Agri sector neglected despite its growing importance

Stimulus package worth billions announced to protect industries only

KARACHI: The agriculture sector has become much more important ever since the outbreak of the coronavirus pandemic. It does not only ensure food security, but also remains the largest source of employment in Pakistan.

However, the government has done very little to make it sustainable despite its increasing significance in the wake of the pandemic, and has announced billions of rupees worth of packages to protect industries only.

"The government has allocated Rs280 billion to procure wheat and at the same time announced relief packages worth billions to protect industries. There is, however, no package for the agriculture sector as the government earmarks funds for wheat procurement every year," said Sindh Abadgar Board Vice President Syed Mahmood Nawaz Shah while talking to The Express Tribune.

"What are the unique incentives announced by the government for the agriculture sector during these difficult times. There is almost nothing," he remarked.

The government needs to pay special attention to the sector as it can help attract export earnings in the medium to long run as major export sectors, including the largest textile industry, are receiving order postponement calls from international buyers.

The share of agriculture stands at around 20% in the gross domestic product (GDP) of Pakistan. It provides direct employment to around 42% of the total workforce of 55-60 million.

Farmers and their produce, especially the perishable vegetables and fruits, have been badly impacted since the virus outbreak in the country early last month. Farmers are selling wheat at lower than the minimum support price of Rs1,400 per 40 kg.

The government has yet to begin the official procurement drive while the staple crop is ready for harvest in Sindh.

"On an immediate basis, the government needs to stabilise prices of commodities at fairly higher levels against a steep fall recorded in recent days and weeks," he said.

"In the medium to long run, it needs to build and strengthen the storage and supply chain infrastructure to turn agriculture into a sustainable sector for the sake of food security in the country and export to global markets," he said.

The world can abandon the purchase of non-essential goods and services but it cannot live without food. Pakistan has an opportunity to play its role in this regard.

"Agriculture remains the backbone of Pakistan's economy. It is high time that attention is paid to addressing the grave issues like streamlining cotton production and increase in wheat output, which are potential export commodities," he said.

Lack of storages was one of the many causes that led to the increase in tomato prices to Rs200-300 per kg in the recent past.

"Disruption to the already poorly managed food supply chain has caused a massive reduction in commodities' prices. This has directly hurt poor farmers and their little income," he said.

"The situation may worsen if supply chain management does not improve over the next 8-10 days. Farmers are selling commodities, including the staple crop of wheat, below cost," he said.

What the government should immediately do was to ensure food security and protect employment in the sector "by stabilising prices at rational (upside) levels," he said.

The prices of tomato, chili, turnip (shalgam) and cabbage (gobi) have reduced by up to 50-60% at farm level in the recent days. "Farmers are selling tomatoes at Rs40-50/ per 12kg sack compared to Rs100-200, depending upon quality, before the virus outbreak in the country. Similarly, they are selling chili at Rs1,200-1,700 per 60kg bag compared to Rs5,000-7,000 earlier."

According to the Asian Development Bank's (ADB) report 2019, Shah said, there is available storage capacity for less than one million ton (or 10%) for vegetable and fruits against their estimated production stand at around 15 million ton per year. "We need to increase the storage to 40-60% to ensure food security," he added.

The per acre agriculture output has remained one of the lowest in the world. The government needs to fix it by providing quality seeds, fertiliser and pests at fair prices and on the right time. Besides, it needs to adopt drip irrigation and other methods to best utilise available water, as 80% off the water goes into agriculture while almost 50% of that goes into wastage due to the water mismanagement. 

Published in The Express Tribune, April 4^th, 2020.

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