Agriculture policy: 2007-08 and its impact on economy

Sep 17 - 23, 2007


No doubt agriculture continues to be the largest single sector, a great driving force for boosting the economic growth, serving as the mainstay for 66 percent of our population, contributing to the country's GDP to the extent of 20.9 percent and employing 43.4 percent of the total work force. Agriculture is thus the backbone of the national economy and is, therefore, at the center of the national economic policies. Agriculture is justifiably called the engine of national economic growth and poverty reduction. It also contributes to growth as supplier of raw materials to the country's industries as well as market for industrial products, besides contributing substantially to Pakistan's export earnings. Any improvement in this sector will not only help the growth to rise at a rapid rate but will also benefit a large majority of the population.

After this introduction, it is clarified that no Agricultural Policy as such for the year, 2007 08 has been announced by the Government. However, policy decisions have been made and are being made at the federal and provincial levels, which followed to bring amelioration in the agriculture sector.

Emphasis on value addition: To achieve the GDP growth target of 7.2 percent for the year, 2007-08, the Government would give more emphasis on high value addition in agriculture sector, including livestock, fishery and manufacturing sector. For the present fiscal year, the value addition in major crops is projected to increase by 4.5 percent to Rs.415.1 billion compared to Rs.397.2 billion in the previous year. In major crops the production of sugarcane is projected at 55.9 million tons for the year, 2007-08 as against 54.7 million tons as achieved during 2006-07 and cotton production is projected to increase by 8.8 percent to 14.14 million bales. This annual plan also projects maize production at 3.2 million tons and that of rice at 5.7 million tons. For wheat production, the target has been set at 24 million tons, higher by 2 percent. The production of minor crops for the year, 2007-08 is projected to increase by 2.3 per cent to Rs.130.8 billion as against Rs.127.9 billion achieved last year. Keeping in view the existing agriculture sector performance especially in major and minor crops, the agriculture sector is directed to grow 4.8 percent in the current fiscal year.

Livestock and Fishery: Livestock sector is projected to increase by 5.7 percent as against 4.3 percent achieved during the last year. A 5-year plan costing Rs.1.588 billion to establish 300 milk chilling plants to help livestock farmers to enhance the quality of their produce has been finalized by the Ministry of Food. Out of these chilling plants, 23 chillers have already been provided in Kasur (Punjab), Pishin (Baluchistan), Tado Adam Khan and Tando Muhammad Khan (Sindh) and Naushehra and Takht Bai (NWFP). The plan is to distribute the rest 277 across the country during the 5-year plan period. Fishery and forestry sector is directed to grow by 4.2 percent and 3.5 percent respectively for the year, 2007-08.

Special incentives and subsidies on fertilizers etc.: In the Budget 2007-08 special incentives have been announced for the development of agriculture and industrial sectors, which would help to increase productivity and enhance income of farmers, thus to reduce poverty. To increase agriculture productivity, the government will increase subsidy on DAP fertilizer from Rs.400 per bag to Rs.470 per bag. Total subsidy on the use of fertilizers is estimated at Rs.17 billion.

Production and export of mangoes: According to Horticulture Development & Export Board, due to better mango crop, the country's fruit export rose to $11.242 million upto July 2007 as compared to 5.405 million in the corresponding period of 2006, effecting an increase of $5.837 million or 87.46 percent. This year we have a bumper mango and kinnow crops both in Punjab and Sindh, which have given good results in fruit exports. This year in July mango exports have gone up to 0.125 million tons.

Aims and objects of Planning Commission including provision of improved seeds: The annual plan for the Agriculture Sector, as issued by the Planning Commission, focuses on better irrigation water availability, water management, best pest control practices and application of modern techniques of production and more credit facility to farmers, which would help achieving the agricultural targets. The government plans to provide better environment and infra-structure facilities to agricultural products.

Federal Government has allocated Rs.336 million for setting up fifteen new seeds testing laboratories, for the production of better seeds of cotton, BT cotton seeds and bio-safety arrangement.

Water Management: A project of drip and sprinkler irrigation has been initiated by the Federal Government with the allocation of Rs.15 billion, out of which Rs.6 billion have been allocated for the province of Punjab to install drip and sprinkler irrigation system on one hundred thousand acres. The Government is highly interested to introduce the drip and sprinkler irrigation systems in Cholistan and Baluchistan, where there is great scarcity of water and the efficiency of these systems is much more than the normal irrigation systems in practice in the canal and tube-well irrigation areas. When these modern systems are fully operative in these areas, a revolution is expected to take place in the production of agricultural products including fruit and vegetables.

Water-logging & Salinity Control: A project for rehabilitation of saline and water-logged soils has been initiated by Agriculture Department, Punjab in collaboration with the United Nations Development Programme (UNDP) in Hafizabad, Jhang and Sargodha districts.

Agri. Research and Development: According to the recent news, the Board of Governors (BoG) of Pakistan Agriculture Research Council (PARC) has unanimously approved annual budget of Rs.790 million for the financial year, 2007-08, including Rs.237 million for operational expenditure and Rs.552.93 million for establishment expenditures. Federal Minister for Food, Agriculture and Livestock Sikandar Hayat Khan said that the government accords high priority to agriculture research and development in order to meet the challenges of food security, poverty reduction and market competitiveness.

Credit facilities: An amount of Rs.104.8 billion was disbursed during July March 2006-07 towards agricultural loans as against Rs.91.2 billion during the corresponding period last year, registering an increase of 15 percent. Optimistically, the disbursement for the purpose may suitably go high during the present fiscal year, in view of the rise in the prices of inputs including fertilizers, diesel oil etc.

Improvement of water courses: Augmentation of water distribution network by lining water channels is well under way. An amount of Rs.28 billion has been allocated for improvement of 28,000 water courses in Punjab under National Program of Improvement of Water Courses. 12,500 water courses have been improved during 2004-05, 2005-06 and 2006-07 under this program in Punjab. Estimatedly 28 lac acre feet water will annually be saved after completion of this project, which will be available to irrigate 15 lac acres of land and at the same time reduce the cost of production. Surely and naturally these measures cannot at all replace the urgent need of construction of mega water reservoirs like Kala Bagh Dam, Bhasha Dam etc., which must not suffer further delay. Moreover, a very large quantity of rain-water is being wasted, which instead of being conserved and stored usefully, is causing great loss to life, land and properties of the poor farmers. The matter should not skip the attention of the concerned authorities as rain-water is free gift from the Nature and should not be allowed to go waste lavishly.

Agri. Income Tax;Appreciably, the exemption from agricultural income tax has been extended from 5 acres to 12.5 acres to give relief to the small farmers. However, it may be of information to readers that the government of China has altogether exempted this tax throughout China. If our government follow China in this regard, it would be a great gesture of goodwill and a very big step forward in the reduction of poverty in the rural areas and economic uplift of the country. .

Concession in 'Abiana': Flat rates of 'Abiana' have been introduced in the province of the Punjab. The tariff flat rate is Rs.50 for Rabi season and Rs.85 for Kharif, whereas 'Abiana' for sugarcane and orchards have been fixed at Rs.130 and Rs.250 respectively.

Provision of Heavy Machinery for land development: Agricultural Engineering Wing of Agriculture department is improving and developing 25 thousand to 30 thousand acres of land annually through their bulldozer operations. The Government of Punjab for the first time has allocated its resources to purchase 100 bulldozers in the budget 2007-08 to bring more area under cultivation.

Relief in electricity bills: To give substantial relief to farmers, the power tariff for agriculture tube-wells has been reduced by 20 percent during off-peak hours in Punjab resulting in saving of an amount of Rs.22,000 to Rs.40,000 by almost each farmer. However, the farmer community has their reservations with regard to the timings specified for tubewell operation to avail this relief. Their grievance must be redressed as after the day long hard labour, farmers need ample rest at night instead of taking care of the operation of the tube-well and irrigating their fields when they are supposed to rest and sleep to restore their energy for the next day's work

Land Levelling: Land leveling has many benefits of saving irrigation water, smooth and easy irrigation of the field, caring the crop and easy and convenient harvesting by the farmers. 1500 lazer land leveling sets have already been provided to the farmers/service providers at half the price. Chief Minister Punjab has directed to provide 2500 lazer land leveling sets, one at each Union Council at half price with the subsidy of 450 million rupees under this project. This will estimated-ly facilitate to level 1500 acres of land annually and will result in significant saving of irrigation water and accruing other benefits.

Support prices: Support prices of wheat and cotton as announced during the last year were Rs.425 per 40 kg and Rs.1025 per 40 kg respectively. These need to be enhanced suitably for the cotton crop of 2007 and wheat crop to be harvested during 2008 to reasonably to compensate the growers, as also for the rice to be produced this year. At times these prices are announced by the government at the time when the harvested crop is ready for marketing. Farmers feel great difficulty in selling their crops at the rates fixed by the government and the middleman tries to exploit the situation to get the maximum profit.

Concluding the Government must publicize its agricultural policies, decisions and incentives/facilities,that the government offers to farmers from time to time. Electronic and print media coverage should regularly be given to apprise the farmers of the developments regularly so that they may benefit from these decisions taken by the authorities for their benefits. Similarly, the results of the research about agriculture must be brought to the knowledge of the agriculturists through extension workers. Extension service in agriculture sector seems to be very slow in communicating the requisite information to them at their doorstep and in the field. There should be a regular co-ordination between the Research Department, Extension Department and farmers. There is no sense in keeping the peasants in the dark. They must be kept abreast with the developments taking place in agriculture research so that they may benefit themselves from this information and give better production qualitatively and quantitatively.