Pakistan Kissan Ittehad (PKI) has urged the federal government to increase its PSDP investment at least three times for agriculture and also raise this issue with provinces for the revival of the agricultural sector and uplift of the farmers.
"Agriculture is the lifeline of Pakistan that contributes over 19.5% in GDP and earns over 70% foreign exchange from cotton and other agri commodities. It is also a source of livelihood for 48% of our country's labor force. Majority of the large and medium scale industry depends upon raw material coming from this sector, in one way or another. The bi-products of these industries are used as raw material for other industries or utilized as organic matter to reclaim the soil fertility. This generates huge rural economy in-terms of wages or livelihood against services farm laborers render: especially women folks," said PKI President Khalid Mahmood Khokhar.
He said' "Unfortunately every government ruling Pakistan has given least priority to agriculture and its development. Seed Act and Plant Breeder Right Act took almost 12 years to pass from the Parliament where as similar acts were enacted 16 years ago in the neighbouring country. This is the root cause for Pakistan not being able to acquire modern seed technology and eventually, relying on Rs 2 billion worth of imported seed. The seed companies today are reluctant to invest due to lack of legal protection and theft of their research and development."
Relying on imported seed is like giving your jugular vein to a foreign hand, which can be twisted at any moment and entire of country's agriculture could come to a halt, he added.
Similarly the taxation regime on agriculture input and farm machinery resulted in ever rising input costs. Simultaneously, diminishing returns on farmer's investment further squeezed his profit margins. This has been indeed very unfortunate in a country that prides itself as an agricultural economy.
Khalid Khokhar inviting the attention of the new government floated a set of proposals, hoping that these proposals will be incorporated in the coming financial bill.
He said, "Research in agriculture is of crucial importance; the top economy of the world, USA has the largest agriculture department smaller only to Pentagon. Because agriculture activities are prone to nature and require continuous research to deal with emerging issues and develop new technology for production and protection from insect pests and diseases."
Similarly India spends 0.4% of its GDP on agriculture research, Brazil spending 1.75%, "China spending 0.5% of its GDP whereas Pakistan is spending only 0.2% of its GDP share. It is direly needed to improve this investment from this meager amount to 1% instantly and target to 2% in the next three years," he added.
He proposed that the GST on tractors may be withdrawn immediately. Alternatively, government may pick the interest rate on bank loans extended for the purchase of tractors.
Farm machinery especially made for small growers may be encouraged to import and respective organization may be given task for reverse engineering to empower the small growers in mechanization and increase their profitability. Farm machinery including laser land levellers for small growers may be subsidized.
The "High Tech Mechanization Service Center", a project by the Government of Punjab, has been in jeopardy since the new government has taken over and there is no clarity on its future. Positive policies such as this public-private partnership should continue.
Given the water scarcity prevalent in our country due to climate change, to get more from less is the need of the hour. This can only be done if per acre yield being achieved by our farmers is substantially increased. This is certainly the most effective and efficient tool for poverty alleviation as proven by developed nations around the world.
Furthermore, in order to control market prices and ensure timely availability of this crucial input to the farmers, it is imperative that all fertilizer units be given special priority in gas allocation; especially to the units producing high-value specialized fertilizers like Nitrophos and Calcium Ammonium Nitrate (CAN). Unfortunately, Pak Arab Fertilizer, a national asset, has been lying to waste due to no gas allocation for the past two years. Giving gas to such industrial complex gives the government increased revenue and reduces its reliance on import of fertilizer.
Agriculture in Pakistan just cannot achieve its true capability without balanced use of fertilizers. Keeping in view this government's aggressive target to produce 150 million bales of cotton in the year 2019, it is naïve to expect farmers to deliver without consistent and affordable availability of this crucial input.
He further proposed that loans to small growers must be extended interest free, all Microfinance institution witness the highest recovery rate is from small growers, and to uplift the socio-economic status of these growers government must give them interest free loans.
Interest rate for regular midterm or long term agriculture loans is still very high, and needs to be reduced to 5%. PKI president also proposed to issue pre-approved loans of Rs 500,000 through "Insaf Kissan Card" readily available to growers as production loan for six months for small growers.
Similarly, he urged for capacity building of dairy farmers, development of dairy supply chain. Controlling middle man's role and incentivizing the local dairy industry to produce more.