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ISSUES
Water scarcity pushes agriculture sector into trouble
ISLAMABAD (June 14 2002) : The economic survey said that
irrigation water scarcity pushed agriculture sector into
difficult area during 2001-2002, with overall negative impact
on economy.
It added that agriculture had grown at an average rate of 3.5
percent per annum since 1991-92 with wild fluctuations -
rising by 11.7 percent and falling by 5.3 percent. The
fluctuation in agricultural growth has largely stemmed from
fluctuation in major crops due to pest attacks, adulterated
pesticides, and relatively lesser attention given to its
sub-sectors.
The review noted that drought that hit the agriculture last
year resulted in water shortages by 51 percent. Last year,
agriculture faced water shortages of up to 40 percent. The
total flows of water in major rivers declined to 91.15 million
acre feet (MAF) against an average flows of 131.69 million.
Rainfall has also been below normal. The canal head
withdrawals in Kharif 2001, and Rabi 2001-2002, seasons have
also witnessed significant decline.
Notwithstanding the severe water shortages, the value added in
agriculture grew by 1.4 percent in 2001-2002, as against a
decline of 2.6 percent last year. Major crops, accounting for
40 percent of agricultural value-added, registered negative
growth second year in a row. As against a decline of 9.8
percent last year, value-added in major crops recorded a
negative growth of 0.5 percent.
Minor crops contributing 19 percent to agricultural
value-added, managed to register a positive growth of 1.0
percent as against almost zero growth last year. Livestock is
the second largest (contributing 37 percent) contributor to
overall agricultural value-added. Its growth slowed to 3.4
percent as against 4.9 percent last year. Fisheries expanded
by 4 percent as against a negative growth of 3.7 percent and
forestry depicted a growth of 1.0 percent as against 9.9
percent of last year.
I. CROPS SITUATION: There are two principal crop seasons in
Pakistan,
Kharif and Rabi.
Major crops, such as wheat, rice, cotton and sugarcane account
for 90 percent of value-added. The minor crops consisting of
pulses, potatoes, onions, chillies, garlic, etc account for 10
percent of value-added.
a)MAJOR KHARIF CROPS:
i) COTTON: Cotton is the important non-food cash crop and a
significant source of foreign exchange. It accounts for 11.5
percent of value-added in agriculture and about 2.7 percent of
GDP. In addition to providing raw material to the local
textile industry, the lint cotton is a major export item.
Production of cotton is provisionally estimated at 10.6
million bales for 2001-2002, which is 1.1 percent lower than
last year.
The shortage of irrigation water is mainly responsible for
less production. Cotton was cultivated on an area of 3,116
thousand hectares, which was 6.5 percent higher than last year
(2927 thousand hectares). The crop suffered from pest attack
in some of the cotton growing areas and as such its yield per
hectare declined by 8.6 percent.
ii) RICE: Rice is a highly valued cash crop and is also a
major export item. It accounts for 6.7 percent in value-added
in agriculture and 1.6 percent in GDP. Production of rice
during 2001-2002 is provisionally estimated at 3,882 thousand
tonnes, which is 19.2 percent lower than last year. The
shortfall is attributed to the shortage of water, which
resulted in delayed plantation, as well as shift in area from
Irri to basmati rice - a relatively high valued cash crop.
Rice was cultivated on an area of 2,114 thousand hectares,
which was 11.1 percent lower than last year. The yield per
hectare is also lower by 9.1 percent.
iii) SUGARCANE: Sugarcane crop is highly water intensive cash
crop and serves as a major raw material for production of
white sugar and gur. Sugarcane tops and molasses are valued as
livestock fodder. Its shares in value-added in agriculture and
GDP are 6.3 percent and 1.5 percent, respectively. Sugarcane
was cultivated on an area of 1,000 thousand hectares during
the current fiscal year, showing an increase of 4.1 percent
over the last year. The size of the sugarcane crop is
provisionally estimated at 48,042 thousand tonnes, which are
higher by 10.2 percent, as compared with the last year. The
yield per hectare has also increased by 5.9 percent. The
increased production is the result of judicious application of
fertiliser and water, improvement in cultural practices and
better management.
b) MAJOR RABI CROPS:
WHEAT: Wheat is the leading food grain of Pakistan, and being
the staple diet of the people. It occupies a central position
in agricultural policies. It contributes 12.5 percent to the
value-added in agriculture and 2.9 percent to GDP. Wheat was
cultivated on an area of 7,983 thousand hectares - 2.4 percent
lower than last year. The size of the wheat crop is
provisionally estimated at 1,8475 thousand tonnes which is 2.9
percent lower than last year. The long dry spell affected the
crop both in barani and irrigated area. The yield per hectare
also decreased by 0.5 percent.
c) Other Major Crops: Barring barley, all the other major
crops have registered increases over the last year's
production. The production of maize during the current year is
provisionally estimated at 1,665 thousand tonnes, showing an
increase of 1.3 percent. The production of bajra and jowar of
Kharif crop registered an increase of 9 percent and 1.8
percent, respectively. The production of gram and rapeseed and
mustard, grew by 2.3 percent and 12.6 percent, respectively.
While production of tobacco remained flat, production of
barley declined by 7.1 percent.
Minor Crops:
i) Oil Seeds: The major oilseed crops include: cottonseed,
rapeseed, sunflower, soybean and safflower. Total consumption
of edible oils in 2000-2001 was 1.95 million tonnes. Local
production accounted for 28.8 percent of the domestic
requirement, while the remaining 71.2 percent of the country's
requirement was met through imports. During 2001-2002, the
total consumption is estimated at 2.0 million tonnes and the
local production is estimated at 0.582 million tonnes to meet
29 percent of the domestic consumption requirement while the
remaining 71 percent will be met through imports. The edible
oils are either imported directly or obtained by crushing the
imported oilseeds in the country. The imported oilseeds are
mainly canola and sunflower.
ii) Other Minor Crops: The production of pulses have increased
this year. Production of Mung increased by 10.5 percent,
followed by Mash (7.4 percent) and Masoor (2.2 percent) during
2001-2002. Production of potato increased by 0.7 percent.
while that of onion estimated to decrease by 11.2 percent. The
production of chillies is estimated to have decreased by 46.6
percent in 2001-2002 over the last year because a bumper crop
during 2000-2001, resulted in marketing problem and prices of
chillies went down by 50 percent. The farmers did not receive
reasonable return. The area, therefore, decreased by 42.2
percent during 2001-2002.
INPUTS
i) Fertiliser: Fertiliser is the major farm input in
agricultural production. Domestic production of fertiliser
during the first nine months (July-March 2001-2002) of the
current fiscal year has depicted a nominal increase of 0.7
percent. On the other hand, the import of fertiliser declined
by 13.6 percent, thus the total availability of fertiliser
declined by 2.9 percent in the current year. The offtake of
fertiliser was also lower by 9.1 percent. The reduction in
offtake is mainly attributed to the shortages of irrigation
water.
ii) Improved Seed: Improved seed has unique position among the
various agricultural inputs because the effectiveness of all
other inputs is mainly dependent on the quality of seed used.
The critical importance to productivity is the authentic
purity during the flow of seed from plant breeders to farmers.
During 2001-2002 (July-March), 1,84.5 thousand tonnes of
improved seed was procured while 1,319 thousand tonnes of
improved seed were distributed, which was 19 percent lower
than the same period of 2000-2001 because distribution of
improved seed for paddy and cotton had not been started until
March 2002.
The Federal Seed Certificate & Registration Department
regulates the quality of seed right from breeder's seed to
certified seed. To achieve this task, the department registers
crop varieties for certified seed production and inspects the
standing crop in order to assess the genetic purity, off-types
plants, weeds, other crop plants, and diseases in the field.
The seed from the inspected fields is also subject to thorough
investigation in the laboratory to determine the analytical
purity, germination, vigour and moisture contents, etc There
are about 360 seed companies, including 5 multinational
companies, doing seed production and marketing in the country.
A total of 143 seed processing plants/units are working. It
has enhanced the seed processing capacity from 12.2 percent to
35.4 percent.
iii) Mechanisation:
Agricultural mechanisation has played an important role in
increasing agricultural production. Mechanisation of
agriculture is crucial for achieving self-sufficiency and
surpluses in food production through increasing productivity
and reducing pre and post harvest losses. Pakistan is making
efforts to modernise its agriculture and make its allied
fields more efficient and productive.
The prolong dry spell has affected the use of tractors and
despite stagnant prices, the sale of tractors has declined
from 24,651 last year to 18,235 during July-April 2001-2002 -
a decline of 26 percent. The Agricultural Development Bank of
Pakistan (ADBP) has stepped up its efforts to mechanise
Pakistan's agriculture. In this connection, the ADBP is
providing major portion of development loans for purchase of
tractors/attachments and installation of tube wells, laser
levelling, drip/sprinkler irrigation, fodder cutter and bed
sowing in order to bridge the mechanised farm power gap in the
country. The Bank, over the years has disbursed a total amount
of Rs 68412 million for the purchase of 430,864 tractors up to
March 31, 2002. The gradual increase in the availability of
farm power has enabled timely disposal of crops while
facilitating increased cropping intensity resulting in
increased agriculture productivity. The ADBP has allocated
funds to the tune of Rs 6734 million for financial year
2001-2002 for tractor financing. The Bank has so far disbursed
loans amounting Rs 1998 million for purchase of tractors of
various makes up to March 31, 2002.
iv) Plant Protection: The plant protection is an important
factor amongst the agricultural inputs. Though it cannot
induce higher yields on its own but without effective
protection against the attack of pests and diseases, the
beneficial outcome of other inputs may not be realised either.
In this connection, the public sector provides facilities,
such as, pest scouting, advisory services and aerial spray to
the farmers while private sector is responsible for carrying
out plant protection measures including ground sprays. During
July-March 2001-2002, 20.1 and 15.3 thousand tonnes of
agricultural pesticides were imported and locally formulated,
respectively by the private sector.
v) Irrigation: It is well-known that an efficient irrigation
system is a pre-requisite for increasing agricultural
production. Despite the existence of good irrigation canal net
work in the world, Pakistan still suffers from wastage of a
large amount of water in the irrigation process. The
continuation of the unprecedented drought has worsened the
availability of irrigation water. The current fiscal year has
experienced overall water shortage to the extent of 51 percent
from the normal availability as against 40 percent shortage of
last year.
The total inflow of water (Indus at Tarbela, Kabul, Jhelum at
Mangla and Chenab at Marala) averaged at 131.69 million acre
feet (MAF) during the last 24 years (1977-78 to 2001-2002).
Against this level of average inflow, the flows in major
rivers have declined to 91.15 MAF in 2001-2002 or a reduction
of 30.8 percent. The canal head withdrawals averaged at 99.12
MAF during 1977-78 to 2001-2002, but it declined to 73.09 MAF
in 2001-2002, thus registering a decline of 26.3 percent.
Rainfall has also been below normal. During the monsoon season
(July-September), the average rainfall has been 126.4 mm
historically but during the monsoon season of 2001, the
rainfall averaged 115.3 mm, suggesting a decline of 8.8
percent.
During winter (January to March 2002), the low rainfall not
only affected the crop in barani area but also reduced the
inflow in the major rivers for irrigated area. Canal head
withdrawals in Kharif 2001 (April-September) has decreased by
8.4 percent and stood at 54.7 million acre feet (MAF), as
compared with 59.7 MAF during the same period last year.
During the Rabi season 2001-02 (Oct-March), the canal head
withdrawals decreased by 13.9 percent, as it went down to 18.4
MAF compared with 21.4 MAF during the same period last year,
due to long dry spell and lesser water flow in the rivers.
vi) Agricultural Credit: Agricultural Credit plays a key role
in enhancing the agricultural production by providing
financial resources to the farming community. The farmers can
thus purchase primary inputs, eg, seed, fertiliser, pesticides
and agricultural machinery in time.
a) Production and Development Loans: Agricultural loans
amounting to Rs 32.6 billion were disbursed during July-March,
2001-2002, as against Rs 29.1 billion during the corresponding
period last year, thereby registering an increase of 12
percent.
b) Loan to Small Farmers: According to Agricultural census
1990, there are 5.1 million farms in the country and 93
percent of these are small farms (up to 10 hectares),
accounting for 60 percent of total cultivated area. The large
farms are only 7 percent of total farms but account for 40
percent of total cultivated area.
The Agricultural Development Bank of Pakistan (ADBP),
disbursed Rs 17.7 billion to small farmers, including landless
during the first nine months of the FY 2001-2002. Availability
of credit to this category now constitutes 88 percent of total
agricultural credit provided by the bank.
c) Loans for Newly Identified Priority Items: In line with the
government's efforts toward strengthening agriculture sector,
the bank has earmarked Rs 4 billion exclusively for newly
identified priority items. These items include water
management, land development, soil improvement, storage, farm
mechanisation, import substitution and export based
commodities.
Innovative cost effective technology for achieving optimal
production on least cost basis is being transferred to farmers
through the field functionaries of the bank. In this regard,
for tea plantation at Shinkiari and palm oil at Thatta, the
bank financed for cultivation of tea on 450 acres and 477
acres respectively.
d) One-Window Operations: A new concept of credit delivery has
been introduced in the country for the expeditious delivery of
credit to farmers with special reference to subsistence and
small farmers. Under this scheme, all concerned officials are
made available at one place on each Monday and Thursday.
The ADBP officers, representatives of the Board of Revenue/Patwari
(along with all the land record) and Post Offices remain
present on these days at one place to facilitate farmers in
obtaining input loans up to Rs 50,000.
Forestry: Pakistan is a forest deficit country with 4.2
million hectare (4.8 percent) of forest area out of 87.98
million hectare of the total landmass. Total forests area of
Punjab, NWFP, Sindh, Balochistan, Azad Kashmir and Northern
areas is 0.69, 1.21, 0.92, 0.33, 0.42, and 0.66 million
hectares, respectively. Though the forest resource is meagre,
it plays an important role in Pakistan's economy by employing
half a million people, providing 3.5 million cubic meters (mm
3) of wood and one-third of the nation's energy needs. Forests
and rangelands support about 30 million herds of livestock,
which contributes more than US$ 400 million to Pakistan's
annual export earnings. Forestry sector plays an important
role in soil conservation, regulated flow of water for
irrigation and power generation, reduction of sedimentation in
water conveyances and reservoirs, employment and maintenance
of ecological balance. During the year 2001-2002, forests have
contributed 270.7 thousand cubic meters of timber and 473.5
thousand cubic meters of firewood as compared with 258.9
thousand cubic meters timber and 477.4 thousand cubic meters
firewood in 2000-2001, respectively.
During 2000-2001, Pakistan earned Rs 1.09 billion by export of
various value-added wood products including the export earning
of sports good (Rs 356.5 million) as compared with Rs 1.5
billion during the year 1999-2000. During the year 2000-2001,
Pakistan spent an estimated amount of Rs 10.5 billion on
imports of raw wood and wood products from different countries
of the world as compared with Rs 7.056 billion during the year
1999-2000.
In order to overcome inadequacy of forest cover, the
Government has prepared Forestry Sector Master Plan (FSMP) in
1992-93 for 25 years. This national document has identified
different strategies and programmes and fixed the physical and
financial targets for each and every category/group of
programme. The FSMP focuses on eco-system management approach
for the conservation of renewable natural resources through
the active participation of all the stakeholders, especially
local community at all levels of planning and implementation
of the master plan. The Ministry of Environment, Local
Government and Rural Development organises plantation
campaigns twice a year at the beginning of spring and monsoon
seasons.
During spring and monsoon seasons of year 2001, 131.62 million
saplings (Spring 84.503 and Monsoon 47.114 million) were
planted as against the target of 156.20 million sapling
(Spring 101.244 million and Monsoon 54.955 million). Shortfall
of 24.58 million saplings has been attributed to less funding,
lack of adequate nursery stock and adverse climatic factors.
IV. Livestock and Poultry
a) Livestock: Livestock is an important sector of agriculture
in Pakistan, which accounts for nearly 37.5 percent of
agricultural value-added and about 9.4 percent of the GDP. Its
net foreign exchange earnings were to the tune of Rs 53.0
billion in 2000-2001, which is almost 12.34 percent of the
overall export earnings of the country. The role of livestock
in rural economy may be realised from the fact that 30-35
million rural population is engaged in livestock raising,
having household holdings of 2-3 cattle/buffalo and 5 to 6
sheep/goat per family deriving 30 to 40 percent of their
income from it.
b) Poultry: Poultry production has emerged as a good
substitute of beef and mutton. Its importance can be judged
from the fact that almost every family in rural areas and
every fifth family in urban areas are associated with poultry
production activities in one way or the other. Government is
providing all possible incentives to develop it at an
accelerated pace.
For promotion of livestock and poultry, the government has
provided the following incentives in the agricultural package:
these are:
-- Imported plant and equipment not manufactured locally shall
be subject to custom duty of 10 percent, with complete
exemption from sales tax.
-- Capital structure of projects in agro-food industry will be
entitled to debt-equity ratio of 70:30.
-- Projects will be entitled to financing from all banks and
development finance institutions.
-- Expatriate personnel of the Units will be allowed to import
food items and other consumable without any duty/taxes,
subject to maximum limit of $2,000 per person per year.
-- Import of breeding stock will be allowed subject to the
import duty of 10 percent.
-- Locally manufactured machinery will be provided credit.
-- Parts and Components up to 5 percent of initial C&F value
of imported plant and equipment shall be imported at 10
percent duty, if imported together with the plant. The export
of livestock and livestock products has been allowed.
-- The imported plant and equipment not manufactured locally
shall be subject to custom duty of 10 percent with complete
exemption from sales tax.
Following measures have also been taken to meet Sanitary and
Phytosanitary (SPS) requirements under WTO for quality
assurance and to improve exports of livestock and livestock
products:
-- Establishment of abattoirs are encouraged in the private
sector;
-- The National Veterinary Laboratory is under construction
for drug residue testing in the livestock products. This will
ensure quality in exported products;
-- Steps have been taken to improve sanitary and hygiene
conditions of animal casing processing units in the country.
Fisheries: Fishery plays an important role in Pakistan's
economy and is considered to be an important source of
livelihood for the coastal inhabitants. Apart from marine
fisheries, inland fisheries (comprising of rivers, lakes,
ponds, dams, etc) are also very important source of animal
protein. Fisheries' share in GDP, though very little, it
contributes substantially to the national income through
export earnings. During the period July-March 2001-2002,
63.129 tonnes valued at Rs 5.9 billion fish and fishery
products were estimated to be exported. During the same
period, the total fish production is estimated at 654,500
tonnes. Of which, share of marine sector is 473,000 tonnes and
inland contribution is 181,500 tonnes.
Pakistan also exports a reasonable quantity of shrimp and fish
and earns a substantial amount of foreign exchange. During
July-March 2001-2002, 63,129 tonnes of fishery products were
exported to Japan, USA, UK, Germany, Middle East and other
countries.
The Government is taking a number of steps to improve
fisheries sector. Marine Fisheries Department is also
executing a project, "Establishment of a Hatchery Complex for
Production of Fish/Shrimp Seeds" which will play a vital role
for the development of fish/shrimp farming.
The total number of persons engaged in fisheries sector during
2001-2002 is estimated at 361,000. Out of which, 137,000
persons (37.9 percent) were engaged in marine sector and
224,000 persons (62.1 percent) in inland fisheries, whereas
the persons engaged in fisheries sector in 2000-2001 were
272,240 persons(127,181 (46.7 percent) in marine and 145,059
(53.3 percent) in inland fisheries.
courtesy Business Recorder
(Arif Rana)
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