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Potential of agriculture sector

Published on 24th June, Edition 26, 2013

 

Agriculture is the backbone of Pakistan’s economy. Pakistan is one of the largest producers of fruits and vegetables in the world besides being the largest overseas exporter of cotton and other agri products. It accounts for around 21.4 percent of GDP and about 45 percent of Pakistan’s population depends directly on agriculture. It is claimed that Pakistan is always governed by big landlords yet agriculture sector remained worst hit and most neglected area of the economy in the last five years. Pakistan has missed the growth target of agriculture sector, which grew only 3.3 percent against the target of 4.1 percent set for the ongoing fiscal year 2012-13. The growth rate is even less than the last fiscal year, during which it touched 3.5 percent.

Even then agriculture is playing a vital role and is known as the most important sector of the economy. Pakistan possesses a very fertile land in which diversified crops grow very easily. Various types of crops are produced in this country. These crops might have been categorized into two — food crops and cash crops. Agri markets in Pakistan are dominated by the existence of unorganized and unregulated regimes, with the presence of a large number of middlemen and widespread prevalence of malpractices. Absence of proper warehousing facilities in the villages, lack of proper transportation facilities and infrastructure such as rails and good quality roads and ignorance about the market prices of their products are some of the important factors for exploitation of farmers from the middle man. They are forced to sell their products to these middlemen at the farm gate at throwaway prices.

The government of Pakistan should, therefore, provide top most priority to the agriculture sector specially on food crops to increase the production of cereals by giving subsidy to the farmers on different inputs such as fertilizer, irrigation etc. to achieve self sufficiency in food. Poverty cannot be reduced to a desired level without increasing productivity of agriculture sector and at the same time it is also to be assured that farmers get fair price of the crops.

Agriculture, including animal husbandry, contributes about one fourth to the country’s gross domestic product. Growth of the agriculture sector therefore has an important impact on the country’s economic performance and more importantly on the lives of people dependent on agriculture.

Cultivable land is being decreased due to the pressure of massive population. As a result, food security is being threatened and the risk of poor people is being increased. Notable portion of annual budget should be allocated for the development of the sector. Some of the main challenges before agriculture sector are:

  • to achieve a higher growth rate and stability and rapidly declining water level.
  • to increase levels of investment, particularly private, in the agriculture sector for modernization, diversification and commercialization.
  • to achieve coordinated development of agriculture and livestock for maximizing benefits to farmers.
  • to modernize agriculture markets to ensure better realization for the producer.
  • to encourage setting up of agro-processing and agri-businesses enterprises for value addition in agriculture produce and generating new employment opportunities.
  • to reduce the adverse affect of erratic monsoon and hostile weather conditions on agriculture production.

It is important to improve land administration system, including computerization of land records and reduction of transaction costs though this has been done in recent past but require more transparency. Agriculture tax was imposed in 1997 but later a lot of exemptions were given, which virtually made it tax exempt sector. Sindh and Punjab managed to collect only Rs1 billion under agriculture tax last year, which is virtually nothing. Since independence, agricultural income is exempted from tax despite the fact that all the big land owners are in election politics, have their own political parties which need heavy funds and have expensive cars and bungalows in almost all the main cities of Pakistan. Therefore tax on agricultural income will not only help the sector but will also contribute positively in the national progress. It would be better if SBP further cut its interest rates for farmers and improve terms and conditions of debt. The degradation of land, water, forests and natural ecosystems is pervasive and mostly affects the poor. The situation in Sindh with respect to land use, salinity, degradation of the wetlands, and floods needs special attention. Policies and public programs need to address the incentive structure for sustainable use and mitigation measures.

 

Since the dawn of independence, several steps have been taken to develop the agricultural sector of the country. The major breakthrough has been achieved in food grains production. However, the various measures employed from time to time produced results yet following various technical measures can also be employed to develop further agriculture sector:

  • Multiple Cropping – Multiple cropping aims at maximizing production per unit of land and per unit of time by taking three or four crops in a year. By adopting multiple cropping, there are two advantages as of getting increased returns and economy of the farm resources.
  • Expansion of Irrigation Facilities – Irrigation facilities to be increased manifold. Several, minor, medium and major irrigation projects are to be launched in the country
  • Plant Protection – Considerable efforts have been made to protect the crops from the insects and pests, yet a lot can be done in this area.
  • Scientific Methods of Cultivation – Stress to be laid on the scientific methods of cultivation. It is to be emphasized to adopt superior agricultural technology in respect of crop rotation, selection of quality seeds, use of proper manure, treatment of soil, selection of crops etc.
  • Use of Mechanization – Mechanization is another noteworthy step that can be employed for the development of agriculture. Small farmers are to be assisted with cheap credit facilities through microfinance institutions and agriculture development banks so that they could purchase machinery and other modern equipments.

Agriculture is an important engine for growth, especially for low-income developing countries. As Pakistan has an agrarian economy and economists believe that agriculture is the backbone of the national economy therefore government should pay special attention on agriculture sector by providing subsidy and loans to growers with a sustainable system. Moreover, Pakistan should bring institutional reforms so as to get advantage from the new opportunities. It is vital to focus on diversification into high value products, agro-processing, and better integration in supply chains. In order to benefit poor, it is equally important to increase the productivity so as to decrease food prices, generate new employment and stabilize rural wages. Long term solutions are needed for inter-provincial drainage problems. At the same time, the safety of infrastructure (especially barrages) needs to be guaranteed. A better integration between irrigation and agriculture would help the whole system to become more demand driven.

There is a need to encourage investment through corporate involvement in the sector, which will definitely increase the crop level both in terms of quality and quantity. There is also an enormous scope to expand output, and also productivity, by increasing the productive efficiency of the relatively inefficient districts. This can only be done by encouraging investment in rural physical infrastructure, providing efficient and effective institutional support, including agricultural extension, soil survey and testing, inputs quality control service, etc.

In short, agriculture continues to grow as a supplier of raw materials to industry as well as market for industrial products. It is contributing substantially to Pakistan’s exports earnings. Therefore, any improvement in agriculture will not only help Pakistan’s economic growth to raise a faster rate but also benefit a large segment of the country’s population.

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