PRIME Minister Shehbaz Sharif has announced his plan to support the country’s agriculture sector that has been severely devastated by the recent floods, especially in Sindh and south Punjab. The so-called Kissan Package seeks to disburse interest-free and subsidised loans among farmers and young agriculture entrepreneurs, significantly subsidises imported fertilisers and electricity, provides free seeds in the flood-hit areas, allows tax cuts on the import of used and low-cost tractors, and encourages conversion of tube-wells to solar power. It also forgives interest on bank loans already used by the farmers from the areas ravaged by the floods. Overall, according to media accounts of the package, the government will bear a subsidy of around Rs175bn under its plan to help small farmers and rural enterprises revive agriculture. Theoretically, the package must improve the liquidity of farmers and help them cope with issues of cash flow in the wake of the devastating deluge that caused massive losses to millions of poor tillers of the soil. But even if it does, the impact will be temporary.

That the announcement came on the eve of the prime minister’s crucial visit to Beijing to renew his push for Chinese investments under the CPEC initiative and seek the rollover of bilateral debt to avert a default underscores the fact that this package is the best his government could come up with to provide for the agriculture sector in general and the hapless farmers in particular. It also underlines the reality that our policymakers are incapable of thinking beyond subsidies to boost the nation’s distressed agriculture economy. Such measures, even when honestly implemented, offer momentary relief, without addressing the structural problems that have been plaguing agriculture for decades now. The issues of competitiveness — low crop yields, soil infertility, outdated farm practices, extremely low mechanisation, harvest losses, higher input cost and what not — pulling down agriculture are complex. Rapidly changing weather patterns resulting in frequent droughts and floods due to climate change have exacerbated these problems, causing massive crop losses year after year and increasing rural poverty. These issues demand radical changes in the country’s agricultural policies and large investments in research. Subsidies given in the name of smallholder farmers mostly end up in the pockets of the big landowners. If agriculture is to become competitive, our policymakers will have to come up with out-of-the-box solutions and revamp their plans. Or we can continue with band-aid measures.

Published in Dawn, November 3rd, 2022