April 14, 2008	Monday	Rabi-us-Sani 7, 1429

Confronted with slow growth in revenue generation and exports, not enough to manage fiscal and current account deficits, the newly elected government plans to focus on ‘agriculture manufacturing’ for which private sector will be provided fiscal stimulus. It also intends to step up mechanisation of farms to increase the existing low agricultural productivity. “ Our major focus would be on agriculture manufacturing and in this behalf, we would soon be assigning a special task to the Planning Commission to come up with viable recommendations”, Minister for Finance, Senator Ishaq Dar told Dawn.

The incentives will be given to the private sector to go into the agriculture manufacturing so that there is no shortage of food and the surplus commodities are exported.

“We have to go back to agriculture and that demands formulation of a new agriculture policy”, he said, adding that the new policy will be finalised and approved shortly by the federal cabinet.

The minister observed: agricultural resources are required to be developed sensibly. The farm surpluses for exports required competitive prices and efficient development and utilisation of existing resources.

While the new fiscal policy was being framed, efforts were also being made to strengthen the agriculture sector. “We have asked our planners to take into account the need for promoting agriculture manufacturing and we know that it is not possible without offering certain incentives”, the minister said.

Member, Food and Agriculture of the Planning Commission, Dr Abdullah Kausar Malik when approached, said: all commodities needed value addition and this was not possible unless there was a policy shift towards the agriculture manufacturing. As soon as broad policy objectives are given to the Planning Commission by the higher authorities, work would start for preparing recommendations over the issue.

New technology was required to manufacture quality plants and machinery to improve the overall agriculture productivity aimed at increasing its exports. Horticulture should receive more emphasis and patronage. Dr Abdullah regretted that the export of citrus fruits could not be adequately increased over the years and that the issue needed the attention of the new government.

The demand for tractors has outstripped local production. Time lag in delivery is reported to be 11 months. The supply-demand gap of 20,000-25,000 tractors per annum has been observed against the existing production capacity of manufacturing units. In order to meet the demand, the government had recently allowed import of new and used tractors in CBU at zero tariff. The use of laser land levellers, ridge and broad-bed farming is also being encouraged.

A senior official of the Board of Investment (BoI) when contacted said that the United States Agency for International Development has agreed to offer financial assistance to help improve the competitiveness of the horticulture sector for exports. For this, the Competitiveness Support Fund (CSF), has proposed an action plan. The government’s resources are not being used efficiently and there was also duplication of work, the official said requesting anonymity.

The CSF has identified harvest losses up to 25-40 per cent. The industry exports only about five per cent of the total harvest at relatively low export price because of great difficulties in maintaining quality at the destinations. Other problems are high air transport cost as compared to low profit margins, inadequate international market information, lack of research and training opportunities.

The PML(N) manifesto has pledged to “ turn agriculture into a fully viable industry by changing the policy framework” in favour of farming; convert Pakistan into a large net exporter of food and move towards self-sufficiency in oil seeds; initiate schemes for crop insurance through private insurance companies to protect farmers against the vagaries of nature.