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Agriculture-led economic growth

August 01, 2013

ISSUES such as low productivity, bad marketing, low competitiveness in farm trade, weak institutional efficiency, poor governance and sustainability have been hindering agricultural development.

We need a new paradigm that recognises agriculture’s multiple functions for development in triggering economic growth. Increase in agricultural growth can only be realised by increasing its productivity.

To improve the production, however, there are two ways. One is the horizontal expansion in production by increasing the resource base or factors of production. By this more arable land can be brought under cultivation. The other is vertical increase in productivity, thus getting more yield per unit area. Both options are difficult but high economic growth rate is impossible without giving high priority to agriculture. For poverty reduction as well, GDP growth originating from agriculture is at least twice as effective in reducing poverty as that originating in other sectors of the economy.

Contributions from irrigated agriculture are 90 per cent. Presently about 19.6 million hectares of land is being irrigated by either surface water supplied by canals or by the underground water pumped through tube wells.

In the last couple of decades, the irrigated area has grown by around three million hectares, due to increase in irrigation water supply from 119.7maf to 137.2maf. On the one hand, the country is moving from water stress country to water scarce country, while on the other, water the storage efficiency is only nine per cent compared to the 40 per cent world average. The only way to increase the resource base i.e., arable land is to increase water storage capacity by constructing dams.

However, construction of big dams is an expensive venture with long gestation period and political consequences. Present meagre pace of allocation of funds against the gap in water economy further confirms the vacillation of the issue in near future.

Pakistan has contiguous irrigation system. Most of the reservoirs are located in the mountainous North because of geographic suitability, while arable lands are in plains of Punjab and Sindh spanning over 4000km from water source. It is very difficult as well as expensive to store and transport water for a farmer living thousand miles away from source on sustainable basis.

The alternative approach is to ensure water security at farm level by constructing water storages which can be replenished by rainwater harvesting and canal water during lean period. This will ensure water supply and give ample opportunities to the farmer to plan his agricultural activities on the basis of quantity of water available.

From these on-farm water storages, land may be irrigated by using natural gradient, installing pumps, high efficiency irrigation system like drip and sprinkler or by using tractor-driven water tankers. The on-farm water storages may be constructed with the help of developmental projects on cost-sharing basis. This will enhance water use efficiency with less dependence on irrigation system and an increase in agricultural productivity.

For vertical increase in production, there is a need to increase the usage of technology in farming system. The National Agricultural Research System has historically contributed well to agricultural development but the momentum of green revolution has now been diffusing.

To give impetus to research and development, there is a need to increase investment in the sector. On the contrary, the country has made little investment in agricultural research, which is continuously deteriorating. This has adversely affected the national capacity for research. Many of the research programmes pursued by the agricultural research institutions have not kept pace with the needs of the farmers and economy. There was less emphasis on innovations and technology development. Research System suffered from budgetary constraint, brain drain, outdated research infrastructure and a service structure providing little incentive for creative research and innovations.

To address these issues on short term basis, foreign technology should be purchased. As a long-term measure, revamping and strengthening of the entire research system along with enhanced budgetary allocations from local resources is urgently required to develop cutting edge technologies indigenously.

Over a period of time the role of private sector in R&D has increased. This could be substantiated by the fact that the green revolution technologies were originated in public sector international institutions (e.g., CIMMYT) while that of GM and Bt technologies were initially introduced by the private sector (e.g., Monsanto). To get flux of technologies, therefore, conducive policy environment is obligatory to attract investment in agricultural technology from generic as well as multinational companies.

If the agricultural sector remains unattended, a developed and prosperous Pakistan will be difficult to realise.

The writer is Chief, Food and Agriculture, Planning Commission.