The agriculture growth would be reasonably better during the FY09 due to the record wheat and rice harvests together with the likelihood of good production in minor crops, said the SBP''s Third Quarterly Report. The report pointed out that reasonable performance from the livestock sector, supporting all this, will help take the overall agri-sector growth close to, or over, the annual target.
"Robust growth by major crops, despite lower water availability and decline in fertiliser off-take, is principally a reflection of anticipated higher prices, and good luck in terms of favourable weather," the report said. The good performance by major crops appears to be more impressive given a substantial decline in sugarcane harvest during FY09.
Similarly, growth in production of some pulses, oilseeds and horticulture crops indicates a better performance by minor crops during FY09. More importantly, growth in livestock benefited from higher supply of fodder, following the extended monsoon and winter rains as well as absence of any major incident of diseases during FY09.
All these developments suggest that FY09 agriculture growth would be reasonably good and that could have been even better if sufficient inputs - irrigation water, fertilisers and certified seeds - could have been used. Farmers'' ability to increase investment in quality inputs may be reflected partially by slower than anticipated growth in agri credit.
The trends so far suggest that the annual target of Rs 250 billion would be missed, for the first time since FY05. This would be due to both demand and supply factors. However, for the next season, credit disbursement is expected to improve. For example, relatively stable fertiliser prices would help restore demand for agri credit for inputs. Similarly, an ease in monetary policy and the SBP measures to address liquidity shortages in the banking system would help improve supply of agri credit in the months ahead.
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