THE situation in the agricultural sector appears to be heading towards disaster. The biggest problem facing this sector is shortage of irrigation water. Rainfall itself has remained very low this year. According to one estimate total rainfall during the last six months has remained no more than 20 millimetres, against about 100 millimetres on an average for this period over the last several year.
The canal system which provides most of the irrigation water to Pakistan’s cultivable lands has, therefore, been severely affected and as a consequence the storages in the two major dams, Tarbela and Mangla have remained insufficient. This has kicked up a tussle among the four provinces sharing the irrigation water.
The low rainfall and drop in the availability of water in storages is threatening most of the major and minor crops. Rice crop is perhaps the biggest sufferer. Cotton crop too is likely to be adversely affected. Though officials still claim that wheat and sugar-cane production would not be affected, there is, however, all the reasons to believe that these claims are not based on facts on the ground.
A major slow-down in the growth of agricultural sector which is expected either to stagnate this year or show a negative rate is likely to bring down the already recessionary economy to a grinding halt. The urban population is already in the grip of severest unemployment. The slowdown in the agricultural sector would bring about a worse employment situation in the rural region.
After achieving impressive growth of 6.1 per cent in the 1999-2000, the agricultural sector could not meet the 2.6 per cent growth target for 2000-2001 and ended the year with a negative growth of 2.5 per cent. This reversal was mostly on account of the shortage of irrigation water that persisted both in kharif and rabi seasons, with supply 15.8 per cent and 28.8 per cent lower during the year compared to the already depressed levels during the corresponding seasons in the previous year.
In addition to losses in major crops, performance of fisheries also remained subdued due to lower water levels in rivers, lakes, reservoirs and dams. In absolute terms, the loss on account of a decline in value addition by agriculture stood at Rs. 4.2 billion during the year, which limited the increase in value addition in GDP to Rs. 16.6 billion last year. The year before agriculture alone had contributed Rs9.8 billion to the Rs24.3 billion increase in GDP.
Although the country’s major crops accounted for 40 .4 per cent of agriculture and around 10.0 per cent of GDP last year, it could not repeat the 15.1 per cent growth recorded a year before.Pakistan’s major crops posted negative growth of 10.5 per cent last year. Among the major crops, production of food grains ( wheat, rice, bajra, jowar, maize, barely) decreased by 8.5 per cent to 26.0 million tonnes last year, while sugar-cane, cotton and mustard declined by 5.9 per cent, 4.3 per cent and 8.1 per cent respectively.
Value added by Pakistan’s four major crops—wheat, rice, sugar-cane and cotton, which make up 36 per cent of agriculture, dropped last year by 12.2 per cent in contrast to a sharp rise of 17.6 per cent in the previous year. Not only did the scarcity of water limit the farmers’ ability to maintain area under cultivation at previous year’s level, it also adversely impacted the per hactare yield of these crops. As harp decline of 6.7 per cent was recorded in the yield of wheat, 2.7 per cent in cotton, 1.4 per cent in rice and 1.1 per cent in sugar-cane. Since the use of non-irrigated land constitutes around 16 per cent of total cropped area under wheat, this also added to the overall decline in the yield.
Minor crops with 17.0 per cent share in agriculture and 4.2 per cent in GDP, posted positive growth of 1.1 per cent during last year against a decline of 9.1 per cent in the previous year. Given the variety of items included ( vegetables, fruits, condiments, oil seeds and pulses—excluding gram), growth in individual crops had shown a mixed trend last year. Production of oil-seed declined by 3.4 while that of pulses increased by 6.2 per cent.
The other important minor crops; potatoes and onion registered declines of 9.2 per cent and 9.7 per cent respectively. A comparison of absolute numbers during the last year, reveals that total value addition by minor crops was Rs. 27.9 billion, which was marginally higher than Rs27.5 million realized last year. nevertheless, this was well below the Rs30.3 billion and Rs29.1 billion contributed during the two previous years (1998-2000) respectively.
The agricultural statistics of last year have been recalled here to show what the situation was in a period when the irrigation water situation as well as rainfall was not any different from today’s and its impact on the overall agricultural sector growth. So, going by the last year’s experience, there is hardly any hope of things improving this year unless a miracle occurs between now and June 30, 2002 when the current financial year would end.
And if the agricultural sector showed a negative growth during the year as is being feared then with the large scale manufacturing already showing signs of slowing down in the aftermath of the September 11 events, the overall growth this year is likely to go not beyond 0 per cent. Agriculture itself is likely to grow at the rate of -3 per cent and manufacturing around 2 per cent.
Such a drop in the overall growth rate is expected to send a highly negative signal to investors, both domestic and foreign. And this would in effect cause the economy to go deeper into the recession.