WELL THOUGHT VIEWS and Suggestions FOR PROVINCIAL BUDGETS
June 16 - 22, 2008
Relevant to the subject, the World Bank's Report 2008 has recently been launched by Sector Manager, World Bank Adolf Brizzi in Islamabad on 16th May, 2008, wherein great emphasis has been laid on agriculture. The learned manager of World Bank stated that agriculture in Pakistan could play a vital role in reducing poverty. He elaborated that in spite of the fact that the agriculture can play enormous roles in spurring economic growth, providing plenty of employment opportunities and reducing poverty in the country, this sector was not harnessed to achieve the desired results as it had been the victim of carelessness and neglect over the past 20 years as well as for under investment around the world. He pointed out that during the last 12 months, Pakistan has witnessed unprecedented increases in the prices of key food commodities, which have profound effect on the poor people. In order to overcome this crisis, there is an urgent need for increased agricultural productivity and effective safety net programmes.
Surely, a dynamic agriculture for development agenda can benefit the rural population. In Pakistan, 65-70 percent of the total population of the country lives in rural areas. One very significant and weighty conclusion derived from the World Bank's Report is that the growth originating in agriculture is four times more effective than the growth coming from non-agricultural sectors in reducing poverty.
The report emphasized that in the emerging/developing countries, agricultural agenda should focus on reducing disparity between rural and urban incomes and raising the income of the rural poor. Identifying the impediments in achieving this goal for reducing disparity, it has been mentioned that the key constraints are unequal distribution of land, water scarcity, inadequate infra-structure and poor public service, which are responsible for low productivity in agriculture sector, hampering rapidity of growth of agriculture in Pakistan.
According to the World Bank's report agriculture sector must be given a serious thought in preparing the budget and necessary allocations incorporations be made therein to ease out the plights and problems of farmers and boost this most neglected sector. The government should be fully cognizant of the prevailing situation regarding farmers problems and agriculture sector so as to provide them necessary redress and adopt ways and means to boost agriculture and increase production to combat food crisis grabbing the country. Our major food crops are wheat, rice, sugarcane and oil seeds, which are being discussed below in brief.
WHEAT: Wheat is the main staple diet of 165 million people of this country. It contributes to 13.7 percent of the value added in agriculture and 3.0 percent to GDP. Per capita consumption of wheat in Pakistan is 8.20 kgs. Pakistan was amongst the 10 top countries producing wheat during 2006. Keeping in view the importance of wheat as a basic food of our people, a good quantity of wheat is kept as reserve for food security. Although the government had originally fixed 24 millions as the target for wheat production for 2007-08, its production, as assessed, may be around 21 million tons.
The factors for low wheat production are attributed to late sowing, cultivation on lesser area, excessively high prices of fertilizers especially DAP, insufficient supply of certified and quality wheat seed, shortage of irrigation water in the irrigated area, late crushing by sugar mills, late payment to farmers and other mal-practices perpetuated by sugar mills, late rains in rain-fed areas, too many un-scheduled and undeclared power shut-downs and unaffordable price of diesel.
In order to maintain regular supply of wheat and atta to its people although the government has planned to buy 5 million tons of wheat within the country and import 2.5 million tons of wheat, still the position of supply in the country is not that satisfactory. People are getting atta at Rs.22 to Rs.26 per kg in some areas of the Punjab and even at Rs.40 to Rs.45 per kg in some of the remote areas of the country. The government does not seem to be in full control of the situation. Black-marketers, hoarders and smugglers are all-out to play hell with the poor population. These elements deserve no latitude or concession. If they are seriously taken to task, the crisis must ease out. Although the planned procurement target of wheat for the year, 2008-09 is five million tons, even half of this quantity has not yet been procured.
It seems well nigh impossible for the government to achieve the target of procurement. Needless to say "A hungry man is an angry man". People do not accept any alibi or excuse for shortage of food supply. After all every body needs basic food at affordable price to keep his body and soul together. The government must, therefore, ensure that all the people get wheat and atta at reasonable prices, even if the government has to subsidize it. Necessary allocation and measures for this subsidization and supply must be made in the budgets.
As a futurist approach, necessary provisions may be made in the next provincial budgets to ensure supply of sufficient quantity of certified and quality seed, adequate and regular supply of irrigation water in the irrigated areas, by constructing water reservoirs on long term and short term basis, subsidizing improved water management schemes like sprinkler and drip irrigations schemes, in view of the shortage of irrigation water, ensuring uninterrupted electricity in tube-well irrigated areas, on fast track basis, providing quality fertilizers at reasonable rates in time and in sufficient quantities, fixing support prices of the crops including wheat at the time of sowing of the crop so that farmers having a temptation may work harder and invest more inputs and labour services to increase their yield and production for their benefit and to meet the country's need of food commodities. It is unwise for the government to import wheat at double the rate from the inter-national market instead of providing inputs to farmers at subsidized and concession-al rates. This aspect deserves special attention of the government to solve the problem of food crisis in the country as well as to solve the problems of small farmers.
RICE: Rice is an important cash food crop. It is also one of the main export items of the country. It accounts for 6.1 percent of the value added in agriculture and contributes to 1.3 percent to GDP. Rice export share in the overall export earning by Pakistan is 7 per cent. During 2006-07 Pakistan exported 3129142 metric tons of rice, which valued 1,125,819 thousand American dollars, in which the share of the value of our well known world class rice Basmati was 49.41 percent. Pakistan has exported 655,506 metric tons of Basmati rice, which valued 444143(000) American dollars, which is 12.43 percent more than the last year's. Till February 2008, the average export price of Basmati was $677.56 per metric ton, which is 15.32 percent more than last year's average export price. Pakistani rice exporters are receiving large orders from foreign markets at 53.19 percent more than the last year's March prices. According to exporters, the price of rice is still to rise above $1000 or even $1100 per tons in the next three months.
According to Agriculture Development Commissioner, the exportable rice is estimated to be 3 million tons, i.e. one million tons of our world class rice variety Basmati and 2 million tons of Irri rice. According to the estimate, these varieties would respectively fetch $1.00 billion and $0.8 billion respectively, making a total foreign exchange earning of $1.08 billion.
In Pakistan rice is cultivated on an area of 2.5 million hectares with a production of 5.5 million tons. In order to get better production, early announcement of reasonable support rice, preferably at the time of sowing paddy, would prove a timely incentive. Paddy is a water intensive crop. Canal irrigated areas should be ensured adequate and regular water supply and in tube-well irrigated areas power supply must be maintained.
COST OF DIESEL MUST ALSO BE CONTROLLED.
Proper allocation in the budget must be made to ensure supply of necessary inputs for the rice crop.
Yield per acre of rice depends upon quality seed and supply of requisite inputs. Quality seed is the basic need, which is the pre-requisite for better yield and overall production. It has been observed that excessive hot weather at times become responsible for lack of production of grain in the paddy. To undo the effect of the severe hot weather, we need to develop heat resistant and hybrid varieties. Till such time as our scientists could produce such a variety, we could buy hybrid varieties from China.
This would not be out of place to mention that the real beneficiaries are rice exporters while the poor rice growers is almost deprived of the real price. The government must ensure that rice growers are paid handsome price of their harvest.
Sugarcane: Pakistan occupies sixth position in sugarcane production with a share of 3.21 percent of the total sugarcane production in the world. Area-wise sugarcane is a major crop in Pakistan.
There are 80 sugar mills in Pakistan, of which 40 mills are operating in the province of Punjab. Per capita consumption of sugar in Pakistan is 1.31 kg per month. The province of Punjab produces 68 percent of the total production of sugarcane in the country. Fortunately due to have rains Pakistan had a bumper sugarcane crop and its per acre yield was high.
According to the official data, sugarcane production of Pakistan this year was expectedly 13.53 percent higher than that of last year.
According to the March 2008 local market prices, sugarcane price per quintal was Rs.2335 as against Rs.2883 in March 2007. May 19 retail price at Lahore is Rs.28 per kg.
Sugar mills have their own clique and mafia. Most of the owners are either elected members of federal and provincial assemblies belonging to the party in power or are in opposition and some of them are their close relatives. They often pay no heed to business ethics in dealing with sugarcane growers, who supply them sugarcane for preparing white sugar. Common complaints of farmers are:
* Short weighing of cane supplied by them by 10-15 percent.
* Millers do not pay any extra amount for quality cane with better sugar content
* At times sugar mills make deductions from the supplies made by the growers with an excuse of low sugar content.
* It is a common practice of sugar mills to start crushing very late, while they are required to start crushing from mid October or at the latest by 1st of November. This delay in starting crushing badly affects the yield of wheat which they grow in the area vacated by sugarcane.
* Sometimes sugar mills stop crushing in the middle of the crushing season.
This causes great inconvenience and hardship to sugarcane growers.
* Sugar mills have their own agents and middle men, who get supplies of sugar-cane at much low rates, resulting in great financial loss to the growers.
* Usually sugar mills delay payment of the supplies of cane made to them and sometimes unnecessary deduction by reducing the rate already announced and decided, whereas they are required to make payments within a fortnight after the receipt of the supplies at the fixed rate.
Sugarcane crop is at least a one year crop and is quite water intensive crop. The government must ensure supply of irrigation water in irrigated areas, power supply and diesel at subsidized rate in tube-well irrigated areas.
The sugarcane growers are disappointed at the government's continued silence for years and years over the genuine problems of sugarcane growers cited above.
It is optimistically hoped that this democratic government would make farmer friendly and pro-agriculture decisions by making necessary useful provision the provincial budgets for redressing the genuine grievances of farmers.
Oilseeds production of Pakistan is meeting only one third need of edible oil of Pakistan, while two thirds is met through imports. The following table shows the position of domestic production, import and value of imported oils.
(RS. IN BILLIONS)
(Source : Agricultural Statistics of Pakistan)
The total availability of edible oils in 2005-06 was 2.905 million tons. The local production stood at 0.793 million tons, which accounted for 27 percent of the total availability while remaining 73 percent was made available through imports. During 2006-07 (July to March) local production of edible oils, as provisionally estimated, was 0.855 million tons.
It is recommended that Potowar area should advisably be declared as oilseed zone like cotton zone as Potowar area is dependent upon rain-water. This has great potential to bring down the import burden of the country to meet its edible oils demand. There is a great scope of oilseed crops and the area has virtually proved to be promising for production of rapeseed/mustard, ground-nut, sun-flower, canola etc., which are very popular for extraction of edible oils. Canola can successfully be grown in summer on fallow lands.
Recently an experimental joint cultivation of sugarcane and canola has proven successful. If both these crops are grown together, farmers will not only get the benefit of sugarcane crop, but will also be able to earn Rs.25,000 to Rs.30,000 per acre additionally from canola. This can go a long way in poverty alleviation.
The scribe has been given to understand that Punjab Agriculture University Faisalabad and NIAB are in the process of developing salinity tolerant sunflower.
If such seeds are developed, our less fertile, marginal and saline lands, which otherwise are not cultivated to grow major crops will be usefully used for production of oilseeds.
Farmers should be provided certified and quality oilseeds, along with proper extension service for obtaining better yields quality-wise as well as quantity-wise and other inputs at affordable costs.
Reasonable support prices of respective oilseeds e.g. sunflower, cottonseed, rapeseed/mustard, ground nut, canola etc. should be fixed by the government well in time so that farmers feeling tempted may work hard to get maximum benefit and enable the country meet its vegetable oil needs. .
The government should always help out farmers in facilitating marketing of their products at support prices so that they get reasonable return of their inputs.
The government should be serious to make Pakistan self sufficient in edible oils to save extra burden on its foreign exchange reserves. It can create much better facilities for the farmers by persuading industrialists with tax relief and adequate credit facility to install oil expellers in oil seed zones.
This suggestion finds support from the fact that in areas where there are sugar mills, farmers automatically feel motivated to grow sugarcane and where there are corn processing units, farmers have preferred to grow more and more corn.
More and more emphasis should be placed on agriculture by adopting measures to ensure adequate supply of inputs to farmers and to announce timely support prices of the crops preferably at the time of sowing so as to encourage the growers to maximize production. The usual inputs are timely availability of certified and quality seeds, genuine fertilizers at reasonable prices, electricity, irrigation water, diesel etc.
Small land owners need sufficient, easily accessible credit facility through "one window operation" on soft terms and low mark-up. Now that the prices of inputs have excessively increased, the credit facility per acre for respective crops must proportionately be raised to enable farmers to make sufficient farm investment. Exploitation of sugarcane growers by sugar mills must be brought to a halt so that these poor farmers may be able to heave a sigh of relief. The role of middle-man and agents should be eliminated as this causes great mental inconvenience and financial loss to the farmers. Agriculture courts, about which a lot has been said in the media in the past, should be established exclusively for dealing with the problems of farmers like supply of fake fertilizers and agricultural medicines, exploitation by sugar-mills, unnecessary inconvenience caused by WAPDA, government departments / agencies etc. for redress of their grievances Facility of crop insurance must also be provided so that farmers could get compensation for losses sustained by them due to attack of pests, earthquake, heavy rainfall, hail storms, floods and wind storms.
Extension Service should be provided to farmers at their fields. Although there is some "On-Line Service" and Web-site facility provided by the Agriculture Department to give necessary expertise advice but it has not proved much useful. Our rural literacy is much low. Field Officers and Extension Agriculture workers should not do their duties while sitting in offices rather they should visit fields of their respective areas and give proper advice to farmers at the spot in accordance with the situation of the crop and field, in the light of the expert's knowledge that these officers and workers possess. Only that way would prove more effective and fruitful.
Our Research and Extension Service side in agriculture is very weak. Sometime ago late Dr. Abdul Majid developed Basmati 385 rice variety. He was offered pride of performance and only a cash prize of Rs.10,000. After that no new variety has been developed. Improved seed varieties of wheat, rice, cotton etc. developed by other countries are responsible for higher yields in those countries. Our Research Centres, Agriculture Colleges, Universities, Pakistan Research Council should come forward to bring the country out of food crisis by developing GM/BT and hi bred varieties of crops as many advanced countries and developing countries including China and India have done. .
Pakistan has been caught in the whirlwind of crisis: energy crisis, food crisis, water crisis, poor law and order situation, lack of business ethics and unbridled loot and plunder. If rulers themselves show autarky, common man would be ready to follow. "Charity begins at home". If Prime Minister's House, Governors" Houses, Chief Ministers" Houses cut down their electricity consumption to the extent of 50 percent, a substantial amount of power can otherwise be saved to be used in agriculture and industry where it is badly needed to rescue the country from food crisis and economic downfall.
Reportedly, a good number of WAPDA's officers are availing facility of free electricity to the extent of 500 units per officer, however, they are using this facility more lavishly, beyond the eligible limit, as most of their premises are un-metered and their own men, meter readers show an average consumption within 500 units. A knowledgeable person in WAPDA was of the opinion that if a check and balance is maintained in using this facility justifiably, some 1300 megawatts of electricity can be saved, which can be used in agriculture and industrial sector.
Moreover, if a census is arranged, thousands of air-conditioning units and refrigerators could be found installed surplus to actual need of residents in posh, and fashionable colonies of big cities. If number of these luxury items could be suitably curtailed, a good quantum of electricity could be saved to be usefully used elsewhere Moreover, if WAPDA and KESC may sweep before their own doors, energy crisis can be eased out. These companies can curtail their line losses by avoiding mismanagement, pilferage and thefts. There are complaints that "kunda system" is rampantly in use in Karachi and some areas of the NWFP. This must not be allowed to go unchecked and unpunished. To ease out food crisis, stringent measures need to be taken to curb hoarding, black-marketing and smuggling. No latitude or leniency would bring any results.