Agriculture sector lacks
efficiency, competitiveness
By Shahram Haq
LAHORE, May 10, 2012: Despite immense potential, the
agricultural sector of Pakistan lacks efficiency and global
competitiveness, former CEO of Engro Corporation and current
member of Pakistan Tehreek-e-Insaf Asad Umar said on
Wednesday. The loss of efficiency is denting the country’s
self sufficiency in production of various farm goods, he
asserted.
Umar was giving a presentation to members of the
Agricultural Journalists’ Association (AJA) on “Agriculture
– a mainstay of Pakistan’s economy”. He claimed that
production of various farm products has been as low as 90%,
if compared with the global benchmark. Sugarcane yield is
40% lower, wheat yield is 20% lower, non-basmati rice yield
is 40% lower, cotton yield is 20% lower and milk yield per
animal is 90% lower than global standards, he added.
Pakistan, once dubbed a
‘great bread basket’, is now struggling due to these
factors, and has increasingly becoming an importer of a
large number of agri-commodities, he noted. At the same
time, Pakistan’s agricultural sector also faces larger
post-harvest losses of 40-80%, if compared with the global
benchmark. This double blow — low output and high losses,
diminishes the income of growers further, he explained.
Much to their dismay, agricultural credit disbursement to
farmers in Pakistan declined from $3.4 billion in 2007/08 to
$3.1 billion in 2010/11, said Umar. During the same period,
agricultural credit in India increased from $63.3 billion to
$103.4 billion, he said. Agricultural credit in Pakistan is
8% of agri-GDP; while in India, it is 31% of agri-GDP.
Water – a major input for the agricultural sector – was also
overlooked; as far as increasing supply for farmers is
concerned. Losses of water are as high as 40% before
reaching farm gates, Umar complained. He stressed the need
to plug these wastages on a priority bases. Emphasising
efficient use of water for optimal benefits, Umar said
irrigating an additional 5% of land can generate an extra
Rs100 billion in farm incomes.
Sharing his vision about farmer cooperatives, Umar said
economies of scale in agriculture can be achieved by
encouraging formation of vibrant clusters of farmers.
Indian cooperatives receive around 50% of total agricultural
credit disbursement and 60% of sugarcane procurement is done
by cooperatives, he said. In France, 75% of agricultural
producers are members of at least one co-operative, and
co-operatives handle 40% of food and agricultural
production, he informed.
Existing legislation in Pakistan allows formation of farmer
cooperatives which can buy inputs, sell produce and obtain
credit for member farmers, he pointed out. Pakistani farmers
can benefit from this model by ensuring lending to
cooperatives from commercial banks, and the provision of
crop insurance.
Courtesy: Pak Tribune