Agriculture: Rising crop production a rare bright spot

Despite floods, cost increases, productivity levels in most crops continue to improve.

FAISALABAD:

Despite much of Pakistan’s prime agricultural land being devastated by floods two years in a row, the country continued to achieve high growth in the production of major commodities, a resilience that was surprising since much of it came from the unusual source of productivity gains.

Responding to last year’s record cotton prices, growers this year invested a considerable amount in cotton production and far exceeded their targets. In Punjab alone, cotton production exceeded 10 million bales (1.7 million tons), compared to a target of 7.8 million bales. This is despite the fact that production was not at optimal levels, largely due to a delay in the monsoons.

The high production, however, has caused prices to come down, which has caused farmers to feel frustrated at lower margins. The blockbuster crop, however, was wheat, which saw production expand by 6.3% even though the total area of cultivation declined by 3.2%. Agriculture experts viewed this trend highly positively. “The country was able to become an exporter of wheat and still hold large reserves of the crop,” said Ashfaq Ahmad, an agriculture economist at the University of Agriculture in Faisalabad.

Wheat is one of the few crops where the government maintains an active support price, which was raised in 2011 from Rs950 per 40-kilogrammes to Rs1,050. Farmers, however, complained that the increase was not enough to compensate for the rising costs of their inputs. Fertiliser, in particular, has seen massive prices increases largely due to a gas shortage which has forced Engro Fertilizers to raise the price of urea.

Another crop that saw a massive increase was sugarcane, which saw production jump by almost 20%. Growers, however, complained that prices had declined by far too much. “Last year, I was able to get about Rs5 per kilogramme. This year, most mills are not even willing to pay Rs3.75,” said Muhammad Hafiz, a leading sugarcane grower of Faisalabad.

The drop in prices has benefited consumers in this highly regulated sector. Retail prices of sugar, meanwhile, have dropped from around Rs110 per kilogramme in 2010 to around Rs50 per kilogramme in 2011.

Perhaps most worrying from the perspective of exports has been the damage to the rice crop in Sindh. The total acreage of rice cultivated declined by about 8.5%. Production, however, declined by about 9%. Pakistan is the third largest exporter of rice in the world, with about $2 billion in global sales.

A surprisingly robust increase was also observed in maize, which saw production rise by almost 20%. Potato production expanded by about 11.6% and mango production by about 3.2%. The year 2011 was the first when Pakistani exporters were allowed to export their mangoes to the US, after Washington eased rules to allow mangoes from Pakistan.

Published in The Express Tribune, December 31^st, 2011.