‘Agriculture sector lacks efficiency, competitiveness’

Published: May 10, 2012

"Loss in efficiency is denting the country’s self sufficiency in production of various farm goods," PTI Senior Vice President Asad Umar

LAHORE: Despite immense potential, the agricultural sector of Pakistan lacks efficiency and global competitiveness, former CEO of Engro Corporation and current member of Pakistan Tehreek-e-Insaf Asad Umar said on Wednesday. The loss of efficiency is denting the country’s self sufficiency in production of various farm goods, he asserted.

Umar was giving a presentation to members of the Agricultural Journalists’ Association (AJA) on “Agriculture – a mainstay of Pakistan’s economy”. He claimed that production of various farm products has been as low as 90%, if compared with the global benchmark. Sugarcane yield is 40% lower, wheat yield is 20% lower, non-basmati rice yield is 40% lower, cotton yield is 20% lower and milk yield per animal is 90% lower than global standards, he added.

Pakistan, once dubbed a ‘great bread basket’, is now struggling due to these factors, and has increasingly becoming an importer of a large number of agri-commodities, he noted. At the same time, Pakistan’s agricultural sector also faces larger post-harvest losses of 40-80%, if compared with the global benchmark. This double blow — low output and high losses, diminishes the income of growers further, he explained.

Much to their dismay, agricultural credit disbursement to farmers in Pakistan declined from $3.4 billion in 2007/08 to $3.1 billion in 2010/11, said Umar. During the same period, agricultural credit in India increased from $63.3 billion to $103.4 billion, he said. Agricultural credit in Pakistan is 8% of agri-GDP; while in India, it is 31% of agri-GDP.

Water – a major input for the agricultural sector – was also overlooked; as far as increasing supply for farmers is concerned. Losses of water are as high as 40% before reaching farm gates, Umar complained. He stressed the need to plug these wastages on a priority bases. Emphasising efficient use of water for optimal benefits, Umar said irrigating an additional 5% of land can generate an extra Rs100 billion in farm incomes.

Sharing his vision about farmer cooperatives, Umar said economies of scale in agriculture can be achieved by encouraging formation of vibrant clusters of farmers.

Indian cooperatives receive around 50% of total agricultural credit disbursement and 60% of sugarcane procurement is done by cooperatives, he said. In France, 75% of agricultural producers are members of at least one co-operative, and co-operatives handle 40% of food and agricultural production, he informed.

Existing legislation in Pakistan allows formation of farmer cooperatives which can buy inputs, sell produce and obtain credit for member farmers, he pointed out. Pakistani farmers can benefit from this model by ensuring lending to cooperatives from commercial banks, and the provision of crop insurance.

Published in The Express Tribune, May 10th, 2012.

Reader Comments (15)

  • Falcon
    May 10, 2012 - 4:30AM

    Love the idea of farmer cooperatives. Based on green revolution and subsequent capacity enhancements done in agricultural sector historically, high quality inputs have become available to big farmers only and smaller farmers have not been able to benefit from it. Encouraging farmer cooperatives will help address this systematic handicap and improve the efficiency in agricultural sector. Lastly, high water carriage losses are a big NO NO specially taking into consideration the fact that agricultural sector is one of the biggest consumers of water in the country and environmentalists are predicting significant water shortages in the region within a decade or two.

    Recommend

  • Salman
    May 10, 2012 - 8:38AM

    He would prove to be a real game changer…. PTI ROCKS….

    Recommend

  • Safder
    May 10, 2012 - 9:48AM

    Where were you when you started Price War in Urea making it unreachable to Farmers Just to cover Engro plant losses. After that Every Agro. Industry Player assumed that Farmer can bear every increase whether in Fuel, Electric Charges, Seed, Pesticides etc just because Farmer can’t Leave a Land uncultivated or Can’t witness Any Withering Crop.
    After Serving Military Every General becomes Pro-Democratic and so doing you. Nothing Strange… Happy Politics….

    Recommend

  • Safder
    May 10, 2012 - 9:56AM

    Where were you When U started Price Hike War amongst major Urea Manufacturers in the Country by Making an Excuse of Enven Expenditure from the Pocket of Farmer. You raised the price of Urea from 830 to 1810 in just on year if we exclude Tax amount in nears 1550 at least. Following you every industry player in Agriculture and Farming has put burden on Farmers whether seeds, pesticides, fuel etc. just because farmer can’t leave his land uncultivated. Every Military Generals after narrating the slogan of Bloody Civilians becomes Pro-democratic when retires. You are Late in Speaking the Truth and Late in Making the Change…

    Recommend

  • Sajid Mahmood
    May 10, 2012 - 10:19AM

    A perfect man for a perfect Pakistan. I salute you Sir. Now is the perfect time to unleash your thoughts/talent to make Pakistan a country to be reckoned with. PAKISTAN PAAINDABAD

    Recommend

  • May 10, 2012 - 12:35PM

    When was the last time you hear something like above (article) from a political party member?

    @Safdar: Business is a mean to have more income than expense. One has to be considerate on the side he serve. Be thankful that such a man has now taken initiative to take side with country and not a “corporatocracy” world.

    Identifying problems is one thing, claiming to resolve them is another, but the most important is to have have knowledge and tools to construct solutions to the problems. Small bit of ideas shared in this article reflect that Asad’s 26 years of Engro portfolio is vast. Let him serve for the benefit of greater cause.

    PTI Zindabad!
    Jeye Khan, Jeye Tehreek!

    Recommend

  • Concerned
    May 10, 2012 - 6:02PM

    @Safder:
    He hadn’t join PTI by then.

    Recommend

  • Meekal Ahmed
    May 10, 2012 - 7:02PM

    Is this new? All this is well-known.

    And why this romantization of this one individual as though he is a sage and a prophet of new revalations?

    Politics is a good occupation when you are financially secure and have a fat bank balance.

    Why not ask him what his severance pay was? And how many bonuses did he earn over the past five years and what they amounted to in rupee terms?

    There is much talk about executive bonuses in the US and other countries. Pakistan is not far behind. One executive of the NBP got a bonus of Rs 46 million. That is four hundred and sixty lacks.

    For what? Is he so smart?

    Recommend

  • ady
    May 10, 2012 - 9:46PM

    @meekal: I fully agree with you that there is no need to idolize someone but at the same time, there is no need to criticize anyone without facts and figures. The real issue of “WE…the pakistanis” is that we are tooo fragile and emotional. If we start following someone, we follow him/her blindly. If we start hating someone, we criticize him/her without knowing the actual facts.

    If you dont know Asad Umar….do read about him and then give such remarks.

    If I have to single out a visionary guy after Shaukat Mirza in Pakistan, that wud be Asad Umar……..plus people who know him ( as i know him personally) know that he is a true patriotic and down to earth guy.

    If you want to do critique on any of this ideas or past track record, you have every right, but dont judge person’s intentions whom u have never met

    Recommend

  • alo majumdar
    May 10, 2012 - 10:35PM

    @Safder:
    Dear Safder in my understanding a “price war” usually leads to a drop in prices where industry players are undercutting each other for greater market share. However from the details you provided it seems the reverse happened and perghaps there was some form of price cartelization by the urea manufacturers. By the way how much of farm inputs seeds, water, power, urea etc. are subsidized by the government in Pakistan? Are there any good reference sites on the agri-economy and struture of Pakistan. Thanks

    Recommend

  • Yusuf
    May 10, 2012 - 11:22PM

    Unless and Until Sindhi in the Rural Poor join hands with Karachi Citizen, the common rural poor sindhi will Not Prosper.Rural land need to be documented so purchase, sale, and transfer is easily identifiable. For Rural Sind to Prosper land documentation is necessity.

    Recommend

  • Shahid
    May 10, 2012 - 11:33PM

    @Safdar,

    You talk completely irrational, Engro and every other corporation do business and earn money and consequently helps in economic growth of the country. Engro itself has endured a lot of losses due to various reasons with government the main culprit.

    What do you want exactly, to shutdown our local industry, Foreign investment are already on the back foot. Governments are responsible for betterment of the farmers and all its AWAM

    Better study some economics, politics and related stuff prior to talking about great people like him. We all loved him prior to his decision of joining PTI.

    Recommend

  • ady
    May 10, 2012 - 11:33PM

    @alo majumdar: There was no price war. Price was increased by fertilizer companies (04 in total) on sngpl circuit due to gas curtailment despite the sovereign guarantee by Government of Pakistan. Fertilizer companies were left with no option and were pushed to wall….to recover their losses, decided to increase the prices which is 100% justified….every sane company wud do that…..:)…..no rocket science…..

    one word of advice for people on this forum…….do read and research before commenting on anything instead of wasting others time just because you have to comment

    Recommend

  • Hamza Humayun
    May 10, 2012 - 11:38PM

    Sustainability improving soils and reclaiming saline land should also be mentioned.

    Recommend

  • drdeath1987
    May 11, 2012 - 8:21AM

    now i understand why we can solve our problems, it because we do trust incompetent people instead of competent men.
    a wise man said once” in Pakistan every one is a doctor and every one is Mullah!”Recommend

More in Business