A year of gloom for agriculture sector

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Agriculturists and farmers have termed the year 2011 as ‘black year’ for agriculture as imposition of General Sales Tax (GST) on agriculture inputs/implements and withdrawal of subsidies have multiplied cost of farming in the country. Speaking to Profit, Pakistan Agricultural Scientists Association (PASA) President Jamshed Iqbal Cheema estimated that on the one hand withdrawal of subsidies and levy of GST had increased the input cost by over 35 per cent, while on the other hand agriculture produce prices , except wheat, dropped by nearly 25 per cent that caused huge losses to farmers. The country had witnessed negligible agriculture performance in 2011 that had compromised its growth. The imposition of GST on fertilisers had shown 30 per cent decline in diammonium phosphate (DAP) usage, besides drop in urea and pesticides usage, he maintained.
He further stated that loans to agriculture sector also witnessed a declining trend because both the provincial and federal governments had already over borrowed from banking channels that left hardly any amount for agriculture. He urged the economic managers to allocate an amount equivalent to the share of agriculture in GDP, which was 23 per cent.
Cheema said loaning had not only shrunk for farmers but also for those involved in the business of agricultural inputs and agricultural produce. He pointed out that even the loan spread had been squeezed for rice sheller, flour mills and agriculture produce distributors (arhtis). He said decrease in loaning to agriculture sector badly hit the farmers, as market forces had limited liquidity to buy agriculture produce. Citing an example, he pointed out that government had announced Rs1,050 as support rate for 40 kilograms of wheat, but it could be ensured only when markets had sufficient funds and competition, otherwise farmers could not benefit from the support price. PASA president said absence of food processing industries, storage and other value-addition industries was another issue, which could not be tackled by any government despite tall claims during the outgoing year. “No new scheme or investment was brought in this sector which could not only overcome waste of perishable and non-perishable agricultural commodities but could also help both producer and consumer in shape of sustained prices,” he regretted.
Agri Forum Pakistan Chairman Muhammad Ibrahim Mughal also believed that the year 2011 was the worst year for agriculture sector. He pointed out that the country had missed almost all major crop targets. Government had fixed cotton crop target of 14.5 million bales, while it was being expected that the country would miss it by 1.8-2 million bales. Similarly, government fixed wheat sowing target of 22 million acre, whereas it would be missed by over 2.1 million acres due to high input cost and shortage of much needed inputs, he added. He pointed out that huge increase in agriculture and food products imports further disturbed the trade balance, which was a matter of great concern for an agricultural economy. He underscored that it was the worst year for formers as fertiliser prices witnessed an unprecedented of over Rs800 in 2011, mainly because of suspension of natural gas supply to fertiliser plants. The country was already short of urea fertiliser and absence of price control further aggravated the situation by offering an opportunity to profiteers and hoarders. Conservative estimates indicated that profiteers had fleeced some Rs10 billion from poor farmers by exploiting the situation, he maintained.
Responding to a question, he said, in real terms agriculture sector witnessed zero growth due to anti-agriculture policies and did not see any positive change in 2012 as neither policymakers had wish to bring change, nor they had vision. Pakistan Basmati Growers Association President Hamid Malhi said that it was a hard year for farmers. He also pointed out that massive increase in the cost of agriculture inputs compromised its growth. He indicated that it was not an agenda item for the government in the whole policy making process. “It would not be wrong, if we say that the government had ruined agriculture sector in 2011,” he underscored. He said he did not expect any positive change from the present regime, but he was optimistic about the future of agriculture. The new government might bring some silver lining for agriculture.
Almost all agriculture and farmers bodies had urged government to cut agriculture inputs cost, improve marketing system and enhance loan spread besides investing in research to increase per acre yield. These steps were essential to overcome food shortage and avoid any threat to food security in the future, they concluded.