FeaturedNationalVOLUME 17 ISSUE # 25

Economic revival without agriculture uplift?

The National Assembly was informed recently that Pakistan has become a net importer of food, at a time when its prices are unprecedentedly high in the world in the wake of pandemic shocks and the Russia-Ukraine war. Pakistan is importing wheat, sugar and 70pc of pulses, which is a matter of serious concern. Every government focuses on improving the economy but no significant progress is possible without upgrading the agriculture sector. It is the only way to provide edibles to the common people at low prices.

It is a fact that agriculture was ignored by successive governments in the past. The result is that Pakistan faces shortages and high prices of foodstuffs. Wheat and sugar have been in short supplies and their prices are abnormally high for years now. The government has been importing them to check their prices, which costs it dearly. The situation cannot be allowed to continue as it will pose serious threats to Pakistan’s food security and economy.

Pakistan’s food import bill grew by 53.98pc to $7.550 billion year-on-year during the 11 months of the last fiscal year, mainly due to sugar, wheat, palm oil and pulses imports. According to the Pakistan Bureau of Statistics (PBS), the share of food items in the total import bill reached 15.08pc in the last fiscal year, compared to 12pc the previous year, making the country dependent on imports to ensure food security. The edible import bill of all products posted growth in value and quantity during the period under review, a clear indication of shortages in domestic production. Within the food group import, the major contribution came from wheat, sugar, edible oil, spices, tea and pulses. The edible oil import witnessed a substantial increase during the period under review in quantity, value and per value terms. The import of palm oil recorded a growth of 40.61pc in value in the period to $2.397b from $1.704b over the corresponding months of the previous year. Pakistan imported 3.612 million tonnes of wheat worth $983.326m in nine months of the last fiscal year. Similarly, the import of sugar stood at 280,772 tonnes in the period as against 6,210 tonnes in the corresponding period of the previous year, an increase of 4,421pc. The import bill of pulses, dried fruits, milk and other food products also witnessed a massive growth.

To stem the tide, the government announced a two-tier intervention strategy to transform the agriculture sector to boost its growth. According to the Economic Survey of Pakistan 2020-21, shrinking arable land, climate change, water shortages and labour shift from rural to urban areas are main constraints to the growth of the sector. The government approved an action plan with a specific timeline for interventions, yield gaps and particular sectoral issues in a two-tier strategy to be implemented both by the federation and federating units. To achieve the targets of cotton revival, olive deepening, and genetic improvement in livestock, first generation interventions aim at bridging yield gaps, suggesting revisiting the criteria for induction, performance, evaluation and cancellation of seed companies, delineating separate requirements for local seed producers and importers with mandatory local seed production by the latter.

It also included a system for consumer traceability for seed authenticity as well as certified seed track and traceability. The plan entailed a digital subsidy mechanism (Kisan card) for inputs, an emphasis on mechanisation and water efficiency, revamping extension services, and restructuring research institutes. It set a Rs1.5 trillion farm credit disbursement target for the current fiscal, 23.5pc higher than the previous year’s Rs1.215tr. The initiatives for promoting farm financing included loan repayment relief to dampen Covid-19 effects, crop loan insurance, a livestock insurance scheme for borrowers, regulatory space for innovative financing, an e-credit scheme in Punjab, and a credit guarantee scheme for small and marginalised farmers.

The government aims to go for crop zoning, land consolidation, organic farming, adaptation and self-discovery with second generation interventions, which include horizontal expansion, seeking international cooperation in technology transfer, developing value chains of various farm and livestock products, setting up clusters of fruit and vegetables packaging and processing industries. Focusing the persistent cotton crop failure, the survey notes biotic stresses of white-fly and pink bollworm, abiotic stresses like climate change, heat stresses and extreme rainfalls, poor agricultural practices, unnecessary use of pesticides, higher costs of inputs, lack of early generation seed as the factors contributing to the white lint decline.

It quotes experts as suggesting cotton zoning with fixing minimum indicative or intervention prices, and timely issuance of subsidies as indispensable to revive the crop and exploring avenues for cotton growing in Balochistan and Khyber Pakhtunkhwa where pest pressure is low and cotton yields are reportedly higher than traditional areas of Punjab and Sindh.

The government has set aside Rs12 billion for the agriculture sector for the current fiscal year. Over Rs1 billion has been allocated for tackling the locust threat while another Rs2 billion has been set aside to enhance the output of crops such as rice, wheat, cotton, sugarcane and pulses. Over Rs1 billion will be utilised to increase commercial sowing of olive. Besides, the government will use Rs3 billion for the overhaul and improvement of waterways. The federal government has also announced the National Agriculture Emergency Programme that envisages integration of information technology solutions and the agriculture sector. The government launched interest-free loans for farmers. Under the scheme, a loan of Rs150,000 could be secured to produce one crop while Rs200,000 could be borrowed to purchase tractors or other agricultural machinery.

It is hoped the new initiatives will boost the agriculture sector. However, the water crisis is worsening in the country. Recently, Punjab and Sindh accused each other of water theft. The country will have to address the issue for sustainable agriculture growth.