The newly elected governments, both federal and provincial, have come up with a couple of populist decisions, aiming at relief for the poor,farmers in particular.

The federal cabinet, in its first meeting reduced the electricity tariff by 12 paisas per unit and the second meeting concluded with setting up of two separate committees to finalize the relief package promised by Prime Minister, Mir Zafarullh Khan Jamali; one for common man and other for farmers.

On the other hand, the government of Punjab, most populous and productive province, has reduced mark-up on agricultural loans. Chaudhary Pervez Elahi, the Chief Minister of the province, has recently announced that mark-up on loans given by the Punjab Bank for inputs like seeds, fertilizers and pesticides have been reduced from 13 to 9 per cent while interest on loans meant for agri equipment has been slashed to 11 per cent from the same ceiling.

To what extent this support would help revive the agriculture sector that has been performing pathetically over the past few years? To find an answer one must have a look at the following hard realities. According to the annual report of the State bank of Pakistan, for year 2001-2002, the agriculture sector had shown a growth of mere 1.4 per cent against the target of 2 per cent. It was, however, slightly better than the negative growth of 2.6 per cent in the preceding fiscal year, 2000-01. But at the same time we must not forget that this very sector recorded an excellent growth rate of 6.1 per cent just a couple of years back, in financial year 1999-2000.

While the shortage of irrigation water, owing to long dry spell in the region, is being termed as the largest factor behind this pathetic performance, short-sighted and misguided official policies have not been less harmful either. Policies initiated by government,from time to time, have severely damaged the agriculture sector and destabilized farmers as well as their food producing fields.

In the days of less or non-availability of natural irrigation water, like canals and rain, farmers all over the country have no other option but to use tube wells to water their crops. The tube wells are run either by electricity or by diesel. The prices of both these sources of energy have increased many folds in the recent past.

Take for example, the price of diesel. Since the so-called deregulation and start of fortnightly price adjustments by oil marketing companies (OMCs), local consumers have seen continuous rise in POL prices. The diesel was selling at Rs10.66 per liter in October 1999. Today the price is over Rs21 per liter and at times it crossed Rs22 mark as well.

This more than 100 per cent raise in deisel price has damaged the agriculture sector more than all other factors combined. The farmers depend upon diesel not only to run tube wells but all equipment like tractors, harvesters and threshers as well. Moreover, the transportation cost of inputs as well as farm produce also rises with the upward revision of petroleum prices.

The prices of essential inputs like fertilizers and pesticides have also sky-rocketed in recent years mainly due to two factors. First the costly gas, which is used as raw material in the fertilizer industry, is forcing the producers to increase the prices of fertilizers. And imposition of general sales tax, no doubt on the prescription of merciless donors, further aggravates the situation.

Besides, totally inefficient marketing networks are also playing havoc with the agrarian economy. Malpractices of government functionaries like PASSCO and TCP coupled with exploitation by the middlemen and industrialists are another major blow for the farmers. Is it not ironic for farmers if they face difficulties to sell their produce or do not get a fair price? How can we expect them to work hard for the revival of agri-sector?

Hence, the drought or dry spell can not be termed as the only factor behind deterioration of agriculture sector. Be it fuel and utility prices, cost and availability of inputs, taxation, pricing system or any other factor, every government has always ignored its consequences and repercussions for the agriculture. In this given situation, the help announced by federal and provincial governments looks very meagre. What difference a mere 12-paisa per unit decrease in power tariff can make if the costs of other essential utilities remain unbearable?

The Punjab chief minister is hopeful that cut in mark-up rates would prove a major breakthrough in his policies for the uplift of agriculture sector. He must be aware of the fact that credit or lower interest rate on it is just one factor governing the performance of agriculture. Moreover, the rate cut is applicable only to the loans given by the Punjab Bank. This decision can prove really effective if its scope is extended to loans given by the Zarai Taraqiati Bank (previously the ADBP). At the same time the new governments should ensure to avoid the past follies, when large and influential landowners usurped large amounts of loans, misused them and did not pay back.

The reports appearing in the media that the government is considering eliminating GST from fertilizers and restoring crop support price system, are rays of hope for the squeezed farmers. But the agriculture sector, which is the backbone of the economy, is looking for a bold new policy to come out of the stagnation it is facing for the last few years.

It is now time to understand the importance of agriculture sector for the economy and prepare it to reap its benefits for the development of our country. Keeping in view the constraints in its revival and hardships faced by farming community, of which water shortages are foremost followed by high costs of inputs, the new governments should consider more effective ways and devise comprehensive strategies and implement them, if its revival is really desired.