Agriculture, food security: draft of policy to be presented to Prime Minister anytime soon: minister

September 01, 2013 ZAHID BAIG 0 Comments

Federal Minister for National Food Security and Research Sikandar Hayat Khan Bosan said on Saturday that draft of agriculture and food security policy has been prepared and will soon be submitted to the Prime Minister Nawaz Sharif for final approval. "A presentation on agriculture and food security policy will be given to the premier in two weeks' time and afterward it will be made public," Bosan said while talking to newsmen at the sidelines of a seminar on 'how business can transform Pakistan's agriculture' organised by the Pakistan Agricultural Council at the Lahore University of Management Sciences (LUMS). Bosan declined to highlight any salient feature of the proposed draft, however, said that problems being faced by the agriculture and related sectors have been identified in this document and possible solutions have also been recommended. He said in Pakistan 90 percent growers are of small landholding and this policy is aimed at to support them in not only producing more but also to work for their own prosperity and strengthening of national economy. The Minister agreed with another observation that the agriculture sector especially small growers needed subsidy. He said we always compare our agriculture sector with India but forget the fact that how much that country is subsidising its farmers enabling them to export potatoes or tomatoes. He said that the present government is keen to provide level playing field to its growers. Regarding compensation to growers who had suffered due to recent floods, the Minister said provincial governments are in the process of compiling data of damages caused to the rural economy in shape of destruction of crops, loss of livestock or else. He said once this data is ready then it will be deliberated at highest level and a policy will be announced to compensate the affected ones. Earlier addressing the seminar, the Federal Minister for National Food Security and Research Sikandar Hayat Khan Bosan said present government is seriously working to meet out the cyber age challenges and it can be gauged by its manifesto which promises to turn agriculture into a fully viable economic industry by changing the policy framework and terms of trade.

He said present government while assigning high priority to corporate agriculture to play its due role in agricultural business development also not to forget well-being of small farmers. 'The government has a plan to introduce a sustainable agricultural credit system to ensure that a substantial amount out of the total portfolio is earmarked for small farmers,' he added. Development of livestock, self-sufficiency in oil seeds and enhanced efforts in the areas of fisheries and horticulture would be salient characteristics of the coming agriculture policy, he added. Moreover, he stressed on revamping the role of private sector through incentives and enabling environment as Government would work as its facilitator rather than a stumbling block. He concluded his speech by emphasising the significance of food security which is as necessary as national security and appreciated the organisers for arranging the seminar. Pro-Chancellor LUMS Syed Baber Ali speaking on this occasion said Pakistan has tremendous potential in developing agriculture sector and small farmers are backbone of this sector. He appreciated the setting of Pakistan Agricultural Council (PAC) and asked that its members should not do anything themselves for this sector rather enable the growers and other stakeholders to get maximum out of the present resources. He said three years back he had told the Chief Minister Punjab to bring research, education and extension services on one page to get more out of the agricultural sector. He said that the PAC should identify the problems and roadblocks. He said that soil does not cheat if provided right seed, right technology and right inputs. He said at the same time Pakistan's horticulture sector should also not be ignored where we have unlimited opportunities of growth. He said it is the job of the people at PAC to enable the growers to produce three times more than what they are producing now. He said that collective efforts and role by private sector can transform the agriculture in three years' time. The seminar was also addressed by Sohail Malik-an eminent International agro-researcher and notable person from agriculture sector during different sessions. This seminar was aimed at launching of the Pakistan Agricultural Council (PAC) which according to its objective will be working to establish institutions such as an agriculture policy and advocacy think tank in partnership with an existing university to develop policies that encourage globally competitive and quality focused agriculture, implementation plans for such policies and advocacy to policy makers and the public regarding a shift in policies. It will also be working for setting up a center of academic excellence in partnership with an existing university programme which has both short-term diploma courses as well as degree programmes to produce graduates with skills required by agriculture-related employers as well as vocational trainers who can provide extension services to farmers. Copyright Business Recorder, 2013

Crop losses due to floods: government may have to lower fiscal year 2014 growth target
September 01, 2013 ZAHEER ABBASI 0 Comments

The government may have to revise growth target of 4.4 percent downward for the current fiscal year due to losses caused to the agriculture crops by the recent floods in the country. Sources said that recent floods have affected paddy and cotton but actual losses are yet to be estimated. The accurate quantum of the damage to crops would be known after losses are reported to the federal government by the provincial governments. The weight of cotton production is significant in overall agriculture sector''s contribution to the GDP and any decrease in projected cotton production would negatively impact growth for the current fiscal year. The government has already revised the cotton production target downward from 13.22 million bales to 12.65 million bales for the current fiscal year which may be further revised. Sources said energy crisis, if not fixed on sustainable basis, would have a major impact on growth hitting the industrial activity. Positive growth of large manufacturing sector in the last fiscal year must be maintained in the current fiscal year. A senior official of the Planning Commission said that manufacturing sector growth for June-July 2012-13 was recorded at 4 percent against 2.08 percent estimated for the last fiscal year on the basis of nine months figures in March 2013. This growth momentum needs to be maintained in the current fiscal year by ensuring energy supply to the industry. The official was optimistic that the implementation of the mega development projects in collaboration with the Chinese government would contribute to overall GDP growth in the country, not only in the current fiscal year but also in years to come. The government, he said, is aggressively pursuing these projects with China and has established a ''China Cell'' in the Planning Commission to monitor them. The GDP growth target was projected at 4.4 percent for the current fiscal year on the basis of growth estimate of 3.8 percent in the agriculture sector, 4.5 percent manufacturing and 4.6 percent in services sector. He maintained that the damage to the agriculture crops by floods may have affected paddy and cotton crops but energy sector and law and order situation are considered the real threat to the attainment of the GDP growth target. He said various estimates suggest that power crisis accounts for an annual loss of 2 percent to the GDP and fuels unemployment in the country. Public Sector Development Programme (PSDP) allocation of Rs 1,155 billion was earmarked for the current fiscal year with the objective of stimulating growth in the economy.

Copyright Business Recorder, 2013

Better rice production: Reap urges establishment of R&D institutions

September 01, 2013 RECORDER REPORT 0 Comments

Vice Chairman, Rice Exporters Association of Pakistan (Reap), Chaudhry Samiullah has urged the government to launch nationwide programmes including the establishment of research and development institutions for producing new extra long grain, aromatic and commercially viable seeds with higher production yields. Talking to Business Recorder here on Saturday, he said, "Public Private Partnership must be promoted and private stakeholders be taken on board of directors of the government-based R&D institutions," adding that the involvement of private sector would ensure finance availability and result- oriented R&D and also promote interaction with foreign R&D institutions. He suggested that funds of 200 million rupees be allocated from Export Development Fund (EDF) to construct state of the art Rice Technical Training institute to produce skilled labour force that must be literate about hygienic and sanitary requirements for exports to developed nations. The measure would ensure at least 20 percent value addition and earn more foreign exchange. "To gain maximum foreign exchange and extract maximum price for our produce, we must focus on regional trade, which ensures better pricing due to less freight costs and swift transfer of funds as compared to other far-flung countries," he further said. A better currency transfer channel & currency exchange programme should be established to ensure smooth transactions within regional blocks including Iran, increasing almost 5% more foreign exchange due to reduced freight pay offs, he said "To manage the electricity and gas crisis, the exporters should be provided these fundamental requirements on priority basis. In case if not possible then exporters should be promoted to generate their own electricity through captive power plants and supply of gas should be assured without any load management," he added. Copyright Business Recorder, 2013

Surge in non-farm bank credit

Mohiuddin Aazim Published 2013-09-02 14:07:27

BANKS lending to the agricultural sector that has been on the increase for some years rose further in the last fiscal year. More importantly, lending to the non-farm sub-sectors like livestock, fisheries, horticulture and forestry got a real boost. But the number of people benefiting from agricultural financing still remains limited. In the outgoing fiscal year, overall lending to agricultural sector soared to Rs336 billion, up more than 14 per cent from what it was a year ago. And in nine months of the year, for which data is available, lending to non-farm sector was no less than a hundred billion rupees. That really counts. However, the number of agricultural loan beneficiaries remained below one million which, according to agriculturists, is less than one-fifth of the number of farmers who need bank financing. Central bankers say the number of farmers benefiting from agricultural financing scheme has been rising steadily since 2011. The inclusion of microfinance banks in the scheme is helping in reaching out to larger number of farmers year after year. In the last fiscal year microfinance banks made about Rs19 billion agricultural loans against their indicative target of about Rs14 billion. That was purely due to their ability to reach out to a larger number of loan recipients, says an SBP official. The State Bank of Pakistan has put in place a comprehensive set of guidelines on agricultural lending and is also providing training to bankers in rural areas on how to monitor agricultural loans performance. Opening up of new branches of commercial banks in rural areas have also been helpful in meeting growing credit demand of the farming community. The Zarai Taraqiati (Agricultural Development) Bank is now accommodating greater number of loan applications. As a result, agricultural loan volumes have been showing consistent increase for the past few years (see table). But despite all this, five to six million farmers have to meet their financial needs out of their own savings or turn to informal lenders. By the end of FY07, about 1.3 million farmers had access to agricultural financing by banks, recalls a central banker involved in monitoring of agricultural loaning. By the end of FY13, the number has come down to less than one million. So what has gone wrong and where? One explanation is that when banks squeezed their overall lending after the 2008-09 global financial crisis and recession, agricultural financing also took a hit. Thats why the number of agricultural loan beneficiaries fell to 740,000 in 2008 and to 570,000 in 2009. The worst-ever

super floods of 2010 further reduced the number of people who got agricultural loans in that year to 470,000. But in all these years, volume of agricultural lending continued to rise chiefly because big landlords obtained larger loans benefiting from the higher support prices of major food crops. Besides, in these years, subsidised sales of tractors and sizable loans for other agricultural machinery like tube-well, wheat-thrashers and refurbished ginning units inflated the amounts of total agricultural loans. In 2008, another trend began creeping in which now seems to have taken roots. Higher corporate activity in food sector and some uptick in both local and foreign demand for food items created room for banks to enhance their non-farm lending which is also a part of agricultural loaning. In FY08 loans to farming sector totalled Rs160 billion against a meagre Rs52 billion to the nonfarm sector comprising livestock, fisheries, horticulture and forestry etc. But the share of non-farm sector in overall agricultural lending began to improve since then and in nine months of FY13 banks lending to the non-farm sector reached to Rs100 billion in comparison with Rs131 billion disbursed in the farming sector. Two years ago, the central bank had approved of a model of agricultural financing to be used by Islamic banks but so far only one Islamic bank has used it. The model based on Salam mode of financing is comprehensive in all respects but the reason why it is not being widely used is two-fold, says a senior executive of Meezan Bank. One is that Islamic banks dont have extensive branch network in rural areas and the second is these banks see little scope for earning huge profits in agricultural lending anyway. Interestingly, agricultural loaning by microfinance banks, which central bankers say can help in boosting the number of recipients, has so far remained limited in terms of per-party volumes. The SBP has already raised the per-party limit for such loans to half a million rupees but microfinance banks hardly lend this much amount to a single borrower. Most of them normally dont go beyond Rs0.1-Rs0.15 million, according to microfinance bankers. However, this overly-cautious approach of microfinance banks is helping them in reaching out to more and more farmers. Meanwhile, farmers lobby groups including Pakistan Agri Forum, Sindh Abadgar Board and Farmers Association of Pakistan all complain of cumbersome procedure and corruption that impede growers access to banks financing. They say that ZTBL and commercial banks now entertain only large and middle-sized growers requests for financing and ignore small growers under one pretext or the other. They also lament

the fact that the warehouse receipt system announced at the beginning of 2013 to enable farmers to use their stored crops as collateral has also not taken off. Usually loan requirements of non-farm borrowers are huge but the number of loan seekers is limited. Banks also find it easier to lend to the non-farm sub-sectors of agriculture where collateral is not an issue and where there is little or no issue of multiple titles of ownership, as in the case of crops financing. This has also reduced the overall number of agricultural loan beneficiaries even at times when volumes of lending are showing consistent rise.Mohiuddin Aazim

Efficiency in irrigation water use

Dr Asad Sarwar Qureshi Published 2013-09-02 14:05:36

THE major concerns regarding performance of irrigated agriculture are low crop yields, water losses and low water use efficiencies. The average yields are low for wheat and rice, being 2276 kg/ha and 1756 kg/ha, respectively. In addition to water shortage, lack of inputs, poor irrigation practices and soil salinisation are the major factors for low crop yields. Low water use efficiencies have led to reduction in crop yields (an overall reduction of 25 per cent and a high of 40-60 per cent in Sindh) and lower overall agricultural productivity. Estimates suggest that to meet the food requirements of the country, cultivated area of wheat has to increase by 46 per cent at present yield levels. Similarly, areas for other crops will need to be increased. However, given the present situation of water availability, this does not seem possible. Therefore the only way to achieve this food target is to increase productivity of water use. The productivity of water in Pakistan is among the lowest in the world. For wheat, for example, it is 0.5 kg/m3 as compared to 1.0 kg/m3 in India and 1.5 kg/m3 in California. The comparison of yields and water use efficiency between India and Pakistan suggest that we are 12 per cent less efficient in using water for wheat crop; the nitrogen fertiliser use in India for wheat and rice crops is almost double of the use in Pakistan a major factor towards increased crop yields in India. Food insecurity in Pakistan is a product of poverty and inadequate food availability. During the past two decades, 1987-2007, about one-third of the households were living below the food poverty line and they were not meeting their nutritional requirements. The incidence of food poverty is higher in rural areas (35 per cent), than in urban areas (26 per cent).

The poor tend to spend a high proportion of their income, perhaps 50-80 per cent, on food consumption and water. Hunger and poverty are, therefore, closely linked. In order to alleviate poverty, poor people need adequate means to obtain food in the quantities and qualities needed for a healthy lifestyle. However, even today when the world is producing enough food to provide every person with more than 2,700 calories per day, there are still over 800 million people in the developing world who suffer from chronic under nutrition. Severe inequality in land and income distribution prevents the poor from reaping the full benefits of food availability. About half of the Pakistani population has extremely low access to food despite bumper wheat crops during the last 2-3 years. The worst hit areas are KP and Balochistan. The situation in Punjab is also not very encouraging where more than half of the districts have low access to food. This clearly demonstrates that abundant food does not automatically mean people have access. Access to adequate food depends upon household income and food prices. For instance, in India and Pakistan, despite an increase in the total food availability from 1980 to 2010, the incidence of poverty has gone up and in recent years it has reached to alarming levels. At present, about one-third of the households in Pakistan is living below the income poverty line and is thus unable to meet their minimal nutritional requirements. An efficient distribution of food is as important as its production. Even in the presence of excess supply, inefficient distribution among different segments of the society may lead to inadequate consumption and under-nourishment. In order to secure adequate food for the low-income groups, the government should encourage food aid, food subsidies and low-cost rationing programmes. These programmes have not been very successful in the past due to their cost and wrong targeting. The price supports and regulations mostly favoured consumers and harmed producers, which depressed the production of domestic food. The intra-household food security in Pakistan is usually dictated by traditions, with women eatings last and the least amount of food that is available to a household. The gender disparity in access to good food is evident from the fact that about 550 million women live below the poverty line (60 per cent of the worlds rural population). This represents a 50 per cent increase for women over the past 20 years, compared with a 30 per cent increase for men. The gender bias in access of food is mostly due to perceived differences in social and economic benefits of families supposed expectations from boys and girls. For lasting food security, food production should be increased in a sustainable way. Continued investments and extending participatory approach in irrigation management would be beneficial for poor smallholders to access reliable water supplies. Technologies should be affordable and easy to maintain and operate, through which there is equitable water distribution system

especially in difficult and marginal areas, where the poorest live need much more attention in order to alleviate poverty. The author is a senior environment specialist at the National Development Consultants, Lahore.