Country losing billions due to agri mismanagement—I

Pakistan, an agrarian economy, is currently grappling with an alarming crisis of low crop yields, resulting in the loss of billions of dollars annually. Despite being endowed with fertile land irrigated water resources and favorable climatic conditions, Pakistan’s agricultural sector suffers from poor productivity, leaving a considerable gap in potential economic gains.

Mismanagement, negligence, and a failure to modernize agricultural practices have kept Pakistan trapped in this low-yield scenario, depriving the nation of much-needed additional value through a significantly higher GDP, especially targets the rural poor.

The Yield Crisis: A Comparison of Pakistan and Leading Agricultural Countries

Pakistan’s crop yields are significantly lower compared to global averages and leading agricultural countries. According to available data:

• Cotton: While Pakistan produces 642 kg per hectare, China achieves over three times that yield, producing 2,027 kg per hectare.

• Wheat: Pakistan’s yield stands at 2.5 tons per hectare, far below the world average of 3.5 tons. In contrast, countries like the Netherlands produce 8.6 tons per hectare.

• Rice: Pakistan yields 2.7 tons per hectare, whereas China achieves an impressive 10.8 tons.

This stark difference in yield underscores how the country is underperforming in its agricultural sector despite having similar or better environmental conditions. Pakistan’s total potential output across these major crops is significantly hampered by inadequate agricultural practices, outdated techniques, insufficient and misdirected funding for research and development (R&D).

The financial impact: How much are we losing?

Financial losses due to the lower yields are staggering. For instance, if Pakistan’s wheat production could match that of leading countries, it would add approximately USD 14.95 billion to the national economy. Similarly, matching global leaders in rice and cotton production would result in additional earnings of USD 10.52 billion and USD 6.63 billion, respectively.

Collectively, Pakistan is losing out on approximately USD 18 billion annually potential across its major crops if yields are only half the world’s best, a feat that can be accomplished. This is due not only to lower productivity but also to the increased costs incurred by inefficient farming practices, which make Pakistani products less competitive in international markets. This shortfall places immense pressure on the economy, limiting exports, increasing imports, and draining valuable foreign exchange reserves.

For reference one striking comparison that highlights Pakistan’s underperformance in agriculture is the yield levels in Indian Punjab, where crop yields are higher than the world average, despite similar land, water, and environmental conditions as in Punjab, Pakistan. Indian Punjab has achieved higher productivity in crops like wheat, rice, and maize, showcasing the effective utilization of agricultural potential through better policies, modern farming techniques, and advanced seed technologies. This stark contrast underscores Pakistan’s failure to harmonize its agricultural potential and fully capitalize on its resources.

More income per acre: the game-changing impact of higher yields

Increasing yields not only reduces the cost of production but also significantly boosts farmers’ incomes per acre:

• Wheat: Income per acre rises sharply from PKR 5,816 to PKR 36,142 when yields match the world average. This is a more than six-fold increase in earnings, directly impacting the livelihoods of wheat farmers.

• Rice: Income per acre for rice skyrockets from PKR 24,175 to PKR 96,958, a 300% increase. This jump demonstrates how critical yield improvement is in crops like rice, which have vast export potential.

• Cotton: Farmers growing cotton would see their income rise from PKR 23,000 to PKR 43,700 per acre, an 89% increase in earnings. This additional income would provide much-needed financial relief to cotton growers who have faced declining profitability in recent years.

• Overall Impact: Even if Pakistan farmers are able to match average yields their combined income per acre across the five major crops would increase from PKR 143,852 to PKR 270,087, more than doubling the current income. Such increases can significantly improve the quality of life for farmers, reduce poverty, and lead to a more prosperous rural economy. This can be the vehicle through which 60% of our population living at subsistence level can break the poverty barrier.

Root causes of low yield: mismanagement and negligence

The core issues plaguing Pakistan’s agriculture are multifaceted:

Outdated seed technology: Pakistan’s seed system is underdeveloped, with farmers relying on outdated seed varieties that lack the necessary traits for high yields and climate resilience. Improved seed systems—featuring high-yield, disease-resistant, and climate-tolerant varieties—are essential to closing the yield gap. Advanced seed technology, which has revolutionized agriculture in countries like India and China, is sorely needed in Pakistan. Without upgrading seed systems, Pakistani farmers cannot compete globally.

Lack of agricultural advisory services: Pakistan lacks a proper crop advisory system as agriculture extension department remains rooted in the 19th century techniques. Crop advisors could have played a pivotal role in helping farmers adopt modern practices, access the latest technologies, and navigate challenges such as pest outbreaks, changing weather patterns, and soil health management but have failed to do so.

Without these advisory services, farmers continue to use traditional methods that limit their productivity. Establishing an effective advisory network would enable farmers to close the yield gap by implementing best practices and making informed decisions.

Although Pakistan’s provinces of Punjab and Sindh have thousands of employees in agricultural extension services, these workers are not leveraging modern technologies to benefit farmers.

Lack of R&D investment: Pakistan’s agricultural sector is hampered by a lack of high-quality research and development. Limited funding means that local farmers cannot access high-yield, climate-resilient crop varieties. Neighboring countries like India and China, which invest heavily in R&D, have witnessed tremendous gains in crop productivity, further widening the gap.

(To be continued)

Copyright Business Recorder, 2024