Agricultural sector in pakistan

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  • 1. 1 AGRICULTURAL AND INDUSTRIAL SECTOR BETTERMENT IS A KEY FOR THE DEVELOPMENT OFPAKISTAN, AND MANAGEMENT IS A KEY PROBLEM Pakistan from its birth has faced so many problems infect every type of problem those problem can be inequality, war, economic, terrorism means we can say that Pakistan has never seen a constant peace in its time. As already discussed that Pakistan has faced every problem but the main problem that Pakistan is facing from its birth is economic problem and this problem has occurred because of mismanagement and lack of planning. Also we can say that the problem has occurred because the main source of Pakistan’s income that is Agriculture is backward or we can simply say that it is not fulfilling the demands of the people because of lack of technology while when we talk about the industry of Pakistan then it has also not made any good contribution for the development of Pakistan. But this thing is true that if Pakistan wants to get developed then it must have to develop first Agriculture and its industry. So let’s have glance on Pakistan’s agriculture and Industrial sectors. Agricultural Sector in Pakistan BackgroundPakistan has a rich and vast natural resource base, covering variousecological and climatic zones; due to which the country has greatpotential for producing all types of food produce. Agriculture has animportant role in generating economic growth. Agriculture affects theeconomy in three ways namely, first, it provides food to consumers andfibers for domestic industry; second, it is a source of scarce foreignexchange earnings; and third, it provides a market for industrial goods.Land use, farming systems and institutionsThe total geographical area of Pakistan is 79.6 million hectares. About 27percent of the area is currently under cultivation. Of this area, 80 percent
  • 2. 2is irrigated and Pakistan has one of the highest proportions of irrigatedcropped area in the world. Most of Pakistan is classified as arid to semi-arid because rainfall is not sufficient to grow agricultural crops, forest andfruit plants and pastures. About 68 percent of the geographical area hasannual rainfall of 250 mm, whereas about 24 percent has annual rainfall of251 to 500 mm. Only 8 percent of the geographical area has annualrainfall exceeding 500 mm. Hence supplemental water is required forprofitable agricultural production, either from irrigation or through waterharvesting.Agriculture is largely dependent on artificial means of irrigation. Of thetotal cultivated area, about 82 percent or around 17.58 million hectares isirrigated, while crop production in the remaining 3.96 million hectaresdepends mainly upon rainfall. The Irrigation Canal Command Area (CCA)has been grouped into classes on the basis of the nature and severity ofits limitations water logging, salinity, sodality and texture. At present aboutone-fifth of the cultivated land in CCA is affected by water logging andsalinity to varying degrees. An additional area of 2.8 million hectaressuffers from sodality. Notwithstanding huge investments, the water tablewas 0 to 1.5 m under 2.2 million hectares of irrigated land, 1.5 to 3 m under6 million hectares and 0to 3 m under 8 million hectares. Thus Pakistanneeds to overhaul its entire drainage and reclamation strategy reduces itscost and makes it efficient. Significance of the agricultural sector in the economyAgriculture is an important sector, providing food to the fast-growingpopulation of the country. According the 1998 census, the totalpopulation of Pakistan is 130 million. With a population growth rate of 2.6percent there is a net addition of 3.4 million people each year. In 1947 thepopulation of Pakistan was 32.5 million; in 50 years it has increasedfourfold. During this period the production of wheat, the major food crop,has increased only 2.9 fold. During 1970/71 the amount of wheat importedwas 0.3 million tones; it has increased to 4.1 million tones in 1997.Tremendous efforts have been carried out to narrow the gap betweenpopulation growth and food production.Agriculture contributes about 24 percent of the gross domestic product(GDP) and employs 47 percent of the national employed labor force. Thecontribution of the agricultural sector to the GDP has declined graduallysince Pakistan came into existence, from over 50 percent in 1949-50 toabout 24 percent in 1996-97. Agriculture still remains the major sector ofthe GDP composition. A major part of the economy depends on farming
  • 3. 3through production, processing and distribution of major agriculturalcommodities.In foreign trade agriculture again dominates, through exports of rawproducts such as rice and cotton and semi-processed and processedproducts such as cotton yarn, cloth, carpets and leather production.Agriculture is essential for sustainable improvements in internal andexternal balances. Of the total export earnings, the share of primarycommodities and processed and semi-processed products constitutedalmost 60 percent of the total exports. There have been some structuralchanges over time, but the contribution of agro-based products has moreor less sustained its position. Overview of agricultural sector developmentSignificant progress has been made in development of the agriculturalsector in Pakistan since the time of independence in 1947. At that time,the Indus Basin was irrigated with an extensive system of canal irrigation,sown with low-yielding traditional seed varieties, fertilized mainly withanimal manure and cultivated by means of animal draught power andby hand.In the early 1960s, conditions that favored more rapid growth were put inplace: the Indus Water Agreement was signed under the chairing of theWorld Bank; the Indus Basin Development Fund was established withmulticolor support; the government improved the terms of agriculturaltrade; and tube wells were installed as a viable investment. That decadewitnessed a green revolution in Pakistan, and crop productionaccelerated during the first part of the decade, primarily because of theincreased use of inputs.During the past 50 years a significant increase in production of the majorcrops has been achieved. Wheat production rose from 3.3 million tones in1950/51 to 18.6 million tones in 1997/98. Similarly during this period riceproduction rose from 0.86 million tones to 4.32 million tones. There was alsoa records increase in cereal production. The production of cottonreached 9.4 million bales during 1996/97.Sugarcane production reached5.3 million tones during 1997/98.Policy measures in the last four years, i.e. from 1993/94 to 1996/97, werepositive for the agricultural sector. Undue benefits provided to theindustrial sector over the years were reviewed and modified. Theagricultural sector as a result responded with new buoyancy. Export taxeson agricultural commodities were reduced or eliminated, which benefited
  • 4. 4the agricultural sector. In the policy reforms package, better supportprices, better tillage and soil preparation practices and adequate andtimely availability of fertilizer and certified seed have added to thepositive response from the farming community. In 1996/97, production ofwheat reached a level of 16.7 million tonnes, and there was also a 13.7percent increase in the production of Basmati rice. The overall productionof rice registered an increase of 8.5 percent - the total production of riceduring the year was 4.3 million tonnes, compared with 3.97 million tonnesin the previous year.There was, however, a decrease in the production of pulses, particularlyof gram, during 1996/97 to 832 000 tonnes from 918 000 tonnes during theprevious year (1995/96). Production of potatoes and onions in 1997/98 isestimated at 1 205 000 and 1 160 000 tonnes respectively, as comparedwith 963 000 and 1131 000 tonnes in 1996/97.Over the past 20 years some important structural changes have takenplace in the sector. In particular, livestock has emerged as an importantsub sector, today contributing more than one-third of agricultural GDP,compared with about 28 percent 20 years ago. Similarly, fisheries andforestry, while still minor contributors to agricultural GDP, have grownrapidly. Structural changes have also taken place within the crop sector.Cotton is now as important as wheat in terms of value added with a one-fifth share of total earnings. Rice and sugar have, however, fallen from a20 percent share in the early 1970s to 15 percent today. INDUSTRIAL SECTORThe Industrial sector as a whole grew by 8.4 percent during FY 2007-08,while the large scale Industrial (LSM) is estimated to grow by 8.8 percentand small-Scale Industrial (SSM) by 8.1 percent. The data for 100 industrialitems for three Quarters of the year 2007-08 implied that LSM growth maybe higher during Jul-Mar of FY 2007-08 as compared with thecorresponding period of the last year, but Suggests that the 13.0 percentgrowth target of LSM sector for the year 2007-08 may not be achieved.Major industries supporting the recovery in LSM included textiles, Sugar,cement and basic metals. The automobile industry, however, registered aSlowdown in growth during July-March 2007-08 relative to thecorresponding period of the year 2005-07. However, industries such asfertilizer, paper and board and Engineering showed a decline inproduction during this period mainly due to Weakness in demand and
  • 5. 5temporary shut down for maintenance as well as Expansion. Infrastructurebottlenecks and power shortage are major constraints in achieving theIndustrial targets of 13 percent for the year 2007-08.An investment of Rs 3,285 million from PSDP was planned to beundertaken during2007-08 in the industry sector. The major projectsinitiated during the year under Review include Auk Hunan Auk Nagar,five Advanced CAD/CAM Training Centers, Technical Up-gradation ofGarment Industry, Agro-food Processing Facilities at Multan, SportsIndustries Development Centre, Sialkot, Gujranwa1ala Business Centre,Gujranwala Tools, Dies and Moulds and Water Desalination ProjectGowanda, Baluchistan.TextileIn view of anticipated competition with countries like China and India inthe global Markets particularly in the backdrop of opening of Chineseexport of textile and Clothing in European Union and USA in 2008, effortsare being made to make the Textile and clothing sector to be moredynamic and competitive. To achieve this Objective, a separate TextileIndustry Ministry was created and a number of projects Including Lahore,Faisalabad, Karachi Cities and Karachi Textile City projects have Beenplanned in the public sector with an investment of over Rs 3.5 billions, ofwhich Two projects Lahore Garment and Faisalabad Garment Cities havebeen initiated During 2007-08 with an investment of Rs 998 million.CommerceIn order to accelerate export, an investment of around Rs 3 billion wasplanned in the Commerce sector. A number of projects including SocialAccountability SA-8000, Expo Centre Lahore, Pakistan School of FashionDesign, Lahore and Trade and Transport Facilitation projects were initiatedduring the year under review.Investment of Rs 1,987 million is estimated for these projects during FY2007-08.Two major projects of Pakistan School of Fashion Design Lahoreand Expo Centre, Lahore is expected to be completed by June, 2008.shiftin the production paradigm to Technology and knowledge basedindustrialization, with a focus on the quantitative and the qualitativegrowth of an integrated and competitive industry in the private Sector.The inefficiencies of import substitution must give way to an export ledStrategy. The share of knowledge and technology intensive engineering,
  • 6. 6electronics, Pharmaceutical, chemical and non-metallic mineralproducts, would be strengthened And enabled through fiscal and tariffmeans as well as building of alliances with International partners. Sectorsand products with comparative advantage such as Textiles, food andagro-processing would similarly be fostered.A focused policy thrust, supported by adequate resources, will beadopted for raising the threshold levels of the technology and skills basewhich will result in better Productivity and quality. However, this needs tobe accompanied by diversification, as well as physical and socialinfrastructure, standardization, and certification to Match the growthrequirements. Pakistan will be made a business friendly Countrythrough lowering cost of doing business, facilitation mechanism, reductionof Procedures, intrusive inspection laws, and co-ordination of policies atthe federal and provincial levels. The private sector is the key stakeholderin the growth strategy, andWould receive its due emphasis, while the roleof public sector would be that of catalyst and an efficient regulator toensure competitive market structure. Private and Public sectors arerequired to go side by side to solve problems and formulate the Tools andmechanisms needed to overcome constraints and exploit opportunities.Challenges and ConstraintsThe Industrial sector still revolves around the traditional low value addedIndustries, whose share in world trade is continuously declining. Theinvestment in Upgrading technology is low and diversifying into emergingmarkets, products and Processes are either slow or nearly constant. Anefficient, international quality supply Chain, which is so essential for localindustry to flourish, is missing, partly due to Insufficient scale of economies,and partly due to bundling of raw material, parts and Modules by themultinationals in their assembly oriented companies, which Discourage alocal vendor industry to flourish. Major constraints in achieving the goal Ofrapid industrialization, are given below:Productivity Levels: A serious constraint in achieving globalCompetitiveness has been the low productivity level. Without thedevelopment of a widely embedded skills base, competence andproductivity, global trading Challenges cannot be achieved.Skills: Pakistan is facing both a skills shortage, and skills gap in key modern
  • 7. 7technologies. This reduces optimum operation of plant and machinery.inadequate and Unreliable Power Supplies: Inadequate and unreliablePower supply, a major constraint, is getting worse and causing poorCompetitive rating.Saturation of Capacity: Many key sub-sectors such as steel, automobiles,Fertilizer, paper and paper board, chemicals etc. are facing saturation ofCapacity.Transport and Communication Infrastructure: Current road and railNetwork is inadequate even for immediate demands, and even morepoorly Maintained. Port congestion and port charges are high, addingcost and lowering competitiveness.Certification and Standards: While some progress has been made, manyof manufactured products still lack proper certification for quality andsafety, which hinders their wider acceptance locally and globally? Policies, Strategies and MeasuresAchieving accelerated industrialization is the foremost goal by capitalizingupon National strengths and mitigation of weaknesses. The challenge forPakistan is not to rediscover industrial policy, but to re-deploy it in a moreeffective manner in the National, regional, and global context. The policyframework will be based upon the Advance industrial economies, wherefocus is on the entire value chain. The Provision of facilities for publictesting laboratories and public R&D, vocational and Technical training,infrastructure and communications, are all necessary inputs which Areregarded as a public good for the Industrial sector. Value addition inProducts and processes will be strengthened through backward andforward Linkages, productivity levels will be increased through humanresource development, Technical and vocational training, andstrengthening research and development.All sectors have been opened for private sector investment, and equaltreatment is Available to foreign and local investors. The basic thrust of thePlan will remain Industrial and technology driven growth within aframework, which encourages Economy of scale, value addition anddiversification of products and processes. Major policy measures plannedto be adopted for the year 2008-08 include the Following:
  • 8. 8Diversification and Pioneering Industries: One the foremost objectives areto diversifies the Industrial mix and generates new areas of comparativeAdvantage. Incentives will be available for new activities, whether theyare ‘New’ products, processes or technologies, so that the range ofactivities is expanded. Enterprises especially those engaged in lightengineering, or those in sub-sectors declared as ‘pioneering’ industries, willbe encouraged to foster Joint ventures and productivity enhancementIndustrial Zones, Corridors, Clusters and Estates: Present urban/Industrialcenters cannot accommodate the expected increase in industrial AndIndustrial activities. Industrial corridors, estates, and industrial parks aretherefore planned to be set up by Provincial Governments along theMotorways, expressways, and railways with full support of the FederalGovernment.Growth and Investment TargetsIn order to achieve the goal of sustained industrialization, a growth rate of10.9 Percent has been targeted for the Industrial sector including 12.5percent for Large scale Industrial and 8.5 percent for Small Scale Industrial.An Allocation of Rs 18.85 billions has been earmarked for both the Industry,Textile and Commerce sectors which the highest one is ever made inthese sectors. It consists of Rs 8.483 billions in the Industry sector, Rs 1.098billions in Textile Sector and Rs1.589 million In the Commerce Sector. Majorprojects to be carried out in Industry Sector during 2008-08 include: Agro-food Processing Facilities at Multan (Rs 79.87Million), Auk Hunan AukNagar (AHAN) (Rs 70.379 million), Gujranwala Business Centre,Gujranwala, (Rs 13 million), Sports Industries Development CentreSialkot(Rs 178.84 million); Technical Up-gradation of Garment Industry allover Pakistan(Rs 100 million), five advanced CAD/CAM Training Centers(Rs 139.4 million),Gujranwala Tools, Dies and Moulds Centre (Rs 295.000million), 2MGD Water Desalination Project GAWADAR Baluchistan (Rs188.87 million). Major projects in the Textile sector include 03 GarmentCities at Lahore, Faisalabad and Karachi, Implementation of Export Planand establishment of two Fiber Testing Laboratories. Major projects to becarried out in Commerce Sector include SA-8000, Pakistan School ofFashion Design, Lahore, Trade and Facilitation Project and Expo Centre,Lahore.
  • 9. 9 Now here every thing is clear,we saw that Pakistan got developed in few times but suddenly due tosome reasons the development process got failed there are number ofreasons behind this but the number one reason is management, or wecan say not sincere management, because we know that ifmanagement is sincere then it will work really heartily for the bettermentof that project and problems in any project can occur only at that timewhen there management is not sincere and also not able to completethat task, so management has remained a big problem in Pakistan. We know that Pakistan highlydepend upon the agriculture and if the agriculture sector is not properlygiven attention then Pakistan can never get developed.