The need for providing substantial relief to the poor by reducing the cost of utilities


From Shamim Ahmed Rizvi, 

June 07 - 13, 2004



Most of the speakers at a pre-budget seminar held recently in Islamabad pointed out to the economic managers that a vast majority of the people of Pakistan did not believe their oft-repeated claims of improvement in the economy during the last few years as their own economic worries have multiplied during this period, unemployment and poverty level had never been so high in Pakistan as it is today, unprecedented increase in the prices of kitchen items during the last year has made the life of common man unbearable. Starvation led suicides in a phenomena never witnessed in Pakistan before.

The speakers stressed the need for providing substantial relief to the poor by reducing the cost of utilities and kitchen items and focus full attention on job creation and poverty reduction programmes. Agriculture sector, which can help the government in achieving these two objectives in a comparatively shorter period, should receive most attention in the budget 2004-05.

The seminar which was presided over by the Finance Minister Shaukat Aziz was addressed by Senator Prof. Khurshid Ahmed, an eminent economist and a former Finance Minister of Pakistan, Dr. Shafi Niaz, former advisor to the President on Agriculture, Dr. A.R. Kemal, Director, Pakistan Institute of Development Economics (PIDE), Dr. Akram Shaikh, Deputy Chairman Planning Commission and Arif Habib, President Karachi Stock Exchange.

Speakers were unanimous that the coming budget should be aimed at improving the lot of common man by creating job opportunities for them. The agriculture sector is a neglected area, which should be focused on to mitigate sufferings of the farming community. They said there is no doubt that macro-stability has improved economic indicators but its positive effects have not reached a large segment of poverty stricken population. They said Parliament should be taken into confidence in budget making processes. The speakers said all stakeholders of the country should be consulted in budget making. The budget should be harmonious and adequate funds should be allocated to social sector. They said provision of health and educational facilities are responsibilities of the government.

Finance Minister Shaukat Aziz speaking on different aspects of the forthcoming budget and state of economy said budget will be growth and investment-oriented to create opportunities. The people of Pakistan will be given opportunities to work and earn with dignity and honour. Denial of opportunities leads to poverty, he remarked. He said economics cannot be developed in a few years. Former Malaysian leader Mahathir struggled for sixteen years to build his country's economy and that process is still continuing. He said poverty issue has to be tackled holistically and integrated approach is required to reduce poverty level. He claimed that on recount surveys have reversed and it has now started to decline.

Mr. Shafi Niaz followed by Senator Khurshid questioned the authencity of the data for the budget specially provided by the provincial government relating to crop production and agriculture growth. According to Shafi Niaz agriculture growth was less than what was projected, as it had been a neglected sector despite its high potential.



Not only at this seminar but also at other forums where economic situation and coming budget is under discussion in the capital these days, the economists and analysts are of almost unanimous views that the budget for 2004-05 must focus on the promotion of agriculture sector which was a must for poverty alleviation.

At another forum, the Finance Minister admitted that agriculture had been neglected in the past but it will be our main focus in the coming budget as it is a must for any meaningful programme for poverty alleviation. Maximum allocations will be made in the coming budget for this sector. More water, reduced input cost, easy and cheap credit for small farmers and support pricing mechanism ensuring a reasonable return to the farmers for his labour are the various measures under consideration of the government for promotion of agriculture sector, he added.

Reforms and uplift of agriculture sector is the need of the hour. More than 60 percent of the total population is dependent on agriculture directly or indirectly. Nature has given us abundant resources it was due to share neglect of the past four successive governments, that an agrarian country like Pakistan was forced to import wheat for its 140 million population while India has a surplus after feeding over 1000 million people. Half of the former Punjab which farms part of India now is producing more than double food grain than our Punjab.

Agriculture being an open industry has many ups and downs in its management in the long-term as well as in the short-terms and requires very careful planning for future prospects. Our bureaucracy is not well versed in this field that's why it cannot go deeply into complexity of matter and hence, cannot frame out policies according to ground realities. For this purpose there must be a rectangular shaped institutional setup both at federal and provincial levels having four pillars agricultural experts, extension wing, research institute and farmer representative, who command the whole sphere of this sector.

Europe was due to the uprooting of socio-political evil so-called feudalism. So this is the high time to change the plight of those unfortunates, who are being deprived of basic human rights in the state under states of "Vaderas" in this modern era. The English gifted vast lands must be distributed among the people who have never seen the dawn of freedom. Along with this they must be provided with capital in form of loan at low interest rate and technical assistance to cultivate these lands on modern lines. Certainly these will results into green revolution and overall prosperity of country.

Small holdings that are caused by fragmentation of farms have resulted into subsistent farming and below subsistent farming in which mechanized agriculture is difficult to practice. Valuable suggestions, guidelines and technical assistance may be imported from China to adapt joint farming or commune farming system to convert having size 20-30 hectares. The next task should be the distribution of 9 million hectares lands of government among agri-graduates, who are already running many private farms successfully.

The share of present agriculture in GDP is 24 percent but its share in budget has been decreased gradually from 5 percent of total budget. It should be increased to 2 to 3 percent as recommended by NCA in 1998.

More than 80 percent budget of agri research institutes is being spent in form of salaries and remaining lot is not sufficient to comply with research of international standard. Government should speed up heavy funding to these institutes to launch research on various problems facing our agriculture. The main focus of research should be how to dissolve various soil problems, how to produce uncontaminated food that is prerequisite in WTO regime, what are those areas which we can capture the world markets and how to cope with overall WTO regime.