Agriculture ministry failed in managing agriculture field and research staff and their activities for development of agriculture sector. Agriculture sector is the sustenance of our country's economy. It contributes around 21% to the GDP, employees 44% of labour force and contributes 68% of foreign exchange earning through export of raw material, semi processed and processed agriculture products.
HIGH LIGHTS
1. Contributing 21% to GDP
2. Providing employment to 44%
3. Contributing to foreign exchange 68%
4. Having horizontal and vertical space for growth
5. And capable to increase 100% production within ten years.
6. Government neglecting this sector by providing insufficient financing. Not giving industrial status to corporate farming. SBP has not exercised its role for development of this sector. Further, it is not properly regulating and managing investment portfolio of financial institutions for sustainable and higher GDP growth.
Corporate agriculture farming encompasses the production of all crops as well as all other allied activities ie processing of seeds, business of pesticides / fertilisers, business of agriculture machinery/equipment used and related research activities.
WE MAY CLASSIFY PRODUCTION AREA AS UNDER:
1 Production of major crops (wheat, cotton, sugarcane, rice, maize)
2 Production of minor crops (oil seed, pulses etc).
3 horticulture (fruits, vegetables, flowers ,medicinal herbs)
4 dairy and poultry
5 forestry
6 fisheries
The average growth rate in this sector over the last forty years was 4.3%, which reflects good performance. Population growth rate average over the last forty years remains around 3.00% which is slightly below the growth rate of agriculture sector.
Further, with the advancement in technology and awareness in emerging new global world, trend of food consumption is changing and increasing towards high nutrition and hygienic foods. That phenomenon is also widening the gap between demand and supply.
Food crisis is being seen now-a-days, also globally. In this scenario we need a higher growth rate of agriculture sector which can fulfil our domestic requirements and surplus could be exported to other countries to set off the increasing demands of our imports and reduce the foreign bills deficit.
The scope of horizontal expansion in agriculture production has become limited as after construction of Mangla and Tarbela dams no remarkable reservoir was constructed or initiated. To secure this nature's gift is likely to save our future generations. To have our right from neighbours and settle this crucial matter is the demand of this era. That matter has prime importance and it should be planned and settled on priority.
It is equally beneficial for agriculture growth and economical power generation. There is space for horizontal growth in agriculture but is limited due to scarcity of irrigation water. The major scope is now in vertical expansion through improving farm productivity levels.
This can be accelerated through implementation of idea about the corporate farming. The table of productivity/yield levels has been prepared from data of year 2006, given on UNO website FAO and web site of Federal Ministry of Agriculture of Pakistan. It depicts that our country has great potential to increase its productivity/yield as our progressive grower is obtaining almost more than double production than our national average yield.
Whereas the average national yield/production of developed countries is also more than double of our national average yield. It reveals that by applying the requisite resources/taking appropriate measures as mentioned in this article, we can double our agriculture production in coming ten years.
If it happens, then we will really enter a new age of prosperity and be able to place our nation and country on an upright status in the world. That milestone can be achieved through adaptation of futuristic/innovative policies, and revolutionary/proactive measures in the followings important areas, which can improve productivity levels significantly.
I Availability of quality seeds
II Availability of fertilisers at competitive cost
III Pest/weed management
IV Transfer of agriculture related technology in Pakistan
V Technical knowledge to farmers
VI Requisite funds availability for farmers
VII Well planned marketing mechanism
VIII Ensure water and other utility availability to farmers
All the above arrangements are not possible for our subsistent farmers under their prevalent financial conditions, technical awareness and marketing mechanism. In addition to continuation and improvement of facilitation to small growers, our government should formulate policies for initiation of corporate farming in our country on persuasive basis. For this purpose the following steps require to be taken:
1. Legislation giving status to corporate farming like industrial undertaking.
2. A task force to be established on corporate farming, comprising agriculture scientists, economists, farmers, investors, elected representatives and legal experts, who will explore all modalities, legalities and working mechanism along with suggestions for necessary clauses in corporate laws ie company law, income tax ordinance, sales tax law and other corporate statutes, determination of SECP, FBR, SBP and Ministry of Agriculture's role in the development and regulation of corporate farming. Task force report be submitted to National Assembly and Senate for their review.
3. Ensure credit/loan facility for inputs, tubewells and modern technologies from all financial institutions at subsidised rates for promotion of agriculture production and exports.
4. Ensure availability of electricity for tubewells at subsidised rates.
5. Availability of roads up to farms.
6. Financial assistance in construction of cemented khaals within farms.
7. Policies formulation for foreign investment with provision for to joint ventures and transfer of technology.
8. Income tax exemption for five-year period to local and foreign investors.
9. Amnesty on investment in corporate farming at 0% income tax.
10. Making arrangements for allied industries in vertical direction ie godowns, cold storages, international standard packaging, making of packed foods and drinks as per international standards and requirements.
11. Ensure documentation and accounting of their activity under prescribed laws like industrial undertaking.
12. Formulation and implementation of crop insurance policies.
13. Formulation of laws for environmental protection and socio-economic welfare of vicinity area population.
14. Ensure protection of small farmers and farm workers.
15. Formulation of policies for corporate farming workers like industrial workers ie social security, EOBI group insurance etc.
16. Mandatory induction of technical staff ie qualified agriculture experts/scientists for overall planning, monitoring and research work, management accountants for management of accounts and analysis of cost and incomes along with other documentation.
17. Agriculture research and extension department needs to be revamped and its policies and programmes need to be redesigned that they may play a vital role in bringing a revolution through corporate farming.
18. There is need for stringent laws in respect of adulteration of pesticide/fertilisers to enhance our crop yield and protect our farmers financially.
19. State Bank needs to formulate policies and programs for all commercial banks, financial institutions and NBFIs, in respect of their investment portfolio to industry, agriculture, service sector, construction, general consumer and capital market.
Investment portfolio of agriculture sector needs to be increased significantly ie 100% for every subsequent year and this practice be continued till the achievement of desired results. Credits to conventional farmers should also increase and monitored that it is consumed for the purpose it is obtained. SBP should entertain genuine and legitimate requests by corporate farming.
SECTOR WISE CREDIT/LOAN PORTFOLIO OF OUR FINANCIAL INSTITUTIONS, INCLUSIVE OF SBP IS: The above data highlight the fact that the sector which is contributing around 21% to our GDP is highly neglected by our financial institutions. There is dire need to make programmes/policies and necessary laws, as stated above, for development of this sector on war footing, that financial institutions can offer loan to this sector like industry.
In the context of implementation of WTO and our achievements in engineering, electronics and other industries, we are far behind from developed countries. I think we cannot achieve higher and sustainable economic growth unless we succeed to double our agriculture production in the coming ten years as we have vertical and horizontal space for that target.
For this purpose we have to make arrangements as stated in this article along with providing desired share of financing ie at least 20% to 25 % from credit/loan portfolio of all financial institutions. That is suggested to achieve the targets gradually within the next five years.
SBP needs to introduce such policies and a programme for financial institutions, which encourage banks to invest in productive sectors like agriculture and industry and discourage non-productive (consumer financing and capital market) loans.
Further government borrowing needs to be reduced drastically. Cut from these sectors be utilised for agriculture sector and it needs to be doubled every year till the attainment of targeted results ie 100% increase in agriculture production during 10-year period.
20 Above all, we need to have and promote honesty and justice in our country, wherein the concept of implementation, monitoring and accountability will have its impact, otherwise in this new era it will be difficult for us to live honourably.
BENEFITS TO BE DERIVED THROUGH PROPOSED CORPORATE FARMING ARE:
A. Higher productivity/ yield.
B. Surplus production of all types of food, dairy products and horticulture items.
C. Increase in export items ie foods, dairy products and horticulture items.
D. Increase in national reserve on one side through reduction in imports of edible oils, tea and other food items and on the other side through increased export of surplus foods, dairy products and other horticulture items.
E. It will increase employment in rural areas.
F. It will train vicinity farmers and enhance awareness about advanced technology.
G. Mass production will reduce cost of production.
H. Higher production will entail lowering of price in domestic market.
I. It will improve living standard of our rural area people.
J. Investor will prefer to establish allied industry in rural areas.
K. It will retard significantly the shifting of people from villages to cities.
L. It will reduce and ultimately convert foreign trade deficit to foreign trade surplus.
M. Overall industrial growth will increase and specially related to agri products.
N. Per capita income will increase.
O. GDP growth rate will increase and ultimately it will accelerate economic activities in the country.
P. Our country credit rating will improve.
Q. Dependence on foreign and internal borrowing will decrease.
R. More funds will be available to government for education, health and other infrastructure projects.
S. Our nation will surely be saved from forthcoming global food crisis. Further we will be in a position to market of our agri products throughout the world.
T. Poverty in Pakistan is largely a rural phenomenon; development of agriculture will be an important vehicle for alleviating rural poverty.
U. It will facilitate Government to have reliable statistics of agriculture sector.
V. It will facilitate and promote documented economy and increases taxes with the passage of time.
IT HAS ITS FLAWS AND LIMITATIONS, NARRATED HERE UNDER:
1. Small farmers' fears of monopolistic environment.
2. Many farm workers may be relieved of their jobs on account of use of modern technologies.
3. Sense of insecurity due to small farms and scarcity of resources.
Its payback is more than its flaws. Therefore our government should take drastic steps for the development of corporate agriculture farming. Since independence, we are saying that agriculture is the backbone of our economy. In fact, it remains just a saying and no solemn efforts and plans were made for the development of this sector.
Presently, the whole world is anxious about the attainment of self-sufficiency in foods. We have potential of horizontal as well as vertical growth in our agriculture sector. We must exert all our abilities and available resources for the development of our agriculture. It will in return, really save the future of our next generations. No doubt corporate farming will be a step forward for a prosperous Pakistan.
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Products National Progressive National Average
Average Growers Yield Yield Developed
Yield Pakistan Pakistan countries
(Tons/H) (Tons/H) (Tons/H)
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WHEAT 2.51 5.5 7.20 (Germany)
4.00 (Australia)
2.82 (USA)
4.45 (China)
COTTON LINT 0.704 1.45 1.86 (Australia)
1.24 (china)
0.80 (USA)
SUGAR 49.22 110 91.97 (Australia)
73.82 (USA)
82.52 (China)
RICE PADDY 3.16 7.30 6.30 (Australia)
7.70 (USA)
6.26 (China)
POTATOES 13.34 25.00 34.41 (Australia)
43.66 (USA)
14.35 (China)
ONION DRY 13.82 N/A 42.88 (Australia)
51.18 (USA)
20.61 (China)
APPLES 3.12 N/A 13.82 (Australia)
29.80 (USA)
13.71 (China)
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(Million Rupees)
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SECTOR Credit/loan (June 2006) Credit/loan (June 2007) Credit/loan (April 2008)
Amount % Amount % Amount %
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Government. 802,949 26.67 898,319 25.54 1,258,001 29.04
Agriculture 136,179 4.52 148,590 4.22 160,005 3.69
Manufacturing 928,183 30.83 1,044,203 29.68 1,238,356 28.59
Construction 42,000 1.39 54,995 1.56 74,301 1.72
Commerce and trade / business 240,928 8.00 275,948 7.84 322,923 7.46
Securities and shares (private) 101,350 3.37 140,118 3.98 176,628 4.08
NBFCs 98,259 3.26 144,224 4.10 140,644 3.25
PSEs 136,209 4.52 164,140 4.67 209,783 4.84
Consumer financing 342,852 11.39 398,858 11.34 422,519 9.75
Trust Funds & NPOs 13,727 0.46 14,325 0.41 14,344 0.33
Natural resources 10,221 0.34 11,183 0.32 16,684 0.39
Electricity water and gas supply 18,874 0.63 42,391 1.21 94,847 2.19
Real estate /renting business 69,515 2.31 90,336 2.57 102,852 2.37
Education & health 7,189 0.24 9,882 0.28 11,468 0.26
transport storage & communications 62,490 2.08 80,158 2.28 88,176 2.04
Total Credit / loan 3,010,925 100 3,517,670 100 4,331,531 100.00
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