Analysis of Agricultural Achievements and Weakness of Pakistan

Module: Agriculture Economics


Introduction:

Pakistan came into existence in 1947. It is the second emerging economy in South Asia after India. It is bordered on the west by Iran, on the north by Afghanistan, on the north east by China, on the east and south east by India, and on the south by Arabian Sea. Pakistan has a vast and rich natural resources as well as different climatic zones. Having various climatic zones and rich natural resources the country has potential for producing all type of food commodities. Pakistan divided into has four parts which are so-called provinces today. The names of Pakistani's provinces are Punjab, Balochistan, Sind and NWFP. The total land area of Pakistan's is 80 million hectares and its population is about 150 million. About 27 percent of the area is under cultivation. About 80 percent of the cultivated area is irrigated while the remaining area is drying farming. So in the content of irrigated cropped area Pakistan is on the top of the world list. With an annual growth rate of 0.9 percent, the cultivated area increased from 16.62 million hectares to 33.63million hectares during 1970-71 to 2007-08. During the same period, the population also increased from 65 million to 165 million. In consequence the per capita land availability decreased from 0.25 hectares in 1970-71 to 0.15 hectares in 2007-08.

Agriculture is the lifeline of Pakistan's economy. The contribution of the agriculture sector to gross domestic product (GDP) is 21 percent as well as employs 48.8 percent of the total labour force. Agriculture contributes less to the national GDP relative to its size of population and labour force compared to other sectors of the economy. Limited information and understanding of the rural markets and economy has been one of the key impediments in penetration of banking & finance in agriculture rural sector of our economy. It also plays a vital role to earning foreign exchange. About 70 percent of foreign exchange is earned through export of raw materials; semi processed and processed agriculture products. About 68 percent of the country's population live in rural areas and are directly linked with agriculture sector for their livelihood. During the decade of the 1990s the agriculture grew at 4.5% per annum averagely. The highest growth rate of 11.7% was achieved in 1995-96 due to increased in cotton, gram, milk and meat products. The lowest negative growth rate was 5.3% in 1992-93 by dint of decrease in cotton and sugarcane production which are the major crops of the country.



There are two principal crops seasons in Pakistan namely "Kharif" and "Rabi. Kharif sowing period start in April and harvest in October and December. Rabi season begin in October-December and ending in April-May. Cotton, sugar cane, rice, maize and millet are Kharif crops while wheat, gram, tobacco, mustard and rapeseed are Rabi crops. The major crops as wheat, cotton, rice, sugar cane and maize account for 41% in value added and minor crops 10% in overall agriculture. A emerging sub sector of agriculture is Livestock. It contributes 37.4% in agriculture value added and 9.7% in GDP. Similarly fisheries is also playing significant role in national income through exports earning.


Overview of Agriculture Sector:

I- Development in Agriculture

Agriculture is a significant sector of Pakistan economy. The growth in national economy and agriculture sector go hand in hand. In past fluctuations in agricultural growth significantly affected the national economy. The share of agriculture sector to the GDP has nosedived gradually since the time of independence of Pakistan. Agriculture sector share to GDP was 51% in 1949-50 and 21% in 2008. In the GDP composition agriculture sector is still a pivotal figure.

Agriculture sector of Pakistan has made terrific progress since the time of came into existence in 1947. There haven been some years of cruising growth and some years of dismal growth In sixties the production of wheat and rice increased due to green revolution. During the decade an average growth rate was 5.1%. The growth rate declined to 2.4% in seventies due to massive nationalization policy. However the seventies was a era of high public sector investment in agriculture sector. During this period many important institutions were commissioned which are Tarbela Dam, Paksiatn Agriculture Research Council, Training and Visit Programme of Agriculture Extension, Seed Certification and Registration Department, Seed Corporation, On Farm Water Management and Barani Area Development Programme. During the same period Cotton Export Corporation and Rice Export Corporation were established to provide the international market to these major indigenous productions.

The result of high public sector appeared in eighties. During the decade the growth rate was 5.4%. In eighties Government established Agriculture Prices Commission to set the official support price for major crops. After lost the heavy public treasure in the form of public investment in agriculture Government started closing down public sector institutions in nineties. These institutions played a vital role in the development of agriculture. Some institutions were confined by the Government. After shout down of some institutions and confined role of some institutions the farm economy started dwindling. During middle of nineties period the production of cotton slumped due to virus attacked on this crop and the economy inflicted heavy losses. In late nineties years the productions of crops and livestock effected by the drought. Despite these difficulties Pakistan transformed from wheat importing country to wheat exporting country. The average growth rate during the nineties was 4.4%. The basic philosophy has been to maintain a growth rate in agriculture sector higher than population growth rate. The average growth rate of the agriculture sector over the last sixteen years was 4.3%. The supply of land is limited and due to increase in population the demand of land for living is increasing. So in this way the area under crops is limited. The Ministry of Food, Agriculture and Livestock is emphasizing on increasing productivity. Livestock has emerged as an important subsector. Its share to agriculture GDP is more than one third which was 28% twenty years ago. The Ministry of Food, Agriculture and Livestock also focus on increase the efficiency and productivity of livestock.


II- Role of Agriculture Sector towards Food Security

"Food security exist when all people at all times have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preference for an active and healthy lifestyle" ( World Summit 1996). Agriculture sector is an important sector to provide food to the fast growing population of the country. The commodities that make an integral component of food security are food grains, edible oil and sugar. Although Pakistan has made significant progress in food production over the last sixty years but most of population have had to face uncertainty in food security and it has been remained food deficit country. The production of wheat increased from 3.3 million tones in 1950-51 to 23 million tones in 2006-07. During the same period the production of rice soared from 0.8 million to 5563 (000) tones. Pakistan is self-sufficient in rice production as well as surplus in rice and export the rice specially Basmati and earn foreign exchange. For oil seeds, the country turned from self-sufficiency into a major importer of edible oils. But on the other side during 1970- 71 the amount of wheat imported was 0.3 million tones, it increased to 4.1 million tones in 1997. The significance of agriculture sector towards food security in term of availability shadow due to increase in population. In 1947 the population of Pakistan was 32.5 million 7 and now in 2008 census it is 160 million. According to United Nations Statement on Food Security in Pakistan 2000, in more than 50 years (1948-2000) the population has increased four folds but in the same period the production of wheat and other major food crops has increased only 2.9 percent. However Pakistan Agriculture Research Council claims that the production of wheat in the country has increased by more than 6.5 fold. The joint Secretary at Ministry of Food and Agriculture of Pakistan Mr.Amjad Nazir told that �� There will be no need for us to import wheat this year because the ministry has raised the minimum price of wheat for farmers which encouraged them to allocate more land to grow wheat'' (Dubai News Channel May 18 2009).There was ban on the exports of wheat in 2007 due to shortage and higher prices of wheat at home. Now it is likely that Pakistan will exports wheat this year said the Qadir Bukhsh Baluch who is the wheat Commissioner at the Ministry of Food and Agriculture of Pakistan. Food insecurity in Pakistan is not only due to underproduction. There are many other reasons like increased use of farming in biofuels, world oil prices which is going down due to financial crisis, low purchasing power, population growth and loss of agriculture land for residential and industrial development. Although the per capita income of the country has increased steadily over the years but it does not mean that the all the population of the country is food secure.


III- Role of Agriculture Sector towards Poverty Alleviation.

Poverty is an international phenomenon. According to the FAO 2005, 1.2 billion people of the world live below the poverty line and more than 850 million does not have enough access to sufficient food for an active and healthy life. The world total population who live below the poverty line, 1.089 billion live in developing countries and 0.431 billion live in South Asia. As far as the Pakistan is concerned it ranked 136 based on HDI out of a total 177 countries. Pakistan is better off as compared to its neighbour countries like India, Sri Lanka, Bhutan which ranked 128, 99,133 respectively.

In Pakistan two-third of the total population live in villages and more than two-third of the population are poor (World Bank 2002). Majority of the rural population earn their livelihood directly and indirectly form the agriculture sector. The agriculture sector absorbed 42% of the manpower of Pakistan. Only half of the rural population are farmers and other half are non-farm. The rural non-farm population, who are poor, produces non tradable goods and services and the market of these goods and services is local. Farmers spend half of their incremental income on the non-farm goods and services. So the increase in farmer's income drives demand of the non-farm sector. There is close relationship between agriculture growth and poverty reduction.

In the 1960s, agriculture in Pakistan grew rapidly and poverty nosedived rapidly. In the 1970s, the growth in agriculture was slow and the poverty reduction was also slow. In the 1980s, agriculture growth soared once again and the poverty declined from 49% to 36% of the population. The reason of the growth was green revolution. Due to slow growth in agriculture between the period 1989-90 and 2004-05, there was no change in poverty reduction (World Bank 2007).

Therefore if we want to reduce the poverty, we will have to increase the income and outputs of agriculture sector. For this purpose we will have to remove all the obstacles in the way of agriculture development. We will have to provide more credit, more fertilize, good market for agricultural goods, better irrigation facilities and storage facilities etc.

Accordingly the government has started water projects worth Rs. 300 billion so that the water facilities could be increased in the country. After the completion of the projects not only 2.88 million acre additional land could be irrigated but 4.4 million feet additional water could be reserved for irrigation purpose also. As a result of these agriculture, agriculture production could be increased leading to increase more incomes and employment for the rural and urban population.


Achievements in Agriculture Sector:

I-Production Increased Overtime:

Agriculture sector is not only provide food to fast growing population of the country, it also provide raw matter to the industry sector. Even there have been fluctuation in the production of agriculture due to pest attacks on crops, climate reasons but on the other hand the production increased overtime due to agronomic,better irrigation and extensive policies of governments. In 1960-61 the food grain production was 5,925 billion tones but it increased to 30,689 billion tones in 2007-08.Livestock contribute 38.7% to agriculture value added and 9.3% to national GDP. In livestock sector the production of milk,meat and fishers also increased. The production of milk,meat and fishers in 1989-90 were 14723, 1507, 446.2 (000 tones) respectively . In 2007-08 it increased to 35160, 2515, 490.0 (000 tones) (Economy Survey of Pakistan 2009).

Wheat which is the main staple food for the country's population because it is main source of getting calories for the majority of the population. In 2007-08 there were shortage of wheat due to wrong policy of the government but now in 2008-09 the provisionally estimated of wheat production is 23.4 million tones which is 11.7 percent more as compared to last year. The reasons of high productions are government support price of Rs. 940 per 40 KG, subsidy on fertilizer of Rs.32 billion as well as timely rain.


II-Biotechnology

the phase of practical application on a large scale. In agriculture, biotechnology has been applied in different fields, including the production of genetically modified (GM) crops. Biotechnology has considerable potential for promoting the efficiency of crop improvement, food production, and poverty reduction, especially in developing countries like Pakistan.

In Pakistan the use of modern biotechnology has started from 1985. There are hundreds of scientists working at more than 29 centres conducting biotech research in different areas. Most of the activities have been on rice and cotton, which are among the top 5 crops of Pakistan. There are about 6,000 plant species in Pakistan; out of these only 1,010 species are identified as having medicinal value. Pakistan Agriculture Research Council (PARC) established a "gene bank" at the Institute of Agricultural Biotechnology and Genetic Resources (IABGR) and the National Agricultural Research Center (NARC), which contains more than 30,000 genes and DNA of different plant species. The germ plasm of major cereals, minor cereals, food legumes, oilseeds, vegetables, fruits, fiber crops, fodder and forages and medicinal plants are available from this 'gene bank" for scientists and researcher for the development of new varieties. More recently PARC has established with NARC a new institute the National Institute for Genomics and Advance Biotechnology (NIGAB); which will conduct research on structural and functional genomic of both plants and animals.

Pakistan has made considerable progress in the research and development sector of agriculture biotechnology and has developed several GM crops. However, commercial release is hampered due to delays and weak capacity of regulatory bodies related to biosafety and IPR (Plant Breeders Rights).There is an illegal spread of biotech (Bt) cotton on a large area due to strong demand of farmer community. So far, development of GM crops has remained exclusively in the public sector, but lately multinational companies (MNCs) have made the initiative to enter into the market under new conducive regulatory regimes that need to be further strengthened. Capacity building in regulating authorities aided by strict legal control is a prerequisite for safe and sustainable use of agricultural biotechnology. It is expected that the farmers of Pakistan will reap the benefits of legally released and indigenously developed biotech crops in the next 1-2 years.


III-Irrigation Facilities:

Water is unique natural resources. The irrigation system of Pakistan is recognized as the largest integrated irrigation network in the world, covering more than 16 million hectares and crossing nine agro-climatic zones. This irrigation network comprises three major storage reservoirs, 19 barrages, 12 inter-river link canals, 43 independent canal commands equivalent to 61,000 kilometers and over 107,000 watercourses of about two million kilometers, including field channels. This huge system of irrigation in the country mostly irrigates the lands of two provinces named Sindh and Punjab, by irrigating relatively small areas of NWFP and Balochistan provinces.

The cultivated area of Pakistan is 22.27 million hectares which was 14.19 million hectares. Out of the total cultivated 15.67 million hectares is irrigated and remaining depend on rain. The availability of water increased by 122.15 million acre feet in 1997-98 to 137.80 million hectares in 2006-07. The increased in irrigated area was most significant before 1980, when the irrigation system was being expanded through High Efficient Irrigation System Since the 1980, increase in irrigated area have come form groundwater resources. But the area irrigated by canal has unchanged because the water resources are approaching its limits; there is little potential for further increase in irrigated areas. The Governments has recently launched its largest project through Ministry of Food, Agriculture and Livestock which aim at bring more than 275,00 acre under micro irrigation in a period of five years. In addition, in 2007-08 non government funding primarily from Pakistan Poverty Alleviation Fund (PPAF) has been providing funds for the installation of HEIS system through the country through their partner originatsion. It aim at to improve the productivity of agriculture sector so that poverty can be removed.


Weakness of the Agriculture sector;

I-Small holding of Land:

In Pakistan the farm size is decreasing due to law of inheritance over the time. The average farm reduced from 5.28 hectares in 1972 to 3.1 hectares in 2000. According to Agriculture Census 2000, farms size which are 2 hectares or less constitute about 58% of the total farms and operate only 16 % of the total farm whereas 5 % of farms operated 37% of the total areas. So due to small size of farm we can,t apply modern technology for getting the optimum level of production. In most of Pakistani villages farmers are doing subsistence farming due to small size of farm. Increased numbers of farm are being operated as uneconomic holdings, which can,t provide acceptable level of living to large chunk of farming community. The farms of very size may also be inefficient. Although land reforms have been done but it proved useless due to political landlord who have influence on policy making. There is again an need to determine optimal farm size and optimal cropping 13 intensity in various agro-ecological regions of the country and to provide required incentives so that majority of farm move towards the optimal size.


II-Shortage of Fertilizers:

Fertilizers and highly yielding varieties are important agricultural inputs. The success story in proliferation of crops production since mid 1960s can be attributed at fertilizers consumption. So demand of fertilizers is higher than supply in Pakistan. The domestic production of fertilizer is 5.8 million tones per annum but the demand is 6.8 million tones per annum Although Government provide subsidy on fertilizers but it become useless when the farmers get the fertilizers through back window due to poor market and poor distribution. In 2008 farmers in Pakistan badly suffered in getting the fertilizers. Those who have political relation got the fertilizers because there was government control on the supply of fertilizers. So it is need to deregulate the process of distribution of fertilizers so that farmers can get fertilizers on time, in the right quantity and at right price.


III-Poor Marketing of Agriculture Production:

Marketing is one of the major problems of agriculture sector of Pakistan. Farmers in Pakistan don't get the right price of their production because of the poor functioning of market. There are two kinds of markets in Pakistan green and grain markets. Green market is for vegetables, fruits and grain market is for wheat, rice etc. Due to long chain of market most of our agriculture produce pass through a number of players. Among these wholesalers and commission agents who exploit the farmers are most important. Vegetables such as onion, potatoes which are perishable commodities are sold to local areas. These are taken to whole sale market and are sold to whole sellers or commission agents. The wholesalers buy through 14 open auction and sell to sub-wholesalers in small form. These sub wholesalers sell these commodities to the retailer after grading. From the retailer consumer get these things at high prices due to excessive rates of various intermediary services on the base of such structure of market, monopoly of cartels exist in the market in the form of commission agents and whole sellers who deprive and exploit the farmers. Most of our food grain sold to shop keepers at village level due to inadequate information at local level. Such sale of food grain is disadvantage of the small farmers. It has been observed by some survey and marketing studies that when the supply of fruits and vegetables reach at peak , some times farmers even don't get the cost of transport to bring their to the market. About 30% to 35 % agricultural production waste due to post harvest in Pakistan due to limited market at local level.


In live stock sector Pakistan is 5th largest country in the world in the production of milk but unfortunately our people specially in urban areas don't get the better quality milk due to market structure. Milkmen get milk from the rural areas and adulterate water in order to make more maximize their profit. There is no quality control in the market and adulteration is the name of the game in the market. This situation leads to vicious circle of malnutrition; (malnutrition-disease-low performance-low productivity-low income-malnutrition).


Recommendation:

Poor Marketing:

I- The structure of market chain should be reset by removing the middlemen who exploit the farmers. Both markets green and grain should be strictly regulated by government.

II- Storage facilities should be provided so that farmers can storage their production in the time of peak harvest to control the supply and demand fluctuations.

III- A marketing cooperative should be established which could accumulate the marketable surplus of farmers and send it to big markets for exports.

IV- After sorting out agriculture goods inferior and superior the packing of these commodities should be international standard both.

V- In order to provide good quality mike through out the country, a cell should be establish which accumulate milk from the dairies and after processing it will provide to the people of the country.

VI- There is need to resetting tarrifs, taxes and subsidies to accelerate export.

VII- Seeking comparative advantage and making foreign exchange In spite of big production, benefits are not gained due to poor marketing. Little fine tune can bring fruits of all efforts.


References

Dr. Muhammad Hanif, Dr. Shakeel Ahmed, Fayyaz Ahmed Nauman, (2004) Agricultural Perspective and Policy, Ministry of Food Agricultural and Livestock Islamabad Pakistan Economy Survey of Pakistan (2008-09) Government of Pakistan

Muhammad Iqbal Munir Ahmad, Science & Technology Based Agriculture Vision of Pakistan and Prospects of Growth Federal Bureau of Statistics, Government of Pakistan

Shafqat Munir Budget (2006-07) Compromising Food Security and Agriculture Weidemann Associates, Pakistan Food and Agriculture Project Report to USAID/Pakistan (2009)

Water Resources Section, Planning and Development Division Government of Pakistan

Food Agriculture Origination Report (2005) Rome

Yusuf Zafar Journal of AOAC International (September- October 2007) Daily Times

Ijaz Ahmad Rao "Genomics to Improve Farming" The Dawn Newspaper

Sarah Aziz Boosting Water Productivity in Agriculture Sector

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