The new government now has to develop an strategy taking into account the effects of the WTO on Pakistan agriculture which is losing it’s competitiveness in the international market.

From January 2005 the country will be required to conform to WTOs requirements and our agricultural goods have to compete or get out of the international market. Agriculture has been in doldrums in recent years although this sector accounts for 25 per cent of the GDP and employs around 45 per cent of labour force. During the last 15 years, its growth rate which was highest in 1995-96 amounting to 11.72 per cent, declined to minus 2.5 per cent in 2000/2001. It slightly recovered to 1.4 per cent in 2001/2002 much below the population growth rate. There is a direct correlation between agricultural growth rate and the overall GDP growth rate. A high agricultural growth rate pushes the overall GDP growth rate, the reverse is equally true. Similarly in a developing economy without adequate agricultural growth, poverty reduction is almost impossible.

The scarcity of water, ineffective water management, poor irrigation management, need for water conservation and above all increasing water availability were duly recognized, but these were not new focus. All these have been continuing as a matter of fact, since the early sixties. The building of Mangla and Tarbella in the sixties and seventies respectively were creditable achievements. On-farm water management programme has been going on since mid-seventies. Implementing these kinds of programmes will not carry us far but at the most maintain the status quo. Therefore poverty reduction, through agricultural development will remain a dream. In other words the poverty reduction strategy (PRSP) so laboriously prepared in consultation with IMF, World Bank and ADB will remain an exercise on paper only, if poverty is not reduced and economic relief to the people do not come through increased employment and income. It does not augur well for the country and its political fallout would be dangerous.

Consistent with the prevailing conditions, an ‘operational strategy’ is proposed which taking into account three basic factors:(i) the increased demand of water for drinking, irrigation and industrial purposes, (ii) the limited scope of the cultivated area and (iii) the declining productivity and the alarming rate of degradation of the cultivable land and the loss of soil fertility.

While the PRSP recognizes the need for augmenting water availability and conservation it has not come up with comprehensive treatment of this crucial issue. We cannot increase water supply, but we can conserve it for the time being. The International Water Management Institute (IWMI) made an analytical study for a group of countries and the result were published in 1998. Pakistan was included in the list of water-scarce country where water scarcity will persist as population and industry grows. The per capita annual water resource (AWR) will remain almost constant because the precipitation rate of rainfall and snowfall are relatively constant.

The Indus basin irrigation systems are extensive in design distributing water to the widest possible area. The operation of the systems is on traditional lines and is supply-based. The delay in the apportionment of surface waters between the provinces on a fair basis has caused severe delay in the long term planning in the provinces. The use of groundwater in conjunction with the available surface water has helped increase the quantum of water and allowed much more water use. Water-logging and soil salinity continue to be major problems in the Indus basin. Arrangements must be made for the disposal of saline effluent and adequate drainage of the river and canal systems. Efficient on-farm water management and the need for a more demand-based irrigation system should be an important part of the strategy of further growth. Cropping intensities in the irrigated areas range only from 90 to 120 per cent and considerable land remains fallow in each of the cropping seasons. At present, less than 60 per cent of canal water is actually delivered to the fields, the rest is lost in seepage from canals and water courses.

Almost 37 per cent of cultivated area is without controlled irrigation, mainly consisting of: (i) rainfed cultivation; (ii) hill torrent-watered cultivation; and (iii) dry farming. Hence the strategy must put more focus on rainfed agriculture. Brackish water agriculture which is in vogue in several countries must also be considered as part of the operational strategy, particularly in Sindh.

The key to increased agricultural productivity is to make better use of the limited rainfall. The use of fertilizers in rainfed farming can become a major instrument of change coupled with improved cultural practices to increase crop yields.

The irrigated and non-irrigated areas together form one eco-system and unequal development of either may in the long-run threaten the entire system. Conserving the natural resource base (land, water and forests) requires a concerted, coordinated effort on the part of several federal and provincial agencies to avoid inefficient execution and follow-up. Although largely freed, farmers still suffer from price controls designed to keep down the urban cost of living and have also been subject to fluctuating prices because of uncertainty and variations in output. There is a need to make the price support policy fully effective and within reach of all the farmers. Support prices should be announced before sowing to reduce uncertainty and to make maximum impact on the farmers’ decision-making.

Despite subsidies it has been estimated that almost 40 to 60 per cent of value added in agriculture was transferred out of agriculture. The beneficiaries of these transfers have been the manufacturing sector, urban consumers, and the government. Most of the transfers out for agriculture were indirect through price controls, depressed procurement prices of selected crops, namely rice and cotton and an over-valued exchange rate.

Agriculture is the most heavily taxed sector of the economy. All producers of crops like rice, cotton, and wheat, where price controls have existed, have been indirectly taxed; whether these were small or big farmers. During recent years, taxes on agriculture averaged almost a quarter of the value-added.

Agrarian reforms are necessary to improve the conditions of the landless, the tenants and the rural poor. They are more comprehensive in concept than land reforms and should be recognized as a continuous process aimed at improving the conditions of tenants and small holders and taking measures to check the rapid sub-division of holdings into small, uneconomical parcels which cannot even support an average family.

An effective and efficient marketing structure must invariably be a part of the operational strategy. Various measures can be taken to improve the marketing situation. These include: (i) increasing the number of markets and locating them closer to producing centres; (ii) instituting a system of grading and standardization; (iii) expanding the rural road network; and (iv) the provision of adequate storage and packaging facilities. The investment required for adopting the new agricultural technology can come either from the farmers’ own savings or through borrowing.

Having failed to take advantage of the Middle East boom during the 1970s and 1980s it is essential to begin considering increased world and domestic demand for livestock and dairy products. Neglect of this sub-sector has led to an emerging gap between growing domestic demand and the supply of milk and meat. Pakistan is in an advantageous position and should adopt policies to help exploit the Middle East market.

Fisheries are another area for potential expansion, especially the fresh water fish industry, and both increased production and value added can be achieved. With the proper investment climate, the promotion of joint ventures, the adoption of appropriate technology and the development of skilled manpower, accelerated investment in fisheries can lead to high growth.

Forests are an area of particular concern and the depletion of forest cover spells potential disaster for the future. The speed of forestation and the rate of regeneration have been abysmally low. This is an area that must be accorded high priority. Reforestation has become essential for the preservation of soil and water resources, and for the supply of timber and fuel wood. In many respects the growth of forests will help determine the future performance of agriculture in Pakistan.