Agriculture Sector: Need to Act Before It Wriggles to Degenerate

By: Azhar Azam

Pakistan real GDP growth set to mark 10-years record of 5.3% for the FY 2016-17, according to Economic Survey of Pakistan 2016-17 by Ministry of Finance. The projected GDP growth rate is expected to supplement the country’s nominal GDP to $304.0 billion.

The provisional GDP estimate for the year has grown to 5.28% precisely; Agriculture (3.46%), Industry (5.02%), and Services (5.98%). In agriculture sector, economic survey noted production growth in five important crops; Wheat (0.5%), Maize/Corn (16.3%), Rice (0.7%), Sugarcane (12.4%), and Cotton (7.6%).

Agriculture, the forte of Pakistan’s economy employing over 42% of the total labor force, contributed just 13.1% to the GDP growth and 19.5% of the total GDP; less than the last year disastrous performance when it scored a contribution of 19.8%.

Although last year, the government announced Agriculture Package of Rs. 341 billion but the sector could just add PKR 76 billion in the country’s GDP. Its contribution in 5.3% GDP growth remained measly 0.7%.

Pakistan is one of world’s top-10 largest producers of agricultural products such as wheat, cotton, sugarcane, mangoes, dates, and oranges. It is also the 13th largest rice producing country in the world. Pakistan owns the privilege to have the largest irrigation system and 4th largest irrigated land area in the world.

Being a food-surplus country at disposal, 43% of the people in the country are food insecure – 18% of whom are affected severely. Nearly 43% of the children, around 10 million, face stunted growth and are chronically malnourished, said Lola Castro, Country Director, World Food Program (WFP) in an interview with The Express Tribune.

This stunting rate is much higher than the global stunting growth rate of 25%. Stunting is an impaired growth in children due to malnutrition, repeated infections, and inadequate psychological stimulation. Furthermore, 60-million adults in Pakistan are living below poverty line of Rs. 3,030 per month.

Albeit, Pakistan is blessed with plenteous resources and great climate diversity due to variation in topography, altitude, and four distinct seasons that is much conducive for agriculture sector to grow; serious efforts are required before the sector wriggles to degenerate.

Agriculture Sector Performance in Last 4-Years

Major Crops	Unit	Production		Average Growth/Year
		2012-13	2016-17
Cotton	million bales	13.0	10.7	(4.4%)
Sugarcane	million tons	63.8	73.6	3.8%
Rice	million tons	6.2	6.9	2.8%
Maize/Corn	million tons	4.2	6.1	11.3%
Wheat	million tons	24.2	25.8	1.7%

After a bitter year of 29% decline, cotton production grew by 7.6% to 10.7 million bales in FY2016-17; short of 3.4 million bales and missing target of 14.1 million bales by wide margin (24.1%). At existing growth rate of 7.6%, government would need four more years to cover-up last year’s massive cotton production drop. As a result, Pakistan will be facing production to consumption deficit from 0.21 million tons to 0.55 million tons (161.9%) year over year.

While the productions of sugarcane (12.4%) and maize/corn (16.3%) have been exception in FY2016-17, the productions of rice (0.7%) and wheat (0.5%) have been solidified particularly in a world agriculture perspective where both rice and wheat production are estimated to grow by 2.1% and 2.2% respectively in FY2016-17.

According to USDA World Agriculture Production statistics, Pakistan (25.6MT) is ranked 5th in global wheat production of 753.1 metric tons (MT). China (128.9MT), India (87.0MT), and United States (62.9MT) lead the table for preliminary estimated wheat production for FY2016-17. Australia is forecasted to supersede Pakistan in wheat production showing a garish growth of 44.6%; from 24.2MT to 35.0MT.

In peer countries for rice production, United States (7.1MT) is expected to take over Pakistan (6.8MT; 0.0% growth) whereas Brazil (8.2MT) is also projected to extend its lead, showing growths of 16.7% and 13.9% respectively; according to the report. China (144.9MT), India (106.5MT), Indonesia (37.2MT) and Thailand (18.6MT) and the world leaders in world rice production of 481.5MT in FY2016-17.

Other Crops	Unit	Production		Average Growth/Year
		2012-13	2016-17
Masoor	000 tons	9.8	6.4	(8.7%)
Mong	000 tons	89.9	130.1	11.2%
Mash	000 tons	10.9	7.2	(8.5%)
Potato	000 tons	3,802.2	3,849.5	0.3%
Onion	000 tons	1,660.8	1,783.5	1.8%
Chilies	000 tons	147.2	143.1	(0.7%)
Oilseeds	000 tons	3,800.0	3,130	(4.4%)

Government ‘s average growth in 4-years in the production of other crops remained dismal; in pulses, only Mong showed average growth of 11.2% while production of Masoor and Mash fell by 8.7% and 8.5% per year respectively. Potato production stiffened whereas onion production could merely improve in 04-years of government tenure. Oilseeds production suffered setback as well.

Livestock	Unit	Population		Average Growth/Year
		2012-13	2016-17
Cattle	million nos.	38.3	44.4	4.0%
Buffalo	million nos.	33.7	37.7	3.0%
Sheep	million nos.	28.8	30.1	1.1%
Goat	million nos.	64.9	72.2	2.8%
Camel	million nos.	1.0	1.0	0.0%
Horse	million nos.	0.4	0.4	0.0%
Asses	million nos.	4.9	5.1	1.0%
Mules	million nos.	0.2	0.2	0.0%

Livestock growth has been satisfactory during prevailing government’s 4-years tenure but its contribution to GDP has also declined from last year’s 11.6% to 11.4% this year. The sector however grew by 3.4% in monetary terms at constant cost factor of 2005-06 (Pak Rupee); from PKR 1,288 billion to PKR 1,333 billion year over year.

Milk & Meat	Unit	Production		Average Growth/Year
		2012-13	2016-17
Milk	000 tons	49,400	56,080	3.4%
Beef	000 tons	1,829	2,085	3.5%
Mutton	000 tons	643	701	2.3%
Poultry Meat	000 tons	907	1,276	10.2%
Fisheries	metric tons	349,500	520,000	12.2%

Milk, meat, and fisheries showed reasonable growths when the government took over since 2013-14, yet again all these growths just added up to 0.7% in the so-called 5.3% GDP growth of the country for 2016-17.