New policy framework for agriculture

Source: http://dawn.com/2008/04/07/ebr17.htm


By Ihtasham ul Haque

AFTER over six decades of industrialisation, agriculture still continues to be a major driving force to determine the overall GDP growth rate. But neglected, the agriculture growth has come down from an average 4.6 per cent in 2000 to three per cent over the last eight years.

Since the importance of agriculture can no longer be ignored, the new government plans to come up shortly with a new agriculture policy.

“We have prepared a new policy framework for development of agriculture, and no sooner the new government settles, it will be presented to it”, member, Food and Agriculture, Planning Commission Dr Abdullah Kausar Malik told Dawn. ‘Out of box’ solutions were likely to be offered to the farmers to improve the overall agricultural productivity, he added.

He regretted that the agriculture sector was neglected by Shaukat Aziz government which mainly focused on stock market and real estate. No real effort was made to boost the agriculture production, the main source of livelihood for over 66 per cent of country’s population.

“We can only propose policies and measures but cannot implement them as we are not the implementing authority”, said Dr Malik when reminded that official planners always criticised the rulers when they were no more in power.

“One of the major recommendations to the new coalition government is to inject substantial money into the agriculture sector through increased public and private investment.”

“A new wheat policy is also expected to be introduced by the new government. The commodity needs to be given full attention by the new government,” said Mr Malik adding that the PML (Q) government wasted full one year and did not find out the solution to wheat crisis. “It was due to political reasons that nobody listened to our views and warnings given over the issue were unheeded”..

“The ministry of food, agriculture and livestock is an implementing agency and whenever, we tried to convince former food and agriculture minister Sikandar Bosan, he refused to listen”.

The Planning Commission had opposed issuance of 4-5 more licenses in Punjab and Sindh for setting up of sugar mills. The issue was raised at the highest level and President Musharraf was then taken into confidence who ordered to stop the plan. “But those who knew how to get the job done, succeeded in having these new sugar mills established”, he said.

The overall prices of food commodities were increasing and no administrative measures were taken to address the issue.

In the new agriculture policy, administrative measures had been proposed including ways to ‘regulate’ flour and sugar mills. He said the Planning Commission favoured increased procurement price for wheat and other commodities unlike the thinking of the ministry of finance. The new wheat procurement price of Rs620 per 40kg will settle the flour prices at Rs17-18 per kg.

The new government will be advised that consumers should not be left on the mercy of so-called market forces and without any solid justification, no increase should be allowed in the prices of essential items like wheat, sugar, rice etc.

The new agriculture policy, Mr Malik said, would also offer increased amount of agricultural loans to farmers. “But this is not possible unless the government gears the banking system to serve the farmers.”

The banking sector was supposed to offer agricultural credit worth Rs300 billion this year but only Rs168 billion were given over which State Bank Governor Dr Shamshad Akhtar was also unhappy, he said.

“But now some of the banks including the Askari Commercial Bank plan to provide credit cards to farmers to timely buy agricultural inputs”, he said adding that initially agriculture credit ranging from Rs25,000 to Rs50,000 was expected to be offered by banks to farmers.

Mr Sartaj Aziz, former finance minister, said that distortions would have to be removed from the system to benefit the agriculture sector and to better its growth rate. “Inflation will not be controlled unless the agriculture policy is linked with the trade policy, fiscal policy and other economic policies”.

Wheat crop was an essential crop and should be given all the needed importance, he said and added that production and productivity in the agriculture sector was dependent not only on technological factors but also on the entire macroeconomic framework. This included price policy, fiscal policy, trade policy, exchange rate policy and the credit policy.

“Wheat is the most important crop in the agricultural economy of the country. It is grown each year on 8.3 million hectares which is 36 per cent of the total cropped area. It accounts for about 40 per cent of total value-added of major agricultural crops. By comparison cotton is 28 per cent, rice 15 per cent and sugarcane 10 per cent of major crops”.

He expected the new government to take immediate steps to address the multi-dimensional problems affecting the wheat economy of the country.

The former finance minister was of the view that the new government must evolve a comprehensive food security policy to ensure that all people at all times had physical and economic access to sufficient and nutritious food to meet their dietary needs and food preferences for an active and healthy life.

Former secretary food and agriculture and ex-chairman Pakistan Agricultural Research Council (Parc) Dr Zafar Altaf told Dawn that there was an urgent need to break ‘agriculture mafia’ which, according to him, had ruined the agriculture sector. He said the Fauji Foundation was selling fertiliser at higher prices despite getting subsidised gas and other incentives.

After the green revolution, he said, there was need for ‘genomic’ revolution to increase the overall agricultural production by greatly improving the soil. He regretted that both India and Pakistan could not pull themselves out from green revolution.

“It just requires Rs50-55 per acre expenditure to implement genomic revolution”, he said adding that initially there would be some dip but ultimately water holding capacity of the soil would be improved through genomic revolution.

He did not believe that there was a need to make any new investment in the agriculture sector. “You just give the fair price to farmers for their crops and it will certainly increase our overall productivity”, Dr Altaf said.

There would be just 17 or 17.5 million tons of wheat production this year, he said and added that some rains last week could slightly improve the crop. “I have been to many areas including Chakwal, Kallar Kahar and Bhaun the other day where wheat crop is in bad shape”, Dr Altaf added.