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New hope for agriculture

It is heartening to learn from a Business Recorder report from Islamabad that the government has given initial approval to Rs 3.1189 billion Public Sector Development Programme (PSDP) for the Ministry of Food, Agriculture and LIVESTOCK (Minfal), with a marked increase of Rs 1,700 million in the volume of Agricultural Sector Development Loan (ASDL).

It will be noted that the major chunk of this allocation - a little over Rs 2,000 million - which would go to ASDL in 2004-05 would far exceed the Rs 300 million allocated in the current year's budget.

The big increase in the volume of farm loans this time has been attributed to the government's concentration on improving the lot of small farmers. The report under reference also has it that the allocated amount would be transferred to the provinces, as the provision of loans to the farmers is a provincial subject. All this sounds quite well but, perhaps, the uncertainty about the share of each province in its distribution as now prevailing can delay the process of efforts desired to be made through these loans.

The Minfal is stated to have demanded over Rs 3 billion for PSDP in the next, primarily, out of its keenness to build up a diversified plan to take up 21 new schemes to develop agricultural infrastructure and to ensure availability of inputs and pesticides.

After its thorough discussions, the Finance Ministry, Planning and Development Division and the Minfal have agreed in principle to approve the PSDP. Moreover, the priority committee held various meetings on the public spending plan, which is 100 percent higher than the last year's allocation of over Rs 1.5 billion. Now it will have around Rs 1,300 million in local currency and Rs 1,450 million as foreign currency component, while Rs 140 million would be met from own resources.

The total number of development projects planned by the ministry with a total cost of Rs 1.1189 billion reportedly stands at 43. The plan envisages loan to the growers as a major component, which is presently being provided by commercial banks, besides Zarai Tarraqiati Bank Limited (ZTBL).

The sources said the PSDP also includes allocations for 32 ongoing projects. According to the report, the Planning and Development Division has approved 11 new schemes.

According to an earlier report, Minfal had identified various areas to focus investment in the sector and aimed at increasing economic growth, with public sector support and participation of the private sector.

These include storage facilities, improved research, quality control laboratories, seed, water and LIVESTOCK sectors, fruits and vegetables, marketing, integrated pest management and aquaculture, besides corporate farming.

Enormous possibilities were also noted as existing for co-operation and support from international financial institutions and developed countries. Some of these areas will be open to foreign private investments. As for storage facilities, it was pointed out that Pakistan has been suffering heavy post-harvest losses in agricultural produce, which it would seek to address through scientific approach in accordance with modern trends.

Reference, in this regard, was made to a number of incentives for the private sector investment for construction of improved grain storage facilities. Moreover, considerable emphasis was laid on research on hybrid breeding, which has remained limited only for a few crops, namely oilseed and maize, thus stressing the need of encouraging investment on hybrid seed production.

Reference was also made to incentives announced in this regard by the State Bank of Pakistan (SBP) and the government for investment in this area, pointing to the prospects of overseas private sector making investment in improving research facilities for this purpose.

With regard to corporate farming, attention was focused on the announcement of corporate agriculture farming scheme, which is aimed at bringing more area under cultivation on lands lying barren, to overcome the land fragmentation problem as well.

It had also been observed that corporate farming would not only help improve the quality of produce but also serve the purpose of value addition to farm produce, thereby, spurring development of modern and competitive agriculture.

All this put together, would point to a new hope for the long depressed sector. It will, however, be noted that the allocation of Rs 300 million in the last budget was not fully utilised, thereby, suggesting lack of timely and full utilisation of the allocations.



Copyright Business Recorder, 2004

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