Need for policy intervention
Agriculture is an integral part of the country’s economy. However, owing to the ill-conceived policies of the last two regimes, the sector experienced low annual growth and its share in GDP consistently declined from 24 per cent in 2004-05 to 18.9pc in 2017-18.
Consequently, Pakistan has become a net importer of food, with a food trade deficit of about $1.4 billion.
High energy prices and rapid depreciation have triggered a significant rise in the prices of locally produced and imported agricultural inputs. High input prices increase the cost of production and reduce agricultural profitability. Poor and marginalised farmers become the worst victims. There is a considerable decline in overall production and a subsequent increase in domestic food prices.
It is high time for the PTI to fulfil its election promises about cheaper inputs to make agriculture a thriving enterprise. Farmers’ access to quality inputs at highly affordable prices is a prerequisite for enhancing productivity.
The government should revisit its current subsidy regime in the wake of high energy prices and devaluation. The gas price hike has considerably increased the rate of locally manufactured urea. If the government ensures uninterrupted supply of gas at a subsidised rate to fertiliser plants, these have the capacity to fulfil domestic urea demand.
The recent decision of the Economic Coordination Committee (ECC) to import 50,000 tonnes of urea might not be a pragmatic move. Subsidising imported urea is costlier than locally produced urea.
To ensure seed supplies, the government should increase its share of the seed market through large-scale production and distribution of approved varieties developed by state-run research institutions.
Currently, the state seed departments provide only about 12pc of certified seeds despite the release of 120 varieties by the Pakistan Agricultural Research Council (PARC) in the last five years. The seed market is currently dominated by multinationals like Syngenta, Monsanto and ICI.
The current agriculture credit policy is skewed towards big farmers and needs to be revised.
An inclusive water policy for the sustainable management of water resources is urgently required to overcome water scarcity. Several independent research reports suggest that Pakistan is in imminent danger of a water crisis. It has been anticipated that the persistence of the current situation can lead the country into dryness by 2025. Water scarcity has grave implications for national food security as it is the lifeline of agriculture.
In addition to building new dams and reservoirs on a preferential basis, the government should also invest to upgrade existing irrigation infrastructure to reduce seepage losses.
The extension workforce has to be effectively mobilised for the dissemination and large-scale adoption of innovative farming practices. Information and communication technologies, also known as ICT tools, can be employed to widen the scope of extension and advisory services.
To sum up, small farmers’ access to quality and inexpensive farm inputs, credit and the adoption of innovative farming practices are vital to the development of agriculture. The government needs to tailor its current and potential agriculture and development policies in the context of these critical preconditions.
The writer is a researcher at King Saud University, Riyadh
Published in Dawn, The Business and Finance Weekly, December 24th, 2018