with investment in agricultural related physical infrastructure and agricultural research and extension.
During Green Revolution, most of the countries in Asia experienced the pivotal role of technological change in enhancing agricultural productivity. Among all types of agricultural expenditures, agricultural research and development is the most important in increasing agricultural productivity and ensuring food security. Various studies have been conducted to explore the relationship between public investment and agricultural productivity.
In case of Pakistan, few attempts have been made to determine the relationship between agricultural research and agricultural output with the conclusion that agriculture research has a positive and significant impact on agriculture productivity and yields high rate of return.
Soil plays a key role in absorbing carbon and filtering water. Soil destruction creates a vicious cycle, in which less carbon is stored, the world gets hotter, and the land is further degraded. Ninety five percent of our food comes from the soil. About a third of the world’s soil has already been degraded. The causes of soil destruction include chemical-heavy farming techniques, deforestation which increases erosion, and global warming.
Presently, organic farming is the only best solution to avoid soil degradation.
NATURAL GAS CRISIS
Pakistan’s primary energy supply mix clearly shows natural gas as playing major role in country’s economic development by accounting for nearly 50% of its total primary energy supply mix. Pakistan’s Natural gas production has remained stagnant at nearly 4,000 mmcfd during the last decade. Over last few decades, Pakistan has developed a formidable gas sector. Its economy has so far survived due to abundant initial gas discoveries.
The natural gas market of Pakistan is among the biggest in Asia and is somewhat comparable with the size to France and The Netherlands. Pakistan was gas sufficient till 2005, however, after that, gas production did not keep up with the gas demand. The constrained demand of natural gas is 6,000 mmcfd whereas the unconstrained demand is 8,000 mmcfd (8 BCFD) or even potentially higher than this during winters when the domestic gas demand surges exponentially.
The peculiar energy mix of the country created space for oil as a major fuel source for power generation, which resulted in piling up of circular debt. The gas dependent sectors are suffering with the number of power plants shut down on account of uneconomical fuel use (HSD), rationing of gas. This resulted in enhanced imports of urea. The largest use of natural gas is in power sector followed by domestic, fertilizer, industrial and transport sectors. Major gas reserves including Sui Field of Balochistan, Qadirpur and Zamzama gas fields of Sindh are depleting rapidly, the supply-demand gap in the country is broadening and the country needs alternative sources of fuel to ensure the smooth functioning of local industries.
Pakistan is an agricultural economy and its fertilizer sector plays an essential role in enhancing agricultural output to meet local requirements as well as exports but as a result of serious gas shortage the fertilizer industry suffered a lot but now with the arrival of LNG the situation
LNG import is a major milestone for Pakistan’s gas sector. LNG development will serve as an impetus for growth not only in gas sector but also in gas consuming sectors including fertilizer and power sector.
The research and extension institutions would have to play their role for the sustainable development of agriculture sector. On the other hand, government would have to ensure adequate financial resources to these institutions so that they could work under constraint free environment. Besides that due to huge investment in this sector, private sector should also be encouraged to invest in agricultural research by eliminating all types of constraints e.g. legal, administrative and bureaucratic in this regard.
Moreover, having long run impact of research on Total Factor Productivity, investment in research and development must be on consistent basis so as to save from future shocks/decrease in aggregate productivity.