Agriculture sector falls way short of growth target

Published: June 11, 2019
A Reuters file photo of an agricultural field.

A Reuters file photo of an agricultural field.

KARACHI: The agriculture sector – the backbone of national economy and a major source of food security and employment – recorded a dismal growth during the outgoing fiscal year 2018-19 primarily due to water scarcity.

“The performance of agriculture during 2018-19 remained subdued. On the aggregate, the sector grew by 0.85%, much lower than the target of 3.8% set at the beginning of the year,” according to the Economic Survey of Pakistan 2018-19 released on Monday.

“This under-performance of the agriculture sector was mainly due to insufficient availability of water, which led to a decrease in cultivated area and a drop in fertiliser offtake,” the survey added. The crops sector experienced a negative growth of 4.43% against the growth target of 3.6% on the back of decline in growth of important crops ie sugarcane, cotton, rice, maize and wheat, it said.

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Sugarcane production dropped by 19.4% to 67.174 million tons, cotton harvest fell by 17.5% to 9.861 million bales and rice crop contracted by 3.3% to 7.202 million tons.

However, two other major crops – maize and wheat – managed to give comparatively higher production.

“Maize crop increased by 6.9% to 6.309 million tons and wheat harvest grew marginally by 0.5% to reach 25.195 million tons,” it said.

Other crops, having a share of 11.21% in agriculture value addition and 2.08% in gross domestic product (GDP), showed a growth of 1.95% mainly due to increase in production of pulses and oilseeds. Cotton ginning, however, declined by 12.74% due to decrease in production of cotton crop.

According to the survey, agriculture contributes 18.5% to the country’s GDP and provides 38.5% employment to the national labour force but it remains a backward sector of the economy while high-performing agriculture is the key to economic growth and poverty alleviation.

Over the last decade, the performance of agriculture sector has fallen short of the desirable level, mainly because of stagnant productivity of all important crops. “Crop area of the five traditional crops has largely remained unchanged. Climate change also poses a serious challenge to Pakistan’s agriculture and threatens country’s water availability and food security,” the survey said.

Livestock sector outperforms

Livestock, having a share of 60.54% in agriculture and 11.22% in GDP, notched up 4% growth in FY19 against the target of 3.8%. The fishing sector, having a share of 2.10% in agriculture value addition and 0.39% in GDP, grew by 0.79% while the forestry sector, having a share of 2.10% in agriculture and 0.39% in GDP, grew by 6.47% due to increase in timber production in Khyber-Pakhtunkhwa by 26.7% to 36.1 thousand cubic metres.

In 2018-19, the production of onion and chillies increased 2% to 2.12 million tons and 0.4% to 148.7 thousand tonnes respectively compared to last year.

However, the production of mash pulse (lentil), moong and potato decreased by 5.5%, 3.4% and 0.3% respectively compared to last year’s production. The production of masoor, however, remained the same as in the last year.

Water scarcity

In 2018-19, the total availability of water for Kharif (summer) crops (rice, sugarcane, cotton, maize, moong, mash, bajra and jowar) 2018 was recorded at 59.6 million acre feet (maf) and remained short by 11.2% against average system usage of 67.1maf and 14.9% over Kharif 2017.

In the Rabi season 2018-19, the total water availability was recorded at 24.8maf, showing an increase of 2.5% over Rabi 2017-18 and 31.9% less than the normal availability of 36.4maf.

Rabi (winter) crops include wheat, gram, lentil (masoor), tobacco, rapeseed, barley and mustard.

Fertiliser sector

Fertiliser is the most important – and an expensive – input contributing 30% to 50% to a crop yield. Its share in the cost of production of major crops is around 10% to 15%. Domestic production of fertilisers during 2018-19 (Jul-Mar) increased by 2.6% over the same period of previous year.

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This increase was due to the functioning of two urea manufacturing plants – Agritech and Fatima Fertiliser – as supply of liquefied natural gas (LNG) was made available at subsidised rates.

The supply of imported fertiliser increased by 4.8%. Therefore, the total availability of fertiliser rose by 3.2% in the current fiscal year.

Total offtake of fertiliser nutrients, however, decreased by 7.3%. Nitrogen offtake decreased by 2.89% and phosphate by 18.2%. Potash offtake recorded an increase of 4.55% during 2018-19 (Jul-Mar).

“The reduction in fertiliser offtake was mainly due to its high prices, despite receiving subsidy from the government,” the survey said. 

Published in The Express Tribune, June 11th, 2019.

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