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Pakistans Agriculture Sector 1 (Crops Sector) Challenges and Response

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Explains the historical evolution of Pakistan's agricultural sector and carries out its SWOT Analysis by describimg its major strengths and weaknesses as well as the threats it faces and the opportunities available for its growth.Then lists the challenges Pakistan's agricultural sector is facing and comes up with a detailed plan of action to face those challenges.Last part touches on the contoversial issues of land reforms and agricultural income tax.

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Pakistans Agriculture Sector 1 (Crops Sector) Challenges and Response

  1. 1. Shahid Hussain Raja Independent Consultant-Public Policy www.shahidhussainraja.com December 02, 2018 1
  2. 2.  Introduction  Historical Evolution  Where we stand - Time Series  Where we stand - Cross Country  Present scenario - SWOT Analysis  Challenges  Responses  Conclusion 2
  3. 3.  The presentation is only an outline of a part of my eBook namely ”Agricultural Sector of Pakistan: Challenges and Response”  It is available for US$4.99 at Amazon.com at the following URL http://www.amazon.co.uk/Agricultural-Sector-Pakistan-Challenges- Response-ebook/dp/B010TMK28S  However, you can get its PDF version directly from me in return for dpositing US$ 2 (less than the price of Starbucks/Costa Coffee) in my paypal account  Kindly send me your email ID at my following address to do so shahidraja@hotmail.com 3
  4. 4.  Despite its relative decline in formal economy, agriculture is still dominant sector ofpolitical economy of Pakistan  Its performance still dictates all its macro indicators - GDP, Poverty, External Balance, Inflation etc  This presentation, after carrying out the SWOT analysis of Pakistan’s agriculture sector, describes the challenges it is facing and how to respond to them  Kindly do see my other three presentations about Pakistan's agricultural sector, available here to have a complete picture 4
  5. 5.  Out of 80 million hectares total area of Pakistan, 58 million hectares have been surveyed so far  The area under cultivation is 22 million hectares (38%) out of which nearly 19 million hectares is irrigated; the rest is rain fed  The area under forest is 4 million hectares (7%) and the balance 8 million hectares can be classified as the cultivable waste  Agriculture sector of Pakistan comprises four sectors - livestock, crop, forest and fisheries  Livestock contributes 56% of the total agriculture production while crop sector adds 38% to it out of which the contribution of major crops is 25% and minor crops is 13%  Fisheries and forestry contributes 2% each 5
  6. 6.  During 1950s, agriculture growth was sluggish due to less area under cultivation and low productivity  Low technological base, adverse agricultural terms of trade, patterns of landholding, inequitable tenurial relations were some of the causes  Main driver of growth became increase in cultivated area which increased from 11.6 m ha in 1948 to 15.3 m ha by 1960  Development of lands (particularly in the new barrage areas) had huge impact on production 6
  7. 7.  During the1960’ emphasis shifted towards vertical expansion - increase in yields through genetic breakthroughs in major crops (wheat, rice, cotton)  Land Reforms of 1959 devised a rational land tenure policy. Implementation facilitated creation of new social relationship conducive for agricultural growth  Rapid increase in tube wells contributed to more than a million ha cropped area in Punjab alone (100% increase in cropping intensity)  Agricultural sector grew at 3.8% pa with the production of all crops grew around 4.8% per year 7
  8. 8.  Modern improved varieties evolved during the 1960s were adopted widely by farmers in the 1970s  Use of inputs,controlled water, and access to subsidized electricity and credit on a large scale incresed yields  Price and non-price measures resulted in higher use of modern inputs, incresing production of all crops  Three rural reconstruction programs’ thrust to create more rural employment, facilitate flow of farm inputs and outputs and provide agri. services in small towns closer to farmers’ doorsteps also helped farmers to grow more 8
  9. 9.  Two successive food crises forced the policy makers to formulate comprehensive food security policy and realisation of rural transformation as a necessary precondition for economic growth  Induction of local bodies resulted in improvement of rural infrastructure  Foreign remittances resulted in rural private construction, rationalisation of the cost of land and realignment of rural political dynamics 9
  10. 10.  Better crop management and extension services played a major role in increasing the agricultural production  Input use efficiency and greater integration with the world markets are the prime reasons for boosting growth in agriculture sector  Fertilizer use and adoption of HYVs and the use of mechanical farm power exhibited rising trends 10
  11. 11.  Food crises of 2007 reemphasized crucial importance of agriculture as an engine of growth, price stabilizer and vehicle for poverty alleviation.  Terms of trade became favourable for agriculture sector again  Introduction of Biotechnology by the private sector started the Gene Revolution in the country  Commercial farming started at large scale by enterprising farmers and business houses which boosted tunnel farming and farm mechanization  Environmental considerations and water scarcity forced state to go for inputs use efficiency and resource management 11
  12. 12. Crop Decades Ago In Recent Years 1950-53 1960-63 2003-06 2007-17 Wheat 3.13 4.01 20.80 25.76 Rice 0.81 1.09 5.14 7.00 Maize 0.37 0.47 2.60 4.48 Sugarcane 6.09 14.52 48.44 55.45 Seed Cotton 0.82 0.99 5.87 7.18 Fruit N/A 2.54 6.49 7.06 Vegetable 0.63 0.86 3.07 4.13 Milk N/A N/A 37.27 38.05 Meat N/A N/A 2.31 2.84 Fish 0.055 0.089 0.59 0.69 Output of most crops increased by 6-10 fold (million metric tons; 3 year moving average)
  13. 13.  Wheat - From 4 MT in 1950s to 26 MT in 2017  Rice - From 1MT in 1960s to around 7.0 MT in 2017  Maize - from 0.5MT in 1950s to about 4.0 MT in 2017  Cotton - From 0.8 MT in 1950s to 13.5 MT 2017  Sugarcane - From 6MT in 1950s to 57.30 MT in 2017 13 MT = Million Tonnes
  14. 14. Commodity Pakistan India USA China World Wheat 28 27 26 48 28 Cotton 20 15 29 43 22 Rice 32 33 82 64 42 Sugarcane 516 734 785 871 717 Maize 33 22 96 55 50 14 Maunds (40 kg)/acre
  15. 15. 15 SWOT Analysis
  16. 16.  22 million hectares of land under cultivation, 35% of the total area, sufficient for its food self-sufficiency but also its industrial and exports needs  Contributing one fifth of Pakistan’s total GDP agriculture is source of income for 60 % population of Pakistan absorbing 47% of the total labor force  Pakistani farmers have now more than 60 years of accumulated knowledge of modern agricultural practices  Pakistan has one of the largest and best Irrigation system  Pakistan is blessed with all four weathers, very helpful in producing all types of crops with potential for better yields 16
  17. 17.  Weak factor productivity leading to stagnant yields  Majority are small farmers with low technology base  Too much Post harvest losses  Inadequate supply chain Infrastructure  Inefficient and inadequate marketing  Depleting soil fertility-salty/brackish tubewell water  Deteriorating Irrigation and drainage system  Ineffective Education, R&D and Extension linkages  Poor skill development for modern agriculture  Inappropriate use of natural resources  Rural Non-farm Sector performs below potential 17
  18. 18.  Productivity gaps-great scope for increas production  Breakthrough in agricultual sciences/practices  Worldwide interest in agriculture/food security  Burgeoning population - need for more food  Growing prosperity -demand for qualty/variety food  Information technology-access to extension services 18
  19. 19.  Climate change and environmental threat  Use of arable land for non-agricultural use  Rise of urban commercial classes in governance -low priority for agriculture  Sluggish economic growth-catch-22 position  Rural Governance issues 19
  20. 20. How to improve the quality of life of the citizens of Pakistan by ensuring their food security and providing agricultural raw material to its industry at competitive rates by making agriculture an efficient, productive and profitable sector of the economy in a manner that its growth is sustainable and outputs are competitive? 20
  21. 21.  Increase productivity by increasing efficiency in all agricultural operations through public as well as private sector investment in R&D and Extension  Increase profitability by rationalizing input and output prices, reducing production and post production losses and selective public procurement intervention  Making agricultural produce competitive in the rapidly globalizing world by reducing cost of production, improving quality and ensuring Sanitary and phyto-sanitary (SPS) compliance 21
  22. 22.  Ensuring sustainability by promoting environment friendly good agricultural practices through appropriate legal framework, awareness campaigns and incentives and rewards  Equitable distribution of gains from enhanced productivity by making available public sector goods and services to all stakeholders without distinction 22
  23. 23. A. Horizontal expansion - increasing the area under cultivation B. Vertical expansion - increasing the productivity C. Structural transformation - diversification and value addition D. Cross Cutting Interventions - agrarian reforms 23
  24. 24.  Bringing new areas under cultivation  Reclaiming degraded lands  Intercropping 24
  25. 25.  Bringing uncultivated area under cultivation by technical support,technology and adequate water  Increasing availability of water by construction of dams and popularizing rain harvesting techniques  Save water by reducing water losses through proper water conveyanceefficient irrigation techniques  Economical management of ground water pumping through incentives, legislation and awareness 25
  26. 26.  Launch a sustained campaign for the use of gypsum in every acre and provide incentives  Forbid burning stubs of wheat &rice; encourage the farmers to plough them into the field  Encourage the sowing of humus making plants soon after the harvesting of wheat and plough them back into the lands 26
  27. 27.  Encourage eco-friendly inter-cropping practices -cultivating vegetables between the rows  Agro-forestry is another profitable option for the farmers and the country  Farmers must be given proper technical support for it to be cost effective and eco friendly 27
  28. 28.  Agricultural Education and Research  Farm Mechanization  Inputs ◦ Seeds ◦ Chemicals ◦ Water ◦ Credit  Production Losses 28
  29. 29.  Introducing need based agriculture education  Creating effective inter and intra institutional linkages  Collaboration with reputable foreign universities  Strengthening public sector Research and Development  Improving inter and intra institutional coordination among educational/research institutions and extension  Encouraging private sector investment R&D with focus on modern technology and facilitating their outreach  Capacity building of extension personnel of the provincial agricultural departments 29
  30. 30.  Intensification and diversification of farm mechanization by ensuring easy access of the farmers to essential farm machinery  Its efficient and optimal use by incentivizing the private sector for opening farm machinery leasing/hiring outlets in villages  Expansion and modernization of local farm machinery manufacturing by providing them training, incentives and technical/financial support to produce agricultural implements as per international standards 30
  31. 31.  Variety development and local production of good quality seeds by the private sector by providing them appropriate legal cover and technical/financial support  Providing legal framework for establishing partnerships between research institutes/private seed companies  Encouraging good practices among the farmers to increase the efficacy of farmers saved seeds  Incentivize the farmers to use drill system of sowing to save on fertilizer and for better seed germination 31
  32. 32.  Timely availability of fertilizers, un-adulterated pesticides & herbicides at reasonable prices to the nearest possible doorsteps of the farmers.  Rationalization of prices, in time import and provision of subsidy when needed  Popularizing the efficient and judicious use of chemical inputs for reducing production losses 32
  33. 33.  Provinces to rationalize their respective water-related legislations including local water usage rules  Implementation of integrated water resource management  Encourage public-private partnerships on water saving techniques in cultivation of different water terrains  Prioritizing planned investment in large storage infrastructure and groundwater use  Saving water by reducing water losses through proper water conveyance and efficient irrigation techniques  Economical management of ground water pumping through incentives, legislation and awareness 33
  34. 34.  Streamlining the traditional sources of farmer credit by integrating them with the formal banking system  Making financial products tailor-made to the needs of small farm owners  Linking small and medium non-farm rural enterprises to the agri-based supply chains  Increasing volume/outreach of formal banking network for timely/easy access to credit by farmers 34
  35. 35.  Production losses due to non-use of weedicides by farmers  Ignorance, fear and costs are general reasons for it  Need to create awareness among the farmers for judicious use of weedicides for reducing the production losses  Eco friendly measures to reduce this loss for those who are excessively conscious of use of chemical inputs 35
  36. 36.  Reducing post production losses  Value addition  Marketing 36
  37. 37.  Reducing post-production losses by developing cool chain infrastructure/storage in private sector  Establishing grain storage and handling system at all levels including on-farm, off-farm,sea/airports  Refurbishment of existing storage facilities  Enforcing grain quality standards and establishing reliable grain testing laboratories at delivery points 37
  38. 38.  Make agricultural produce competitive by enforcing SPS standards and introducing international certifications  Encouraging quality consciousness among the farmers through awareness campaigns  Introducing and implementing grading standards and improving marketing system of agricultural produce  Establishing modern agricultural produce wholesale markets in public-private partnership with cold storages, pack houses, customs facilities etc. 38
  39. 39.  Link agriculture sector with its corresponding upstream/downstream national/international markets  Establishing modern agricultural produce wholesale markets in public-private partnership with all facilities  Encourage processing/value addition of agricultural produce for better value/reduce post-harvest losses  Introducing warehouse receipt system for easy realization of sale proceeds to farmers 39
  40. 40.  Formulation of comprehensive Land Use Policy  Improving Agricultural Terms of Trade  Improving Rural Infrastructure  Improving Rural Governance  Environmental Sustainability  Creating Linkages and promoting Investment  Gender Mainstreaming  Production Relations 40
  41. 41.  Develop national land use policy for its rational use as valuable arable land is being converted indiscrimately for non farm uses  Infrastructural development, though necessary is also rendering fertile land to brick and mortar  Add to it the declining fertility of our agricultural lands due to non sustainable agricultural practices  And degradation of lands due to water logging/salinity going on for decades, a negative side effect of our irrigation practices  All these issues needed to be addressed by formulating a long term comprehensive land use policy by the government 41
  42. 42.  Improve the terms of trade between agriculture and the other sectors of the economy to stop its squeezing  Rationalize the prices of the inputs farmers use, provide subsidy on them and as well as commodities they produce  Improving the marketing infrastructure  Selective procurement when the prices of agricultural commodities crash  Introduction of crop insurance scheme 42
  43. 43.  In rural areas the roads, schools, hospitals and other infrastructure are in deplorable condition  Government must invest in farm to markets roads, construction of health facilities, schools and also rural electrification  However there are complaints of substandard workmanship and their fast wear and tear due to paucity of maintenance funds  Complaints of shortage of staff to man these health and educational schools. 43
  44. 44.  Develop efficient and effective agri-based supply chains that link the agriculture sector with their corresponding upstream and downstream links in the rural non-farm (RNF) to the national and international markets  RNF provides 40-60% of incomes/jobs in rural areas, much of its activity occurs in the trading, services and processing sector having strong forward and backward linkages with agriculture  Informal and low capital using entities catering mostly to domestic markets, RNF presents opportunities for providing value addition to primary production at the farm level 44
  45. 45.  Not easy to dismantle centuries old rural governance structure and replace it with modern, rural public management in a short period  Start with education, literacy and skill formation which will shake the foundations of this feudalistic structure  Establish alternate dispute resolution mechanism to replace informal system heavily dependent on big landlords and government  Local bodies elections be held regularly to bring in the leadership interested in improving rural infrastructure and governance 45
  46. 46.  Creating awareness among the farmers about the looming threat of climate change and environmental degradation  Synchronise provincial extension services and private agro services providers to popularise good practices  Promulgation of legislation for stopping of practices aggravating the threat of climate change  Allocation of resources for carrying out research to adjust the cropping patterns and and diversifying crop mix  Developing more varieties responsive to climate change  Adapting irrigation practices and fertilization regimes. 46
  47. 47.  Introduce the three modern forms of farming production relations  Contract farming-encouraging agri-based processors to supply inputs & technology packages to farmers on deferred payment with buy-back of produce at guaranteed prices  Cooperative farming-piloting variations of successful coop-models (with refinements to traditional coops)  Corporate farming-promoting lease of commercially viable tracts of land to corporate level entrepreneurs who are willing to practice high-tech export oriented agriculture and share profits with the owners  However all the above three need comprehensive legislation about contract making/dispute resolution as well as their strict implementation through a specially created institutional infrastructure 47
  48. 48.  Rural women are under three pressures-nature, society and family, all treat them unfairly in terms of status, resource ownership, jobs  Improving healthcare and family planning facilities to relieve them of excessive child bearing burden should be the top priority  Launching of special rural female literacy and education campaign by offering attractive monetary rewards would help in their empowerment  Ensuring women’s access to resources and assets, by creating awareness about their rights and strict enforcement of legal framework  Providing equitable opportunities to women by developing marketing oriented skills and remunerative employment in the rural areas 48
  49. 49.  Enhance the productivity of the agriculture by increasing efficiency in all agricultural operations through public as well as private sector investment in R&D, extension services, rural infrastructure, marketing, value addition  Make agricultural produce globally competitive by reducing cost of production, improving its quality and meeting global food safety standards. raising the awareness of the opinion leaders and decision makers to enforce strict food safety standards.  Motivating domestic and foreign investors to invest in seed production, fruit and vegetable processing, agri-infrastructure development and encouraging development of commercially viable non-farm rural agriculture enterprises 49
  50. 50.  Agriculture sector capable of accelerating growth, reducing poverty, containing inflation and improving the quality of life of its citizens.  Due to its backward and forward linkages, small investment can bring substantial gains  Area needing urgent attention are inputs use efficiency, reducing production/post production losses, credit availability and bringing more areas under cultivation through intercropping and tunnel farming  Areas needing attention in the short term are rural infrastructure, agricultural terms of trade, promoting investment, formulating land use policy ,farm mechanisation and improving rural non-farm sector  Areas needing attention in the long term are agricultural education, rural governance ,gender mainstreaming, adapting to climate change threats and introducing modern forms of production relations 50
  51. 51.  Thank you for viewing the presentation  If you liked it, can you please download its EBook version at the following URL http://www.amazon.com/author/shahid_hussain_raja  Peanuts for you, but will help me a lot 51
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