Agriculture mess

June 02, 2020

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THE threat of food insecurity looms large as Pakistan faces multiple challenges to its agricultural sector, which despite its declining share in GDP remains the country’s economic backbone. Agriculture employs almost 40pc of the labour force and provides raw material for manufactured exports. It is also a major consumer of locally manufactured industrial goods including fertilisers, tractors, pesticides, etc. In recent years, the increase in the sale of cars, motorcycles, home appliances and other products have greatly depended on growth in farmers’ incomes. Unfortunately, successive governments have neglected agriculture at the peril of national food security and economic well-being. On top of this, changing climate patterns, and pests such as locust swarms, pose a new threat.

Decades of inconsistent and poor policy choices, and little investment in farm mechanisation, efficient irrigation systems and R&D have led to stagnation in yields and prevented farmers from moving towards value-added crops including fruit, vegetables, edible oils and fodder to increase their income. Some estimates show that nearly a third of crop produce is wasted in the harvesting period. The wastage in the case of perishable products is even greater because of poor storage facilities. The story of the livestock sector is no different. Pakistan is the world’s fifth largest milk producer and yet many families cannot afford it. A fifth of the total annual output is wasted, and the absence of laws to regulate its trade is hindering investment in the dairy industry. We also have one of the world’s largest cattle population. Yet the majority cannot afford meat. Nor have we been able to capitalise on the presence of a growing multibillion-dollar, global halal meat market.

Recently, the government approved a Rs50bn programme to help farmers access subsidised fertilisers, pesticides, cotton seed, locally manufactured tractors and bank loans. The package to be implemented through the provinces is part of the relief given by the centre to help the economy fight the adverse impact of the coronavirus. This is not the first scheme of its kind, nor will it be the last. But the scope and impact of such schemes is limited. While such measures may help governments cover up long-term, structural issues in agriculture, they don’t offer permanent solutions, which require investment in R&D to develop drought-resilient, high-yield quality seeds, training of farmers in water management, provision of soft loans to purchase equipment, and improvement in extension services to reduce the use of chemicals and increase soil fertility. Similarly, the government needs to enforce policies to increase milk and meat yields and laws to regulate their trade for investment in the supply chain. In other words, instead of wasting billions on inefficient subsidies, the government should tweak its policies to encourage development of competitive markets that eliminate the middleman, and enable farmers to buy inputs and sell their produce at the right prices.

Published in Dawn, June 2nd, 2020