Revival of agriculture sector
has led to a smart recovery in the related industries like textiles and tractors
From Shamim Ahmed
Mar 13 - 26, 2000
The third meeting of the Economic Advisory Board (EAB), a think tank
constituted by the present government to advise on economic matters, while reviewing the
economic situation with special reference to the developments during the first seven
months of the current financial year, noted that whatever little improvement has taken
place on the economic front was due to the good crop of cotton, rice and edible oils.
The official data presented to the Board showed significant improvement
both in the agricultural and agriculture related manufacturing growth, during the year.
Crops of cotton and rice recorded major increases over last year while the prospects of
wheat looked highly promising. Even after accounting for the decrease in the production of
sugarcane, the growth in agriculture sector looked set to meet the target of 4.3 per cent
for 1999-2000 compared to the growth of less than one per cent last year. In the
manufacturing sector, growth prospects were even better, revival of agriculture sector has
led to a smart recovery in the related industries like textiles and tractors.
As indicators in the other sectors did not offer any good prospects in
the near future there was almost a consensus on the point that for immediate boosting of
economy agriculture offered a potential which should be fully harnessed. According to a
report Pakistan is expected to save over 1 billion dollar from reduction of imports on
wheat and edible oils in the current year. Pakistan's wheat out put target for the current
year has been set at 20 million tonnes as against 18 million tonnes last year and the
present crop situation promises that the target may be achieved further bringing down our
import requirement. Pakistan's domestic demand is estimated at 21 million tonnes but
another 1 to 1.5 million was needed to feed the neighbouring wartorn Afghanistan.
The Managing Director, Pakistan Oilseed Development Board told a press
conference that Pakistan is expected to save over 500 million US dollars in the current
financial year from a cut in its edible oil imports. He attributed this development to an
upsurge in the domestic production of edible oils. Making a pointed reference to the role
of his organisation in this context, he revealed that the quantum jump was possible
largely due, among other factors, to its massive promotional programme for oilseeds,
especially sunflower, leading to an increase in acreage from rising demand and
profitability. Referring to sunflower alone, he said that it was planted over 427,000
acres in spring 1998-99, the highest ever and depicting an increase of 73 per cent over
the preceding year's 248,000 acres. He stated that the increase in acreage under oilseeds
could be possible from a number of steps aimed at reduction in the prices and improvement
in quality of seed as made available to the farmers.
All these, put together, helped keep prices of domestic oil at levels
competitive enough to cut the demand for imported oil. For a predominantly agricultural
country like Pakistan, so caught in a vicious circle, as even to import its food needs, a
small relief from reliance on own resources should serve as quite an eye-opener. He
claimed that with little extra attention to this sector Pakistan can be self-sufficient in
its edible requirement within a short span of 2/3 years.
The prospects of agriculture substantially boosting the economy have
always been there, but enamoured by the lure of industry, as detached from farming, we
could not put it to good use. It is not that nothing has been done for agriculture
development, as all its aspects have been variously attended to, though in generally
disconcerted manner leaving a bit too many loose ends. Now that with the passage of time
and under the compulsion of unfolding constraints, newer avenues of agriculture are coming
into focus, its importance to the country's economy is becoming increasingly pronounced.
Former finance minister of Pakistan Shahid Javed Burki, in a series of
lectures during his visit to Pakistan last month described the economic situation of
Pakistan as most critical in its 52 years history. He saw the only hope in Agriculture
which according to him can put economy back on track.
Addressing a select gathering of economists and retired bureaucrats on
"Current economic crisis of Pakistan and its implications for poverty and social
development", the former World Bank executive painted a very bleak picture of the
country's economy and its future riddled, as it would be, with slow growth and increasing
poverty. The way things are going, he warned, there would be little improvement in growth
and more appalling poverty would grip the country. The previous growth was based on the
green revolution in agriculture, high remittances and direct inflow of investment. A
number of these factors were now missing. The Middle East boom is no more, while the
Pakistanis in Europe and the US were not interested. Foreign investors are also reluctant
to come. Burki said that in the circumstances only agriculture could be the engine of
growth if the government came out with clearly perceived policies in the next six months
Answering how agriculture could be made a strong instrument of economic
revival, he said that it would generate surpluses for exports, which should have
value-addition. It would also provide employment and increase income of the poor. With
forward and backward linkages, it would have salutary impact on other sectors. For
improving the sector, he urged development of infrastructure and not mega projects like
motorways, building of farm-to-market roads; meaningful results oriented research,
development of agribusiness, and improvement in credit facilities and involvement of women
in workforce. For achieving these, the government must come out with a comprehensive
It is gratifying to note that the present government has taken due
cognizance of the problem and attending to it on prompt basis. The fact that the last
cabinet meeting devoted almost 8 hours to discuss matters pertaining to Agriculture.
Describing the agriculture as the backbone of our economy, Chief Executive Gen. Pervez
Musharraf urged for all possible incentives far the formers in the farm policy under
preparation. The policy which has almost been finalised will be announced after the
approval of cabinet. Some of the recommendations have already been implemented.