Farmers' package: all depends on implementation
First came the Economic Survey and then the Budget for the
year 2004-5. Policy declarations, speeches and statements of
the President of Pakistan , the Governor of the State Bank and
the federal finance minister aimed at providing facilities to
and enhancing productivity of the agriculture sector preceded
The leaders focused on the farming community with the purpose
of ameliorating its lot. The picture they presented has been
disappointing but they have promised hope and pledged good
intentions. How they would be translated in to deeds and where
would they lead the sector?
The thrust of the President's address to a Kisan Conference
was a better deal comprising numerous deals and concessions
for the sector; the Finance Minister recorded a dismal growth
rate; the Governor, State Bank, underlined problems besetting
the farming community and crop output. What has come out is a
vicious circle identified at the highest level.
Some solutions were also prescribed. They have however been
there for years and get repeated endlessly but no forward
movement is made. Can the circle be broken without new and
positive initiatives? That does not sound likely. Ailments are
chronic; tried cures are hardly the medicines for recovering
The basic issue has neither been discussed nor is any effort
on the anvil to resolve it. A lamentable lack of expertise
marks the management of the sector. Nothing is done to handle
things on a professional, contemporary manner with the result
that the performance of the country's agriculture is declining
by the year.
The finance minister rock-rolled his way to a U-turn
comparable with Pakistan's policy on Afghanistan. Last year,
he had declared a high growth rate for the sector despite
shortfall in two major crops. One of them was the strongest
base of exports while the other provided basic food for the
population; the crops were cotton and wheat.
The argument has been reversed for 2004-05: negative
performance for these crops has been cited as reason for low
growth of the agriculture sector this time.The Minister's
expertise and acumen are not to be challenged but how is
shortfall in two major crops calculated for rise in one case
and decline in the other while other factors remain unchanged?
Accepting this line of argument calls for extra talent for
gullibility that may be in abundance in officials directly
involved in authoring sacred documents of the government or
beneficiaries of budget but it may be in scarce supply among
other people. To say the least, the minister is not
The beneficiaries can be identified in most areas covered by
the budget but those from the farming community have been
doubly blessed. Men of means from any walk of life can import
what an average citizen regards as a luxury car.
A similarly placed agriculturist can have his car and his
tractor and purchase any other farm machinery that he requires
or wants to have it on his farm, usually a model farm on
The policies proclaimed in the budget should go a long way
towards making rich farmers richer and if that is not
sufficient, the proposed reduction in withholding tax from six
percent to two percent should fill whatever gap leading
members of the farming community wish to bridge.
Fertilizer inputs have also been extended concession in
withholding tax but hopefully that advantage would be passed
to every user though it is too much to expect. The exemption
of sales tax from farm machinery import of 'tractors,
bulldozers, combined harvesters and on a number of other
agricultural implements' belong to the same category of
benefits to the farming community: not every farmer can import
such machinery and those who can afford already ahead of the
rest of the farming community.
Perhaps these measure would close the rich-poor distance in so
far as when the income of members of the farming community are
calculated, highest and lowest incomes would be added and
divided to conclude that per farmer income has increased.
The methodology for drawing a conclusion would be the same
that is applied to determine per capita income. This, however,
is not to say that the budget contains nothing for the poor of
the farming sector.
The proposed relief of Rs100 on the per bag price of
phosphatic fertilizer is a measure that should reach every
farmer. The only apprehension is that the quality of
fertilizer sold to him may not be standard. It should be
ensured that he is not taken on another ride.
The small farmer should also benefit from the proposed
exemption of sales tax from all locally manufactured
machinery. The application of ten per cent duty on imports
would provide protection to the local manufacturer but the
prices of indigenous implements would need to be watched: the
manufacturers should not feel that it is time for them for a
free run in the market.
Needless to point out that the landless farmer has been left
out of all propositions; he apparently does not exist for
Islamabad. They are the poorest of the poor of not merely the
farming sector but the most deprived segment of the society.
At the present approach towards alleviating poverty, one
cannot visualize that they will ever have their day; this
certainly does not look possible in the foreseeable future.
It is heartening to note those at the helm at the highest
level in the country realize that poverty exists in rural
areas of the country; their statistics may not be universally
regarded as authentic but the fact that they are aware of the
phenomenon is welcome news. Not so their agenda for countering
One imagines that the nine points of State Bank Governor are
not his personal view but assessment and ideas by decision
makers. A few days prior to the budget, the Governor laid down
a nine point agenda to counter poverty. There can be little
disagreement with his vision.
He was clear that low productivity of the agriculture sector
was major factor in poverty and suggested that it should be
overcome by dissemination of agriculture research, lining of
watercourses, better marketing of agri-produce, by boosting
the livestock sector and other already identified measures for
the betterment of the sector and enhancement of its
(The Finance Minister found a remarkable way of supporting the
livestock sector in the Economic Survey by shifting
slaughtering to the manufacturing sector. The need for
juggling with slaughtering in this manner is incomprehensible
and one wishes the minister or some spokesman of the Finance
Ministry explains the rationale, as has been done to counter
criticism about statistic on poverty.
From the look of things, the implications of the decision can
only be negative). His observation that agricultural
productivity was crucial for increasing incomes in rural areas
and that poverty cannot be effectively reduced without higher
performance by the farming sector is one hundred percent
But agendas are not enough to do that; there must be a plan
and professional implementation machinery. The existing
machinery has failed and the government does not seem to have
any idea of what can be done. That does not augur well for the
sector. If anything, the situation spells more decline in the
performance of the sector.
Curtesy: The DAWN