. .

1_popup_home.gif (1391 bytes) i&e.gif (7340 bytes)

Agri sector given less importance in federal budget
Govt must be working on new strategy to achieve food autarky by year 2000 as vowed by PM immediately after assuming power

  1. Restricted growth of ship breaking industry
  2. Trade deficits soars to $1.449 bn
  3. Agri sector given less importance in budget
  4. Declining sales of two-wheelers
  5. Solar energy: Substitute for oil

From Shamim Ahmed Rizvi, Islamabad
July 12-18,1999

Despite the fact that the growth rate in the Agriculture sector during the fiscal year 1998-99 has been extremely poor — 0.4 per cent as against the target of 5.4 per cent, surprisingly this sector remains neglected in the budget 1999-2000 belying all claims to achieve food autarky by the end of year 2000.

Immediately after assuming power in 1997, Prime Minister Nawaz Sharif focused attention on the neglected Agriculture Sector and took various measurers for this sector's improvement. He expressed his determination publicly to achieve self sufficiency in the production of food items such as wheat, edible oils and other kitchen items in the next two to three years.

Addressing the first ever called Kissan Conference, the Prime Minister announced a very attractive package for the farming community including about 20 to 25 per cent increase in support prices of wheat, rice and other cash crops and easy loan facilities to small farmers. The tempo built up did work and wheat production increased to 18 million tones in 1997-98 from 16.5 million in 96-97. This tempo could not be sustained during the year 1998-99 with the result that wheat production remained static at 18 million tons against the target of 20 million.

The situation should have warranted a serious review while making policies for 1999-2000 fiscal year. But this sector seems to have been neglected in the budget except provision for importing 3 million tons of food in the current fiscal year.

The subject of agriculture and its intrinsic value to the Pakistan economy has been discussed and debated as no other sector of the economy. An infinite number of conferences and seminars have been held and continue with noticeable frequency. There has been no dearth of reports and recommendations by a plethora of committees and commissions which have, at one point of time or the other, dealt with this issue in minute details. Yet, somehow, the problems afflicting the agriculture sector have persisted with their attendant impact on the production levels. There is no denying the fact that agricultural production has remained and would remain subject to the vagaries of weather, but the failure of some crops during the last year was not caused by this factor alone.

Much though we would like to believe, we are not basically an industrialized nation, yet. With a nearly $ 9 billion worth of expected annual exports, facing a trade deficit of $ 1.5 billion and are dependent on imports for the greater part of our capital and consumer goods requirements as also industrial raw materials, we can hardly qualify to any pretence of being really industrialized. Despite rapid urbanization the majority of our population still lives in the country side and agriculture continues to contribute the greater part of our national income. Agro-based, agro-dependent and agro-related manufacturing and processing units like ginning, spinning and weaving mills, sugar mills, rice mills, flour mills, edible oil mills and fertilizer plants constitute over 70 per cent of our industrial base. Despite this heavy economic reliance on agriculture, it is surprising that this vital sector should figure so low in our policy planning priorities. Fiscal, monetary, investments, trade and industrial policies are all being eagerly and assiduously updated to cope with the imperatives of the new world order and the challenges of the century just around the corner. But scant attention is being paid to the revitalization of the agricultural sector and fully exploiting its domestic and export potential.

We have long identified low yield per acre due to the use of outdated modes of farming as the basic problem plaguing agriculture and have sought to address the problem by attempting to introduce mechanization, without cutting much ice. The existing land ownership pattern intrinsically mitigates against modernization. Agricultural land is mostly divided between a large cross-section of small farmers, an appreciable segment of absentee landlords and a significant chunk of big farmers or feudals as we call them.

The interests of the absentee landlords being vested elsewhere, they are least interested in what transpires in their fields so long as their tenant farmers scrape a fit income for the use of their land. It is the much maligned big farmers or feudals who have introduced whatever mechanization that we see in the fields and to whom goes the credit for whatever growth that has been witnessed in the sector. But these big land owners are basically farmers with little technological know-how, literally no acumen for research and scant knowledge of the marketing techniques being evolved and applied in the rest of the world.

As Pakistan's population is said to be rising at the rate of three per cent per annum, the agriculture production ought to keep ahead of it. In certain cases like wheat and cotton, buffer stocks are also needed to be built up. Rice production has to be increased in order to boost exports. What is quite, therefore, obvious is that the production of both the major and the minor crops have to be accelerated through timely policy packages of incentives, support price mechanism and procurement of the produce. That needs to be backed up by adequate and timely availability of credit, inputs, irrigation water and even extensive farmers' education.

In fact, the urgency of increasing our food production demands that "commercial farming on massive scale" be tried in all areas where large tracts of land are available, as for instance in Bahawalpur and Thar. Actually we have two feasible choices either break up the waderas' huge fiefs into smaller holdings cultivated by peasant-proprietors as in most parts of East Punjab and some parts of West Punjab; or have the extensive fiefs leased out to large farming companies who have the resources to invest in modern technology and maximize the yield.

The only way to make farming worthwhile to the modest peasant-proprietor is to eliminate the middleman who skims off all the cream by over-burdening the cultivator with questionable debts and dictating his Shylock-style terms. A study, made by the World Bank, has disclosed that some of the private money-lenders including the feudal lords, charge anything from 33 to 50 per cent interest on loans advanced to the small farmers, whereas the official banking interest rate is only 12.50 per cent which, however, the small farmer rarely has access to. The World Bank, therefore, suggests the establishment of "new specialized banker in the rural areas, which requires no collateral for the benefit of the small farmer. According to the World Bank report, the big farmer not only pre-empts the cultivator's crops by exploiting his need for credit, but also grabs all the loans provided by the government at concessional rates, and seldom pays them back.