Reviving the Agricultural Industry of Pakistan

Introductory Comments

I am penning below some conclusions that I gleaned from the discussion on agriculture during the round table on July 11. However, I have taken this opportunity to add some of my own thoughts on the subject as well.

We were not merely self-sufficient but, an agriculture surplus country. And yet, we have become an agriculture deficient country. According to the most recent report by the State Bank of Pakistan almost 37% of the population is “food insecure’; out of which a half face “severe” insecurity. Not only is the small-land-holding farmer starving, so is the large land holder. What is worse is that, on a daily basis surplus perishable goods i.e. vegetable and fruit are still going waste.

Although this subject was not discussed during the round table, China and Chinese interests in CPEC also need to be taken into account.

China has been an agriculture deficient country for a number of decades. Although the Chinese and US total land mass is roughly equal but, despite the numerous dams China has on its rivers, the arable land in the US [which has far less population] is 1.5 time the Chinese.

Consequently, among the Chinese interest in its Belt and Road Initiative, BRI, of which CPEC is the flagship, overcoming its agriculture deficiency is very high. To this end, China seeks routes wherein it can find locations where cheap high quality agricultural products are available. But, in the case of its closer neighbors, particularly Pakistan, China is seeking to acquire land on lease along the entire route(s) of CPEC.

The Chinese plan to make as much of this leased land arable as is possible and, this land will also be housing Chinese sponsored agricultural industry. The question, therefore arises, how much of this will benefit Pakistan and how? Or, will Pakistan regress further in agriculture, as a result of Chinese hogging this land with technologically advanced farming?

Textile industry and edible oil have been our foreign exchange industry and, obviously, depend on a healthy cotton crop. Cotton provides not only for textile but also for edible oil. Both have been systematically throttled by successive governments. The reason is obvious. Most of the political bigwigs have bought into the sugar industry and are throttling cotton so as to milk millions. The sugar mafia is politically far stronger than the rich farmer. And the poorer farmer, with small land holdings is not audible to anybody.

Is it another mere coincidence that, with Chinese investment in CPEC and Pakistan, throttling of the edible oil and the textile industry, resulting in the soon-to-be demise of our cotton crop has accelerated? The Chinese are, after all competitors in both industries.

Lahore and surrounding area used to be a region where sugar industry was not allowed. Politically powerful individuals got rid of the restriction and added more sugar mills. As an obvious consequence, the local farmers took to growing sugarcane; which is a cash crop. Having acquired a monopoly over the crop which had a local market mill owners repeatedly cheat them of their legitimate earnings and hold even those back. Since the Supreme Court has become a kind of supra government, it has had to intervene to ensure payments to the farmer.

All over the world, agriculture is now referred to as an industry. It is so, not only because it is supported by industry which is becoming increasingly high tech and much more economical, but also because agricultural products support innumerable industries. And, countries like ours, blessed with about 35% arable land and enough water to cultivate it should find this the cheapest industry to cultivate.

Except where necessary, I will list below only the recommendations, since, all who attended would recall the rationale for most.

Recommendations

1. Agriculture should be declared an industry. By doing so, it will become liable to industrial rules of taxation. While taxation is a separate and hugely complicated subject that merits separate analysis, for taxing farmers, a system based on crop and average yield is essential.
2. Foreign exchange earning industries based on agriculture must be revived and encouraged. To this end, the following are suggested:
3. Cotton farming and cotton-based industries must be provided better than a level playing field.
4. There is a huge market for Halal meat in the international arena, estimated at 300 billion dollars annually, which has remained untapped by Pakistan. Since it seeks beef, and animals can grow better and heavier with better feed, that suits us ideally. We must tap into it earliest.
5. Aqua farming and poultry also have an international market. We are already in it but our contribution can be much larger.
6. The Middleman in Pakistan is a huge profiteer. Without risking or even investing a penny he can make tons. When he buys out an entire crop of one or more farms, he pays a pittance and makes a huge killing on the plea that he has made a down payment on a crop that might even fail. He bleeds both ends of the agriculture marketing process i.e. the farmer and the consumer. To end or, at least, reduce his role, the following are recommended:   
7. Agricultural Banks seem to have disappeared. Until they appear, all banks should be encouraged to provide loans to farmers. Farmers should be readily able to obtain small loans against expected crops, at moderate rates to cover their seeding and fertilizer. This should prevent the exploitation of crops bought against a modest down payment at a heavy interest rate.
8. Coop Marketing: the concept of cooperative marketing can be introduced. Local governments designate a location where, following harvest, farmers can market their own goods themselves.
9. If removing the middlemen entirely, is not considered appropriate, a percentage of profit can be fixed for the middleman e.g. he may be allowed to resell his purchase from the farmer at less than 15% of the price he paid to the farmer. If this entire process is recorded, agricultural middlemen could also be taxed appropriately.
10. All kind of farming must become scientific, technology supported and thus economical so as to compete in the international market. Central and Provincial governments will have to provide support to Farmer’s Associations to make this possible. Farmers with small land holdings will still not be able to afford technology. To provide small farmers access to technology, the revival of Cooperative Farming might be the only method. To remove the anomaly of the farmers being unable to cooperate—-which is what reportedly led to the failure of the first effort at coop farming, perhaps an elected overseer/arbitrator for each set of coop farmers can be appointed.

Dissemination of Information

Central and Provincial governments will also need to assume responsibility for dissemination of information and all fresh international developments, to all farmers. Rice farming, for instance, no longer requires as much water to be wasted as our traditional method necessitated. We are still stuck to our antiquated methods. And, it is now well known that if the same crop is planted again and again in the same soil, the yield will steadily reduce. However, by alternating crops on the same soil, the yield will increase.

All this and more, needs to be disseminated to farmers. While pamphlets etc. might be useful, not all are literate. Perhaps an hour or so on official TV and Radio channels around midday, when the farmer usually takes his lunch break and other audience is light, can be used to explain these and/or answer questions in all the local languages of each province.

Agricultural Land Reforms

Although Land Reforms are really not under the scope of this study, a few words on the subject, having a bearing, may be considered. Under our system of inheritance, land can continually be divided and sub-divided among heirs forever. This can continue till the holdings become infinitesimal. The fact that it is not, is because, both, large and small land holders tend to work out illegal solutions to avoid sub-divisions of land. On the other end of the spectrum, large land holders tend to lease out their land for tilling, seeding, and harvesting their crops. Since the lessee gets only a tithe of the produce, he usually cannot afford scientific farming. This too is uneconomical use of the land.

It is, therefore, suggested that, depending on the richness of the soil, a suitable upper and lower limit to agricultural land holdings should be considered expeditiously.

Small Dams

Like land reforms, dams are also not directly under the purview of the current debate. However, the moment one begins to study agriculture, one realizes that the subject is all encompassing. Anyway, a brief word on the subject.

Projects of mega dams sound impressive and make a political point, even a thousand smaller dams won’t make the same impact politically; at least not at the outset. However, smaller dams that, collectively, hold the same quantity of water as a mega project and produce the same amount of electricity will cost a fraction of the mega project.

Furthermore, silting of these dams, since each will hold less water, is easier, less costly and more viable because desilting of mega dams will require time to empty, desilt and refill, thus adversely affecting at least one of the annual crops for the season of the entire region the dam serves. And, it will require redistribution of electricity or, alternately, additional load shedding. If desilting is not carried out, the water holding capacity of the dam and, therefore, electricity generating capacity will decrease incrementally. Mangla and Tarbela are both suffering from this. Finally, smaller dams, after being built, can be handed over to the local governing body for administration, maintenance, supply and revenue collection, thus reducing WAPDA’s role over the water and power everywhere.