The agriculture sector suffered heavily in 2018-19 because of insufficient supply of water: just 84.4 million cubic feet against the average annual requirement of 103.5m cubic feet.
The output of the crop sector slumped owing to this 18.5 per cent water deficiency, highest in a decade.
The total seed requirement for major and minor food crops plus cotton was estimated at 1.74m tonnes. But the actual supplies were just one-third of that (0.578m tonnes), according to the Economic Survey of Pakistan.
Pakistan will have to keep input prices from rising too fast in order to make the five-year agricultural emergency programme a success. Will this be possible under the IMF programme?
The output of the entire crop sector declined by 4.43pc — and the production of major crops saw an even steeper decline of 6.55pc. The agriculture sector as a whole grew by 0.85pc in 2018-19 against 3.8pc in 2017-18.
A million-dollar question is: will the recently announced agriculture package of Rs309 billion spread over next four years help reverse these trends? No one knows. It depends on lots of ifs and buts. But first of all, one must know that out of this Rs309bn, the federal government has promised to allocate Rs84bn only — the provinces are supposed to spend the remaining Rs225bn. Will the federal government live up to its promise and pump in Rs84bn? Will the provinces be able to pool in Rs225bn? No one knows.
But consider these two facts: one, the agriculture revival programme was unveiled by Jahangir Tareen who was flanked by Minister of National Food Security and Research Sahibzada Mehboob Sultan. The four provincial chief ministers or their ministers in charge of agriculture were not present at the presser.
And two, despite the fact that the provinces will contribute 73pc of the promised sum, the initiative is called the “Prime Minister’s Agricultural Emergency Programme”.
Will Sindh and Balochistan — being governed by the PPP and a multi-party coalition, respectively — own this so-called emergency programme as much as they should to make it a success? Will Punjab, the agricultural heartland ruled by a PTI-led coalition, be able to implement this emergency programme smoothly?
Agriculture is the lifeline of our economy, though it is a provincial subject administratively. It is wiser to let all the provinces take equal ownership and pride in making any collective agricultural initiative a success. That is not possible unless there is a decent working relationship between federal and provincial governments. Does such working relationship exist? Do we see such proud participation from all the provinces in the programme? Your guess is as good as mine.
Confrontation between the opposition and the federal government has now reached a stage where it has started weakening the democratic order. In this environment, making any jointly owned development initiative work has become too difficult.
In this environment, how the agriculture emergency programme will pan out over the next four years should not be difficult to assume.
Apart from this, there are issues regarding resource distribution between federal and Sindh governments with the latter claiming that it continues to receive less-than-promised federal funds under the National Finance Commission (NFC) award. That too can have a telling impact on the package unless these issues are sorted out amicably. But that seems to be a tall order because of the ongoing fiscal belt-tightening by the federal government under the latest IMF programme.
The provinces have also remained lethargic in pushing agricultural progress to next levels under the 18th Amendment that declared agriculture a fully provincial subject. From 2010-11 when this amendment became effective to 2018-19, Punjab made some visible progress in agriculture, but the smaller provinces lagged behind. Poor coordination between federal and provincial governments and among the provinces themselves, politically motivated and inefficient decision-making, mismanagement of resources, misaligned priorities and corruption played a part in blocking true progress in agriculture. No wonder then that overall agricultural growth during these nine years averaged around just 2.4pc based on officially reported sectoral growth rates.
Even after the devolution of agriculture as a provincial subject, successive federal governments have been presenting medium- to long-term agricultural recovery plans. The PTI is no exception. But the problem is that they never bothered to explain why these plans failed to deliver the desired results. The federal government would do a great service to the nation if it explained to people why it failed to boost the agriculture sector in its first year in power.
Provincial governments, too, must do some soul searching and tell the nation why agriculture suffered as much as it did in the last fiscal year in their respective jurisdictions.
The federal government will have to take the responsibility for a couple of things that led to less than 1pc growth in the agriculture sector. One of them is the phenomenal rise in the prices of agricultural inputs during the last fiscal year. In the absence of a proper agricultural input prices index, it is quite difficult to assess the exact inflationary impact on the agricultural output.
But farmers’ lobbies across Pakistan identify the higher input cost as one of the factors that brought agricultural growth down to 0.85pc in 2018-19 from 3.3pc a year ago. Prices of inputs may continue to rise further due to inflation-stoking conditions of the IMF lending programme that includes quarterly adjustments in energy prices, phased withdrawal of subsidies and market-determined exchange rates.
In order to make its five-year agricultural emergency programme a success, Pakistan will have to keep the prices of inputs from rising too fast. Is this possible under the IMF programme? Besides, can we expect that the government will develop the much-needed agricultural input prices index? If this index is developed by the end of this fiscal year, calculating the impact of inflation on agricultural activity — and devising a mechanism to ensure that farmers get fair prices for their agricultural produce — will become easier.
The agricultural emergency programme promises some initiatives for modernising practices and enriching human capital in this sector. But the government has yet to tell the nation how many of such initiatives were started in 2018-19, the first year of the five-year programme, and how they helped in boosting agricultural growth. Making honest promises is good. But fulfilling the past promises is equally important.
Published in Dawn, The Business and Finance Weekly, July 15th, 2019