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Neglect of agriculture

May 10, 2014

THE volatility of domestic prices of farm products like potatoes in a country like Pakistan with agriculture as the base of its economy is regrettable. If retail potato prices have peaked despite a good crop and the government is forced to restrict the commodity’s further export and allow its duty-free import to stabilise the market, it shows something is not right with the way we manage our agriculture sector. Indeed, the government has no credible policy framework to protect producers or consumers from the excesses of the middleman who is the only beneficiary of the official neglect of this area of the economy. Agriculture forms a fifth of the country’s economy, provides jobs to 45pc of the labour force and is directly and indirectly responsible for fetching almost 60pc of export revenues. Yet decades of lack of investment in research and infrastructure development have meant erosion in soil fertility and decline in yields. Smallholders don’t have access to finance. Consequently, they’re forced to borrow from the middleman at exorbitant rates and forced to sell their produce at rates lower than the market price to their creditors. It is hardly surprising then that rural poverty has significantly increased in spite of a surge in crop prices in recent years. More and more people are now shifting to cities for jobs, putting pressure on the urban infrastructure.

It’s about time that a comprehensive policy was formulated to develop agriculture to help increase the income of smallholders in order to alleviate rural poverty and decrease the dependence on middlemen. The policy must ensure significant increases in investment in infrastructure and research to stop soil degradation, minimise the use of chemicals and raise crop yields. It should focus on training growers in modern agricultural techniques to help them add value to their crops and market their produce. It has to suggest ways to put subsidised credit in the hands of smallholders to help them get out of the poverty trap and ensure their produce reaches consumers at a fair price. Unless this is done, the middleman will continue to hold sway and create artificial shortages of vegetables and other food commodities in order to manipulate prices at will.