THE planned presentation of the next fiscal budget on April 27, two months before the end of this fiscal year, seems a certainty now.

But for the agriculture sector a longer than usual time lapse between the budget presentation and its implementation could create more problems than in other sectors. The reason behind this is that commodity markets are quicker in factoring in future trends, particularly if they can be predicted with certainty.

Most budgetary steps such as changes in tax and duty structure, and offers or withdrawal of subsidies and incentives to agriculture, provide a solid basis for predictable trends and behaviours in supply, demand and pricing.

“One can hardly expect to hear big news in the next federal budget”, says a senior official of the Ministry of National Food Security and Research, regarding digitisation in agriculture and making agriculture climate-smart, adding that provincial governments may have something in store.

Sindh has only recently announced a much overdue agriculture policy, and making agriculture climate-smart is one of the cornerstones of this policy. “Let’s hope we hear more about it in the provincial budget.

“Let’s see how much resources are allocated for this purpose and what mechanism is introduced for its implementation,” said an official of the Sindh agriculture department, refusing to give the specifics.

The federal government is likely to set a growth target of 3.8 per cent for agriculture in the next fiscal year, up from 3.5pc for this year

The federal government would likely set a growth target of 3.8 per cent for agriculture in the next fiscal year, up from 3.5pc for this year. And it would likely announce a comprehensive package for the farming community to help meet the desired growth in agriculture.

Sales tax exemption on imports of agriculture machinery, unified rate of sales tax on all types of fertilisers, and concessional tariff on tube wells used for agricultural purposes are part of the proposed package, according to a Dawn report.

In the budget, the government is expected to allocate Rs37 billion for the Diamer-Bhasha dam to increase the national water storage capacity in 38 to 45 days. The completion of the dam would take several years. But mere initiation of civil works alone would likely cheer up the whole nation, particularly water-starved farmers.

For several years, federal and provincial authorities have been promising support for projects aimed at water conservation but no major development has so far taken place.

Farmer lobby groups including Sindh Abadgar Board hope that in the next budget a couple of such projects would also be announced to win rural support in upcoming elections.

Officials of the Sindh Abadgar Board, Sindh Chamber of Agriculture, Pakistan Muttahida Kissan Mahaz and Agri Forum Pakistan say that the farming community is expecting from the federal budget schemes that can help in making barren land cultivable.

Without these, producing more food and non-food crops sufficient for domestic consumption, while creating enough export surpluses at the same time is not possible.

The best way forward according to them is to expand arable land and boost agricultural research and innovation alongside boosting the per-hectare yields of the crops. Failure to do so would ensure that commodity shortages keep hitting occasionally and the country will remain a net importer of food items.

Despite farmers’ demands and protests, a pro-industry bias remains visible. Take for example, the case of setting up Balochistan Bank, announced at the beginning of this fiscal year, for ensuring greater access of Balochistan-based farmers to formal finance.

“This fiscal year is going to close after two months and we don’t know why the promised bank has not been set up,” says an official of Balochistan Chamber of Commerce and Industry who has been tracking progress in this matter on behalf of the chamber.

Agriculture in Pakistan is divided into four key sub-sectors: crops, livestock and poultry, fisheries and forestry. Budgetary measures specific to any of these sectors or to a combination of them have a direct impact on agricultural growth.

But unlike the crops and livestock and poultry sub-sectors, in which politically-influential people have business stakes, fisheries and forestry get little or no attention. This has to change for both harmonised growth of each sub-sector as well as for growth of services sector and building export base.

Officials of the Pakistan Cotton Ginners Association and Pakistan Flour Mills Association say they need financial and technical support to carry out balancing, modernising and replacement (BMR) projects.

They say that a large number of ginneries and flour mills are using decades old plants, and without BMR neither their outputs can be optimised nor productivity improved.

After experiencing immense hardships in disposing off their crop and suffering losses due to sugar millers’ refusal to lift sugarcane at the support prices fixed by the Sindh and Punjab governments, cane growers say they don’t have high hopes from the upcoming federal budget.

As sugarcane growers see it, protecting the interests of sugar millers at the cost of cane growers seems to have become an agenda for our politicians. For them, the best thing the federal budget can offer is a transparent system of resolving issues between growers and millers over lifting of cane crop and clearance of dues.

Published in Dawn, The Business and Finance Weekly, April 23rd, 2018