While the government’s inability to honour promises of expanding exports and subsequently revenue is no surprise, news of the agriculture sector itself on a down-curve definitely is. Remember, this is the year when bulky loan-repayments are due, foreign aid (civilian and military) is shrinking, debts and deficits have ballooned in unprecedented ways and despite promises no efforts have been made to stem the Rs4b odd annual loss from PSEs. Then there’s the election just around the corner, mandating a fiscal position the finance ministry is in no position of adopting, meaning further downward pressure on growth and worse deficits. Yet there’s not a thing to be done.
Or maybe there is. So long as agriculture remains the economy’s backbone – largest national employer, bedrock of export industry – it behooves the government to ensure resource allocation is not only adequate, but also utilised in the best manner possible. It reflects poorly on a predominant agri economy that its R&D base is the lowest in the region, and what little is allocated either disappears to money heaven or is spent according to systems implemented in a bygone era. In an era of trade blocs, rapid globalisation and falling regional barriers, our agri-base will have to get its act together. Rising competition from India and elsewhere, where farmers are much better protected, will only speed the decline we find ourselves in failing immediate measures.
We stand at a crucial crossroads. With little in earning and heavy hemorrhaging, we have long depended on exogenous shots to keep our financial lifeline intact, a fact amply reflected in the government’s ridiculous addiction to local debt now that foreign avenues are drying. And at the risk of repetition, both debt and deficit tell of extremely difficult times ahead. This being election year, with its own people-friendly compulsions, it is difficult to see a financial breather for Islamabad anytime soon. Unfortunately, that just means more austerity for the people. But if agriculture continues with its deterioration, the unemployment situation, with all its harmful spillover on society, is set to slide further.