Pinning hopes on agriculture

Published October 28, 2019

The government has targeted 3.5 per cent growth in the agriculture sector this year, up from 0.85pc last year. It hopes to achieve this target on the back of an increased output of major and minor crops plus sustained growth in livestock.

Achieving targeted expansion in agriculture is a must to keep overall economic growth from falling below the last year’s level of 3.3pc. The IMF says this year’s GDP growth may slip to 2.4pc, but the government and the State Bank of Pakistan (SBP) believe it could be 3-3.5pc. Industry is not accelerating and, thus, the services sector is not expected to outpace its own performance last year. Naturally, all eyes are on agriculture.

During the recently concluded Kharif season of farming, major crops showed a mixed trend. Targets for the ongoing Rabi crops were fixed month. So it is early to say whether Rabi crops’ performance will be strong enough to achieve the targeted agricultural growth. Given the performance of Kharif crops and favourable prospects of Rabi crops, the overall output this year should be definitely stronger than a year ago. That is one silver lining. And, the last year’s low base will help achieve agricultural growth anyway.

The federal government should set up a separate body to monitor the performance of the livestock sector

Among Kharif or summer crops, rice and maize have done well, according to statistics shared by the Federal Committee on Agriculture (FCA). But sugar cane has missed its target marginally and cotton by a wide margin. The sugar cane output has been estimated at 64.77 million tonnes against the target of 68.7m tonnes. The anticipated slippage in the cotton output is too big — 10m bales against 14.37m bales. That means the major crops’ contribution to targeted agricultural growth might be smaller than what officials are expecting. However, since the major crops’ output receded 6.6pc in 2018-19, their current performance, marked with some success and some failure, can still contribute significantly to aggregate agricultural expansion in 2019-20.

In a recent meeting, the FCA noted that the rice output this year totalled 7.7m tonnes, exceeding the 7.43m-tonne target, while maize production grew to 6.9m tonnes, beating the last year’s record bumper crop of 6.3m tonnes.

FCA members were upbeat about output prospects of Rabi or winter crops on the basis of improved water availability and increased supply of inputs. The production of wheat, potato, onion and other minor Rabi crops are likely to remain higher than before. The wheat output is expected to exceed 27m tonnes against 25.2m tonnes last season. But if the estimated water availability — up to 85pc of the requirement — does not materialise and the sowing of the wheat crop over the targeted area of land is not obtained, the wheat output cannot rise to the targeted level. The availability of last year’s wheat stocks — in excess of 7m tonnes — can also discourage growers from sowing wheat aggressively. This is a real concern.

Unlike the crops’ sector whose performance comes under review periodically, we come to know about the growth in livestock towards the end of the fiscal year when the federal government releases the Economic Survey of Pakistan.

Provincial governments keep harping on agricultural uplift projects around the year, but have so far not devised any mechanism to tell people periodically how the livestock sector is performing. In the last fiscal year, livestock registered growth of 4pc, beating the target of 3.8pc. That’s what the nation knows. How this number was arrived at and what contributed to the better showing of livestock was not shared with the public.

So one can only hope that livestock will perform better during the current fiscal year, too. The physical animal census has not taken place for the past 13 years, except in Punjab. Every year, growth in the population of animals is calculated on the basis of the inter-census growth rate (1996 and 2006). Thus, making a smart guess about the livestock performance is an exercise in futility.

The government had promised to revolutionise the agriculture sector. It would do us all a favour if, with the cooperation of the provinces, it set up a body on the lines of the FCA to monitor the livestock performance. The estimated number of livestock heads, actual production of milk and meat and performance of value-added meat processing and exports should be monitored on a regular basis and results shared with the public at least twice a year. The same can be done with fisheries, another component of agriculture, though not as dominating as livestock because all information regarding inland and offshore fishing activities are currently shared with the public just once a year.

For boosting agricultural growth to 3.5pc, authorities are also pinning high hopes on a possible increase in the distribution of agricultural finance. The SBP has set a target of Rs1.35 trillion for agricultural loan disbursement during this fiscal year, up from Rs1.17tr a year before. Officials boast of Rs263bn loans already disbursed in the first three months of 2019-20.

But what they conveniently forget is that larger agri financing does not necessarily push the agricultural economy, more so if double-digit inflation increases the borrowing requirements of farmers. Below 1pc agricultural growth in the last fiscal year amidst a 20pc increase in agri lending (Rs1.173bn versus Rs973bn) is the most recent example. —MA

Published in Dawn, The Business and Finance Weekly, October 28th, 2019

Opinion

Editorial

Judiciary’s SOS
Updated 28 Mar, 2024

Judiciary’s SOS

The ball is now in CJP Isa’s court, and he will feel pressure to take action.
Data protection
28 Mar, 2024

Data protection

WHAT do we want? Data protection laws. When do we want them? Immediately. Without delay, if we are to prevent ...
Selling humans
28 Mar, 2024

Selling humans

HUMAN traders feed off economic distress; they peddle promises of a better life to the impoverished who, mired in...
New terror wave
Updated 27 Mar, 2024

New terror wave

The time has come for decisive government action against militancy.
Development costs
27 Mar, 2024

Development costs

A HEFTY escalation of 30pc in the cost of ongoing federal development schemes is one of the many decisions where the...
Aitchison controversy
Updated 27 Mar, 2024

Aitchison controversy

It is hoped that higher authorities realise that politics and nepotism have no place in schools.