Re-energising agriculture

Post Source: Dawn Economic and Business Review



By Mohiuddin Aazim

AGRICULTURE and livestock have been hit hard by the recent floods. Still they provide an opportunity to re-energise the economy in the short to medium term. Officials say the government is prioritising agricultural growth citing the Rs14 billion Rabi package as a proof. But tapping the real potential of agriculture requires much more. “Apart from decisions taken in Islamabad and in provincial capitals, farmers in flood-affected areas are doing what they can to revive agricultural activities,” says Mr. Ibrahim Mughal, Chairman, Agri Forum Pakistan. Mughal and other agriculturists say farmers began to work on their lands and started growing pulses and vegetables even in the midst of the floods.

The July-September floods strengthened wheat plants and brightened prospects of output, particularly in rain-fed areas. Growers say wheat output this year is expected to reach 25-25.5 million tonnes because of higher yield per acre and also because better price outlook at the sowing time last year had brought more area under cultivation. Better outlook for the new crop and carryover stocks have facilitated export of wheat flour and products. About 100,000 tonnes of flour has been exported so far against export quota of 200,000 tonnes.

“We are exporting our branded wheat flour to over a dozen countries including America, Australia, South Africa, Singapore and Hong Kong,” said Mr Akhtar Hussain, owner of Ashrafi brand of wheat flour and former president of All Pakistan Flour Mills Association.

A Punjab-based flour miller is also exporting Sunny brand of wheat flour and its products. Major quantity of flour is, however, being exported to Afghanistan in bulk—without any branding.

Flood waters have also increased the sucrose content of sugarcane. Higher sucrose content would partly offset sugar shortage because of crop losses during the floods. “Sucrose content normally ranges between 8.5 and nine per cent when cane is harvested in November. It rises to 11-11.5 per cent in February,” says Mr Ibrahim Mughal.

“We hope sucrose content would be higher by at least half a percentage point during harvesting in November as well as in February.”

After a substantial increase in support prices of major crops in last few years, more farmers have been providing direct supplies to export houses and many of them have also invested in capacity enhancement. That the business community is anxious to tap export potential of agri-products is evident from the fact that Flour Mills Association has decided to set up a central office for flour exporters and to penetrate into new markets of wheat flour. At a meeting in Karachi last week the Association decided to collect Rs2000 per mill from its 1400 members for this purpose.

Experts say agriculture, livestock, fisheries and forestry and their sub-sectors all stand to gain after the floods. Keeping in view the warning from environmentalists that flood-drought cycle is going to become more and more frequent we need to strengthen our agriculture sector. “We need a policy framework to ensure food security and to maximise exports of farm products,” says a senior agri scientist at Pakistan Agricultural Research Council.

“First, we need to conduct a land fertility survey of flood-affected areas. Second, we need to help farmers preserve flood waters in pits and ponds for future and build small modern grains and greens storage facilities. Third, we must find ways for setting up small agro-based industries across rural Pakistan. Fourth, there is a need to establish seasonal dry ports in the areas where a big chunk of agricultural produce goes to waste. Fifth, farmers deserve a large network of wholesale markets within their own districts. And sixth, we must conduct the much over-due botanical survey across the country.”

The scientist says each of the above-listed measures is doable provided our policymakers come up with an agricultural initiative with comprehensive inputs from all stakeholders including small farmers.

Experts say attracting local and foreign investment in the above-listed areas should not be a problem. Officials agree. They say that the US, Australia, Turkey and China have shown interest in making investment in agriculture sector adding that talks have been held both at the federal level as well as between investors groups and provincial governments.

“From conducting soil fertility surveys, to building modern on-farm steel silos to setting up small industrial units for immediate value-addition in agri products we have a long list of proposals that are being discussed with both local and foreign investors,” claimed an official of the Board of Investment.

He said the inauguration of Rs10 billion grains and fertiliser terminal at Port Qasim last week was a proof to the government`s commitment towards building infrastructure projects for sustainable growth of agriculture. The new terminal created after reclaiming 22 acres of water-land would enhance the port`s capacity to handle larger vessels loaded with fertiliser and grains and would thus help in boosting food exports.

The State Bank of Pakistan, in its annual report for FY10 released last week, notes that exports of cotton and cotton yarn, fruits and vegetables, meat/meat preparations all increased both in terms of volumes and value during the last fiscal year. Food experts say this is a reflection of improved farmers-to-export houses supply chain management and investment in production and processing techniques.

Terming growth in exports of agri-commodities as a welcome development the SBP report says: “This would not only ease pressures on the trade deficit, it would also help increase income of farm sector. In this backdrop, it is pertinent to point out that substantial exportable surplus of agri-commodities could be generated by reducing post-harvest losses. This requires awareness amongst the farmers, training, investment in infrastructure and construction of storage facilities and improvement of the transportation system.”

“That our farming community instinctively knows much of what the central bank has said is going to show through many ways. The one that I know of is post-flood picking of cotton seeds,” says an official of Karachi Cotton Association. “Cotton production this year could reach up to 12-12.5 million bales (against post-flood official projection of 11-11.5 million),” he said adding: “field reports suggest that farmers have cut through losses in picking, temporary storage at fields and transportation of phutti to ginneries.


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