Agricultural prospect: vital for economic growth

Published on 12th May, Edition 19, 2014

 

The agriculture sector plays dual but vital role for the economic development of Pakistan it contributes to the exports of the country by being a primary supplier of raw materials to the downstream industry and on the other hand, it is a large market for industrial products such as pesticides, fertilizers and agricultural machinery. The sector accounts for over 21 percent of the GDP of the country thereby being the second largest sector in the country. It is also the largest employer and employs 45 percent of the total labor force of the country. The 62 percent of the population residing in the rural areas are somehow linked to this sector for their livelihood.

According to the Economic Survey of 2011-2012, Pakistan missed its agricultural growth target due to a negative growth of wheat and some minor crops. The yield per hectare of wheat during the said year showed a negative 4.2 percent growth as compared to the 11 percent growth that had been experienced during the previous year. During the year, minor crops had also shown a decline of 1.26 percent. The production of gram was 291 thousand tons during the period of 2011-2012 while in the previous year; 496 thousand tons had been produced, thus suggesting a 41.3 percent decrease during the time period, due to unfavorable weather conditions. Crops like bajra, tobacco, jawar and barley also experienced a decline in their productions by 12.1%, 8.7%, 2.8% and 1.4% respectively in comparison to the previous year. Similarly, the production of onion, chilies and pulses i.e. masoor and mash also decreased by 78.3%, 15.4%, 12.8% and 3.5% respectively. The production of potato and moong, however, did experience an increase with 17.5% and 22% being recorded respectively.

The survey also revealed that the major crops apart from wheat which did experience a growth of 3.18% which included cotton, rice and sugarcane. Each of these crops witnessed a growth in production by 18.6%, 27.7% and 4.9% respectively. Therefore, 4 major crops are considered to be on average contributing to the overall agriculture sector of the country and these include wheat, rice, sugarcane and cotton, adding 29% whereas minor crops contribute 10.1% of the total value added to agriculture.

Cotton is also a significant contributor to the national economy and accounts for 7.8% of the value added to agriculture and 16% to the GDP. During 2011-2012, the cultivation of the crop occurred on an area of 2835 hectares which is almost 5.4% more than the area used for its cultivation the year before. During the July-March 2011-12 period, the production of cotton was recorded at 13.6 million bales which were 18.6% more than the previous year’s production.

Sugarcane being the second major cash crop for the country adds a value of 3.7% to agriculture and 0.8% to the GDP. Its production during the period in question was estimated to be 58 million tons and showed an increase of 4.9% over the production which occurred during the previous year (i.e. 55.3 million tons). The yield per hectare for the production of sugarcane however registered a negative growth during this period.

Lastly, rice accounts for a share of value to agriculture by 4.9% and 1.0% to GDP. The production of rice in the period in question was estimated to be at 6,160 thousand tons, being valued at 27.7% more than the previous year. The yield per hectare also showed an improved growth of 17.5%.

For the period of 2012-13, the Economic Survey revealed that the agriculture sector exhibited a growth of 3.3% only. Crop production grew by 3.2%, livestock by 3.7%, forestry by 0.1% and fishing by 0.7%.

The output of rice and cotton crops declined due to weather conditions and the water crisis, which resulted in cotton ginning to experience a negative growth of 2.9% during the period against the positive growth of 13.8% which had been experienced in the previous year. The figures revealed by the Pakistan Cotton Ginners Association stated the production of cotton to stand at 12.915 million bales during 2012-13 which is 1.898 million bales less than the production of cotton in the previous year. Out of this output, Punjab was responsible for producing 9.508 million bales and Sindh produced 3.407 million bales. While Punjab experienced a decrease in production by 21.62%, Sindh experienced an increase of 27%.

The United Nations Food and Agriculture Organization, in a report with respect to Pakistan stated that the forecast for the production of wheat in the country has been revised upwards by 5% in comparison to the last year’s output. This is mainly due to the increase in the area, which is under cultivation, good weather conditions with the Rabi season being in full swing in Punjab and Sindh; the two major wheat producing provinces along with a good supply of water and fertilizer.

According to the organization, total cereal production in the country is likely to rise by 4% in this year in comparison to the previous year. Cereal crops which include maize, rice, wheat and others are estimated to be produced in a quantity amounting to 40.63 million tons whereas 39.17 million tons were produced in 2013.

The report by the UNFAO stated that with regard to the planting of the maize crop, the prospects look good and the forecast of the crop points to an aggregate output of 4.8 million tons. This amount is also higher than the output produced last year due to the higher plantings this year in response to the sustained demand emanating from the feed industry.

For rice, the forecast is set to increase rice cultivation to an area of 2.8 million hectares which will begin in late June as that is when the main Kharif season started. This increase is also considered to be greater than the average of the previous year. The rice production is forecasted to be of 9.8 million tons assuming there will be an adequate availability of water and that weather conditions remain good for the crop to grow.

Wheat production has unfortunately been deficient in the past two years which has led to wheat being imported to the country; an estimate of 900,000 tons has been imported.

With a relatively good rice production in 2013 and with Pakistan being the world’s fifth largest rice exporter, the exports for this year are forecasted to be of a value of 3.3 million tons which is almost 6% greater than the above average figure which was achieved in the last year.

The report by the organization also stated that while food security conditions are relatively stable at the moment, Tharparkar is still facing a number of food insecurity issues. Due to poor rainfall for the second season, the production of cereal crops in the area has greatly been affected. Furthermore, due to a sheep pox outbreak, a number of small animals were lost as well adding further problem. Along with these issues, high prices of wheat which is considered to be the main staple food also add food insecurity problem, particularly for those people belonging to lower income households.