Over the years, Punjab has perfected one art: modernise and complicate jargon to narrate deteriorating realities that keep worsening because there is no political will and planning to arrest the process.
Its agriculture budget every year is an example of this fine artisanship. This year is no exception. The hard fact is that Punjab has slashed its budget for agriculture and related sectors, including food, irrigation and livestock, by a whopping drop of 26.85 per cent — from Rs64.80 billion to Rs47.40bn.
For agriculture alone, the budgetary allocation has come down from Rs31bn last year to Rs19.53bn this year — a staggering cut of 38.71pc. It happened against the department’s wishes, which was aiming at, and hoping for an allocation of Rs40bn — with a development component of Rs20bn.
Now, the jargon: “We are introducing Punjab Resilient and Inclusive Agriculture Transformation (PRIAT) plan to technologically modernise the sector and align it with the latest technological trends in the world,” as put by the minister for finance during his budget speech. What it actually means is left to the imagination of the reader.
Fancy words cannot cover up the gaps in financing essentials such as fertiliser and fuel whose prices have gone through the roof
“Punjab is also starting eight new programmes to develop the seeds of pulses, peanuts, blackberry and other high-value crops,” the minister continued. The province will also continue subsiding drip and sprinkle irrigation systems and carry out the zoning of crops according to soil potential. For meeting all these sectoral structural needs, the province has spared a paltry sum of Rs14.77bn — the development component earmarked for the year.
Now, the reality check: the PRIAT plan is a lender-driven programme that has been facing issues because of failure to meet loan conditionalities like restricting the official wheat procurement target. Financing for revamping individual crops like wheat, sugarcane and rice was stopped by this government for the last few months because of the budgetary squeeze.
Punjab’s penchant for short-term donor-driven programmes, like PRIAT, is phenomenal as they give a progressive look to the effort and the executioner. For this reason, Punjab has literally had hundreds of such lender-sponsored plans during the last few decades. Enhancing Vegetable Production, Management of Fruit Fly with Special Reference to Non-Conventional Methods, Promotion of Pulses Cultivation, Community-based Integrated Management of Pink Bollworm and Provision of Missing Facilities of Pest Warning Wing and Promotion of Agriculture Mechanisation and Uplifting of Extension Farms, to name a few.
They were launched, money was spent, some of them fizzled out mid-stream, others completed their lives and fresh ones were launched. Some of them (like improvement in watercourses) are being run for decades now.
Punjab’s penchant for short-term donor-driven programmes is phenomenal as they give a progressive look to the effort and the executioner, which is why it has had literally hundreds of lender-sponsored plans during the last few decades
No one can or should deny their importance. However, trouble starts when asked what they achieved. What is the lesson that was learnt? What role did they play in the development of the sector? Did we get the intended results? Did the implementation strategy work? If yes, how much did it work? If not, why not? Since no accountability takes place, they simply fizzle out and are replaced by fresh ones.
The fresh budget promises to restart some of them and continue with some others. It is time to launch a performance audit process as well so that one could assess the cost and benefit ratio — how much they added to loans and what was the sectoral and yield benefit.
Apart from these promised schemes, there would be other claimants on this meagre and slashed budget. For example, where would the money for the fertiliser subsidy come from? The urea prices went up during the last year and so would be the subsidy bill.
Punjab has been contributing 50pc (or Rs6bn) to the federal bill to subsidise urea. Would it suffice this year? Probably not! If not, where would extra money come from?
The Di-Ammonia Phosphate (DAP) price went through the roof last year — from Rs3,500 to Rs11,000 or an increase of 265pc. Punjab had been paying a Rs1,000 per bag subsidy, which has now lost its relevance for farmers.
Apart from the fertiliser crisis, there are two more (disastrous) factors that will be gripping the farms and farmers ie the highest ever diesel and electricity prices. Diesel prices have gone beyond Rs250 per litre. This would cripple the entire cropping cycle — land preparation to harvesting — and transportation. With water scarcity now ranging close to 50pc, pumping water out of the soil is the only option and it would be robbed by diesel prices.
The highest ever electricity prices would open another Pandora’s Box both for the farmers and the government. The farmers have been fighting for a flat rate of Rs5 per kilowatt. Now, the base price has been raised by Rs7 per kilowatt. Diesel and electricity prices would cause multi-pronged and multiplying shock waves through the sector.
Will Punjab be paying, and arranging, additional money to deal with the unfolding disaster? If yes, where would it come from? All these questions beg for answers, which the budget has not provided.
To be fair, the government also had multiple constraints this year. It has just assumed power and is not fully settled due to the continued constitutional crisis in the province by the time it presented the budget.
Most of the budgetary homework was completed by the previous government and the current set-up had little time to alter it. It hardly had fiscal space usually available to the government. On top of it all, governance issues have bedevilled the province like never before.
It is fact that policy and fiscal constraints limited the options of the new government badly. But still, it is also guilty of not trying to break the cycle and take fresh initiatives.
In final words, it is more of a usual budget, which will only ensure routine results in normal circumstances. This year, however, is of exceptional circumstances and it would only be served by extraordinary efforts, which seem to be a missing component of this budgetary document.
Published in Dawn, The Business and Finance Weekly, June 27th, 2022