Major crops share in GDP hits alarmingly low level: World Bank

The World Bank has cautioned that Pakistan''s share of major crops in GDP was down to an alarming level and suggested the government that it needs to go for diversification into high value crops and livestock to increase the rural income for a quick U-turn in this key area.
The World Bank report on the Pakistan''s agriculture sector output mentions a number of reasons of farms shrinking share in GDP and suggests various measures to face the challenge upfront.
It says agricultural growth in Pakistan throughout most of the last three decades has depended to a large extent on the major crops (wheat, rice, cotton and sugarcane).
It notes: "The share of major crops in total GDP in Pakistan has fallen dramatically (from 0.234 in 1970 to 0.091 in 2000) and direct effect of a 10 percent gain in major crop production is smaller: equivalent to 2.3 percent of GDP in 1970, but only 0.9 percent of GDP in 2000."
It says that assuming an unchanged value-added multiplier, total effects (including multiplier effects) on the rest of the economy are also smaller (4.6 percent of GDP in 1970 compared with 1.5 of GDP in 2000). The report mentions that for increases in production of major crops, future increases in agricultural productivity and rural incomes will need to rely more on diversification into high-valued crops and livestock.
The report adds that Pakistan needs to restructure research and extension services to meet the needs of a more diverse agriculture, including provision of region-specific information packages. It says facilitating the new contracting arrangements and investments by super markets will also facilitate marketing of highly valued fruits, vegetables and animal products.
It also recommended investment in irrigation and drainage, together with reforms in irrigation management are also crucial to arresting environmental degradation, especially in some major irrigated areas of Punjab and Sindh. Expanded use of water-conserving technology, such as drip irrigation, can increase the efficiency of use of scarce available water.
It claims that Pakistan needs to resources for the provision of research, extension and veterinary services for livestock, particularly for larger animals. The poultry sector is already expanding rapidly, including both substantial rise in maize production (a major feed) and in poultry and egg production. It says productivity gains in the livestock sector are especially important for pro-poor rural income growth since the distribution of livestock in rural Pakistan is more equitable than the distribution of land.