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Agricultural Development Planning And Resource Mobilization
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Agricultural Development Planning And Resource Mobilization


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Agricultural development planning and resource mobilization

Agricultural development planning and resource mobilization

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  • 1. Table Of Content Topic Page Executive Summary 2 Introduction 3 Development and Policies 5 Major Target Of Develop Plans 6 Emerging Issues 8 Neglects and Successes 11 Mobilization 12 Role Of Foreign Aid 15 Agricultural and Industrial Development 16 References 17 1|Page
  • 2. Executive Summery Farming is Pakistan's largest economic activity. In FY 1993, agriculture, and small-scale forestry and fishing, contributed 25 percent of GDP and employed 48 percent of the labor force. Agricultural products, especially cotton yarn, cotton cloth, raw cotton, and rice, are important exports. Although there is agricultural activity in all areas of Pakistan, most crops are grown in the Indus River plain in Punjab and Sindh. This topic is all about the agriculture sector of Pakistan in which we are going to discuss the resources, mobilization, neglects, successes, development, plans and some other points. This document will tell you about the plans, policies like what are the policies regarding agriculture in Pakistan. How the foreign aid is helping under developing countries like Pakistan and what are the impacts on it? The major problem that we are facing in this sector is the lack of technology and production techniques. Now there comes a new problem of water that is still hanging between Pakistan and India. This thing then arise the need to discuss the agricultural and industrial development in our country. 2|Page
  • 3. Agricultural development planning and resource mobilization Introduction Pakistan's principal natural resources are arable land and water. About 25% of Pakistan's total land area is under cultivation and is watered by one of the largest irrigation systems in the world. Pakistan irrigates three times more acres than Russia. Agriculture accounts for about 23% of GDP and employs about 44% of the labor force. Pakistan is one of the world's largest producers and suppliers of the following according to the 2005 Food and Agriculture Organization of The United Nations and FAOSTAT given here with ranking: • Chickpea (2nd) • Apricot (4th) • Cotton (4th) • Sugarcane (4th) • Milk (5th) • Onion (5th) • Date Palm (6th) • Mango (7th) • Tangerines, mandarin oranges, clementine (8th) • Rice (8th) • Wheat (9th) • Oranges (10th) Pakistan ranks fifth in the Muslim world and twentieth worldwide in farm output. It is the world's fifth largest milk producer. Crops Wheat Fields in Punjab, Pakistan The most important crops are wheat, sugarcane, cotton, and rice, which together account for more than 75% of the value of total crop output. Pakistan's largest food crop is wheat. In 2005, Pakistan produced 21,591,400 metric tons of wheat, more than all of Africa (20,304,585 metric tons) and nearly as much as 3|Page
  • 4. all of South America (24,557,784 metric tons), according to the FAO (Food and Agriculture Organization) Pakistan has also cut the use of dangerous pesticides dramatically. Pakistan is a net food exporter, except in occasional years when its harvest is adversely affected by droughts. Pakistan exports rice, cotton, fish, fruits (especially Oranges and Mangoes), and vegetables and imports vegetable oil, wheat, cotton, pulses and consumer foods. The country is Asia's largest camel market, second-largest apricot and ghee market and third-largest cotton, onion and milk market. The economic importance of agriculture has declined since independence, when its share of GDP was around 53%. Following the poor harvest of 1993, the government introduced agriculture assistance policies, including increased support prices for many agricultural commodities and expanded availability of agricultural credit. From 1993 to 1997, real growth in the agricultural sector averaged 5.7% but has since declined to about 4%. Agricultural reforms, including increased wheat and oilseed production, play a central role in the government's economic reform package. Much of the Pakistan's agriculture output is utilized by the country's growing processed- food industry. The value of processed retail food sales has grown 12 percent annually during the Nineties and was estimated at over $1 billion in 2000, although supermarkets accounted for just over 10% of the outlets. The Federal Bureau of Statistics provisionally valued major crop yields at Rs.504,868 million in 2005 thus registering over 55% growth since 2000 while minor crop yields were valued at Rs.184,707 million in 2005 thus registering over 41% growth since 2000. Livestock According to the Economic Survey of Pakistan, the livestock sector contributes about half of the value added in the agriculture sector, amounting to nearly 11 per cent of Pakistan's GDP, which is more than the crop sector. The leading daily newspaper Jang reports that the national herd consists of 24.2 million cattle, 26.3 million buffaloes, 24.9 million sheep, 56.7 million goats and 0.8 million camels. In addition to these there is a vibrant poultry sector in the country with more than 530 million birds produced annually. These animals produce 29.472 million tons of milk (making Pakistan the 5th largest producer of milk in the world), 1.115 million tons of beef, 0.740 million tons of mutton, 0.416 million tons of poultry meat, 8.528 billion eggs, 40.2 thousand tons of wool, 21.5 thousand tons of hair and 51.2 million skins and hides. 4|Page
  • 5. The Food and Agriculture Organization reported in June 2006 that in Pakistan, the world's fifth largest milk producing country, government initiatives are being undertaken to modernize milk collection and to improve milk and milk product storage capacity. The Federal Bureau of Statistics provisionally valued this sector at Rs.758,470 million in 2005 thus registering over 70% growth since 2000. AGRICULTURAL DEVELOPMENT POLICIES AND PRIORITIES: The scope for horizontal expansion in area brought about by quantum jump in water supplies through commissioning of Mangla and Tarbela dams in 1970s and later on has already touched a super saturation level. The major scope is now in vertical expansion through improving farm productivity levels. This can be accomplished through raising productivity of subsistent farming community to bridge the gap between the national yields and yields of the progressive growers. The focus is the subsistent farmers who lack behind in harvesting good yields. To achieve this objective, the productivity will be increased through improvement in agronomic practices. Pakistan being in the nexus of nuclear club of nations, it has to assure and safeguard the continuity of the chain of food supplies. The sustainable domestic food security through our own indigenous production is therefore an issue of prime importance in Pakistan’s Agricultural Policy. The commodities that make an integral component of food security are food grains, edible oils and sugar. Pakistan can ill afford a fragile or marginalized situation in production of these commodities. Pakistan’s cotton vision program targets cotton production to 15 million bales by the year 2010. The Government is, therefore, determined to accelerate the cotton research and development process necessarily required for a quantum jump in cotton production and for the qualitative improvement matching the industrial requirements. At the same time, it also intends to facilitate all the stakeholders, particularly the farming community, through both the price and non-price measures to safe guard their interests. For enhancing the cotton production, principally through increase in the yield, the following arrangements / measures would be focused: • Genetic Base of Commercial Cotton Varieties • Strengthening of Foundation Seed Cell in Sindh 5|Page
  • 6. Major Targets of Develop Plans Water Requirements by 2025 The major driving forces creating additional needs for water in Pakistan are • Demographic pressure • Rapid urbanization • Socio-economic improvement • Industrialization • Better recreational facilities • Improved environment • Expanded irrigated agriculture Irrigated agriculture consumes by far the major quantity of freshwater in Pakistan. Existing uses of available water include agriculture 93% (99 MAF), industry 3% (3.5 MAF) and households 4% (5.8 MAF). The existing water uses for crops is wheat 30 MAF, rice 19 MAF, sugarcane 15 MAF, cotton 18 MAF, fruits and vegetables 8 MAF and other crops 9 MAF. Future water requirements (by year 2025) would be influenced by many factors. The anticipated population by year 2010 would be 168 million with annual increase of 2% and 221 million by year 2025 with an average annual increase of 1.81%. Accordingly water requirement to meet increased demand are to be met. Water Vision 2025 Water vision 2025 envisages mega program including development of 64 MAF of storage capacity with an investment of 50 billion over next 25 years in three phases. Phase-1 comprises fast track projects to be completed in first 5-7 years (2002-2006). This includes construction of Gomal Zam Dam, Mirani Dam, Greater Thal Canal, Kachhi Canal, Rainee Canal, Raising of Mangla Dam and Satpara Dam. These dams would add about 5 MAF and bring more than 0.8 million hectare of land under cultivation besides generating 332 m.w. of power. Feasibility studies for Basha Dam, Kurram Tangi Dam are underway. Detailed design of Sehwan st Barrage and Chashma 1 lift project would also be started. Phase-II include Basha Dam on Indus with 5.70 MAF storage capacity and power generation 3360 M.W, Sehwan Barrage on Indus with 0.65 MAF storage capacity Phase- II of Thar Rainee Canal in Sindh, Phase II of the Greater Thal Canal and a high Dhoke Pathan and combined storage from Sanjwal and Akhori Dams in Punjab. 6|Page
  • 7. Phase-III would include Kalabagh Dam with Storage capacity of 6.10 MAF, Yugo Dam on Syhok River in Northern Areas with 9.82 MAF capacity Skardu Dam with 15-52 MAF capacity and Kalan Dam on Swat River. Water Management Strategy • Improving water productivity. • Institutional Reforms. • High Efficiency Irrigation System. • Operational Management of Canal. • Adjusting cropping pattern with water availability. • Harvesting Hill torrent in Rood Kohi and saliba area. • Farmers’ awareness. Intervention for Improvement of Water Productivity The following proposals need to be made for improvement of water productivity. • Farmer’s training. • Precision land leveling/laser land leveling. • Reduce tillage/resource conservation cultivation. • Raised bed cultivation. • Rain water harvesting (Barani areas/Rod Kohi). • Drip and Trickle Irrigation System. • Sprinkler Irrigation System. • Watercourse lining and improvement. • Water storage reservoir. • Demonstration centers. • On-Farm Drainage. The conclusion is that Pakistan has so far undertaken a few small-scale irrigation projects. The need for large-scale reservoirs is imperative. It takes a decade to build up a dam once the earth breaking ceremony has taken place. It appears that next decade in view of the changes in climate and lack of undertaking major water projects both for capacity building and conservation of resources in delivery and at the farm could be a period of difficulties. This situation will not only for agricultural water but the drinkable water for human settlements and for the growing industry can also pose a serious problem. The solution to this difficult situation is 7|Page
  • 8. that Pakistan should immediately go for large-scale capacity building for reservoirs, conserve water resources through modern agronomic practices and encourage the adoption of pressurized irrigation system as sprinkler/drip at least for high value horticultural/ medicinal crops. Ten Year Plan A ten years investment plan of Rs. 36 billion has been prepared for developing agriculture sector. These include: • Initiation of Crop Maximization Project for developing centers of excellence in 109 villages across Pakistan for community extension to raise productivity of crops and diversify farm income. • Integration of Research and Extension Project to narrow the productivity gaps between subsistence growers and progressive growers. • Improvement in agriculture marketing through improving market information system and removing distortions. • Sugar beet production and promotion through intercrop culture. The objectives is to raise farmers’ profitability and elongate crushing /slicing season of sugar mills. • Production of medicinal herbs. • Building Livestock National Veterinary Laboratories to assure meat quality for export. • Establishing Global Positioning System for monitoring movement of fishing ships. Emerging issues The cultivable waste land: According to the experts of MINFAL Pakistan has a total geographical area of 79.6 million hectares. Of this 9.1 million hectares land is cultivable waste which is fit for cultivation but was not cropped due to lack of water availability, lack of interest, financial resource constraints etc. Saying that cultivable waste area is almost half of the cultivated area, the experts said that development of this area is not only better for investment but also have potential to contribute to increase in agricultural production. About half of the cultivable waste area (4.87 million hectors) is in the province of 8|Page
  • 9. Balochistan from total 9.14 mh while there are 1.74 mh cultivable lands in Punjab, 1.45 mh in Sindh, 1.08 mh in NWFP and NWFP. Cultivable waste land in Balochistan is mainly in the Kalat Division followed by Quetta, Nasirabad and Makran Divisions. In Punjab, cultivable waste area is mainly in the Divisions of D. 0. Khan, Bahawalpur, Rawalpindi and Lahore. In Sindh, cultivable waste area is located in Hyderabad, Mirpur Khas, Sukkur and Larkana Divisions. In NWFP, cultivable waste area is located in D. I. Khan, Hazara and Kohat Divisions. Cultivable waste land in Balochistan is mainly in the Kalat Division followed by Quetta, Nasirabad and Makran Divisions. In Punjab, cultivable waste area is mainly in the Divisions of D. G. Khan, Bahawalpur, Rawalpindi and Lahore. In Sindh, cultivable waste area is located in Hyderabad, Mirpur Khas, Sukkur and Larkana Divisions. In NWFP, cultivable waste area is located in 0. I. Khan, Hazara and Kohat Divisions. FOCUS ON SMALL AND MEDIUM FARMERS The number of small farms (less than 5 ha) is continuously increasing over the time. In 1962, the small farms were 45 percent of total farms whereas in 1972 this number increased to 68 percent. According to Agriculture Census 1980, the small farms increased to 74 percent and in 1990 the number further increased to 81 percent. The leading factor causing this trend is the burgeoning population, which was growing at 3 percent per annum. According to Agriculture Census 1990, there are 5.07 million farms in the country and 81 percent of them are small farms but account for 39 percent of total cultivated area. The middle size farms (5-10 ha) are 12 percent and account for 22 percent of cultivated area. The large farms (10 ha and above) are 7 percent of total farms but account for 40 percent of total cultivated area. The average size of small, medium and large farms is 1.8, 6.6 and 21.6 ha respectively. All Government run programs in the shape of interventions are designed to primarily focus on the drudgeries of small farmers. Some of these programs are provision of agricultural credit, procurement of agricultural commodities, distribution of cotton seeds in NWFP and Balochistan, distribution of agricultural machinery under cotton promotion program and farmers visits abroad. The small farmers are given high priority in state run development program in agriculture sector both in federal Government and 9|Page
  • 10. provincial Governments. Some of these are on farm water management program and crop, livestock and fisheries development programs. The programs for tubewells subsidies and subsidized tractor programs in the past were basically designed for small and medium scale farmers. Small and Medium Enterprises (SME) Bank and Small and Medium Enterprises Development Authority (SMEDA) are also active in providing financial and technical support to small and medium scale farmers for setting up enterprises in agriculture and ancillary sectors. THE MIDDLEMEN: The middlemen sometimes secure up to 50 per cent or even more by exploiting extreme conditions in the market. Farmers cannot sell their produce directly to processors, factories and markets due to strong network of middlemen. If farmers take their produce directly to markets, they have to face many problems due to close links of middlemen with brokers, commission agents, transporters and market committees. Commission agents refuse to buy produce from the farmers due to self-created low demand. For resolving the problems faced by farmers, the following steps need to be taken: 1. Strict marketing policy: The government has to go for new marketing policy to cope with the challenge of new markets with special focus to streamline the role of middleman and introduce regulations, which bind the limits of margins. The small producers should be included in market committees. The government should also try to encourage direct linkages between farmers and business houses to increase profit margin for farmers. 2. Bargaining power: If farmers unite, they can easily minimize the role of contractors in the supply chain. With the farmers’ union, farmers can have a stronger voice to bargain collectively. Other options could be commodity exchanges and commodity boards. 3. Improvement in infrastructure: Due to poor infrastructure, farmers often have difficulty in taking their produce to bigger markets and have to sell their produce at lower cost in the local markets. With improvement in infrastructure, they can not be connected to wider areas which could help them make more choices to sell wherever they get a better price. 10 | P a g e
  • 11. 4. Vicinities: Better access to bigger markets in near vicinities can provide farmers with an opportunity to establish relations with bigger businesses and retailers. They would no longer have to rely on middlemen and get their right share of profit. Markets in the near vicinity would also reduce the cost of transportation. 5. Linkages: Establishing linkages with factories, processors and retail chains would take away burden of middlemen off the farmers’ shoulder. Not only would farmers benefit out of it but also factories, processors and modern retailers would greatly benefit since middlemen have been acting as a buyer and seller between the two ends and making more than 50 per cent of the profit. Efforts should also be made to make arrangements so that growers of vegetables and fruits in the peri-urban areas can have direct contact with the ultimate buyers. 6. Regulations: Since middlemen have established networks in the market, they rule the market. The government should play its role as a watch dog in the market so that forces of demand and supply can act freely in determination of prices. Neglects & Successes: Neglects: Kalabagh Dam Irrigated agricultural is the backbone of Pakistan’s economy. At the same time with word’s fastest growing population estimated to touch 150 million marks by the turn of the century, there is a dire need to increase agricultural production. If nothing is done, there would e approximately 25% shortfall in food grain requirements by the year 2000, Judging from current (1997) two million tones import of wheat, by that time, Pakistan could be one of the major food deficit countries in the world. CONSEQUENCES OF NOT BUILDING KALABAGH DAM • National food security would be jeopardized, thus subjecting the economy to additional burden of importing food grains. • Loss of storage capacity of the on-line reservoir due to sedimentation would result in shortage of committed irrigation supplies causing serious drop even in existing agriculture production. • For implementation of water Apportionment Accord 1991, a new storage project like Kalabagh is essential. In its absence it would give rise to bitter inter- 11 | P a g e
  • 12. provincial disputes and recriminations particularly in a dry water year. Dispute between Punjab and Sindh on shortage of about 0.2 MAF water during Rabi maturing/Kharig sowing 1993-94 should eye-opener. It may be worth mentioning that Rabi 1993-94 had a normal river inflow pattern. • Irrigation would affect in the future due to not building a Kalabagh Dam… It can be said like a backbone of the Pakistan’s agricultural sector. • It would be a great threat to the agriculture sector. Role of PASCO PASCO is the institution of the Pakistani government which deals with the purchase of agricultural products like Wheat, Rice, Potatoes, and Sugar etc… This time, there is a record cropping of wheat. But due to insufficient of funds, PASCO is not going to buy the wheat on the rate set by the government. This will create the problems in future regarding the attitude of farmers and cropping in the country. Successes: In past year Pakistan was facing a number of problems regarding wheat, rice, sugar etc. but through continuous improvement it covers these sectors, through availability of products in the market. Like last year sugar crisis was on the top list, but now sugar is available in the market but at high rate, that’s why people use it but in less amount. Similarly is the case with potato sector, Frito-lays is the sub-brand of Pepsi, whose seeds are imported and planted in lands of Pakistan this is good success for Pakistan agriculture sector. Mobilization of domestic resources; shortages, deficits and role of Foreign Aid Mobilization is the act of assembling and making both troops and supplies ready for war. The Government of Pakistan in early 1960s started agricultural credit scheme through Agricultural Development Bank of Pakistan (ADBP), renamed as Zarai 12 | P a g e
  • 13. Taraqiati Bank Limited (ZTBL). Recently, the Commercial Banks and Domestic Private Banks have also started disbursing agriculture credit to the farming community. Credit is provided to farmers for purchase of seeds, fertilizers, and pesticides as well as for purchase of agricultural machinery. Government policy with regard to agricultural credit is to safeguard the interest of small/medium farmers by extending credit to them on easy term and to recover the same in time as well as to protect them in case of any natural hazards and calamity. Ministry of Food, Agriculture and Livestock is playing an active role to monitor agricultural credit disbursement and conducts meetings to remove the bottleneck/hurdles in disbursement. Present regime gives special emphasis to resolve the credit problems of farming community. Agriculture credit is provided for production and development purposes. Production loan is being provided for agriculture input comprising of seeds, fertilizer, pesticides/ insecticides, poultry/animal feeds, chicks medicines, water charges, electric charges for tube wells, labor, fuel and ice of marine fisheries. The development loan is provided for agriculture machinery i.e. purchase of tractors, installation of tube wells, pumping set, reapers, cutter binders, threshers, trolley, spray machinery and cane crusher. The act of assembling and organizing national resources to support national objectives in time of war or other emergencies. See also industrial mobilization. Resources of mobilization: There are five major resources of availability of capital to a country, i.e. a) Capital may be raised through surplus budgeting b) The profit earned from the public sector may be utilized for financing the projects. c) The government may borrow from its own people for promoting economic growth. d) The government may resort to deficit financing for supplementing domestic saving and investment. e) The government may receive economic assistance or aids or loan from other countries to increase the rate of capital formation in country. Need for resource Mobilization: 13 | P a g e
  • 14. Economic planning is an effective technique of mobilization of resoures internal and as well as external, for the achievement of pre-determind economic goal. Domestic resources or internal resources of a country comprise the purchasing power in term of local currency representing saving plus foreign exchange earned by her citizens or nationals and made available for development. External resources on the other hand, consist of foreign exchange made available by foreigners plus the domestic purchasing power also made available by foreigners. Both internal and external resources referred to above are financial resources and these are required to pay for the real resources consisting of manpower and its skill technology, raw materials, capital equipment, managerial and supervisory personnel. These real resources have to be purchase from domestic or international markets and made available for financing and implementation of plan. Domestic resources mobilization: Domestic resources are raised by nationals of a country, because concerns and the government. These are respectively known as private corporate and government savings. Private savings are composed of the surplus of private, income, over private consumption and largely depend upon will to save and power to save of people. Corporate or business savings are undistributed dividends or profits of the corporate business. Government or public savings are the resources mobilized by the government for making development projects. Public savings are also called forced savings if generated through imposition of taxes. Public savings can also be raised through floating of internal loans or deficit financing or both. Deficit financing although a genuine technique of resources mobilization is however fraught with inflationary risk and used only as a least resort. Role Of Foreign Aid Foreign aid is the transfer of resources from developed countries to under-developed countries, either through bilateral donors or multilateral donors. Many countries in the world accept foreign assistance and get different benefits along with a few adverse results. Foreign aid takes place when a recipient country receives additional resources in foreign currency over and above the capacity to import generated by exports. 14 | P a g e
  • 15. Foreign aid means those additional resources, which are used to raise the performance of the recipient country above the existing level. All kinds of resources inflow that are publicly granted and are made either from government to government or from financial institutions to a government, only economic aid is included while military aid is excluded. The main points of this definition are: a. Resource inflow b. Publicly granted c. From government to government i.e. bilateral aid d. From financial agencies to government i.e. multi-lateral aid e. Economic aid, the aid that is used for economic purposes and for dams, projects, industries etc. In case of agriculture, Commodity Aid is very important and it is the aid that is given to Pakistan or any UDC as it helps in advancement of this sector, For this, we would like to discuss commodity aid. Commodity Aid It is type of aid, which relates to commodities such as agricultural products, raw materials and consumer goods. It helps in controlling famine and maintaining the tempo of industries by providing raw materials to the industrial sector. It would be more helpful if it is provided in cash form because a country can then buy more commodities from cheaper sources. Commodity aid some times has a depressing effect on agriculture prices in a recipient country, so it serves as a disincentive for the agriculture sector. The donor country may have much political influence on a recipient country. Foreign Direct Investment Foreign Direct Investment (FDI) is also included in the category of foreign aid. In Pakistan, the examples of FDI are Lever Brothers, Reckitt and Colman, Bata, and Philips etc. It is sometimes argued that foreign direct investment is much cheaper for a recipient country because it entails no payment of principal or interest. But it is also argued that the profit outflow may exceed the amount of repayment. FDI brings technical know 15 | P a g e
  • 16. how to developing countries. But technical know how can be purchased at cheaper rates on commercial basis if possible. Agricultural VS Industrial Development Debate There is much more to discuss agriculture and industrial sector of Pakistan. Agriculture helps in industries to provide the raw materials like Cotton, Wheat, Sugar Cane etc… Without the agriculture sector, industries can’t move on… They have to face and have to pay the heavy cost of imports and that will ultimately affect the cost of the production. The more cost of the goods is, the less the demand of our goods will be in the foreign markets. Agricultural development becomes as important in this era as the technology is going to obsolete very rapidly. Good techniques should be used in agricultural sector in order to survive with the world. It will ultimately help in providing the efficiency and effectiveness to the operations and as well as higher production with good quality. This will then affect the quality of food available in the markets. In our case of Pakistan, people give the importance towards the industrialization without knowing the advancement in agricultural techniques. Pakistani government should focus on agriculture sector. There are private groups who are involved in agriculture sector and doing and earning well in this field. Ali Akbar Group is one of the respected groups who takes agriculture as an important industry of Pakistan. Mansha group has recently launched some of the projects related to agriculture. Mansha group is the Pakistan’s biggest business group and the chairman of mansha group, “Mian Mohammad Mansha” recently talked to Geo News about the importance of Agricultural development in Pakistan. According to him, it would be one of the most profitable industry to invest and earn more revenues from it. 16 | P a g e
  • 17. References Development Planning In Pakistan by Muhammad Aslam Economy Of Pakistan By Khawaja Amjad Saeed "FAOSTAT Database Results". Areas=359&Areas=165&Areas=318&Items=15&Elements=51&Years=2005&For mat=Table&Xaxis=Years&Yaxis=Countries&Aggregate=&Calculate=&Domain=S UA&ItemTypes=Production.Crops.Primary&language=EN. Retrieved 2006-06-03. Economic Survey of Pakistan, 2005-6 Business & Finance Review Food Outlook - No. 1 June 2006 17 | P a g e