PROMOTING agriculture through budgetary measures alone is difficult in Sindh where law and order, social sector schemes and infrastructure projects are likely to consume the bulk of the provincial budget for FY16.

Officials of the provincial government, however, say the agriculture sector allocation may be 10-20pc higher than in the last year but they decline to comment on its specifics. The Sindh government’s budget for FY16 is expected to follow the federal budget which is due on June 5.

In FY15, agriculture in Sindh had received Rs9.6bn, of which Rs5.2bn came out of the revenue budget and Rs4.4bn were earmarked in the annual development plan.

Incentives are being considered for all progressive farmers of food crops whose fields give the highest per-hectare yields

“The maintenance of law and order and physical infrastructure projects would claim fairly large chunks of the budget,” says a provincial government official privy to the budget making exercise. After the May 13 terrorist attack in Karachi, last-minute changes have been made in proposed budgetary allocation for law and order. “Besides, on the instruction of the top PPP leadership, heavy allocation is being made for social sector mostly on merit but also to gain some much-needed political mileage.”

As for agriculture, the provincial officials giving final touches to the budgetary proposals say that unlike in the past, the crops and dairy sector would get handsome share in the overall agri spending “and this time around, water and irrigation and land development would not heavily outweigh other priority areas.”

Two separate, ongoing World Bank-supported programmes “already require Sindh government to do its part in achieving the goals of agricultural growth and productivity enhancement,” a senior official of the provincial agriculture department told this writer.

This means, that in the upcoming budget ‘allocations will be made for co-financing of subsidised agricultural machinery including tractors and for financial and technical support of farmers engaged in food crops growing and fruit processing’. A project that has almost been finalised relates to offering incentives to growers for more scientific processing of dates. Likewise, incentives are being considered for all progressive farmers of food crops whose fields give the highest per-hectare yields.

Officials privy to budget preparation say that in FY16, Sindh would raise the allocation for making the ongoing diary village project fully functional. And it will also provide funds for an adjoining project for the establishment of meat processing zone. These two projects were conceived five years ago and were supposed to become operational in 2015-16.

In fisheries, the provincial government is considering offering subsidised loans through the Sindh Bank to fishermen for building boats and for setting up small fish processing units as well as for fish farming, officials say, adding that these budgetary proposals are currently being finalised.

Agriculturists’ lobby groups including Sindh Kissan Ittehad, Sindh Chamber of Agriculture and Sindh Abadgar Board have been demanding financial assistance for rice, wheat, cotton and sugarcane growers.

Their demands also include setting up of seed standardisation institution, more allocation for agricultural research and introduction of a mechanism to ensure provision of quality seeds to growers. Officials say the FY16 budget would hopefully address all of these issues adding that active consultation has already been held with stakeholders.

Reclaiming of agricultural land is also expected to get attention in FY16 budget and, according to some officials, the provincial government will continue to provide farmers subsidised bulldozers, levelers and other machinery for this purpose. In the last two fiscal years, more than 200,000 acres of land have been reclaimed. Subsidy on solar-powered tube wells is also expected to continue during this fiscal year.

Sources in agriculture department say as a policy matter, the provincial government has decided to focus more on budgeting for ongoing projects and, as such, work on some key projects are likely to be accelerated in FY16. These include construction through public-private partnership of steel and concrete silos for grain storage; water conservation and productivity enhancement through efficient irrigation system; and some projects related to research on rice, red chillies and onion production..

Some new projects, generally pilot projects are also likely to be initiated in Thar districts to promote farming and livestock there.

During the pre-budget discussion in the Sindh Assembly session held on May 11, it had emerged that only 53pc of the annual development allocation was released in nine months of FY15.

“The provincial government will have to ensure that the pace of the release of allocated funds remains satisfactory,” says a former secretary of provincial agriculture department.

He added, “unlike industrial and services sector, agriculture falls completely in provincial authority and the province stands to benefit the most from better agricultural performance.”

Published in Dawn, Economic & Business, May 25th, 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play