Agriculture – pay attention or starve

[RabzonKhan]

Agriculture – pay attention or starve

Random thoughts

Wednesday, February 04, 2009
Dr A Q Khan

Muhammad Binyameen (the same name as that of the younger brother of Hazrat Yusuf A.S.), a Pakistani PhD scholar at an agricultural university in Sweden, has drawn my attention to one of the most important problems being faced by Pakistan – agriculture. Hardly anyone pays attention to it and even fewer speak about it. Only when there is a shortage of wheat, sugar, vegetables, etc., do we hear that the government has raised the fixed buying prices of certain commodities. There is no long-range planning; no precautionary steps taken for the future.

Pakistan's economy depends heavily on agriculture. It accounts for about 25 percent of our gross domestic product (GDP), and I believe that more than half of our labour force is engaged in this important sector. Since there is insufficient rainfall, most agriculture is dependent on water supplied through almost 40,000 miles of irrigation canals – the largest canal system in the world. Most of this water comes from the Indus River; some from other rivers flowing in Punjab. Unfortunately, poor drainage causes salinity, affecting large tracts of invaluable agricultural land.

We all know that wheat is the main food crop in Pakistan, followed by rice, millet, maize, pulses, barley, vegetables and fruits. Cotton and Basmati rice are by far the most important cash crops, bringing in valuable foreign exchange. Other crops include sugar cane, tobacco, oil seeds.

The agricultural sector

--provides food to about 160 million people;

--is responsible for about 70-80 percent of our total export earnings;

--employs about 50 percent of the total work force;

--is the main source of livelihood for the rural population;

--provides raw materials for many industries and a market for many locally produced industrial products.

A few words here about the agricultural sciences. Since time immemorial, agriculture has played a prominent and important role in the lives of human beings. People migrated long distances to find fertile lands to settle. Many wars were fought over land. In the world at large, almost 80 percent of the population depends on agriculture for its livelihood, which lies at the root of many key issues in society – i.e., production and supply, international trading patterns and their development, over-exploitation of land and natural resources and impact on the environment, to name but a few.

In the developed countries, agriculture supports fewer people but it uses a higher proportion of budget resources. For example, a small country like the Netherlands exports $5 billion worth of farm produce and flowers per year. Their people are well fed, so they face issues like food surpluses, agricultural support prices, alternative land uses and enterprises less hostile to the environment, sustaining farm incomes and rural economies, etc. In the developing world, the problems of feeding the people from the limited natural resources, poverty, population growth and deterioration of the environment become more acute with every passing year. Developing countries, including Pakistan, need more people trained in agriculture, horticulture, food technology and the various sciences connected thereto in order to be able to make better use of the limited resources. In Pakistan in particular, there is an urgent need for economics and management studies applied to the whole of the food chain and associated industries and services.

The two biggest problems facing Pakistan today is uncontrolled population growth and the urbanisation of fertile land. As pointed out to me by Mr Binyameen, the worst affected areas are in Punjab – including Sahiwal, Okara, Vehari, Multan – where hundreds of thousands of acres of fertile land are being lost to housing colonies. Beside urbanisation, large areas of fertile land are being lost to salinity.

Our population is increasing so fast that all efforts to keep up with the need to feed, clothe and shelter people have become almost impossible. At the time of partition, the population of West and East Pakistan together was hardly 80 million. After the separation of Bangladesh, our population was 80-85 million. Now it is around 170 million – impossible for a developing country to cope with. There is an urgent need to educate our population, especially the rural population, about the necessity of restricting the size of the family. This should be executed on war footing, just like the Europeans, Japanese and Chinese are doing. Five babies are born per minute in Pakistan! An intensive campaign is required that should be run by educated staff and which offers incentives to the uneducated. I myself opted for vasectomy after we were blessed with two daughters and felt our family to be complete, and have never regretted it.

A possible suggestion in this regard could be where lady health workers of District Health Units give incentives to encourage and persuade women in the rural areas to use three-monthly injections to avoid pregnancy. The DHUs should keep records while health workers should keep notebooks recording details like names and dates. A bonus of, say, Rs2,000, should be given at the time of the injection. In the long term, such an amount to each recipient would amount to peanuts compared to the cost of dealing with the disaster. Local Unions and local imams should also be taken on board, providing incentives to convince them of the urgency for an immediate need for family planning.

Population explosion leads to uncontrolled expansion of residential areas. I can still remember how we took a visiting Chinese delegation to show them cities and suburbs almost 30 years ago. The visiting minister afterwards remarked that we were heading for a disaster as we were covering extremely fertile land with cement and bricks – i.e., houses and houses. To avoid this, a strict code of planning cities/towns should be enforced. No extensions on fertile lands should be allowed and such housing colonies should be built on non-fertile lands only. If we do not take drastic measures now, this country of ours won't have enough space left to grow anything -- there won't be enough to eat and not enough to cover our bodies with. Clean high-rise buildings with shopping/workshop centres on non-fertile land are the need of the day.

Another looming problem is the greenhouse effect which is changing our climate and affecting our agricultural crops and fisheries. In a recent communication to an English daily, Mr Asif Ali Abro drew attention to this danger. It was pointed out that, though Pakistan is responsible for only 0.4 percent of annual global emission of greenhouse gases, it ranks 12th in the list of those most affected by climate change. He suggested a remedy to protect our agriculture from the disastrous impacts of global warming by making substantial investments in biotechnology. He also pointed out the urgent need to develop high-yield, drought/flood/salinity resistant varieties of crops, especially wheat and rice. There are some good institutions in Pakistan already working in this field, but more concerted, goal-oriented efforts are needed and the government must invest generously in this field to safeguard our future. I myself was instrumental in establishing the state-of-the-art Institute of Biotechnology and Genetic Engineering at Karachi University for this very purpose.

I am very well aware of my limited knowledge in this field, but my acquaintance, association and friendship with such experts as Mr Shafi Niaz, Mr Zafar Iqbal, Dr Abdul Hafeez, Prof Dr Khalid Mahmood Khan and my old friend from Holland (now in Canada), Prof Dr Mahmood Hasan Khan, enabled me to pick up some threads to put this piece together. Many excellent articles and suggestions have been written on this topic by these experts. We need a solid government policy to tackle the prevention of this looming catastrophe using the services of these experts.

Before I conclude, I would like to quote what Khalil Gibran wrote decades ago. I have taken the liberty of changing the word "pity" to "curse."

Curse is on the nation that is full of beliefs and empty of religion.

Curse is on the nation that wears a cloth it does not weave, eats a bread it does not harvest, drinks a wine that flows not from its own wine-press.

Curse is on the nation that acclaims the bully as hero and that deems the glittering conqueror bountiful.

Curse is on the nation that raises not its voice save when it walks in a funeral, boasts not except among its ruins and will rebel not save when its neck is laid between the sword and the block.

If we read "dictator" for "bully" and "medals and badges" for "glittering," we have a true picture of our country

 

[metalfalcon]

Pakistan Claims to be an Agricultural Country and we don't have Flour, Sugar and Rice to feed our own People.

Pakistan needs to Pay special attention towards Agriculture otherwise the consequences will be severe for Pakistan.

 

[Flintlock]

Very correct. With current production trends, the world will be unable to feed itself in a couple of decades (even today Africa and parts of Asia can't do it properly).

In Asia, China I think is taking the lead in this - making people give up subsistence farming and moving them to cities, while using modern techniques to boost production.

 

[Energon]

While the article has sound information, I just think it's a bit ironic that the man who wrote it was notorious for having acquired arable land to build his own industrial mega complexes producing non agrarian products (to say the least).

 

[Aeneas]

peasants are unwilling to stay in rural whenever they get opportunity to become citizen.we should make agriculture lucrative and glorious at first.It's depend on propagating agriculture science to rural.

 

[RabzonKhan]

A bumper wheat crop but...

By Kaiser Bengali
Saturday, 11 Apr, 2009

THE wheat harvest season is under way. Thanks to a high procurement price set by the government, a bumper crop of close to 25 million tonnes is expected.

This is considered sufficient to meet the consumption needs of Pakistan and partly of Afghanistan. Taking Afghanistan’s needs into account is prudent policy, given the difficulties of controlling the movement of goods across the porous border. The past policy of keeping wheat procurement price low led to low acreage and output, creating a supply deficit, which had to be met through costly imports. The new policy pays higher prices to Pakistani farmers than to farmers abroad.

The bumper wheat crop is, however, not likely to resolve the problems of wheat or wheat flour availability and price by itself. In fact, it is likely to generate new problems that will have to be attended to before they arise. Essentially, the wheat issue will need to be treated as part of a policy package and all elements of the package will need to be planned and executed accordingly.

The immediate problem the bumper wheat crop is likely to present is one of storage capacity. Without proper storage, there is a danger of a part of the wheat being spoilt, thus reducing supply despite the bumper harvest. Secondly, a decade of economic management under the neo-liberal paradigm has eroded the government’s administrative capacity to operate the distribution system. Even today, flour price in remoter parts of the country is about twice that in the Karachi-Lahore-Peshawar belt.

The other problem is the rise in the consumer price of wheat flour. The raise in the procurement price of wheat to Rs950 per maund will provide improved prices to producers but cost consumers more as the retail price of wheat flour is likely to rise from an average of about Rs25 per kilogram currently to Rs40 per kilogram. In remote areas, the price could rise to shocking levels. The impact on the poor will be devastating.

Continuing to benefit the producer and at the same time protecting the poor will require de-linking producer and consumer prices. Managing the conflicting interests of producers and consumer is thus of critical importance.

Governments have traditionally attempted to keep wheat flour price low through the provision of subsidised wheat to flour mills with the expectation that wheat flour ground from government-supplied wheat will be sold at lower prices. However, the policy is conceptually flawed and has led to the subsidy element being absorbed as flour mills’ profit, rather than being passed on to consumers. The arrangement also has the effect of distorting the market.

Economic theory postulates that the success of an indirect input-level subsidy requires two conditions to be present for it to be passed on to consumers. One, the product must have high price elasticity of demand; two, it must be possible to segment the market. Neither of these conditions exists with respect to wheat. Wheat price elasticity is low on account of it being an essential commodity with the result that the price is largely determined by supply rather than demand factors. Moreover, since flour mills grind government-supplied as well as market-procured wheat, the necessary market segmentation does not exist. In any case, market segmentation for such a homogenous product as wheat or wheat flour is difficult.

Given that elasticity and market segmentation factors do not allow for the subsidy to be passed on to consumers, the policy of subsidising flour mills need to be discontinued forthwith and replaced with a subsidy mechanism that enables the transfer of the benefit to the consumer more directly. As with every commodity, there is a demand and a supply aspect. The supply aspect relates to the distribution network, which is available at utility stores.

Currently, however, utility stores present a host of problems. Coverage is limited, particularly in poorer areas. Procurement and financial management systems are flawed and there are pervasive complaints relating to the substandard quality of products and corruption at various levels, including the store level. All these will need to be and can be attended to. The Utility Stores Corporation is on the privatisation anvil. A traditional privatisation will see the end of the corporation, at least as far as the poor are concerned. Consideration needs to be given to retaining the corporation as a state-owned entity and privatising its management. The management technology for multi-store retail chains is fairly standard in the West and can easily be replicated. If necessary, foreign management consultants can be hired — at government expense — for the initial period.

The problem of coverage is currently being addressed by moves to increase the number of utility stores to 6,000 — at one store per union council. That number too will need to be doubled to improve outreach to consumers in all areas including those of low-population density. The cost of operating stores at uneconomic locations can be met by the government.

The utility stores can purchase all items from the market at market prices, but sell wheat flour and other specified food items, like rice, pulses, cooking oil and sugar, at separate counters at subsidised prices in specific quantities per week per ration card. The purchase-sale price differential can be paid by the government to the corporation as subsidy. Unlike in the case of subsidising the flour mills, subsidising at the retail level will not be market-distorting. The subsidy payable to the Utility Stores Corporation on both counts will be based on measurable costs and can be adequately accounted for. The necessary operational efficiency and transparency with respect to government subsidy can be achieved.

The demand aspect in this case relates to identification of the poor and their targeting. Given that over two-thirds of the population are stated to be living under $2 a day and are under economic stress, the costs of excluding the non-poor are likely to exceed the benefits of identifying the poor. It may thus be advisable to extend the provision of subsidised flour to all households, with limitations on the quantity available to each household. In other words, all households can be provided with ration cards, albeit with limited quantities of food items supplied per card. Given that the share of food expenditure for richer households is significantly low, the benefit incidence of the subsidy is likely to remain progressive.

The economic pressure facing the vast majority of the population is severe. There is the concomitant threat of a social upheaval, especially in urban centres, which can be exploited by anti-democratic forces. Managing the wheat flour regime is thus important and urgent.

 

[AliFarooq]

Pakistan Claims to be an Agricultural Country and we don't have Flour, Sugar and Rice to feed our own People.

Pakistan needs to Pay special attention towards Agriculture otherwise the consequences will be severe for Pakistan.

I completely disagree with you, big farmers have a habit of stocking up on crops, they will buy crops like gandum , munji, and get it packed and they will stock it up for 1 or 2 years, when the prices are high, then sell it. This happens all over pakistan.