If the Pakistan Tehreek-i-Insaf (PTI) comes to power in the centre, Khyber Pakhtunkhwa and Punjab, then it will have no excuse for not fully implementing its agenda for the agriculture sector across Pakistan.

During its five-year stint in power in the centre and Punjab, the PML-N did a few good things for the sector, like boosting credit and modernising agriculture in Punjab. But it failed in terms of the distribution of water among provinces and ensuring fair play in the commodity markets. Obviously, the areas in which the party failed were the ones that required real inter-provincial coordination and principle-based management of conflicting interests.

Sindh and Balochistan kept complaining throughout the PML-N tenure that water distribution among provinces was not judicious and that Punjab was getting more of it. Our agriculture sector suffering from an acute water shortage cannot afford a repeat.

PTI plans require a large fiscal space at the federal and provincial levels

Actual availability of enough water is itself in question. According to official estimates, per-capita surface water in Pakistan shrank to 1,032 cubic meters in 2016 from as high as 1,672 cubic meters back in 1990.

Just three months before the July 25 elections, then provincial governments in collaboration with federal authorities formulated a national water policy. A major challenge for the government is to implement this policy in letter and spirit and ensure judicious water distribution among all provinces. Conservation and economisation of water for agricultural and household use, with the help of innovative technologies, will have to be prioritised.

In 2017-18, the combined development allocation for the water sector was seven per cent of total federal and provincial development budgets. Our national water policy calls it “totally inadequate”.

Enhancing allocations to this sector will certainly require higher revenue generation by both the federal and provincial governments and some possible yet tough priority trade-offs.

As for removing distortions in the commodity markets and ensuring fair play between the public and private sectors and among different stakeholders within the private sector, hoping for an early remedy of the existing ills seems too optimistic. Developing an “efficient and transparent clearing mechanism” for the commodity markets and ensuring fair returns to farmers are key points of the PTI’s manifesto. But its implementation will require principle-based coordination among federal and provincial authorities. That is where the will, sincerity and skills of policymakers at the central and provincial levels will be tested.

The traditional tiff between sugarcane growers and millers heightened during the days of the PML-N. Growers suffered due to delayed payments by millers. The country saw a sugar glut that caused financial losses to millers. Sugar politics practised by top politicians of the PML-N and the PPP was believed to have been at the root of the crisis.

A lack of proper storage facilities as well as coordination among federal and provincial authorities damaged hundreds of thousands of tonnes of wheat in the final two years of the PML-N government. The country missed wheat export targets and earned a smaller amount of foreign exchange.

Sindh and Balochistan kept complaining throughout the PML-N tenure that water distribution among provinces was not judicious. Our agriculture sector cannot afford a repeat

If we don’t want to see the repeat of such costly follies, the PTI-led new political setup must do a lot of homework for well-coordinated policymaking and its strict execution.

According to its manifesto, the PTI is keen on “optimising existing and introducing new subsidy programmes, increasing access to credit with easy terms of repayment and sharing costs of investments required to improve productivity”.

These are very ambitious plans. The idea of optimising existing subsidies is good if it really means a scrutiny of cost-benefit ratios of subsidy programmes.

But while introducing new subsidy initiatives, the new government will have to make sure that they are not meant for gaining political mileage. The PTI can learn a lot from the tractor and tube-well subsidy schemes of both the PML-N and the PPP. They boosted sales of these items, but failed to fully benefit small farmers who still pay rent for using tractors and tube-wells that big landlords of Punjab and Sindh purchased and installed using subsidies.

The PTI plans to expand existing warehouses and create new ones along with a grading system in key locations across Pakistan under public-private partnership.

The experience of public-private partnership projects in agriculture has not been very encouraging. The much-trumpeted steel silos project is an example. Despite funds lined up from the International Finance Corporation (IFC), this project gained little success in Punjab and remained almost neglected in Sindh.

The PTI has also promised to further deregulate the seed market and incentivise farmers to conserve water, adopt regenerative agriculture, effectively control weeds and be more market-driven with their crop mix.

The party wants to encourage private banks to roll out digital loans for quick access with easier terms of repayment and take the already working warehouse receipt financing system to a new level.

Most of these and other ambitious PTI plans, like its promise to reduce import duties on agricultural machinery, will require a large fiscal space at the federal and provincial levels.

Another major challenge on the agricultural front will be to obtain precise technical support and technological upgrade from China under the China-Pakistan Economic Corridor (CPEC). A Chinese state-owned firm is keen on acquiring Fauji Foods, according to a Dawn report. In the short term, the move means the arrival of some desperately needed foreign exchange. But in the long run, Pakistan needs foreign investment for capacity building in agriculture and other sectors. Let’s hope that too will start pouring in.

Published in Dawn, The Business and Finance Weekly, August 6th, 2018