SINDH agricultural development budget for FY18 has been prepared in the backdrop of low utilisation of the FY17 allocations and with a greater focus on completion of ongoing schemes.

New development schemes will, however, be launched in such key areas like crops’ and livestock productivity, grain storage, innovation in farming and livestock breeding, meat processing and greater use of solar energy.

In addition to Rs2bn China-assisted project (China funding $80,000) for electrification of villages with solar energy, a scheme for providing subsidised solar-powered tube wells to growers, is likely to be unveiled in the budget, senior officials told this writer.

Sindh Chief Minister says that in FY18, special attention will be paid on canal lining and improvement of water courses to stop water seepage that causes land erosion and affects crop yields

The provincial budget is expected to be announced on June 5.

Officials say that the new development budget for agriculture would be 15-25pc higher than this year’s Rs5.8bn, adding, that the revenue budget might not see any big increase. The revenue budget for agriculture department (meant for covering employees’ salaries and operational expenses) was set at Rs6.7bn for FY17.

Chief Minister Sindh, Syed Murad Ali Shah, says that in FY18, special attention will be paid on canal lining and improvement of water courses to stop water seepage that causes land erosion and affects crop yields.

According to sources in Sindh government, the CM has taken strong exception to the fact that this year’s agriculture development budget has remained grossly under-utilised. So, the focus would be on completion of the ongoing projects.

“The CM has advised us to ensure that in FY18, releases from the finance department against allocated funds are utilised in time”, says a senior official of Sindh Agriculture Department. According to him, only about one third out of the Rs5.8bn allocated for agricultural development in FY17 was utilised till end of April.

It is not clear what the provincial government has planned for the revival of the dairy city project that was launched back in FY13. The fate of an IFC-backed project for construction of steel silos on public-private partnership also remains unclear.

Growers and dairy farmers, in their pre-budget meetings with the CM, have urged him to find ways for making both projects fully operational and their leaders hope for good news in the next budget.

A project of clean energy — that could be executed by the USAID in partnership with Pakistani banks (for clean energy project financing) — is also expected to be announced in the new budget.

Officials say that this project aims at introducing better technology for large-scale solar power production for agricultural use. Besides, the ADB has also agreed to partly fund such projects.

Late last year, the USAID signed $88m funding agreement with five banks in Pakistan (HBL, MCB, Faysal, Meezan and JS banks) to help finance the setting up of small-scale clean energy projects.

In FY17, out of the Rs5.8bn development spending, the bulk of the funds were set aside for two long-term foreign-funded projects: Sindh Agriculture Growth Project (SRGP) and Irrigated Agriculture Productivity Enhancement (IAPE). However, very little progress has been made on the first project, though work on the second one has somewhat advanced, officials say.

“But we hope that in FY18 enough progress would be made on SRGP and in FY19 this mega project (initially estimated at Rs8.8bn) would be completed,” a senior official said. The project is to be financed largely by the World Bank but the Sindh government will arrange partial financing (about 15pc) from farmers (as originally stipulated under the scheme) or under a joint arrangement with farmers.

“This scheme is designed to help growers and dairy farmers boost their crop and cattle productivity, gain access to markets, develop skills and improve the use of irrigation water at their farms. And, it covers all parts of Sindh, except Karachi and Hyderabad.”

Under the IAPE project, more laser land-leveling equipment will be provided to growers on cost-sharing basis, water courses will be improved, installation subsidy will be provided for tubewells and drip irrigation systems will be introduced in some areas.

Officials say a micro insurance scheme for small growers can also be introduced in collaboration with the Sindh Bank in the new budget. Some incentives are also expected to be announced for agriculture sector SMEs and several public-private partnership projects could be announced for upgrading agricultural marketing and transportation infrastructure.

The ongoing schemes, for which additional funds would be earmarked in FY18 budget, include setting up of a date processing plant in Khairpur, establishment of horticulture research institute in Sukkur and launching a pilot project of hydroponic gardening technology.

These projects, each of three-year duration, were initiated in FY17. But no significant progress has been made on any of them during this year.

In the next year’s budget more allocations are likely to be made also for setting up of Cotton and Sugarcane Research Institute in Ghotki and for development of technology for hybrid seeds production.

Besides, new projects may be announced for farm mechanisation, preservation and storage of fruits and vegetables and for extending the scope of previously announced agro-export processing zones for horticulture products, officials say.

The scheme of rehabilitation of a rice and cotton research station in Thatta may also get additional funds, though the slow pace of work on it has more to do with bureaucratic hurdles rather than insufficient early allocation, they admit.

Published in Dawn, The Business and Finance Weekly, June 5th, 2017