IMPROVING AGRICULTURE SECTOR
SHABBIR H. KAZMI
Feb 13 - 19, 2012
Agriculture contributes nearly 25 per cent to Pakistan's GDP and two of the country's large-scale industries textiles and clothing and sugar are agro-based.
Around 60 per cent of total exports are realized from textiles and clothing. Pakistan is a major exporter of rice and wheat. During the current financial year, the country will once again be able to export sugar after a long time.
Fertilizer manufacturing companies have been playing a major role in boosting yield of various crops but little progress has been achieved due to acute shortage of irrigation water and farmers are still averse to mechanized farming.
State Bank of Pakistan (SBP) is trying to improve lending to farmers with the active participation of government of Pakistan.
There has been a persistent and substantial hike in prices of agriculture produce on the demands of farmers. While hike in support price of wheat has enabled the country to achieve self-sufficiency, capacity utilization of sugar industry has remained disappointingly low despite regular increase in its support price.
Years ago the government decided not to fix support price of cotton and allowed market forces to determine its price but cotton output as well as quality remained poor. Experts are of the opinion that cotton production can be doubled without increasing area under cotton cultivation. Pakistan has not been successful in increasing local production of long staple cotton. Therefore, bulk of country's yarn is concentrated in coarse and medium counts.
Experts agree that yield of almost all the crops can be improved by 1) using certified seeds, 2) promoting balanced use of fertilizer, 3) applying water prudently and 4) following better crop management.
Till lately, there was a complaint that farmer didn't get enough money to buy farm inputs and agriculture implements. The central bank has fixed the agriculture credit disbursement target of Rs285 billion for this year.
Last year (2010-11), disbursement remained below target because of two floods and delay in disbursement of claims by the insurance companies.
Pakistan suffers due to torrential rains and faces drought like situation because of insufficient water storage facilities and deteriorating irrigation system. The country has the world largest manmade irrigation system falling prey to apathy.
Water logging and salinity problems are eroding cultivable area at a very fast pace. Due to inadequate water storing facilities, the country faces deluge after torrential rains and drought like situation when there is little or no rain.
Lately, farmers have not been able to apply right dosage of chemical fertilizers because of skyrocketing prices. Hike in urea price is because of curtailment of gas and mandatory closure of plants because of acute shortage of gas.
Though urea is imported in hundreds of tons and billions of rupees subsidy paid, farmers have to pay higher price because of the inefficient performance of NFML. It is often alleged that employees of National Fertilizer Marketing Limited (NFML) are involved in black marketing of imported urea.
Agriculture is a major source of employment direct as well indirect. However, productivity remains low because of fragmentation of landholding and lack of mechanized farming.
Experts say that the time has come for corporate farming. There are millions of acres of barren lands because of huge landholdings. It is often said that less than two per cent people hold 90 per cent of land. Another reason for bulk of area remaining uncultivable is shortage of irrigation water. It is common observation that feudal lords take away maximum quantity of water and tail-enders hardly get any quantity.
Sugar industry is said to be the driving engine of rural economy but little is done to improve its capacity utilization. The level of acute shortage of sugarcane can be gauged from the fact that as against an installed capacity nine million tons sugar production, average production remains below 3.5 million tons. As a result, average cost of production is very high as compared to other sugarcane producing countries.
The country is fraught with energy crisis and oil import bill. Sugar industry can help in resolving both the issues by generating power on bagasse and producing biofuel. Both the objectives could not be achieved because the government is not willing to grant sugar mills independent power producer (IPP) status and offer them the same bulk power purchase tariff that is awarded to IPPs.
Production and distribution of bio-fuel is opposed by ever-strong oil lobby. Experts are of the view that if government is serious in containing use of CNG in transport sector, the objective can be achieved by promoting use of bio-fuel.
The strong palm oil lobby is also responsible for limited production of edible oil in the country and wastage of over two billion dollar every year on the import of palm oil. A little focus on production of corn, canola, and sunflower can help in containing edible oil import.
The central bank introduced a scheme of soft-term loans for the growers of edible oil seeds but the plan is resisted on the point that increasing area under cultivation of oilseeds will have negative impact on production of wheat.
Experts say that propaganda is completely baseless because oil seeds can be cultivated at below-average land and water requirement is also low.
Pakistan is among the top five milk producing countries but a huge quantity of dried milk is imported every year. Prices of beef, meat, chicken, and eggs are touching record high levels because of declining production and rising cost of inputs.
Milk production can be further enhanced by feeding cows and buffalos on green fodder. Increasing cultivation of corn can yield two benefits: 1) it is an ideal fodder for milk giving animals and 2) the added advantage is higher production of corn oil in the country.