MAJOR CROPS REGISTER AN IMPRESSIVE GROWTH

AGRICULTURE SECTOR DEPICTS 4.7 PERCENT GROWTH IN 2008-09

KANWAL SALEEM
June 15 - 21, 2009

Agriculture is still the single largest sector of the national economy. Pakistan's economy grew by only 2 percent in 2008-09, against the target of 4.5-percent, due to poor performance of almost all sectors, coupled with internal and external pressures of extreme nature. Agriculture has been the only sector, which demonstrated some growth, mainly because of better weather conditions and good support price to wheat growers.

Agriculture sector depicted a stellar growth of 4.7 percent, as compared to 1.1 percent witnessed last year and beyond the target of 3.5 percent for the year. Major crops accounting for 33.4 percent of agricultural value-added registered an impressive growth of 7.7 percent as against a negative growth of 6.4 percent last year and a target of 4.5 percent. The livestock sector grew by 3.7 percent in 2008-09 as against 4.2 percent last year.

On overall basis, the agriculture growth would be reasonably better during the FY09 due to the record wheat and rice harvests together with the likelihood of good production in minor crops.

The reasonable performance from the livestock sector, supporting all this, took the overall agri-sector growth close to, or over, the annual target. "Robust growth by major crops, despite lower water availability and decline in fertiliser off-take, is principally a reflection of anticipated higher prices, and good luck in terms of favourable weather conditions," a report of the State Bank said.

The good performance by major crops appears to be more impressive given a substantial decline in sugarcane harvest during FY09. Similarly, growth in production of some pulses, oilseeds, and horticulture crops indicates a better performance by minor crops during FY09. More importantly, growth in livestock benefited from higher supply of fodder, following the extended monsoon and winter rains as well as absence of any major incident of diseases during FY09. All these developments suggest that FY09 agriculture growth would be reasonably good and that could have been even better if sufficient inputs - irrigation water, fertilizers and certified seeds - could have been used. Farmers' ability to increase investment in quality inputs may be reflected partially by slower than anticipated growth in agri credit. Cotton production at 13.0 million bales remained at last year's level. Livestock, with almost 50 percent contribution to agriculture, performed reasonably well at 4.3 percent this year as against a strong growth of 7.5 percent of last year.

According to Prime Minister's Advisor on Finance Shaukat Tarin, the government was giving due attention to agriculture and manufacturing sectors, as these sectors have ability to create jobs opportunities. The budget for 2009-10 will focus on agriculture, energy, manufacturing sectors and to develop infrastructure.

Foreign Minister Shah Mehmood Qureshi said that the agriculture sector would be focused in next budget to bring economic stability and alleviate poverty. He said that the government is keenly interested in redressing issues for revival of agriculture and other such sectors of key importance for national economy.

According to him, macro economic indicators have started reflecting positive outcome of the initiatives of the government, as inflation is going down, trade deficit is being narrowed and economy is taking strength. Launching of work on Bhasha dam project would be part of 2009-10 budget, as the government wants to construct small and big dams to meet water and energy shortfall in the country. The major crops grown in Pakistan are wheat, rice, maize, sugarcane, cotton, pulses (gram, mash, mung, lentils, etc.), millets, barley, oats, onions, potatoes, tobacco, oilseeds viz. canola rapeseed and mustard, soybean, sesamum, groundnut etc. In addition, horticultural crops including almost all the fruits and vegetables are grown.

Agriculturists and dairy experts are of the firm view that Pakistan's agriculture and dairy sectors have full potential to earn substantial foreign exchange with value addition to agriculture and dairy products.

UAE LIFTS BAN ON THE IMPORT OF LIVE BIRDS, POULTRY PRODUCTS

United Arab Emirates (UAE) lifted ban on the import of live birds, poultry, and non-poultry products from Pakistan.

Sources in TDAP said the Veterinary Quarantine authorities have recommended the Ministry of Agriculture of UAE to lift ban on Pakistani live birds, poultry, non-poultry products and their derivatives and residues. It may be noted that UAE had imposed a ban on the import of live birds and poultry products from some countries including Pakistan, in 2006 on the royal decree and the ministerial decision.

About rice crop, experts believe that Pakistan has certain unusual advantages for efficient rice production because of long, hot and cloud free sunny days throughout the growing season. Little or no rainfall but abundant water supplies from surface and sub-surface irrigation and levelled heavy soils are blessings for the production of good qualities of rice.

MINFA SEEKS TAX HOLIDAY ON SEED PROCESSING UNITS' IMPORT

With an aim to increase per hectare crop production in the country, the Ministry of Food and Agriculture (Minfa) has proposed to the government for the provision of about 20,000 tractors for the growers during forthcoming financial year.

The Ministry had also proposed to the government for granting a subsidy of Rs 200,000 on the purchase of the tractor under Benazir Green Tractor Scheme. Beside subsidy on tractors, the sources said that the Ministry also proposed to provide subsidy and tax holiday on other agri-equipment like land leveller, plough and other modern agricultural equipment in the 2009-10 budget. The Ministry had also proposed to provide special incentives in terms of customs duty on import of agri-pesticides, fertilizers, and other inputs used in agriculture. To overcome the wastage of crops, the sources said that about Rs 27 billion would be spent to enhance storage capacity of crops in the country. The Ministry of Food and Agriculture asked the government to provide tax holiday on the import of seed processing units, adding that some of the equipment were already declared zero-rated.

INDO-PAK TALKS ON WATER ISSUES IN OCTOBER

Pakistan Indus Water Commissioner, Jamaat Ali Shah said that a second round of talks between Pakistan and India at commissioner level would be held in October this year in Pakistan.

While there was rancor on issues like Baglihar, Kishanganga, and Uri-II dams, both sides decided to exchange regular data on flow of rivers and canals besides strengthening the commission's role.

According to him, Pakistan has the option of approaching the World Bank in case India continues to reject Pakistan's stance under the Indus Water Treaty. The treaty did not specify procedures on certain issues, therefore, the commission decided to evolve measures to take up such matters. Pakistan also raised the issue of India building the Nimo Bazgo hydel power project on Indus River in Ladakh region. The project is a part of Indian Prime Minister Manmohan Singh's reconstruction package with an amount of Rs 3.83 billion. Pakistan is waiting for responses to its two technical objections. India also agreed to provide flood data to Pakistan between July 1 and October 10 on a daily basis.