Pakistan’s Agriculture sector Potential: Opportunities Amid.
Challenges Pakistan has one of the world’s most impressive agricultural systems but it has not used it well. Agriculture could become the main driver of economic growth and poverty alleviation but for that to happen policymakers at the federal level as well as in the provinces will have to appreciate the sector’s potential as well devise public policies to realize it.
The agriculture sector is still the dominant sector of the economy with a profound impact on the rural economy. Its forward and backward linkages particularly with the industrial sector, give it a central place as a useful tool for the economic development of Pakistan. In the face of increasing population growth, limited possibilities of further extension of cultivated land due to lack of mechanization, increasing resource degradation and widening gap between potential and national average yield, productivity growth takes an important place to face the challenges of the future to combat food insecurity.
Despite the devastating floods of last year, the earnings of rice, wheat and sugarcane have increased significantly in the year 2022-23 as compared to the year 2021-22. Although inundation, floods and heat wave played their part, the news of increased earnings bears good omen for the growers on one hand and for the food security situation in the country on the other. Below is a tabular presentation of the major crops and their earnings:
Wheat
| Wheat | 2021-22 | 2022-23 | 2023-24 (Projected) |
|---|---|---|---|
| Total expense | 45,926 | 72,013 | 81,523 |
| Fertilizer expense | 12,000 | 15,200 | 15,100 |
| Yield (Maund/acre) | 33 | 33 | 33 |
| Grain price (Rs/maund) | 2,150 | 3,900 | 4,300 |
| Straw price (Rs/maund) | 425 | 450 | 500 |
| Earnings (PKR/acre) | 39,049 | 71,538 | 76,877 |
In 2022-23, wheat was sown on 21.77 million acres as compared to 22.18 million acres last year. The decline in area was mainly recorded in Sindh due to inundation and seeds availability issues. It is, however, projected that next year 23 million acres will be cultivated based on higher wheat prices and expected normal year.
Cotton
| Cotton | 2021-22 | 2022-23 | 2023-24 (Projected) |
|---|---|---|---|
| Total expense | 56,281 | 73,093 | 103,133 |
| Fertilizer expense | 10,804 | 16,600 | 18,500 |
| Yield (Maund/acre) | 20.5 | 15.4 | 20 |
| Phutti price (Rs/maund) | 6,000 | 8,570 | 8,500 |
| Earnings (PKR) | 66,719 | 58,885 | 66,867 |
Last year, water shortage and heat waves were the main factors for dropped area. This year, it is expected that 5.44 million acres will be harvested as compared to 5.19 million acres last year due to expected normal year and sentiments of good produce price.
Sugarcane
| Sugarcane | 2021-22 | 2022-23 | 2023-24 (Projected) |
|---|---|---|---|
| Total expense | 99,485 | 114,230 | 143,935 |
| Fertilizer expense | 12,500 | 17,400 | 21,500 |
| Yield (Maund/acre) | 770 | 740 | 760 |
| Cane price (Rs/maund) | 245 | 330 | 350 |
| Earnings (PKR) | 89,200 | 130,000 | 122,100 |
This year, sugarcane fetched better prices due to higher demand and improved earnings despite heat waves and lower productivity due to floods last year. However, due to rainfalls in March, farmers could not prepare land for sowing cane in spring season as a result of which only 3.16 million acres is expected to be covered as compared to 3.26 million acres last year.
Rice-Basmati
| Rice-Basmati | 2021-22 | 2022-23 | 2023-24 (Projected) |
|---|---|---|---|
| Total expense | 49,219 | 71,115 | 81,265 |
| Fertilizer expense | 9,142 | 18,175 | 16,000 |
| Paddy yield (Maund/acre) | 33 | 34 | 34 |
| Paddy price (Rs/maund) | 2,350 | 4,500 | 4,500 |
| Earnings (PKR) | 28,330 | 81,890 | 71,740 |
This year, rice fetched exceptionally higher prices due to limited supply and higher demand factors. It is expected that 8.4 million acres will be sowed this year as compared to 7.4 million acres last year due to better water availability. Rice earnings are however projected to be normalized due to increased area coverage and rising fertilizer prices.
The need of the hour is an expansion of agriculture produce markets and enforcement of an efficient and transparent market clearing mechanism to get fair market prices for farmers. This could be done through the following suggestive measures:
- Expansion of existing and creation of new warehouses along with crop grading system in key locations across Pakistan under public-private partnerships.
- Deregulation of the seed market apart from a few commercially important seeds.
- Reduction in import duty on farm machinery to increase productivity.
- Incentivization for farmers to conserve water, adoption of regenerative agriculture sector to effectively control weeds and be more market-driven with their crop mix.
- Expansion of existing and creation of new markets for value addition, e.g. organic farming, SME level processing to provide cheaper inputs for local manufacturers (reduce import burden) and encouragement of high-value exports, etc.
- Encouragement for private banks to roll out digital loans for quick access with easier terms of repayment and launch warehouse receipt financing.
- Imposition of a research emergency and spearheading scientific cooperation initiatives with other countries to strengthen agricultural research.
- Transformation and expansion of the agri-extension program to provide effective on-farm technical support.