UNDERFED AGRICULTURE SECTOR

S KAMAL HAYDER KAZMI,
(feedback@pgeconomist.com)
Research Analyst
, PAGE
May 17 - 23, 2010

Pakistan is blessed with vast agricultural resources such as fertile lands, well-irrigated plains, and variant seasons.

It is because of its central importance in the economy that the government has identified agriculture as one of the four major drivers of growth.

Pakistan produces one of the best quality food items such as wheat, rice, sugarcane, maize, fruits, vegetables, grams, cotton, livestock and fisheries. Agriculture contributes 21.8 per cent to the GDP while around two third of the population is directly and indirectly associated with the agriculture. A robust performance by agriculture sector provided a major impetus to GDP growth in FY09 with both the crops and the livestock sub-sectors exhibiting above-target growth.

The most prominent feature of the FY09 agri-growth profile was the record harvest of three major crops that helped major crops record an impressive growth of 7.7 per cent in FY09 against the target of 4.5 per cent. The growth in minor crops was also impressive despite production declines in crops such as canola, onions, mangoes and some pulses; the 3.6 per cent growth seen in FY09 was higher than the target of 2 per cent.

CROPS

There are two principal crop seasons in Pakistan, namely the "Kharif", the sowing season of which begins in April-June and harvesting during October-December; and the "Rabi", which begins in October-December and ends in April-May. Major crops, such as, wheat, rice, cotton and sugarcane account for 89.1 per cent of the value added in the major crops. The value added in major crops accounts for 33.4 per cent of the value addition in overall agriculture. Thus, the four major crops (wheat, rice, cotton, and sugarcane) on average contribute 29.8 per cent to the value added in overall agriculture and 6.5 per cent to GDP.

INDICATORS FY06 FY07 FY08

FY09

TARGETS ACTUAL
Real GDP (at factor cost) 5.8 6.8 4.1 5.5 2
Agriculture 6.3 4.1 1.1 3.5 4.7
Major crops -3.9 7.7 -6.4 4.5 7

The minor crops account for 12 per cent of the value added in overall agriculture. Livestock contributes 51.8 per cent to agricultural value added much more than the combined contribution of major and minor crops (45.4 per cent).

COTTON

Cotton is the important non-food cash crop and a significant source of foreign exchange earnings. Cotton accounts for 7.3 per cent of the value added in agriculture and about 1.6 per cent to GDP. The crop was sown on the area of 2820 thousand hectares, 7.7 per cent less than last year (3054 thousand hectares). The production is estimated at 11.8 million bales for 2008-09, higher by 1.1 per cent over the last year's production of 11.7 million bales.

SUGARCANE

Sugarcane is also an important cash crop of Pakistan. It is mainly grown for sugar and sugar related production. It is a major source of income and employment for the farming community of the country. It also forms essential item for industries like sugar, chipboard, and paper. Its share in value added of agriculture and GDP are 3.4 per cent and 0.7 per cent respectively.

RICE

Rice is food cash crop. Rice is also one of the main export items of the country. It accounts for 5.9 per cent of value added in agriculture and 1.3 per cent in GDP. Pakistan grows enough high quality rice to meet both domestic demand and for exports.

WHEAT

Wheat is the main staple food item of the countryís population and largest grain crop of the country. It contributes 13.1 per cent to the value added in agriculture and 2.8 per cent to GDP. Area and production target of wheat for the year 2008-09 has been set at 8610 thousand hectares and 25 million tons respectively. Wheat was cultivated on an area of 9062 thousand hectares in the said period, showing an increase of 5.9 per cent over the last year's area of 8550 thousand hectares.

CHALLENGES

While Pakistan produces large quantity of agriculture produces, it unfortunately faces sometimes extreme shortages of food items. There are number of reasons for this situation. Apathetic government response to agriculture sector often results in non-availability of seeds and pesticides to farmers. High prices of inputs besides water scarcity also lead to food inflation. In addition, shortage of inputs as water mismanagement hinder development of high yielding crops.

ACTUAL SURFACE WATER AVAILABILITY (MILLION ACRE FEET)

PERIOD KHARIF RABI TOTAL
Average system usage 67.1 36.4 103.5
2004-05 59.1 23.1 82.2
2005-06 70.8 30.1 100.9
2006-07 63.1 31.2 94.3
2007-08 70.8 27.9 98.7
2008-09 (P) 66.9 24.9 91.8

CONCLUSION

Without any doubt, God has given so many resources to Pakistan. It is unfortunate that lack of proper planning and lack of sincere efforts are restraining the real growth of agriculture sector. Therefore, a proper short term and long term strategy is immediately required by the government in order to revive the agriculture sector