June 15 - 21, 2009

Agriculture is the single largest sector of Pakistan's economy. Favorable climate, abundant water and productive soil have enabled us to grow variety of crops throughout the year. Currently the share of agriculture in GDP stands at 20.9%. The average annual growth of agricultural output of more than 4% has been quite impressive. According to the World Bank's World Development Report 2008, GDP growth, originating in agriculture, is about four times more effective in raising incomes than any other sector. The development of agriculture is synonymous with the development of economy.

The importance of agriculture to the economy can be seen in many ways: It provides food to consumers and fibers and raw materials for domestic industry; it is a source of foreign exchange earnings; it provides a market for industrial goods. Last but not the least, it boosts infrastructural growth, source of revenue and savings, etc. A major part of the economy depends on farming through production, processing, and distribution of major agricultural commodities. Our major crops include cereals pulses, fruits and vegetables. These crops play an important role not only in earning foreign exchange but also fulfilling the nutritional requirements of the people.


Despite numerous problems being confronted by the sector advancements are under way in agriculture in Pakistan. The production, marketing and distribution of agricultural products have all become gradually more complicated and advanced. New ventures are undertaken for development of different new hybrid species of plants and animals.

In cooperation with China there is a plan of plantation of BT Cotton. This is an attempt to boost BT cotton production in the Punjab and Sindh. Experimental sites have been selected in the cotton growing areas after holding meetings with experts and scientists for cultivation of BT cotton in collaboration with provincial scientists. It is recommended that germ plasm of hybrid BT color cotton and inter-specific hybrids need to be acquired from China and production technology to be tested at five sites selected by the Chinese on colored and white cotton on a large scale.

Advances in technology have made it feasible for agricultural products to be produced to 'specification' and preserved in a fresh condition for a longer time. New marketing tools and sales strategies have emerged which are stressing to establish a brand image with consistent quality. The absolute scale of operations has also been increasing.

There is a growing trend of contract farming nowadays. The contract gives the farmer an access to additional sources of capital, brings in new technology and ensures better price for his produce. In this system lesser amount of capital is involved and it is comparatively easy than costly and risky corporate farming. It actually boosts income and raises new employment options in backward and underdeveloped regions. It enhances low levels of productivity and eliminates flux in production. Thus, overall, it puts the local economy on a dynamic path to growth and development.


There are innumerable issues connected with the agriculture sector. It has always been neglected by the policy makers as well as government. As a matter of fact, approximately 40 to 45% of produce is wasted due to the lack of knowledge and shortage of trained manpower in the field of post harvest operations such as harvesting techniques, handling, packaging, transportation, and storage. This wastage on one hand causes monetary loss to farmers and on the other this is a loss of nutritional benefit. Despite the fact that agriculture is the major driver of economy of Pakistan, there is an acute shortage of agro based food industry which can convert potential wastage into nutritional and usable form and adoption of appropriate processing and preservation techniques for making the food availability in the form of products as well.

Another big problem is that the disbursement of credit to agriculture sector by commercial and specialized banks is not up to the required limits. Despite strong agriculture output in this season the credit flows remained restricted to just Rs174.8 billion during July-April, 2008-09, against Rs250 billion target fixed for the current year. Overall credit disbursements by five major commercial banks, including Allied Bank, Habib Bank, MCB Bank, National Bank of Pakistan and United Bank Ltd stood at Rs86.552 billion during July-April, 2008-09. Zarai Taraqiati Bank, Punjab Provincial Co-operative Bank and 14 domestic private banks also extended loans to the sector.

As far as live stock, cattle farming and animal husbandry is concerned, there are a lot of other problems like lack of specific area required for animal's proper growth, lack of market information, medical treatment for animals, least know-how about latest techniques of raising production (milk and meat) etc. All these factors lead to low productivity, affecting adversely disposable income level and small savings of these families. This, in turn, is having a negative impact on their livelihood, security and socio-economic status.

For local farmers, the impending troubles linked with contract farming are increased risk of introducing new crops in the area, unsuitable technology, and crop incompatibility, manipulation of quotas and quality specifications.


To meet the increasing food requirements and to achieve more sustained growth in agriculture, it is necessary to focus on livestock and dairy farming also.

Farmers play a vital role in agricultural production and hence need special focus. They should be provided with short and intermediate easy-term credit through one window operation for investment in cultivation and farm mechanization. The existing cumbersome process of loan grant needs to be simplified.

Subsidy is normally given to farmers on inputs e.g. fertilizers needed to boost output. Such subsidies should also be given to livestock breeders and farmers should be facilitated to buy animals in installments. Moreover, animals should be provided with insurance cover to minimize farmers' losses.

The import of palm oil, tea and other consumer products take a lion's share of foreign exchange earnings. Attempts should be made to grow these crops locally. Reasonably successful experiments have been made in Hazara for cultivation of tea. However more efforts and support are to be extended by the government to promote such cultivation. To get indigenous palm oil humid areas should be used and these trees can be planted on a massive scale. The 4,000-mile-long canal system is ideal for the planting of three or four rows of small coconut trees along banks, similar to those in the Seychelles. These have an abundant yield and coconut oil is a healthy food. Edible oil can be produced by planting sunflowers in large quantities. Government can save valuable foreign exchange by giving incentives for substantial production of these species to give boost to the economy.