Pakistan Agriculture Developments

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Given the increased strain on the import bill in recent times, the government is expected to prioritise the agriculture sector, making self-sufficiency in food staples a top priority in the upcoming FY24 budget, scheduled to be announced on 9 June (Friday), said brokerage house JS Global on Tuesday.

“We anticipate the agricultural sector would be prioritised by government in the FY24 budget, given the need to manage food inflation and maximise export potential from exportable products such as rice and cotton,” said the brokerage house in its report.

The report expects the government to take prompt measures to prevent the agriculture sector getting affected from the impact of heavy rainfall like the previous year.

The monsoon deluges of last summer submerged a third of the country, killing 1,700 people and displacing another eight million. The floods devastated the country’s crucial agriculture sector, leading to severe supply chain disruptions and causing massive food inflation.

The country’s annual inflation rose to 37.97% year-on-year in May, the statistics bureau reported earlier.

The finance ministry attributed the potential reasons for the rising price levels to flood damages, disruptions in supply chains, devaluation brought by the macroeconomic imbalances and political uncertainty.

Meanwhile, the JS report on Tuesday said that government may raise its allocation for research and development of agriculture in the FY24 budget.

“Government is also expected to allocate resources to farmers for the delivery of quality seeds, solarisation of tube wells and agri machinery,” it said.

 

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PKR 2.5 Billion pivot irrigation project converts Thal desert into cultivable land​

By Fatima Javed
Jun 8, 2023

THAL, Jun.8, (Gwadar Pro)-The Pakistan-China joint venture, a PKR 2.5 billion pivot irrigation project, has effectively transformed 5,000 acres of the Thal desert into fertile green cultivable land.

Dr. Rana Fartab Shoukat, the Farm Manager at Samsons Agri Farms Rungpur, expressed during an interview with Gwadar Pro that the two-year-long Centre Pivot Project, collaborated between China's Haier and Pakistan's Samson's Group, has resulted in the successful cultivation of various crops and trees, including Rhodes grass, wheat, alfalfa, orchards, citrus fruits, mangoes, guavas, bamboo, olives, dates, and Bari.

The satellite image of the green land in heart of Thal desert, Punjab Pakistan

The project is situated in the Thal desert of Rangpur Muzaffarabad, Punjab province, and is equipped with state-of-the-art agricultural water-efficient machinery known as a central pivot system.

Fartab, who holds a PhD in Agricultural Entomology from South China Agricultural University in Guangzhou, mentioned that they have two central pivots covering an area of 100 acres each, while the remaining seven central pivots span 132 acres each.

"The land was entirely desert, so we conducted soil sampling. The water condition was extremely poor, with no nutrients present in the soil," Fartab explained.

The improved soil structure of the desert to cultivate more crops.

He stated, "We planted our own Rhodes grass on the central pivots, for which we prepare compost using animal manure, poultry manure, and sugar beet or sugar cane mud. We create a proper compost mixture that includes earthworms, which serves as a fertilizer, thereby reducing the need for basic fertilizers like urea or MP."

"In areas where central pivots cannot be used, we employ drip irrigation methods. Previously, another company handled this for us, but now we have our own team responsible for its preparation," he added.

Fartab further mentioned that in addition to various types of oranges, they also cultivate between 1,500 and 2,500 date plants and guava. They are also undertaking a bamboo pilot project, and if successful, they plan to expand it in the future.

He emphasized that in areas where pivoting was not possible, they were engaged in forestry and plantation activities to promote a natural and stable ecosystem in those particular areas of land.

He expressed his satisfaction that people have begun to pay attention to this aspect, stating that to effectively address food shortages, it is crucial to improve desert cultivation methods. He mentioned, "I have previously implemented the same approach in China as well. Essentially, if we want to avoid food security issues and ensure an adequate food supply, we must improve our desert cultivation practices."

This transformative initiative has not only created significant employment opportunities for local communities but has also resulted in a substantial increase in Pakistan's foreign exchange earnings. According to the Farm Manager, the joint venture has generated considerable employment opportunities for local residents, offering both permanent and daily wage jobs. The project employs approximately 270 individuals, including executives, farm managers, accountants, laborers, pivot operators, pivot maintenance staff, and 10 agrarians.

Center pivot irrigation systems have a longer lifespan of 40-50 years compared to drip irrigation systems, which typically last 5-8 years. This system proves to be efficient, especially in dealing with weather anomalies such as frost and heatwaves, thanks to its overhead irrigation systems with controllers.

 

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Wheat production to top28 million tonnes in 2022-23​

The News
Jun 10, 2023

Pakistan's wheat production is set to top 28 million tonnes in the 2022-23 fiscal year, the finance minister said on Friday, beating official estimates by a big margin. Finance Minister Ishaq Dar said in his budget speech that the bumper crop was due to favorable weather conditions and government support to farmers.

“Despite the ravages of floods, the agricultural sector has grown at a rate of 1.5 percent. The bumper crop of wheat has resulted in production of more than 28 million tonnes and the income of farmers has increased. 1,500 to 2,000 billion rupees have been transferred to our rural economy. This will have a positive impact on the overall economy of the country,” Dar said. Earlier on April 12, 2023, the Federal Committee on Agriculture (FCA) assessed the size of wheat production at 26.81 million tonnes.

According to meeting minutes of the body, the committee was informed that the domestic wheat production during the 2022-23 crop year has been estimated as 26.8 million tonnes, from an area of 9.0 million hectares, which is an increase of 1.6 percent over the last year of 26.39 million tonnes.

However, a day before the FCA meeting, The News projected an increase in wheat production up to 28 million tonnes. “Despite weather-related adversities, wheat growers have been reaping a surprisingly high output in South Punjab, a major food basket, stoking prospects of plenteous produce on the provincial level if a similar trend continues in the central parts of the province as well,” The News reported while quoting initial estimates from the farm level. According to the analysis, reports pouring in from South Punjab suggest well above-average wheat output, right from Rajanpur in the southwestern stretch to Bahawalnagar in the south-eastern belt.

Many farmers are reporting yields of more than 50 maunds per acre, compared to the national average of 32 maunds. Such a turnaround in wheat projections shows how wheat plants miraculously withstood wet-weather-related damages to the crop, thanks to consistently cool temperatures and bright sunny days.

The April 11, 2023 report concludes with the remarks that “on a national level, the likelihood of producing close to 28 million metric tonnes of wheat has not been out of sight.” With enhanced wheat production, according to market insiders, wheat imports for 2023-24 may be reduced by 1.5 million tonnes, settling around two million tonnes. The greater size of crop also helps in stabilizing the highly volatile grain market, providing much relief to the consumers.

As per latest estimates of a bigger-than-estimate production of wheat, Punjab is now projected to harvest over 21 million tonnes of wheat for the first time, surpassing the official production target of 21 million tonnes for 2023-24. At the national level, the earlier biggest volume of wheat output at the national level was recorded in the financial year 2020-21 when the country produced 27.46 million tonnes.

 

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Ignoring ground realities​

Ahmad Fraz Khan
June 12, 2023

It is hard to make sense of the agriculture budget this year: what it is for and what it will achieve next year — especially if taken in the backdrop of prime ministerial promises made a week ago in the budget (agriculture) proposal meeting.

If steps taken in the document are something to go by, one is not sure if someone tried to analyse issues that the sector is facing, leave alone trying to address them. In the absence of any such exercise, this finance bill will surely neither solve sectoral problems nor those of farmers during the next year.

First, let us recount the measures Finance Minister Ishaq Dar announced in his speech. He said the agriculture loan limit is increasing from Rs1.8 trillion to Rs2.2tr.

He also promised to shift 50,000 tubewells to solar energy and allocated Rs50 billion for it, withdrew duties on the import of seed, exempted the import of combine harvesters from duties, rice planters, seeders and dryers have been freed of duties as well, concessional loans and tax relief for the industry has also been promised, and Rs16bn have been set aside for subsiding loans and urea fertiliser.

Without belittling the benefits of these steps, now let us consider what the sector is facing and where these actions fit in. The sector suffered an exceptional rise in the cost of production in the last few years, especially in the last one when the current government came to power in April 2022.

No farmer can risk leaving solar equipment worth millions in the field, given law and order in rural areas

The seed sector is chaotic, where no one knows who is selling what, why and when he would quietly exit the market after inflicting billions of rupees in losses on the farmers. Water shortages are now a permanent part of farming, interrupted by super floods sweeping everything away between severe scarcity times.

Even a cursory reality check on measures taken by the budget reveals their irrelevance to the sector and its bigger issues.

As far as increasing loan limits is concerned, all financial institutions agree that they do not benefit farmers — only a tiny part of it goes to them and the rest to industry, which is regularly recycled and restructured in the name of the farmers.

The banks prefer paying fines for failing to meet these targets because they are less than the administrative cost of giving small loans to clientele spread far around. On top of it all, can farming afford a 25 per cent markup and still survive?

Shifting tubewells to solar energy has been a hoax every government resorted to because of perceived benefits. But the experiment has not taken off because no farmer can risk leaving equipment worth Rs3 million in the field, given law and order in rural areas.

Withdrawal of duties on machines and seeds should certainly positively affect individual farmers and crops, which can only be welcomed.

The measures announced in the budget look smaller also for two reasons: high hopes given by the prime minister in a pre-budget meeting and dismal performance by the sector last year.

In a meeting at Lahore, a week before the budget, the prime minister promised “practical and permanent steps” for agriculture reforms. It immediately raised hopes, especially because previous “Kissan packages,” announced by the PML-N governments, both at the centre and province, were worth hundreds of billions of rupees.

Khalid Khokhar of Pakistan Kissan Ittehad says that farmers had a single demand: control the cost of production. Help reduce input prices and bring fertiliser within farmers’ fiscal reach. Electricity, which used to cost farmers Rs5.35 per unit until two years ago, now costs between Rs45 and Rs50 per unit. It has been left untouched. “Solarisation has been offered as an alternative. However, no one has realised it has been on the offer for the last many years without any success. The process never took off because of massive investment in it and deteriorating social conditions. It has been dusted off again.

“The biggest investment is fertiliser, and there has been no relief. The usage of phosphorus fertiliser dropped by 50pc, and the application of potash fertiliser by 40pc last year due to price factors. Urea fertiliser has three different prices in the market and is given to growers on the fourth one — the black market rate, which naturally is the highest one. All these missing steps hardly leave room for any optimism as far this finance bill is concerned,” he says.

Syed Nadeem Shah
Member of Pakistan Central Cotton Committee

“The financial allocation in the budget does not match agriculture’s contribution to GDP.

I found nothing for the cotton sector. While seed imports were incentivised through duty exemption, it won’t benefit growers owing to ‘adaptability’ and ‘acceptability’ issues.

Rather, the government should concentrate on seed research and development allocations since indigenous varieties respond to climatic conditions. But with zero allocations for research, such seeds can not be produced.

If cotton is not getting attention, how will the Pakistan Central Cotton Committee (PCCC) come up with new varieties? PCCC employees are not given salaries regularly.

The subsidy on urea will most likely benefit traders instead of farmers. We should curb urea smuggling, and for this, the subsidy should be given directly to farmers to increase its uptake.

And, given past experiences, the Rs10bn markup subsidy for small farmers to enhance per-acre productivity will be good for nothing because the provincial government won’t pitch in its share.

Dr. Iqrar A Khan
Vice-Chancellor, Agriculture University, Faisalabad

“The budget can catalyse a second green revolution. It is likely to promote investment through enhanced credit availability, solarisation of tubewells, tax waivers on seed imports, fertiliser and machinery, promotion of SMEs through business loans, and prevention of postharvest losses.

Looking back, the green revolution of the 1960s was catalysed by the introduction of a new seed of wheat (MaxiPak), which was fertiliser responsive. The yields went up manifolds, necessitating mechanisation. Ever since then, we have continued to reinvent the same recipe. The times have changed with the arrival of GM crops, precision technologies, value addition and better trade and marketing options.

While I fully endorse the budget announcements, there could be more to it. The seed imports should be clearly spelt to allow the introduction of GM seeds. There are 1.2 million tubewells, and 50,000 is a modest start. The solar subsidy should be linked with net metering to avoid unnecessary pumping. My frustration is about a lack of attention to the investment in research. The largest research sector is universities with a stagnant budget allocation of Rs65bn only when fixed expenditure is bound to rise by 30-40pc.“

Aamer Hayat Bhandara
Co-founder of think-tank Agriculture Republic

“The budget is very good if one goes by the current state of the economy and resources available with the government. But, it does not emphasise as much as it should have on research and development of indigenous high-yielding, drought and heat-resistant seed varieties and localisation of imported farm inputs to make the country food secure.

In the absence of indigenously developed good quality seed, the country will have to depend on imported sources at the cost of previous foreign exchange. At the same time, the behaviour of the kernel in the local environment will be uncertain.

The decision-makers should have thought more of climate change resilience, early warning systems and crop insurance to enable the sector to survive in the harshest time of history.

I am upbeat about the policy of setting up value-addition small industries close to villages and hope that the step will lead to four immediate benefits for the rural population: cutting the crop transportation cost to markets, eliminating supply-chain losses, creating job opportunities for the jobless rural youth, and turning the unskilled labour into a skilled one force.

 

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Expert says climate change, water scarcity can affect rice production​

Staff Reporter | Business Recorder
Jun 12, 2023

Chairman Rice Research and Development Board Punjab Shahzad Ali Malik warned that challenges such as climate change, water scarcity, and pests can affect rice production in Pakistan and hectic efforts must be made on top priority to address these issues through research and development, improved farming practices, and policy support to ensure the continued importance and sustainability of rice as a cash crop in the country’s economy.

He said rice is one of the most important cash crops in Pakistan, contributing significantly to the country’s economy.
Talking to a delegation of plant breeders here today led by Prof Dr Muhammad Arshad Javed, Chairman Plant Breeding and Genetics Punjab University he said Pakistan is one of the major exporters of rice in the world, and rice exports play a crucial role in earning foreign exchange for the country.

The export of rice generates substantial revenue, contributing to the overall balance of trade and strengthening the economy, he added. He said its cultivation and the associated value chain provide employment opportunities to a significant portion of the rural population in Pakistan. Farmers, laborers, millers, traders, and exporters are all involved in the rice industry, creating jobs and improving livelihoods, he added.

About trade competitiveness, he said Pakistan’s rice industry competes internationally due to the quality and diversity of its rice varieties. By maintaining a strong presence in the global rice market, Pakistan enhances its trade competitiveness and expands its export opportunities.

He said the rice sector contributes to Pakistan’s gross domestic product (GDP) significantly and the income generated from rice cultivation and its related activities directly contributes to the agricultural sector’s overall contribution to the country’s GDP.

He said its cultivation serves as a means of poverty alleviation in rural areas of Pakistan. He said small scale farmers, who constitute a substantial portion of the rice-growing community, are able to generate income and improve their living standards through rice farming.

Regarding food security, Shahzad Ali Malik said it is a staple food in Pakistan, and the country’s growing population relies on it as a major dietary component. He said the production of rice ensures food security by providing a stable supply of this important crop to meet the domestic consumption needs.

About rural development, he said the cultivation of rice plays a significant role in rural development by stimulating economic activities in rural areas. It encourages infrastructure development, supports the growth of ancillary industries, and helps improve living standards in rural communities.

 

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Expert says climate change, water scarcity can affect rice production​

Business Recorder
Jun 12, 2023

Chairman Rice Research and Development Board Punjab Shahzad Ali Malik warned that challenges such as climate change, water scarcity, and pests can affect rice production in Pakistan.

He said rice is one of the most important cash crops in Pakistan, contributing significantly to the country’s economy.

Talking to a delegation of plant breeders here today led by Prof Dr Muhammad Arshad Javed, Chairman Plant Breeding and Genetics Punjab University he said Pakistan is one of the major exporters of rice in the world, and rice exports play a crucial role in earning foreign exchange for the country.

The export of rice generates substantial revenue, contributing to the overall balance of trade and strengthening the economy, he added. He said its cultivation and the associated value chain provide employment opportunities to a significant portion of the rural population in Pakistan. Farmers, laborers, millers, traders, and exporters are all involved in the rice industry, creating jobs and improving livelihoods, he added.

About trade competitiveness, he said Pakistan’s rice industry competes internationally due to the quality and diversity of its rice varieties. By maintaining a strong presence in the global rice market, Pakistan enhances its trade competitiveness and expands its export opportunities.

He said the rice sector contributes to Pakistan’s gross domestic product (GDP) significantly and the income generated from rice cultivation and its related activities directly contributes to the agricultural sector’s overall contribution to the country’s GDP.

He said its cultivation serves as a means of poverty alleviation in rural areas of Pakistan. He said small scale farmers, who constitute a substantial portion of the rice-growing community, are able to generate income and improve their living standards through rice farming.

Regarding food security, Shahzad Ali Malik said it is a staple food in Pakistan, and the country’s growing population relies on it as a major dietary component. He said the production of rice ensures food security by providing a stable supply of this important crop to meet the domestic consumption needs.

About rural development, he said the cultivation of rice plays a significant role in rural development by stimulating economic activities in rural areas. It encourages infrastructure development, supports the growth of ancillary industries, and helps improve living standards in rural communities.

 

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Pakistani Ambassador visits China's National Precision Agricultural Demonstration Base​

By Shafqat Ali
Jun 16, 2023


ISLAMABAD,- Pakistani Ambassador to China Moinul Haque on Thursday afternoon visited China's National Precision Agricultural Demonstration Base and said that agricultural machinery based on AI technology was well suited for the agriculture modernization drive in Pakistan.

During the visit, the Ambassador and his team were introduced by Han Wei, CEO of AI Force Tech, about his company's latest products in the field of smart agriculture.

Han Wei introduced the company's talent team, scientific research and innovation, product system and business development.

He also spoke about the advantages of use of intelligent technology and practical achievements of his company in the field of agricultural production.

Han Wei emphasized that his company was committed to using artificial intelligence and self-driving technology to provide day-night farmland operation.

“Our company actively participates in the development and construction of countries along the Belt and Road, willing to carry out practical cooperation with Pakistani friends to promote agricultural modernization drive.”

Ambassador Haque expressed willingness to establish a good cooperative relationship with AI Force Tech to promote the implementation of more efficient farmland robots in Pakistan.

During the visit, Ambassador Haque and his team also witnessed the operation of robot products such as intelligent agricultural machinery, patrol robots, medicine robots and transportation robots in the joint laboratory.

 

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MNS University to launch Sino-Pak dual diploma in livestock management​

By Khalid Aziz
Jun 20, 2023

ISLAMABAD - The Faculty of Veterinary and Animal Sciences (FVAS), MNS University of Agriculture, Multan, and Xinjiang Agricultural Vocational Technical College, China, held an online meeting to launch Sino-Pak dual diploma program in livestock management at FVAS.

Under the dual diploma program, students will study initial two years in Pakistan and one year in Xinjiang Agricultural Vocational Technical College, according to an update by the FVAS. The two institutions had signed an MoU in February 2023 for the purpose.

A Faculty Exchange Program will also be funded in addition to online training of animal husbandry and veterinary science teachers of FVAS.

Furthermore, Xinjiang Agricultural Vocational Technical College will establish modern agriculture and animal husbandry demonstration training centre at MNS University to organize trainings for Pakistani veterinary professionals, technical personnel and industrial partners.

Vice Chancellor Dr Asif Ali said on the occasion that this partnership will not only benefit students but also contribute to the development of livestock industry in Pakistan.

Dr Asif Raza, Dean FVAS, said that aim of the program will provide the students with a diverse and enriching learning experience to develop their skills in livestock management and animal care in a multicultural environment.

Prof. Yang Guiquan, Principal of Xinjiang Agricultural Vocational Technical College; Guo Qinghe, Deputy Director of Animal Science and Technology Institute; Jiang Xiaoxin, Dean Department of Animal Husbandry and Veterinary Medicine and Ma Wenjing, Dean of Int’l Cooperative Office from Xinjiang Agricultural Vocational Technical College, attended the meeting.

Max Ma, Director and Executive President of Tang Pakistan was also present during the online meeting, among others.

 

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Chinese firms, Punjab govt to collaborate in meat export, disease control​

By Khalid Aziz
Jun 29, 2023

ISLAMABAD - A Chinese delegation led by Vice President Royal Group Ms.Teng Cuijin met with Secretary Livestock Punjab Masood Anwar on June 26. On this day, they discussed avenues for collaboration in the livestock sector including the export of meat to China.

The Chinese delegation expressed the desire to cooperate with the Punjab government in areas including the export of meat to China, disease control, genomics, and breed improvement. The Chinese delegation also sought land and the required facilities for manufacturing veterinary vaccines, the Punjab Livestock Department stated on June 27.

The Secretary welcomed proposals to set up special beef and dairy economic zones. He said that proposals to collaborate with Chinese experts in controlling foot-and-mouth disease (FMD) and other animal illnesses are under consideration.

Ms.Teng Cuijin said that they wanted to save the livestock in Punjab from diseases along with trade cooperation.

Director of Royal Cell Biotechnology, Dr.Qaisar Shahzad told Gwadar Pro that the Royal Group wanted to initially export heat-treated meat to China. Later, after setting up a disease-free animal farm, the firm will look to export fresh meat and milk to China, he said.

Dr.Qaisar said that Royal Cell has already established a 70-acre farm in Sheikhupura, which can accommodate 4,500 animals. “Presently, we have purchased 200 animals and will soon achieve our initial target of 1,000 animals,” he said. He said that the farm will be duly notified as disease-free by the Punjab government.

He further said that representatives of the Inner Mongolia Bigvet Biotech Co. also accompanied them. They intend to explore the market for their FMD vaccines in Pakistan and later establish a manufacturing unit in Punjab, he said.

 

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Tractor prices surge despite localisation​

Aamir Shafaat Khan
July 2, 2023

KARACHI: In the outgoing fiscal year, tractor prices witnessed a steep rise despite achieving higher localisation of up to 94 per cent.

While feeling proud, the assemblers and their vendors always refer to the stability in tractor prices as a result of the massive presence of locally made parts used in its assembling.

A comparison showed the prices of Al-Ghazi Tractors model 480S (55HP), Ghazi 65HP, model 640 (75HP), Dabang (85HP) and NH-70-56 (85HP) rose to Rs1.772 million, Rs2.037m, Rs2.651m, Rs2.728m and Rs3.654m in the first nine months of the FY23 from to Rs1.170m, Rs1.352m, Rs1.733m, Rs1.790m and Rs2.355m in July-March FY22.

The prices of various models of Millat Tractors Ltd (MTL) like MF240 (50HP), MF-350 Plus (50HP), MF260 (60HP), MF360 (60HP) and MF385 4WD (85HP) had risen to Rs1.524m, Rs1.770m, Rs1.756m, Rs1.856m and Rs3.083m as compared to Rs1.192m, Rs1.380m, Rs1.378m, Rs1.455m and Rs2.410m prevailing in July-March FY22.

Defending the price hike, a Punjab-based tractor assembler said the supply of tractors was chargeable at 5pc general sales tax till June 2022 and in Finance Act 2022-23 it was exempted by placing in the 6th Schedule of Sales Tax Act.

Accordingly, he added that the input sales tax paid on the purchase of raw materials at 18pc is not adjustable and became part of the cost. Therefore, the prices of tractors have sharply increased as sales tax is no more adjustable.

In addition to changes in the GST pattern, other financial burdens on local assembly included higher power and gas rates and rising labour charges, he said.

Part makers are also dependable on imported raw materials and the rupee depreciation makes an adverse impact on the cost of manufacturing, he said.

Amid mixed trends in the country’s agriculture indicators during FY23, tractor sales remained highly depressed.

Sales of Fiat (Al-Ghazi) and Massey Ferguson (MTL) plunged by 45pc and 46pc during 11MFY23 to 11,466 and 16,486 units from 20,741 and 30,616 units in the same period last fiscal year.

Wheat production rose by 5.4pc to 27.634m tonnes in FY23 as compared to 26.208m tonnes.

During 2022-23, the cotton area sown increased to 2,144 thousand hectares against 1,937 thousand hectares last year, revealing a growth of 10.7pc. However, due to floods that swept away the entire crops in Sindh and Balochistan, production remained low at 4.910 million bales against last year’s 8.329m bales, showing a dip of 41pc.

In Punjab, cotton-producing districts Rajanpur, DG Khan and Taunsa were the worst hit. Moreover, the insect pests, especially pink bollworms, whiteflies and thrips remained prevalent during the season.

 

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The Pakistani rupee has lost over 125 per cent of its value against the US dollar, sliding from Rs125 per dollar in June 2018 to Rs285 per dollar in June 2023.

Several key factors have contributed to this situation, including a substantial trade deficit, diminished foreign exchange reserves, reduced foreign investment and the heavy burden of foreign debt servicing. These factors have had a detrimental impact on Pakistan’s fragile economy, adversely affecting the overall economic landscape.

The currency devaluation has also had profound direct and indirect effects on Pakistan’s agriculture sector. First, currency devaluation has increased crop production costs due to price hikes in agricultural inputs such as fertilisers, pesticides, diesel, electricity, and agricultural machinery that are imported or use imported raw materials and are directly linked to the dollar value.

The impact on production costs is more pronounced for input-responsive/input-intensive crops such as potato, maise, sugarcane, and vegetables, whereas wheat, chickpea, sesame, canola, and other crops, whose input requirements are low to medium, have been affected to a relatively lesser extent.

The weakened currency has helped local farmers, who grow exportable crops, to fetch better prices for their produce in local currency for the same export value in US dollars

Second, the ongoing Russia-Ukraine war disrupted global supply chains of various food items, which led to food inflation worldwide. In Pakistan, the situation was further worsened by the devaluation of the Pakistani rupee as it increased import-parity prices of agricultural commodities like wheat, oilseeds (canola), pulses, garlic, and other crops, which are imported to meet the country’s demand beyond local production.

Consequently, these commodities have experienced an upward trend in prices within the local market. Faced with all these, the government had no choice but to increase the minimum support price of wheat from Rs1,650 per 40 kg in 2021 to Rs2,200 per 40 kg in 2022 and then to Rs3,900 in 2023.

Third, the weakened currency has helped local farmers, who grow exportable crops, including rice, maize, sesame, potato, fruits, and vegetables, to fetch better prices for their produce in local currency for the same export value in US dollars.

This is quite evident from the improved farm gate prices, which rose in a span of a year from Rs3,300 to Rs5,500 per 40 kg for paddy (basmati rice) and from Rs10,000 to Rs17,000 per 40 kg for sesame.

Nevertheless, it is important to note that currency devaluation is not the sole factor driving the price hikes. Other significant contributors include the country’s high inflation rate, the heightened global demand for agricultural commodities and the exceptional prices they have commanded in the recent past.

Given that both crop production costs and farm gate prices have increased, the net effect on farmers’ income depends upon the relative value of the two effects.

As far as production costs are concerned in Pakistan, cost elements can be categorised into two. Some elements like diesel, fertilisers, pesticides, and electricity are strongly dependent upon dollar value, whereas, the rest like land, labour, and canal water, rely upon domestic dynamics. Given that the agriculture sector is highly labour-intensive, the cost of crop production has not increased proportionally to farm gate prices.

Therefore, the empirical analysis, based on farmers’ responses, production costs of various crops, and farm gate prices, indicates that the net income of farmers has increased in recent years, despite the country’s average inflation rate of around 30 per cent.

However, there are certain geographic areas in Pakistan where adverse effects of climate change, such as floods, heavy rains, and hailstorms, have badly affected crop yields and, in turn, farmers’ revenue.

Though farmers’ income has improved, there are two risks that can alter this situation altogether. In April 2023’s Commodity Markets Outlook, the World Bank forecasts that the prices of agricultural commodities will experience a 7.2pc drop in 2023 and likely fall again in 2024 by 2.0pc.

The bank estimates that prices of maize (corn) will drop by over 15.3pc this year and by another 11.1pc next year, whereas wheat prices are expected to decline by 17pc in 2023 and a further 5.6pc in 2024.

On the other hand, the inflation rate has been steadily rising in the country, pushing up wages and labour rates. Recently, the government raised the minimum wage rate from Rs25,000 to 32,000 per month in the annual budget. Even though the minimum wage rate does not apply to the agriculture sector, it still indirectly influences labour rates in rural areas because workers migrate from rural to urban areas and vice versa.

If global prices of agricultural commodities maintain a downward trend in 2023 and 2024 (as the World Bank predicts) but inflation in the country continues to gather pace due to further currency devaluation, the simultaneous impact of these two factors can adversely affect the farmers’ income.

This, in turn, may negatively affect national food security and agriculture sector growth.

However, everything ultimately hinges on the point at which inflation and currency devaluation comes to a halt.

Fourth, economists argue that the devaluation of a country’s currency improves the competitiveness of its exports in the global market. In the past, a number of developing countries have used currency devaluation as a policy instrument, either unilaterally or under the direction of international institutions, to enhance their exports and improve macroeconomic indicators.

However, with a depreciated currency, Pakistan’s agricultural sector failed to enhance its exports considerably. Exports increased by just 13pc in four years, from FY18 (food group $4.8 billion) to FY22 ($5.42bn), whereas, during July-March FY23, exports declined by 3.4pc compared to the same period last year.

 

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China and Pakistan will jointly explore new ways of harvesting and processing silage​

By Staff Reporter
Jul 4, 2023

According to China Economic Net, a meeting on joint research and development of small and medium-sized silage harvesting equipment in mountainous and plain areas of China and Pakistan and commercialization of results was held in Lanzhou, China.

In the meeting held in Lanzhou, China, it was announced that by establishing a test and demonstration base in China's livestock sector, 1. By donating 5 million yuan of agricultural machinery and equipment, and training a professional team for R&D, design of silage harvesting and processing machinery and technical experts for operation, use and maintenance of machinery for Pakistan.

A group of will help Pakistan. CEN learns that the project, initiated by Gansu Academy of Mechanical Sciences Company Limited, aims to increase the mechanized operation, efficiency and economic benefits of Pakistan's agricultural production and the export competitiveness of its silage.

Since the project was launched in 2018, the team has been studying key technologies suitable for Pakistan in terms of silage harvesting and processing, wrapping reliability of wrap film, mechanical properties of wrap film and harvesting characteristics of maize. According to China Economic Net, so far, there are four suitable for silage production in hilly and plain areas of Pakistan under different conditions.

A variety of harvesting and processing equipment has been developed, namely silage harvesting equipment, mounted silage harvesters, efficient silage processing machinery, and silage stripping press balers. According to the requirements of silage production, two production lines were developed for small-scale silage production in mountainous and hilly areas and large-scale silage production in plains, respectively.

According to China Economic Net, Mohammad Ismail, an ecosystem expert at the International Center for Integrated Mountain Development (ICIMOD), an intergovernmental knowledge and learning center, said mechanization on agricultural farms enables efficient use of water, seeds, pesticides and fertilizers. Reduces cost by making It also reduces spoilage and crop losses.

After the meeting, Pakistani experts visited Gansu Academy of Mechanical Sciences Co., Ltd.'s agricultural machinery and equipment manufacturing station, where

 

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A Chinese company wants to set up a state-of-the-art dairy farm in Punjab

By Staff Reporter
Jul 5, 2023

LAHORE .... During the second phase of the China Pakistan Economic Corridor (CPEC) to focus on agriculture and livestock, China's Royal Group plans to set up a state-of-the-art dairy farm in Punjab.

According to the statement of the Punjab Board of Investment and Trade (PBIT), a meeting was held in Lahore on Tuesday between the Royal Group of China and the officials of the Department of Livestock and Dairy Punjab.

Secretary Livestock presided over the meeting aimed at setting up a modern dairy farm with 500 animals in collaboration with Royal Group, PBIT added that the Department of Livestock and Dairy Development has produced dairy products as per international standards.

PBIT pledged to assist the Royal Group in finding local partners for joint ventures, particularly in the production of value-added dairy products. PBIT is also committed to support the export of dairy and meat products to China. According to the statement, these efforts represent a significant step towards creating opportunities for China to begin exporting.

Last year, a Royal Group delegation comprising management and senior scientists visited Pakistan to establish a Buffalo Embryo Development Facility in Lahore. According to the plan, the facility will use high quality buffaloes and 50 percent of the gin production will be used to meet local needs while the rest will be exported to China.

Apart from the Buffalo Embryos Laboratory project, the Royal Group also plans for intensive processing of buffalo milk (milk powder, cheese, fresh milk, etc.). If implemented, this project will not only increase the quality of buffaloes in Pakistan but also create thousands of jobs for local people.

 

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PM, COAS vow to address food insecurity, boost agri exports​

Govt launches Land Information and Management System – Centre of Excellence – to transform unproductive land

Rizwan Shehzad
July 07, 2023

According to the World Food Programme, 36.9 per cent of Pakistanis are food insecure and 18.3 per cent of these are facing severe food crisis. PHOTO: EXPRESS

Pakistan’s civil and military leaders joined hands on Friday to tackle the pressing issues of food insecurity, malnutrition, and soaring import costs in the agriculture sector.

The groundbreaking solution of Prime Minister Shehbaz Sharif and Chief of Army Staff (COAS) General Asim Munir, among others, came in the form of the Land Information and Management System – Centre of Excellence (LIMS-COE).

The endeavour aims to transform unproductive acres, ensure food security, boost agricultural exports, and lighten the load on the national economy.

The inauguration ceremony of LIMS – COE was attended by the prime minister, COAS, ministers of finance, defence, planning, information and others.

The chief secretaries of the provincial governments, agricultural experts, senior army officials and several other key officials of the other countries were also present on the occasion.

“Establishment of LIMS is the first exceptional initiative, aimed at enhancing food security and improving agri exports thus reducing import burden on the national exchequer,” read the official statement issued by the PM Office, adding that the initiative would help transform millions of acres of uncultivated or low yield land within the country.

“This state-of-the-art system will help optimise the agricultural production through innovative technologies and sustainable precision agricultural practices based on the agroecological potential of land,” the statement added, saying the system would ensure the well-being of rural communities and the preservation of the environment.

According to the World Food Programme, 36.9 per cent of Pakistanis are food insecure and 18.3 per cent of these are facing severe food crisis.

Cognisant of the prevailing food insecurity, the statement continued, mass malnutrition and widening import bill of agri-related products vis-à-vis projected population growth and future domestic food needs, “the national political, economic and military leadership has decided to undertake the decisive and meaningful steps to address this critical issue.”

The GIS-based LIMS will greatly improve the national agri yield by systemising digitisation of agriculture, it said, providing real-time information to local farmers about soil, crops, weather, water resource and pest monitoring through remote sensing and geospatial technologies as well as minimising the role of middlemen through efficient marketing system.

The LIMS-COE initiative has come on the heels of the civil-military leadership presenting an “Economic Revival Plan” on June 20, which was stated to be bigger than the China-Pakistan Economic Corridor (CPEC), to address the nation’s continued struggles with growth.

The government had established a Special Investment Facilitation Council (SIFC) under the economic recovery plan, which would serve as a streamlined interface for investors and remove all the bottlenecks in investments with the help of the army.

The army-backed plan was focused on harnessing the country’s untapped potential in key sectors through local development and foreign investments mainly from Gulf countries and expediting project implementation.

Just before the government is about to complete its five-year constitutional term and the country is about to go for general elections, this is the second initiative where the civil-military leadership has come united to move ahead.

On a previous occasion, the plan was unveiled during an event, which was chaired by PM Shehbaz and attended by the COAS at the Prime Minister's House.

The prime minister had stressed the need for export-oriented foreign direct investments (FDIs) while the army chief pledged the full support of the military, recognising the plan’s importance for national prosperity.

The plan envisages capitalising Pakistan’s untapped potential in key sectors of defence production, agriculture, livestock, minerals and mining, information technology and energy, through indigenous development as well as investments from friendly countries.

 

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Food concerns​

Editorial
July 10, 2023

THE government has put into gear a new strategy, backed by the army and financed by the food-deficit Gulf countries and China, to tackle critical issues of low agricultural productivity, food insecurity and food imports.

The Land Information and Management System–Centre of Excellence, launched on Friday, will focus on transforming how farming is done in Pakistan with a view to optimising agricultural output for improving domestic food security and creating exportable surplus for the Gulf states and China.

It is being financed by Saudi assistance of $500m. The GIS-based initiative aims at enhancing modern agro-farming, and utilising 22m acres of uncultivated state land. The government is expecting huge investments in agriculture from the Gulf and China under LIMS.

It is perhaps the first multipronged strategy designed to simultaneously target urgent challenges related to agriculture: growing food insecurity, a surging food and agricultural import bill and diminishing export surplus. The success of the new scheme is projected to address these issues to a large extent.

While the LIMS initiative is a step in the right direction, its scope is likely to remain confined to the foreign-funded agriculture projects under it — mostly for producing exportable surplus for investing nations. With food insecurity rising in the country — the World Food Programme has said that 37pc of Pakistanis are food-insecure and one-fifth of them are facing a severe food crisis — it is imperative for policymakers to quickly design strategies to deal with long-standing, deeper structural issues such as climate impact, soil erosion, land fragmentation, lower crop yields, etc, All these are pulling down Pakistan’s important agriculture sector.

This becomes even more critical as the population is projected to grow to 367.8m by 2050. The surging population has already put unbearable pressure on the food system, and food insecurity in the country is billed to worsen in the coming years unless remedial steps are taken now.

With the country’s agriculture sector characterised mostly by smallholder farmers, the rise in the demand for food has to be met either through an increase in yield or expansion in cultivable cropland. Pakistan needs to work on both as climate change, resulting in droughts, floods, uncertain weather patterns, etc, is likely to increase the already considerable stress on the food supply system.

There is no doubt that the government needs to encourage the utilisation of uncultivated state land to boost crop output. Besides investing in swathes of wasteland to make them cultivable, it must also put a stop to the encroachment of agricultural lands by sprawling housing schemes.

A lot is required to be done to ensure food security and create exportable agricultural surplus. The LIMS initiative is only the first step. The next one should focus on strengthening the capacity of agricultural research institutions to increase yields.