These positive results were achieved as a result of agriculture package announced by President Musharraf at the Farmers Convention


Sep 26 - Oct 02, 2005

This year, the domestic wheat production was over 21 million tones, which is sufficient to meet the domestic demand. We had a bumper crop of cotton of about 13 million besides last year (Nov/Dec 2004) and the coming crop is expected to be more than the last year's despite some bad effects of unprecedented rains specially continuing during September. Revised estimates are being finalized, and are likely to exceed 13 million bales.

These positive results were achieved as a result of agriculture package announced by President Musharraf at the Farmers Convention held in Islamabad last year. This was noted at the presentation made by the Ministry of Food & Agriculture to the Prime Minister during his quarterly review of the ministry's performance last week. Citing higher agriculture production during the out-going year, the Prime Minister was told that it was made possible by the increase in per acre yield because of the success of the policies of the government.

As against last year when the country had to import over 1.5 million tones of wheat from Australia, Russia and Canada worth $ 230 million to meet the shortfall between production of about 19.1 million against the demand of 20.8 million tones of wheat created acute problems, besides rocketing the price of both the grain and the flour adding miseries to the poor class.

Reviewing the quarterly goals of the Food, Agriculture and Livestock Ministry, Prime Minster Shaukat Aziz is reported to have emphasized the need of taking new initiatives and attracting investors in the agro-based industries to make the best of the huge potential of this sector. Citing higher agriculture production in recent years, he said it was made possible by the increase in per acre yield, primarily because of success of the policies of the government. This enabling approach, he said, could bring a revolution in the lives of the people of rural areas.

Regarding the prospects ahead, the Prime Minister sounded quite confident of attainment of the wheat target of 21.2 million tones. Similarly, the observations made by the Food and Agriculture Minister on the occasion seem to have flowed from optimism about increased production, to varying degrees, in cotton, wheat, sunflower and rice, attributing this to the sector's positive response to the policies of the government. Easy and timely availability of financial assistance at affordable cost to the farming community, the agriculture sector received Rs. 108.6 billion credits from 21 banks during the fiscal year 2004-05 which was about 28% higher than Rs. 47billion the farmers received in 2003-04. This has made a big difference to set the improving trend. The credit limit for the current year has been increased to Rs. 130 billion.

This was, indeed, a very sorry state of affairs that Pakistan started facing food crisis, and had to spend huge foreign exchange to meet its domestic requirement. In our neighbourhood India was in really a bad shape as far as its food situation was concerned. Pakistan then had enough wheat to spare and export the same to India to help the latter overcome its food crisis. The situation has now reversed. While India has achieved food autarky, notwithstanding its huge population, Pakistan is deficient in food items and has to look to foreign markets to make up for the deficiency. It sounded very strange when the former Prime Minister of India, Atal Behari Vajpayee, during his visit to Lahore offered wheat to Pakistan. It is heartening to note that the situation is changing.

It goes to the credit of the government under Pervez Musharraf that it focused its attention on this highly neglected sector with a high potential to improve living conditions of the poor masses. A historic relief package for the farming community was announced by President Pervez Musharraf at the Farmers Convention last year providing many incentives to the farmers and protection to the financially weaker segment of the farming community. Announcing that no farmer will be arrested for non-payment of loans, the President said that the relief package to the farming community was designed to spur growth in agriculture sector.

The landmark package was the most comprehensive looking after almost all needs and requirements of the farming community. The steps announced by the president included abolishing customs duty on agricultural implements, establishment of new tractor plants, and allowing import of tractors below 35 HP and above 100 horse power with no GST or withholding tax. The importers of such tractors will have to pay 10 percent import duty only. The farmers, who return loans within the stipulated time, will be charged only 8 percent mark-up. The rate of 9 percent will be charged for all types of new loans and ongoing tractor, tubewell loans etc. will also be charged at 9 percent so that maximum number of people benefit from this changed interest rates. Under the relief package, the loans up to Rs. 500,000 will stand fully settled on payment of 50 percent of the amount outstanding. This concession has benefited approximately 250,000 farmers.

Keeping in view the hardships faced by the farmers of Balochistan due to prolonged drought, the President instructed that a special concession be provided to the farmers in the calamity-hit areas of Balochistan. The president also announced that the loans up to Rs. 200,000 in the calamity-hit areas of Balochistan defaulted beyond December 31, 2000, shall stand fully settled on payment of 25 percent of the principal amount outstanding.

On the occasion, the president announced that the ZTBL shall not exercise any more the special powers given to it under the Land Revenue Act, to use Tehsildars and police to directly arrest and imprison people for not returning their loans. "From this day onwards no farmer will ever again have to suffer the humiliation of arrest and imprisonment for non-payment of loans."

Musharraf expressed the hope that the package and other steps taken by the government for bolstering agriculture sector would lead to fast growth in agrarian sector. He said the entry of commercial banks in agriculture credit will also help boost the sector. In their very first year, the commercial banks will lend more than ZTBL to the farming community.

Now that the Prime Minister has deemed it expedient to make a call for new initiatives, along with efforts aimed at attracting foreign investors to this sector in the country, it should leave little doubt that there is a great deal more left to be desired to make the best of its tremendous potential. It will be noted that this realization, howsoever belated it may appear, can be traced to unsatisfactory results accruing from similarly motivated agriculture boosting plans.

It be recalled that with unmistakable focus on enhanced production, attainment of targets had remained subjected to increasing investment in its enabling factors, with farm credit assigned the lead role. Needless to point out, credit driven pursuit of agricultural development has continued to fall short of expectations of the country's economic planners and managers. However, it goes without saying that the approach of increasing output, mostly at the cost of quality and stability in prices, has come to be regarded as the bane of the nation's economy. Notwithstanding the vital role of a number of major crops in the country's industrial progress, the gains have yet to reflect in the lives of the people, particularly in the rural areas.