ROADMAP TO IMPROVE AGRICULTURE SECTOR
May 11 - 17, 2009
Agriculture has a critical direct and indirect role in generating economic growth and triggering poverty alleviation. It accounts for close to a quarter of the GDP and employs over half of the workforce. The average annual growth of agricultural output at more than 4% has been quite impressive. The importance of agriculture to the economy can be seen in many ways: it provides food to consumers and fibers and raw materials to domestic industry; it is a source of foreign exchange earnings; it provides a market for industrial goods. Last but not the least, it boosts infrastructural growth, is a source of revenue and savings, etc. A major part of the economy depends on farming through production, processing, and distribution of major agricultural commodities.
The total geographical area of Pakistan is 79.6 million hectares. About 27% of the area is currently under cultivation. Of this area, 80% is irrigated. In this regard, Pakistan has one of the highest proportions of irrigated cropped area in the world. In foreign trade agriculture again dominates, through exports of raw products such as rice and cotton and semi-processed and processed products such as cotton yarn, cloth, carpets, and leather production. Over the past 20 years, some important structural changes have taken place in the sector. In particular, livestock has emerged as an important sub sector, today contributing more than one-third of agricultural GDP. Similarly, fisheries and forestry, while still minor contributors to agricultural GDP, have grown rapidly. Structural changes have also taken place within the crop sector. Cotton is now as important as wheat in terms of value added with a one-fifth share of total earnings. Rice and sugar have, however, fallen from a 20% share in the early 1970s to 15% today.
Agriculture is essential for sustainable improvements in internal and external balances. Of the total export earnings, the share of primary commodities and processed and semi-processed products constitute almost 60% of the total exports. There have been some structural changes over time, but the contribution of agro-based products has more or less sustained its position.
As a matter of fact, the contribution of the agricultural sector to the GDP has declined gradually since Pakistan came into existence, from over 50% in 1949-50 to about 25% prevailing now. Agriculture remains the major sector of the GDP composition. The shortages and non-availability of fertilizers, original pesticides, quality seeds, lack of easy availability of credit, etc have pounded the poor.
HOW TO IMPROVE?
1-Future growth in agriculture largely depends upon increasing productivity, which in turn requires major changes in systems, policies, and institutions for agriculture. One of the key government policies, which directly affect upon agricultural growth, relates to pricing. Agricultural price policy, being a sub-set of the overall macroeconomic policy, affects upon the allocation of resources, income distribution, industrial productivity, and exports.
2- The government must announce support prices of important crops well in time before their harvest, and this price must be paid out. The Agricultural Policy Institute should enforce this policy and they should be given autonomy, wide powers and staffed with competent agriculturists. Periodic government intervention should be ensured to hedge against extreme price volatility should continue.
3- Undue benefits provided to the industrial sector over the years should be reviewed and modified. The agricultural sector as a result is likely to respond with new buoyancy.
4- Market and storage development is critical. The government should provide incentives to the private sector for storage development, which is critical to price stability. Adequate support to develop private marketing channels for greater competition should be provided.
5- Export taxes on agricultural commodities are to be curtailed or eliminated, which can benefit the agricultural sector.
6- Efforts must be made to grow crops, which use less water, are resistant to salinity and give a relatively higher yield.
7- Better support prices, better tillage and soil preparation practices and adequate and timely availability of fertilizer and certified seed should be added to get the positive response from the farming community.
8- Small farmers should be provided greater access to credit to improve their productivity.
9- Pakistan has about 80 million hectare of land, out of which about 22 million hectare is under cultivation and about eight million more can be cultivated. About 19.5 million hectares of this can be cultivated with the use of canals and tube wells. For this purpose, there should e a reasonable increase in the availability of water from tube wells. However, the irony of fate is that about 80% of already installed pumps run on diesel and increase in the price of diesel has proved to be the last straw on the camel's back. This issue is to be tackled properly.
10- The prevalent system of general subsidies, which lead to leakage of benefits to the non-deserving, should be replaced by targeted subsidies to poor and indigent consumers.
11-The statistics provided by the government are not considered reliable, they must be made transparently reliable and acceptable.
12-All the materials and facilities that help farmers in obtaining good yields and healthy crops should be provided cheaply. This would be of much greater use to the country than writing off loans worth billions of dollars. Such a huge amount of money could make a big difference to our agricultural sector.
13- Research results from various agricultural research institutes usually remain confined to researchers for references and progressive farmers for trials. These research results are seldom translated and disseminated among common farmers. It is necessary that successful research results are transferred to the doorstep of farmers, especially to small so they can understand and apply these in farming fields
14- Urbanization of fertile land and the uncontrolled spread of housing societies is to be curbed by imposing strict rules and their immediate enforcement.
15- The Agricultural Policy Institute should have a panel of experts to prepare a concise report periodically and give suggestions to the government which crops are needed in the short term, which for the future and what steps must be taken to ensure successful implementation.
16- Effective policies for income redistribution should be pursued to ensuring that the long-term benefits of structural adjustment reach the lower segments of society.
17- Farmers are to be trained as to the efficient usage of water of flat, furrow, and drip agriculture systems. The razor land-leveling system should be used. This step will lead to reduce constant and progressive shortage of water. Moreover, the experts should advise measures for the best use of this resource and the government should comply.
18- The import of palm oil, tea and other consumer products take a lion's share of foreign exchange earnings. Attempts should be made to grow these crops locally. Reasonably successful experiments have been made in Hazara for cultivation of tea. However, more efforts and support are to be extended by the government to promote such cultivation. To get indigenous palm oil humid areas should be used and these trees can be planted on a massive scale. The 4,000-mile-long canal system is ideal for the planting of three or four rows of small coconut trees along banks, similar to those in the Seychelles. These have an abundant yield and coconut oil is a healthy food. Edible oil can be produced by planting sunflowers in large quantities. Government can save valuable foreign exchange by giving incentives for substantial production of these species and give boost to economy.