Agriculture sector remains underdeveloped and prone to vagaries of nature
Management of irrigation water is one of the trickiest problems that
need to be tackled effectively and professionally

By M. Sharif

National economy is basically an agrarian economy and whatever industrial capacity it has developed over the past six decades, it is mostly because of the agriculture sector. Over the decades, it has not attracted either the attention or investment it deserved. Consequently, it remains underdeveloped and prone to vagaries of nature with a huge potential that is yet to be exploited to boost the growth rate of economy and sustain it, meet export targets and alleviate poverty particularly in rural areas.

There are concerns arising because of the new world trade order that is stuck to be finalised, primarily because of biased approach of the developed world towards the developing countries. They favour huge subsidies for agriculture sector of their own countries but are opposed to extending the same by the governments of the developing countries.

Importance of the sector 

According to the 1998 census of Pakistan, 67 per cent population lives in rural areas and depends upon the sector for its living, 48 per cent of the total work force of the country is utilised by the sector, it provides raw material for the largest industry i.e. textile industry that earns 66 per cent of the total exports and provides food security. In addition to these, the country earns substantial amount of foreign exchange by exporting agro-products such as rice, fruits and vegetables, leather and its finished goods. Its contribution to GDP is 22.5 per cent at present that has decreased by 2.5 per cent over past a few years. Sustaining a high economic growth rate of around 7.0 per cent of GDP depends on maintaining not less than 4.0 rate of growth in agriculture sector per annum.  

Keeping in view some of the important facts stated above, it is expected that the sector over the years must have developed into perfection in some of the vital areas that are its life line. They include irrigation water-management, value addition, product preservation, marketing, livestock, investment, credit facilities and provision of quality seeds, fertilisers and pesticides through domestic industry and advancement in biotechnology for higher crop yield.  Ironically, the situation is far less satisfactory than expected for reasons that are multi-faceted. Concerted efforts need to be done to address them as the economy can hardly sustain higher economic growth without a robust agriculture sector.

Problems of the sector

Agriculture sector has been facing a number of problems since long, partially addressed by the government from time to time. Management of irrigation water is one of the trickiest problems that loom large over the sector. The country has an irrigation water system that was established by the British rulers during their colonial rule. The system despite being well planned and having stood test of time for more than two hundred years cannot meet requirements of the present moment.

The problems have increased manifold primarily because handing over of water of lower three eastern tributaries (Ravi, Sutlej and Beas) to Indus to India under the Indus Basin Treaty of 60s with the help of WB. The Southern Areas of Punjab and certain areas of Sindh have to be irrigated by transferring water from the two major water reservoirs at Tarbela on river Indus and at Mangla on river Jehlum with the help of the Indus Basin Replacement Works Projects.

The system of distributing irrigation water to different provinces, particularly to Sindh, from the two water reservoirs has created a sort of conflict of interest between the smaller provinces and the Punjab on one hand and the smaller provinces and federal government on the other hand. The real issue is about availability of sufficient irrigation water down the stream. Less quantity of water is unable to meet mounting needs of irrigation during the harvesting seasons. The necessity of building more water reservoirs is too obvious to be debated because of this very reason.

The government has taken initiative, though belatedly, to build huge water reservoirs at Kalabgh, Bhasha and other places in the north, not only to store sufficient irrigation water that waste in floods but to overcome the power crisis also. Construction of huge water reservoirs is being done by the federal government despite reservations expressed by the smaller provinces especially about the Kalabagh dam.  

The second important problem that needs attention of the government and other stake- holders in agriculture sectors is about reducing the cost of inputs such as irrigation water, fertilisers, good quality seeds, pesticides and their timely provision at competitive price and credit facilities, particularly to small farmers who suffer the most either because of lack of them or their high cost. Sufficient supply of irrigation water is to a larger extent linked with construction of water reservoirs at huge cost estimated to be around $20 billion over next 10 years. Till then, it is imperative that a transparent system of water distribution should function. It should satisfy all the stakeholders.

The government should remain open to providing subsidy for various inputs to facilitate bumper production of wheat, rice, sugar cane and other crops, failing which it comes under a lot of pressure to import food products. It becomes difficult to manage imports on time to meet the needs of the consumers. It has yet another lacuna that encourages market players to hoard and push food prices upward. It is to be appreciated that during the last fiscal year the government had the compulsion of importing food products worth around $3.0 billion. The food inflation persisted at around 10.3 per cent that pushed overall inflation to 7.8 per cent despite efforts by the SBP to bring down inflation from around 8.0 per cent in FY06 to 6.5 per cent in FY07.

The government on its part is alive to the problems highlighted above and took measures particularly during the last fiscal year present year also. It has provided subsidy for fertilisers; electricity used for tube wells and has facilitated provisioning of good seeds. The efforts facilitated producing bumper crops of wheat, cotton and sugar cane. During the last fiscal year, growth of agriculture sector was 4.2 per cent that partially compensated for lower growth in the manufacturing sector.

Equally important is paying attention to the marketing of agro-products, even if produced in surplus quantity would mean little to growers, particularly small ones, unless they received reasonably price for their products. Market forces work in quite volatile manner in order to manipulate it for windfall profits. Around two years earlier sugar crisis were engineered through artificial shortage to give a quantum jump to sugar prices that doubled from around Rs22.0 per kg to Rs45.0 per kg. Since then sugar prices have not witnessed the same level despite some belated efforts to reduce prices through import of sugar. Similar crisis was experienced in the cement prices that were gradually reduced with a certain degree of success.

Very recently wheat prices have shot despite a bumper crop. Real manipulators of the market are least willing to forego any opportunity of profiteering. National Accountability Bureau (NAB) had initially started investigating the hike in sugar prices against the hoarders but had to drop it because of their influence.

Submissions made by NAB in the Supreme Court of Pakistan only a few days earlier about the sugar crisis revealed names of dealers, power brokers and owners of sugar mills as well. They were involved in huge hoardings and bagged billions by squeezing the consumers.

Similarly, in recent price hike of wheat and flour, the gainers are market manipulators whereas; the farmers and small landlords are on the losing end. A negative market is a great disincentive for growers not to put in their best efforts and money to grow surplus agro-products either for exports or to make food available to their fellow countrymen at reasonable prices. That is where crux of the problem: the price of agro-products lies. It needs to be addressed through strong administrative measures to control the market and co-operation of the consumers.

 In order to give impetus to the growth of agriculture sector and sustain its high growth, the government must ensure through strong administrative measures that the growers get a reasonable good price of their products soon after harvesting. That very time is very crucial to ensure that support price fixed by the government for wheat, sugar cane or any other commodity really benefits the growers. They are not left at the mercy of the market manipulators. A reasonable price for the products would enable growers to share their income in somewhat better ways with a large seasonal work force that is landless and most of it lives below poverty line.

One of the most important points that need to be focused in the context of food security is that the government should make and encourage private sector to make huge investments in sub-agriculture sectors like livestock, dairy farming and its products.

The government of Punjab is taking initiative to boost their production. Supply of beef, mutton, milk and dairy products at reasonable price is the best food security for common citizens who constitute around 75 per cent of the population and yearn for healthy diet. Improvement in these sub-sectors will decrease food imports that are already costing substantial forex.

No sector of the economy can progress without investment and research. The latter element had drawn substantial efforts of the public sector over the past many years. However, the private sector is shy to join in the effort, for which necessary steps need to be taken. There has been visible progress in improving seeds and increasing yield per acre of different crops. But, the improvement is much less than the expectations and breakthrough is yet to be made to address the challenges that agriculture sector really faces. Research on cotton in particular needs special attention not only to improve yield per acre but also to improve its quality. It is really surprising that Southern Punjab, the land of cotton is without a single research institute of national or regional repute to help the growers.

Credit provided to the growers by Zari Taraqiati Bank (ZTB) has definitely improved over the years and two years earlier the government took initiative of providing credit at comparatively less interest rate and with less hassle to small farmers.

According to an estimate, the banking sector has provided around Rs169 billion during the past five years for development of agriculture sector and enhancement of exports of its various products. The analysts and the growers have strong views about allocation of funds for research and the credit provided to the sector. The latter hardly meets their requirements by half. It needs annual credit of around Rs300 billion.

Conclusion

In order to fully utilise the potential of agriculture sector, the sector should be provided with liberal loans, funds for research to develop new varieties of seeds, value added products. It should step in biotechnology domain to increase yield of crops to ensure food security and create surplus for exports. Growth of fruits, vegetables and horticulture products should also be focused for the same purpose. Advancements made in these areas over the years, despite being commendable, need more attention. This would help in alleviating poverty in the rural areas as well as the urban region.