Federation of Pakistan Chambers of Commerce & Industry (FPCCI) has said agriculture policy has been an area of much debate in Pakistan and understandably so, given the country's reliance on its primary produce for both exports and domestic usage. However, despite the arguably exaggerated claims that the sector contributes around 25 percent to the GDP, it hasn't been receiving the attention it once garnered or one that it usually requires. Attribute some of that to the burgeoning services and tertiary sector in South Asia, read with Pakistan where the service sector presently contributes 55.5 percent to the GDP, and the rest to the low value propositions and over-complicated supply chains involved in the agri export business.
Unfolding the details, in a statement issued here on Tuesday, FPCCI Regional Standing Committee, Chairman Ahmad Jawad said the average annual growth of agriculture sector in Pakistan dropped from 5.4 per cent during 1980-90 to 2.2 per cent during 2011-16. The growth during the past fiscal year (2015-16) plummeted to -0.2 per cent mainly contributed by -6.3 per cent decline in the crop sector.
Prime Minister's Agriculture Package of Rs 341 billion and also to extend some fiscal incentives in the federal budget 2016-17 for the agriculture sector were not the solution, "we must admit that such short-term fiscal packages cannot be an answer to structural problems faced by agriculture"; he added. He said Public sector's capacity to invest in agriculture has been on the decline. Due to lack of modernisation in agriculture, average growth in yields (kg/hec) for cotton and wheat declined from 9 and 2.6 per cent respectively between 1980-90 to -2.2 and 1.4 per cent respectively between 2011-16.
These problems include: a) rising input costs faced by the farmers; b) indirect taxes on inputs and farm operations; c) subsidies and support price benefits not reaching the poorest of the poor in the farming sector; d) lack of innovation in seed varieties; e) missing technology to modernise the crop harvesting, cultivation, storage and marketing; f) weak access to agriculture credit; g) and water shortages threatening the irrigated lands.
"In order to reverse this dismal situation, it is important to put in place a carefully formulated long-term plan for the revival of this sector. The Planning Commission, Ministry of National Food Security and Research (MNFSR), provincial agriculture and agriculture extension departments, and provincial planning and development departments are best placed to collaborate and put forward a comprehensive national plan on agriculture for the approval of Council of Common Interests and the Parliament". Jawad remarked.
Similarly timely and formal credit to farmers remains a challenge. The government will need to review the mark-up rates faced by farmers on a regular basis. Private commercial banking sector also needs to be encouraged through interventions from Ministry of Finance and State Bank of Pakistan to increase micro credit in agriculture extension.
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