Limping agriculture sector

The agriculture sector, Pakistan's economic backbone, looks fatigued. The sector has missed the 3.8 percent growth target against the provisional growth of 2.1 percent in FY14, recent economic survey shows.
This growth rate, lower even than last year by 0.8 percentage points is circling around the population growth rate of two percent per annum, a warning sign.
Details show that major crops such as wheat, rice and sugar posted a significant growth of 3.74 percent as compared to 1.19 percent of last year. While other sub-sectors witnessed a paltry growth, like livestock 2.9 percent, forestry 1.5 percent and fishing one percent: Whereas, cotton ginning and other crops showed negative growth of 1.3 percent and 3.5 percent, respectively.
Seeking to turnaround the agriculture sector, the Finance Minister offered several incentives for the agriculture sector in his budget speech, including those for small and marginal farmers.
These include the sales tax to be exempted on high irrigation equipment for green house farming, removal of customs duty on plastic coverings, mulch films and anti-insect nets for tunnel farming, credit guarantee schemes for small and marginalized farmers with 50 percent loss sharing, livestock insurance scheme for farmers with up to 10 cattle and crop loan insurance scheme for farmers with 25 acre land.
Moreover, the agriculture produce in Gilgit-Baltistan and Makran divisions will enjoy five-year tax holiday and 50 percent airfreight subsidy for the horticulture produce.
A representative of Pakistan Agriculture and Dairy Farmers Association was of the opinion that budget allocations made for jacking up the agriculture sector were not at par in terms of the share it holds in the GDP. Also, no steps were taken to withdraw sales tax on all agricultural inputs except the reduction in sales tax for tractors from 16 percent to 10 percent due to lobbying of influential tractor manufacturers.
During FY14, the availability of water was 13.5 percent lower for Kharif crops and 10.7 percent lower during Rabi season than the normal supply.
A member of Seed Association of Pakistan expressed that the government allocated around Rs112 billion for roads but did not apportion adequate amount for increasing crop water supplies. He demanded that the fruit processing incentives announced for some Northern areas should also be offered to entire country rather than limiting it to a particular area.
There are subjective propositions in the budget, but many agriculturists contend that these allocations and measures are inadequate given the agriculture sector challenges. One hopes the provincial governments come up with schemes to address these issues within their boundaries.