ROUGHLY about 44pc of the country’s population is engaged in agriculture contributing just 22pc to GDP, highlighting the low farm and livestock productivity.
Surpluses of wheat and sugar produced from costly cane are piling up as high domestic prices have made exports of these commodities virtually impossible despite liberal subsidy. And poor landless peasants are migrating to cities in search of jobs. The agricultural society is in the process of disintegration.
On the other hand, a 34pc drop in cotton output has forced the spinning mills to import the fibre from India. The yield per acre in farming and the crop price is directly linked to the cost of production of all traditional industries using agricultural raw material, whether it be sugar, textile, leather or ghee industry.
For a lack of synergy or harmonising development in the three broad segments of the economy — agriculture, industry and services — the structural imbalances are deepening. And the competing interests of the trio are making matters worse.
There is a wide gap between the crop price at the farm gate and for the consumers in urban areas. The difference swells to more than five to six times in case of vegetable and fruits. The middlemen prosper at the cost of growers.
The first step towards ending the agricultural crisis and for supporting all segments of the economy is that all economic agents work for common good. For example, sugarcane growers must get a fair price for their produce and the industry must get its cane at a competitive price. The issue cannot be resolved through support price or export subsidies.
Such policies may help in extraordinary times but cannot resolve the underlying and deep-rooted issue of low productivity which depends much on farmers’ earnings, savings and investment in modernising agriculture.’The private sector is still shy from investing in building rural physical and social infrastructure to provide an impetus to agricultural growth, leaving no option for farmers to fend for themselves in an adverse environment.
With unabated resource transfer from rural to urban areas, the industry and the service sector have grown much faster over time at the cost of agriculture.
While multiple reasons are advanced for maladies in the sector, the core problem is often forgotten. It is feudal cultural practice and the zamindari system (crop-sharing) that is a drag on agricultural progress, a system that has been done away with in fast developing and developed economies.
Both Ayub Khan and Zulfikar Ali Bhutto did introduce reforms to reduce large landholdings, and to quote Ayub Khan, to promote investment. The process they initiated was halted by General Zia. And for one reason or another, the Sindh government has stopped distribution of state lands to the landless peasants instead of resolving related problems.
Agriculture production has not been organised on modern commercial lines. One cannot find much evidence of corporate farming in case of big cultivators or cooperatives required to pool resources of small farmers for adopting modern production and marketing methods.
With unabated resource transfer from rural to urban areas, so markedly visible in the fast-rising prices of farm inputs — fertiliser, seeds and pesticides — and falling prices of commodities worldwide, farmers’ earnings, savings and investment are badly hit. Over decades, the industry and the service sector have grown much faster over time at the cost of agriculture.
The preferred segment of the urban-based market which gets subsidised wheat flour because the trade and industry would not pay labourers even the government-fixed wages.
In recent years, the pace of industrialisation has been outstripped by a much faster growth of the service sector contributing about around 55pc to GDP. It is not realised that farmers are both producers and consumers who (the latter) provide the industry and service sector the rural market. Industry, farmers and service sector need to grow in harmony for faster all round economic progress and the prosperity of the people.
The absence of right policy has not only hurt agriculture but also burdened the government with subsidy and heavy borrowing from the banking system to buy surplus stocks and keep reserves of grains to stabilise prices. Failure of agriculture has an all pervasive effect on the economy.