De­vel­op­ing agri­cul­ture

The Pak Banker - - FRONT PAGE -

Agri­cul­ture is Pak­istan's ma­jor re­source and the back­bone of its econ­omy. The sec­tor ac­counts for al­most 21 per­cent of the coun­try's GDP and it pro­vides em­ploy­ment to nearly 45 per­cent of the pop­u­la­tion. But the sec­tor re­mains in a mori­bund state. It has never re­ceived the at­ten­tion it de­serves in terms of bud­get al­lo­ca­tion, de­vel­op­ment plan­ning and in­vest­ment. With suf­fi­cient time and money put in this sec­tor, Pak­istan can be­come a ma­jor ex­porter of food to the Mid­dle East and Cen­tral Asia. Year af­ter year, the sec­tor has con­tin­ued to stag­nate. The sec­tor missed the 3.8 per­cent growth tar­get against the pro­vi­sional growth of 2.1 per­cent last year which is lower than the tar­get by 0.8 per­cent­age points.

To im­prove the sit­u­a­tion, in this year's bud­get a num­ber of in­cen­tives have been of­fered for small and mar­ginal farm­ers. These in­clude sales tax ex­emp­tion on high ir­ri­ga­tion equip­ment for green house farm­ing, re­moval of cus­toms duty on plas­tic cov­er­ings, anti-in­sect nets for tun­nel farm­ing, credit guar­an­tee schemes for small and marginal­ized farm­ers with 50 per­cent loss shar­ing, livestock in­surance scheme for farm­ers with up to 10 heads of cat­tle and crop loan in­surance scheme for farm­ers with 25 acres of land. A rep­re­sen­ta­tive of Pak­istan Agri­cul­ture and Dairy Farm­ers As­so­ci­a­tion re­cently said that bud­get al­lo­ca­tions made for sup­port­ing the agri­cul­ture sec­tor were not at par in terms of the share it holds in the GDP. It has also been pointed out that no steps have been taken to with­draw sales tax on all agri­cul­tural in­puts ex­cept a re­duc­tion in sales tax for trac­tors from 16 per­cent to 10 per­cent. The Seed As­so­ci­a­tion of Pak­istan has drawn at­ten­tion to the fact that the avail­abil­ity of wa­ter was 13.5 per­cent lower for Kharif crops and 10.7 per­cent lower dur­ing the Rabi sea­son than the nor­mal sup­ply. .

One rea­son why bud­getary al­lo­ca­tions for agri­cul­ture are low is that its rev­enue po­ten­tial has yet to be fully ex­ploited. Dur­ing his last bud­get speech the Fi­nance Min­is­ter re­ferred to the low agri­cul­ture tax col­lec­tion by prov­inces. But in­come tax is a fed­eral sub­ject and the time has come to sub­ject the rich land­lords to the same IT rules as in­dus­tri­al­ists and the salaried classes. If high agri­cul­tural in­come is taxed, there will be enough rev­enue gen­er­ated for in­vest­ment in the up­lift of agri­cul­ture as a whole. Feu­dal lords en­joy sig­nif­i­cant lob­by­ing power in the par­lia­ment, which has en­abled them to avert the ef­fec­tive levy of Agri­cul­ture In­come Tax so far. But this ano­ma­lous sit­u­a­tion can­not be al­lowed to con­tinue any longer.

Ac­cord­ing to a re­port of the UN Food and Agri­cul­ture Or­gan­i­sa­tion (FAO), the area un­der agri­cul­ture crops in Pak­istan has stag­nated and no ex­pan­sion is fore­seen due to dwin­dling wa­ter re­sources and other re­lated fac­tors. Soils in Pak­istan are low in or­ganic mat­ter and many plant nu­tri­ents. In gen­eral, 90 per­cent of the soils are poor in or­ganic mat­ter, 80 per­cent low in phos­pho­rous and 40 per­cent low in potas­sium.

The de­fi­ciency of zinc and boron is widely re­ported at above 50 per­cent in field crops. Iron de­fi­ciency in de­cid­u­ous fruits is also a com­mon oc­cur­rence. Out of 80 mil­lion hectares of to­tal agri­cul­tural area of Pak­istan, about 22 mil­lion hectares are presently cul­ti­vated. There is also pres­sure on land in semi-ur­ban ar­eas where agri­cul­ture land is be­ing eaten up by hous­ing so­ci­eties. Keep­ing in view the im­por­tance of the sec­tor, the gov­ern­ment should fo­cus on im­prov­ing agri­cul­tural pro­duc­tiv­ity by sys­tem­atic ap­pli­ca­tion of bet­ter in­puts and ad­vance tech­nol­ogy, etc.

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