What does it mean for a crop to be popular with growers? That farmers are bringing more area under its cultivation, usually due to increase in profitability and reduced volatility in prices. Profitability, of course, can improve due to increase in prices or decline in cost of production, or a combination of both. However, the seller would not want prices to increase too much or too quickly, as most agri-commodities are raw material for manufactured goods, while increase in prices may push buyers to substitutes.
If that argument seems self-evident, why is it so hard for policymakers to comprehend? Why, for example, are subsequent governments seen blaming decline in prices of agricultural products for falling area under cultivation?
Commodity prices do not rise forever. Even if a crop becomes more popular due to a temporary supply shock or demand surge, the increase in area cannot sustain into perpetuity because agricultural land is a finite resource and must be optimally allocated between other similarly important crops. In fact, the area must fall if finite resources (land and capital) can find greater profitability elsewhere. It will also fall if final prices fail to keep up with general inflationary trends and associated increase in cost of production.
Self-explanatory? Yet, these tautologies need stating and re-stating because an entire network of agricultural bureaucracy and political class is devoted to the noble cause of fixing the output side of the equation with zero concern for what goes into achieving those results. “Production target fixed”, “crop area zoned”, and “minimum guaranteed price set”, are the headlines plastered every day in newspapers, as if they were brilliant brainwaves of 21st century, never heard before in history.
Targets cannot be set in thin air, divorced from the trade-offs faced by growers in land allocation. If the productivity of a crop is declining due to environmental factors, or availability of impure seeds and pesticides, no amount of subsidy on urea or seeds can persuade a farmer to continue growing same crops year after year. Similarly, if farmers fear that their crop may be lost to flash floods – occurring more frequently due to climate change – zoning that parcel of land for that crop or offering loans on reduced markup is akin to pushing them into bankruptcy.
Meanwhile, there are those who find every cause worth fighting. They oppose growing rice because it is tantamount to exporting water, sugarcane because of exploitative millers, GMO cotton and maize because it leads to infertility and cancer, and corporate farming because it displaces tenant farmers. Starved of choices, when a villager family finally migrates to cities in search of a better life, the same people moan the loss of vanishing mango orchards and raise the spectre of rural-urban migration. Should all farmers grow avocadoes and cherry tomatoes then?
Putting Pakistan’s lost agricultural productivity back on track foremost requires an acknowledgement that the complex challenges faced have no easy answers. If any quick fix such as cheaper DAP fertilizer, minimum support price or zoning existed, various stakeholders would have lobbied for their adoption long ago!
But that would require admitting that as policymakers, politicians and technocrats face a long arduous battle ahead, and no single action taken by them can prove to be the magic wand. Unfortunately, that may lead to hopelessness, but is that so much more worse than believing their own lies?