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‘Agriculture growth rising, but may not sustain’

Updated January 08, 2017

ISLAMABAD: Agricul­tural production and productivity in Pakistan continue to rise, though the growth is increasingly on the back of unsustainable input intensification patterns rather than technological change, according to a report released by the International Food Policy Research Institute.

While the agriculture sector is still the foundation of Pakistan’s economy, it is changing in terms of both structure and composition; its share in country’s total output and its capacity to drive growth and development are diminishing.

Moreover, given its large share in the gross domestic product, it will be extremely difficult for Pakistan to achieve high overall growth without substantial agricultural growth.

Agriculture is no longer the largest sector of Pakistan’s economy today, however, it remains a major source of income for the country’s rural poor and an important driver of the rural non-farm economy where there is untapped potential for pro-poor growth, according to the IFPRI report titled ‘Agriculture and the Rural Economy in Pakistan: Issues, Outlooks, and Policy Priorities’.

Researchers David J. Spielman, Sohail J. Malik, Paul Dorosh and Nuzhat Ahmad in the report examined what can be done to revitalise the country’s agricultural sector and rural economy in light of recurring macroeconomic policy shifts and weather-related shocks.

The challenge for Pakistan’s development strategy is how to take advantage of opportunities to continuously increase agricultural productivity and incomes, facilitating a smooth spatial and structural transformation of the overall economy, the publication said.

Economist Dr Ashfaque Hassan agreed that agriculture was no longer the largest sector of Pakistan’s economy today. Its falling growth indicates that this sector is not on the radar of the government, he said.

On an average of 2.1 per cent growth in eight years, this key sector of the economy has slipped further to 1.6pc growth, he said. This sector is being grossly neglected in the absence of the public sector while the government’s focus is only on the support prices and subsidies, he said.

Dr Hassan feared that the rural people will be hard hit as a result of this neglect, and gap between the rich and poor will widen.

According to the report, growth in rural infrastructure, transportation networks and urban agglomerations is reducing the time, effort, and cost of linking production to consumption, yet agricultural diversification into commodities that serve urban demand remain limited.

Public policy clearly has a role to play in addressing these paradoxes, but shifts in attention given to agricultural policy since independence are closely tied to the observed fluctuations in Pakistan’s agricultural growth rates.

Agriculture has not performed to its full potential and functions in a low productivity trap. Scope for technological change exists, but the gains associated with the Green Revolution have long disappeared, indicating the need to redouble efforts to introduce farmers to new productivity-enhancing technologies and practices.

Scope for diversification also exists but current policies do not explicitly encourage a move out of low-value food staples and into higher-value crops and livestock where agro-climatic conditions and market infrastructure are otherwise conducive.

Furthermore, the continued fragmentation of cropped area from the economically viable medium-size farms into smaller and economically unviable farms continues unabated, with little chance of addressing the weak institution and high transaction costs found in local land markets or the political power issues that allow large landowners to protect their landholdings.

On the other hand, Senator Syed Muzafar Hussain Shah, who is chairperson of the Standing Committee on National Food Security and Research, sees the revival of agricultural sector in the near future. He counted a number measures taken on government level, including the recently approved Seed Act Bill and Plant Breeders Bill in addition to reduction in the prices of fertilisers, support prices and increase in loans for farmers. He also hoped international seed companies will now enter into Pakistan.

Published in Dawn, January 8th, 2017