The agriculture cycle seems to be in trouble yet again, despite the earlier optimism. After hitting a paltry growth rate of 0.85 per cent last year, better planning and execution was expected to deliver a higher growth rate.
However, things are threatening to get worse instead of better — mainly because of climatic impact but with other factors, such as rising cost of production, poor technology and lack of awareness on emerging sectoral issues, contributing as well.
Six weeks of erratic weather — from the second half of August to the end of September — badly affected the agriculture sector. Unusually high temperatures (hovering in the mid-40s degree Celsius) and accompanying strong winds damaged the rice and maize crops at the grain formation stage. Sugar cane and cotton were also adversely impacted. Together these four crops dragged down the performance of the sector, the extent of which will be detailed in the next economic survey.
Cotton crop alone is expected to cost the national exchequer over $2 billion in imports and bring the national agricultural economy down by a whopping Rs300bn
Right now, both farmers and agriculture officials are calculating the loss and differing widely on its extent. The farmers think they have lost well over 20pc of the rice production in Punjab. The Punjab Agriculture Department, however, thinks otherwise. It concedes that the sector was impacted by weather changes but insists that the production target of four million tonnes was surpassed as rice was sown on 5m acres against a target of 4.7m acres, thus compensating for the loss.
The farmer and traders do not agree with this assessment. Shahzad Malik, a major trader and exporter estimates the loss at 15-20pc this season and cites field reports to substantiate his claim.
The case of maize, an autumn crop sown in late July and harvested in October, is similar. Official figures put production at 6m tonnes against a target of 5.3m, whereas farmers from central Punjab estimate a 15pc yield loss as high temperatures adversely impacted grain formation and weight at the pollination stage. They think official figures are inflated by at least 25pc.
With grain loss, the farmers have also lost purchases from the silage industry since it does not help produce milk in livestock.
Both farmers and officials agree that cotton and cane suffered massive losses which could dent overall sectoral growth rate. The most crucial loss stems from cotton for which the country is expected to trail the target by a massive figure of 6m bales.
By any stretch of imagination, the country will be well under its 15m bales target with the loss led by Punjab that had a target of 10m bales but ended 32pc below target at 6.8m bales. The province was supposed to sow cotton over 5.3m acres but covered 4.6m acres only. It failed its own revised production target of 7.9m bales by 1.1m bales or 14pc. The cotton crop alone is expected to cost the national exchequer over $2 billion in imports and bring the national agricultural economy down by a whopping Rs300bn.
Sugar cane’s story is the same as that of the other three crops. Official figures accept a loss of 2m tonnes — 42m tonnes production against the target of 44m tonnes. However, the farmers insist that the loss tally is about 2-3m tonnes higher.
“If farmers continue suffering financial losses on all major Kharif crops, where will they get the money to invest in Rabi crops?” says Ibrahim Mughal, a farmer and the head of an agriculture think tank in Lahore. General inflation, caused by the current government, has also increased the quantum of investment required.
Instead of Rs1,400, a urea bag now costs Rs2,200. A Di-ammonia Phosphate bag costs Rs3,800 whereas its price was Rs2,400 two years ago. A million tube wells and 800,000 tractors in Punjab run on diesel which costs Rs130 per litre.
As a result, the cost of production of wheat (a Rabi crop) will rise above Rs1,500 per 40kgs. But the government is keeping the official rate at Rs1,300 per maund. People may sow wheat for food security but it does not make sense as a commercial venture.
“The country has never had such huge tracks of fellow land in October as it has this year but farmers are still confused about what to sow,” explains Abad Khan, a farmer from central Punjab. With all major crops — rice, maize, cotton — pulled off the ground the land is empty but farmers are in a wait-and-watch situation as they are unsure of everything including weather, input and output costs and policy environment.
According to the last Economic Survey of Pakistan, the agriculture’s low growth rate was because of the abysmal performance of the crop sector which registered a negative 4.4pc growth rate against a target of 3.6pc. As things stand, the country is heading towards a repeat performance; let’s hope for the best for Rabi crops.
Published in Dawn, The Business and Finance Weekly, November 4th, 2019