Agriculture relief package

Economic Coordination Committee (ECC) of the cabinet has approved a relief package of Rs.50 billion for the agriculture sector. It is part of Prime Minister’s Rs.1200 coronavirus relief package, out of which Rs. 100 billion have been earmarked for small and medium scale enterprise (SME) and agriculture sector. The salient features of agriculture uplift initiative include subsidy on fertilizers, subsidy on high yield variety of cotton seeds, reduced markup on agriculture loans, subsidy on insecticides used against white fly in addition to subsidy in sales tax on the purchase of locally manufactured tractors.

Although small measures approved for implementation in relief package for agriculture sector are worth appreciation yet deep rooted causes that have created crisis in the sector also need long term planning and development. The growth of this mainstay sector of the economy has stagnated due to water scarcity, high cost of inputs, lack of uniform policy on minimum support price that hinder increase the net return ratio to 2 percent for small farmers, climate change impact and now the recurrence of locust infestation.

The issue of water scarcity, which was utterly neglected for the past four and a half decades, is being seriously addressed by the construction of big storage dams. Construction work on Mohamand dam was started last year and contract has been awarded for engineering, procurement and construction work of DiyamerBasha dam to the joint venture of Power China Company and Frontier Works Organisation, the other day. As per the set schedules the former project shall be completed by 2026 and the latter one by 2028. However, the utility of small and medium storage dams for water conservation cannot be ignored. These useful projects can be launched and complemented within few years from domestic resource mobalisation.

The price of genetically modified imported seed is not affordable for small farmers. High yield variety of hybrid seeds can be evolved locally if agriculture research centers are made fully functional in all four provinces. Currently, these centers are operative to greater extent in the province of Punjab alone, doing a commendable job for evolving disease resistant and better productivity seeds of various crops. On the contrary, agriculture research centers in other provinces are plagued by redundancy due to lack of equipment and required chemicals.

The ECC has approved subsidy on cotton seeds which will not go far enough in encouraging growers of this crop to increase area under cultivation. The long standing demand of cotton producers is fixing minimum support price at Rs.5, 500 per 40 kilogram of raw cotton. National Assembly Standing subcommittee on agriculture had recommended reasonable amount of increase in minimum support price for cotton, after consultation with stake holders that comprised representatives of farmers and All Pakistan Textile Mills Association (APTIMA). Farmers are not satisfied by fixing the minimum support price of wheat at Rs.1500 per 40 kilogram. Government, on the one hand announce purchase price for sugarcane but fails to bind the Sugar Mills Association to lift the crop on that price. Support price for agriculture commodities are viable built-in-stabilizers that enhance the income of farmers and induce them to boost production. A uniform policy of support price is needed instead of giving one or two crops specific incentives.

The climate change impact in the shape of excessive rains, or less rains, drought spell and heat wave have necessitated changing crops pattern to which attention is yet to be given. It merits mention that 25 percent of standing cotton crop was destroyed by heat wave in Sindh last year. The excessive rains have delaying sowing of the crop this year.

Grant of subsidy on insecticide spray for the prevention of white fly is not the sole measure of crops protection against insects attack. Manual spray does not achieve the desired results it the insects attack is widespread. The locust attack in December and succeeding months of January and February had caused substantial damage to winter crops such as wheat, potato and other vegetables in all provinces. The second one is expected against which neighbouring country Iran and government of Sindh have forewarned. Sind government has demanded leasing of six aircrafts by the federal government for aerial spray of insecticides on standing crops.  General Secretary Sind Chamber of Agriculture, ZahidBHurgri has cautioned that imminent locust infestation will devour summers crops like cotton, sugarcane, rice, fruits and vegetables, if preventive measures are not taken, creating dire food security issue. The UN Food and Agriculture Organisation (FAO) has estimated that loss of first locust attack could be around PKT 353 billion and the second one may inflict losses of PKR 454 billion on summer crops. Implementation of a uniform and long term agriculture policy is inevitable.