AGRICULTURE IGNORED IN THE BUDGET 2011

KANWAL SALEEM
(feedback@pgeconomist.com)
June 14 - 20, 20
10

Agriculture is the second largest sector of the economy, contributing over 21 per cent to the GDP and absorbing 45 per cent of the total labour force. Nearly 62 per cent of the country's population lives in rural areas, and is directly or indirectly linked with agriculture for livelihood.

Pakistan's agriculture sector performance during 2009-10 remained below the target, as it grew by only two per cent against the target of 3.8 per cent. Last year, agriculture sector grew by four per cent in 2008-09.

Despite its critical importance to growth, exports, incomes, and food security, the agriculture sector is facing continuous decline for the last few years. Finance Minister Dr Abdul Hafeez Shaikh presented federal budget for the year 2010-11 that attracted severe criticism from representatives of growers' bodies who said that the government has ignored the agriculture sector in the budget by not announcing any incentive for this vital sector. For them, incentives to agriculture sector are necessary to help this sector to grow with full potential.

Those associated with agriculture sector only expect incentives package. They need to realise poor economic condition of the country and instead of criticising the government, all segments of national economy must help out the government for revival of economy. In the present financial health of the country, no body should expect incentives from the government rather it is time for everyone to realise national obligation and honestly pay taxes to the government.

According to Federal Minister for Food and Agriculture Nazar Muhammad Gondal, duty-free agricultural equipment would be imported and government would continue to provide subsidised equipment to the people.

He said that the government would provide maximum relief to the farmers while every possible effort would be made to promote the agriculture sector.

Critics of the government say growth in the agriculture sector, particularly in the crop sub-sector, is declining for the last three decades.

Productivity remains low, with yield gaps rising. Pakistan's agricultural performance is linked with the supply of irrigation water. As against the normal surface water availability at canal heads of 103.5 million acres feet (MAF), the overall (both for Kharif as well as Rabi seasons) water availability has been less in the range of 2.5 per cent (2005/06) to 20.6 per cent (2004/05). However, it remained less by 2.5 per cent in 2005/06 against the normal availability.

Rabi season faced shortage of water during 2009/10. During the current fiscal year (2009/10), the availability of water as an important input for Kharif 2009 (for the crops such as rice, sugarcane and cotton) has been 0.3 per cent more than the normal supplies and 0.6 per cent more than the last year's Kharif. The government needs to pay immediate attention to overcome water shortage, if it wants promotion of agriculture sector in real sense.

According to Pakistan Muttahida Kisan Mahaz (PMKM) Head Ayub Khan Mayo, the government has not given any clear strategy for constructing water reservoirs in the country. In the Federal Budget 2010-11, he said the government has allocated Rs22 billion for water and power projects that would only be met through the non-developmental expenditures of the sector. "Wapda must be provided revenue to generate cheap electricity while in the budget 2010-11; no amount has been given to Wapda for maintenance of its hydel and thermal power units. Regarding the proposal of setting up of Rs20 billion Energy Development Fund, he alleged that it was a point to sell energy sector to international monetary organisations at throwaway prices. He said that the government has totally ignored the agricultural sector, as no package has been announced for this vital sector.

Representatives of different growers' organisations have expressed their resentment and anguish for not announcing any incentive for the agriculture in the budget 2010-11 by the government.

Farmers Associates Pakistan (FAP) Chief Coordinator Dr Tariq Bucha expressed astonishment that the government has not announced any concrete measure for the agricultural sector. The Finance Minister did not mention about the agriculture sector in his budget speech, he said.

He feared that the government might have imposed General Sales Tax (GST) or any other levy on the agricultural sector. Especially, GST had been applied on fertilisers, pesticides, tractors or agricultural implements.

Agri Forum Pakistan Chairman Muhammad Ibrahim Mughal said that for the first time in 62 years, nothing was mentioned in the budget speech about agriculture sector that drives national economy, generates job opportunities and ensures food security for the nation.

A spokesman of Kisan Board Pakistan (KBP) said that nothing had been said in the budget speech for the most important sector of the country. He said whole economy of Pakistan relies on agriculture but the PPP government was not paying any attention to improve this vital sector. He said the government should pay attention towards increasing the per acre yield of major crops and also build storage capacities.

On the other hand, Federal Minister for Education Sardar Aseff Ahmad Ali said the budget took care of the interests of poor, as it contained many measures to provide relief to them.

Critics say the Finance Minister has shown great commitment by presenting true facts about the economy. It is time to think collectively and strive sincerely and devotedly to steer the country out of prevailing economic crisis.