From Shamim Ahmed
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.