"Unless users are charged in proportion to the volume of water that they consume, there can be no incentive to lure them towards adopting more efficient technologies and processes," insists Dr. Mahmood Ahmad.
Dwarfing energy and gas supplies in the face of mounting demand have necessitated frequent increases in their respective tariffs in recent times. Dr. Ahmad highlights that the availability of water relative to its demand has witnessed a similar imbalance, but costs associated with the consumption of this resource have not reflected this acute shortage.
WATER MANAGEMENT
"The pricing of water is a crucial element of water management, however, unfortunately it has been largely missing in the policymakers' tool kit," he laments. The veteran economist explains: when the canal system was built in the early 20th century "the cost share of water in the overall budget for farmers was about 45 percent". Since rates have not been revised on a regular basis; this proportion has dropped to a measly 0.5 percent.
Dr. Ahmad contends that this gaping differential bears dire implications on the irrigation infrastructure. "Such a huge irrigation infrastructure requires regular maintenance but since the contributions paid for its use are so small, only a fraction of the funds needed for its upkeep, are being made available," he says.
While he accedes that there is a dire need to increase the country's water storage capacity by building new dams and reservoirs, the veteran economist stresses that this is only a part of the solution. "The focus needs to be on reducing the water requirements of the agri-sector by using this resource in more efficient ways", he says adding that "sugar cane and banana are not economically efficient crops for Pakistan because they require a lot of water which is in scarce supply."
EFFICIENCY IN AGRICULTURE
Booming commodity prices have benefited agriculturists all over the world over the past two years. While these benefits have also accrued in favour of Pakistan's farmers, their gain has been relatively limited. "Farmers do not get the right prices for their produce because of myriad factors including lack of market access, dearth of storage and transportation facilities," explains Dr. Mahmood Ahmad.
He reveals that in the case of cotton and rice crops farmers in the country typically receive only about 50 to 70 percent of the prevalent international market prices. He highlights that the cost of production is constantly on the rise giving the increasing rates of farming inputs such as fertilisers, pesticides and energy costs; while, on the other hand, only a fraction of the concurrent increase in the prices of the crops reach farmers. "Our farmers have to be given the right prices so that they are properly incentivised by global trends of demand and supply," says Dr. Mahmood Ahmad.
Domestic markets are quite fragmented and given the fact that a vast majority of farmers cultivate very small landholdings on a subsistence level, they are not able to secure competitive prices for their produce. "In order to make the country's agri-sector competitive globally, we have to concentrate on developing an efficient value chain," stresses the agri-economics expert.
VIRTUAL WATER
Cotton cultivation in Pakistan predominantly takes place on land irrigated by canals. By comparison, in India while yields are relatively low, most cotton cultivation uses rain water. "When pricing our crops, we have to factor in the cost of the water being used up in its cultivation," contends Dr. Ahmad. He highlights that if this cost is not factored into prices of agricultural output, then the country cannot maintain its competitive edge in cotton, rice, sugar cane and other crops in the long run.
"When we export crops, we are virtually exporting our scarce water resources, so we have to consider the cost of replenishing this supply". Citing the example of Saudi Arabia, he reveals that the cultivation of wheat is now being discouraged in that country as depleting water resources have made its cultivation economically unfeasible.
"We should try to maximise wheat productivity in rain-fed areas in order to meet our food security needs," says Dr. Mahmood Ahmad. He explains that the focus must be on producing more food while using less water and land so that other areas, particularly those irrigated through canals may be devoted to high-value crops.
"Allowing other countries to utilise marginal lands that are currently not being cultivated, for sowing crops with the use of new technologies can be very beneficial for the country's agricultural sector," maintains Ahmad. He asserts that the coming of these technologies would expose local farmers to efficient technologies and procedures which may then spread to other areas of the country as well.
IMPROVING THE VALUE CHAIN
"Agriculturists have to be made aware of demand-side variables so that they can switch their cropping patterns according to market signals," says Dr. Mahmood Ahmad adding that "at the moment, they only consider supply-side variables such as the availability of water, fertiliser and other inputs".
The veteran economist, along with his team is already working to raise awareness regarding value addition in the agri-sector by conducting workshops and consultations with local farmers. "Our produce is largely missing from international markets at the moment despite their good quality," he laments. Dr. Mahmood Ahmad highlights that by packaging locally produced crops and marketing them extensively; "significant value can be added to chillies, mangoes and salad".
"Introducing good agricultural practices to local farmers can really boost the value of the country's agri-produce," he asserts. Citing the example of chillies grown in Pakistan, he reveals that after cultivation, chillies are dried under the sun by being dispersed on the ground. "As this produce is left in fields for two to three weeks, moisture and other elements often contaminate it because of which our chillies have been banned for import by some countries," he explains, adding that if farmers can be educated to cut down this drying period, their chillies can be free from contamination and thus, open to export to lucrative markets.
AWARENESS AND THE USE OF TECHNOLOGY
There is rising acceptance globally, that agriculture must have a greater role to play in generating economic growth and in poverty alleviation. The cost of importing food has been risen manifold and food security is a rising concern.
"There is increasing global acceptance that agriculture has an important role to play in sustainable economic growth and poverty alleviation, however, whether this realisation has reflected in our national developmental priorities and budgets is a separate issue," says the economist. Devoting adequate funds for the development of the agri-sector is vital for the country. At the same time, private investments in the sector must also be encouraged and facilitated.
In his opinion, the lack of awareness among local agriculturists regarding efficient farming techniques has stunted Pakistan's agricultural productivity. Dr. Mahmood Ahmad and his team are persevering to create awareness among local farmers so that their productivity may be increased and the quality of local produce can be improved to capture a greater share in global markets.
Profile
Dr Mahmood Ahmad is an expert trainer and agro-economist with over 40 years of diverse experience working and consulting with multilaterals and development agencies. After retiring from heading the technical division of the FAO for the RNE region, Dr Mahmood has been working as an international consultant, advising on Value Chains and Agribusiness development, Trade and competitiveness, agriculture policy, rural development, poverty reduction and water policy for organisations like One UN, ADB, JICA, Mercy Corps and FAO, among others. Dr Mahmood has also advised the governments of Pakistan, Yemen, Oman, Egypt, Jordan, Iraq and others in the Central Asian region on agricultural policy and related development issues. Dr Mahmood completed his PhD in Agricultural and Resource Economics from the University of Massachusetts. He is currently advising the OIC/IDB on agriculture development strategies.