FOCUS AGRICULTURE TO UP EXPORTS
ACHIEVING FOOD SECURITY REQUIRES REMOVING IMPEDIMENTS AFFECTING PRODUCTIVITY
SHABBIR H. KAZMI
July 05 - 11, 2010
It is not a cliché but hardcore realities that if Pakistan wants to accelerate GDP growth rate it has to focus on agriculture. The two immediate benefits will be achieving food security and ensuring optimum supply of cotton and sugarcane, the two agro-based large scale industries. Since bulk of country's population lives in rural areas, creation of new job opportunities and improvement in disposable income would also result in higher sale of consumer durable as well as consumer goods. Higher spending would also improve General Sales tax (GST) collection.
However, to achieve higher production and productivity in agriculture sector certain inputs are a must. These include 1) high yielding certified seeds; 2) adequate supply of irrigation water; 3) ample supply of fertiliser; 4) sufficient supply of quality pesticides/insecticides and 5) all season farm-to-market roads. It may be true that ensuring all the inputs may not be possible in the short-term but a focused plan can help in doubling the output over the next ten years. Pakistan has no option but to work on war footing to ensure adequate supplies for the population growing around 3 percent per annum. It must be remembered that Pakistan can double the production without bringing additional area under cultivation.
Finance Minister, Dr. Hafeez Shaikh has raised a pertinent point that if wheat and sugar prices have declined by around 40 percent in the global markets, why their prices have not come down by the same proportion in Pakistan? For his kind information his colleagues sitting in the national and provincial assemblies and senate are responsible. While they have been supporting hike in support price of food and cash crops, least attention has been paid to improving yield.
Poor yield is the outcome of absentee landlords, limited availability of agriculture credit, bad crop management and fragmentation of land ownership. Added to these are irregularities in the supply of irrigation water and highly inadequate storage facilities.
Lately, efforts to enhance wheat production have helped in achieving production above 20 million tons. However, the country has around seven million tons storage facility that is too not up to the international standard. Improper and highly depleted storage facilities result in wastage of wheat and often render stored wheat unfit for human consumption. Lately, the central bank has announced availability of credit for the construction of storage facilities. Pakistan also needs to build storage facilities equipped with temperature control facilities for fresh fruits and vegetables. It is on record that nearly half of the output is destroyed due to lack of appropriate storage and transport facilities.
It is on record that billions of rupees are collected as 'Road Cess' on sugarcane alone for the construction and maintenance of farms to market roads but the amount is being used for other purposes. Since the amount is collected on the basis of quantity of sugarcane delivered at the mills working out the collection poses no problem and disbursements could also be tracked easily. Some of the informed sources say billions of rupees are misappropriated but no one seems to be bothered. Had even half the amounts collected been spent on construction of roads over the years, thousands of kilometers of pucca roads would have been built. Some one needs to take up the issue at the earliest.
One of the factors playing key role in boosting production of wheat has been very attractive support price. Since global prices of wheat have come down significantly some of the quarters are suggesting reduction in support price which could prove fatal and reduce production next year. For the information of honorable minister around the globe governments pay huge subsidy to farmers for maintaining self sufficiency in food to keep the masses immune from the adverse impact of price movement in the global markets and Pakistan can't be an exception.
It will be pertinent to let the minister know that sugar crisis is the outcome of following bad policies due to lack of understanding of 'sugronomics'. Sugar industry has an installed capacity to produce nine million tons sugar annually but actual production has been hovering around 3.2 million tons. This is mainly because of an acute shortage of sugarcane in the country. Any industry operating at one-third capacity utilisation can't be economically viable. Therefore, the only solution for bringing down sugar price in the country is to at least double the sugarcane output by cultivating high yielding sugarcane varieties.
The minister should also know that sugar industry can help in overcoming electricity shortage in the country as well as brining down oil import bill. Sugar industry is capable of supplying more than 3,000MW electricity and millions of liters of ethyl alcohol for blending with motor gasoline. Pakistan State Oil Company has already started marketing of E-10 (blended) fuel, which is still available at limited number of outlets. Achieving both the objectives is also dependent on running sugar mills at optimum capacity utilisation.
Pakistan is also heavily dependent on imported edible oil. The country can achieve self sufficiency by enhancing production of sunflower, corn and canola. All the crops can be cultivated on below average land and require minimum water supply. Globally corn and canola oil is added to produce bio-diesel. However, this can't be done in Pakistan because these oils sell at almost double the price of diesel. If rest of the world can produce corn and canola oils at such a low cost, why the same can't be done in Pakistan?
Pakistan's dismal agriculture sector can be made vibrant by allowing corporate farming. Consolidation of fragmented land holding will facilitate mechanised farming, applying latest irrigation technology and giving all the right inputs. The country must also get rid of absentee landlords. The land must belong to the farmer and he must get the best return of his hard work.
It is heartening to know that lending to agriculture sector has increased substantially due to the joint efforts of commercial banks and insurance companies through insurance of agriculture credit. The endeavor must continue to help the country achieve food security.