Pakistan’s Agricultural Sector: Challenges and Response (Part 6)

D. Cross-Cutting Issues

In my previous articles, I have discussed how Pakistan can increase its agricultural production through horizontal expansion (bringing more area under agricultural use), vertical expansion (increasing the yield/productivity of the resources, land, and inputs), and structural transformation of the agricultural sector. In this article, I will be discussing the fourth pillar of agricultural development, namely cross-cutting issues which affect the agricultural sector as a whole and are not limited to any of its sub-sectors such as crops, horticulture, fisheries, etc.

Keeping in view the crucial role agriculture plays in improving all the socioeconomic indicators in a developing country like Pakistan, the need to transform it from an underdeveloped sector to a dynamic one becomes all the more important. This calls for the implementation of comprehensive agrarian reforms, which could bring fundamental structural and institutional changes to the political economy of a county’s agriculture sector. Some of the areas that need proper policy formulation, the creation of institutions, and the allocation of resources are as follows:

A. Formulation of comprehensive Land Use Policy

B. Improving Agricultural Terms of Trade

C. Developing Rural Infrastructure

D. Improving Rural Governance

E. Ensuring Environmental Sustainability

F. Creating links and promoting Investment

G. Gender Mainstreaming

A. Formulation of Land Use Policy

Thanks to rapid population growth, economic development, and urbanization, valuable arable land is being converted at alarming rates for commercial nonfarm uses. Infrastructural development, though necessary, also renders fertile land brick and mortar. While extremely fertile land is being lost to urban sprawl and infrastructural developments, climate change is threatening arable cropping in dry lands, reducing the productivity of rangelands, and increasing sea levels, creating problems in coastal areas.

All these developments necessitate the formulation of a national land use policy for the rational use of its respective land resources. There is thus an urgent need for all provincial governments to formulate long-term comprehensive land use policies that should cover all uses of land relating to the security and distribution of land rights, land use and land management, and access to land, including the forms of tenure under which it is held. It should have a production and a conservation component whereby the state should restrict the use of arable land for property development by imposing heavy duties and, if need be, an outright ban on such use.

B. Agricultural Terms of Trade

With few exceptions, terms of trade are always against the agriculture sector, more by design and less by default, as a deliberate policy of the government to transfer resources to the industrial sector for its rapid growth at the cost of farmers.

They are under the impression that any increase in the prices of agricultural commodities in general and of food crops in particular, would directly and proportionately increase the general price level in the country, creating labour unrest. Evidence and logic do not corroborate this hypothesis.

We must remember that inflation is a complex issue, with multiple sources of origin and is affected by a myriad of economic and non-economic factors. It is extremely difficult to pinpoint a single causative factor to blame for a complex and constantly evolving situation; you have to treat it with judicious use of a broad spectrum remedy, not a single shot dose.

Secondly, it is the duty of the state to formulate comprehensive social safety networks to help those affected by inflationary trends. Do not put the entire burden of controlling inflation on farmers’ shoulders. Thirdly, if we do not incentivize the farmers to produce food commodities by paying them fair returns, it will result in reduced production of the very food crops that are supposed to keep the general price level stable, either due to a loss in productivity of their crops or a diversion of land use to more lucrative cash crops.

In order to stop this squeezing of the peasants,

1. rationalize the prices of the inputs farmers use and provide subsidies for them
2. ensure that the farmers get fair returns for their efforts through selective procurement when the prices of agricultural commodities crash
3. improve the marketing infrastructure
4. introduce a crop insurance scheme

Improving Rural Infrastructure

Not only is there an acute shortage of these facilities in the villages, but there are also complaints of a shortage of staff to man these health and educational schools where they exist. Complaints of substandard workmanship and fast wear and tear due to a paucity of maintenance funds are also common. Of course, no government can afford to allocate the huge funds required for the above in the short term, but there must be a master plan for the construction of rural infrastructure over a medium- to long-term period.

Besides improving the quality of life of the people living in rural areas, this improved rural infrastructure can strengthen linkages between the two essential components of rural areas, namely the farm sector and Rural Non-Farm (RNF ) which in turn will act as income and employment multipliers for each other. At the same time, improved infrastructure will not only reduce the costs of doing business but will also help slow down the trend of migration from villages to cities, facilitating their smooth integration with urban areas.

Realizing the gravity of the situation, the government should

1. improve both hard infrastructure (e.g. roads, electrification) and soft infrastructure (e.g. banking systems, market information systems)
2. Starting with farm-to-market roads for safe and speedy transportation of agricultural inputs and commodities as well as facilitation of rural commuters.
3. After roads, it is the uninterrupted supply of electricity for domestic consumption and tube well operation that should be the biggest priorities.
4. The provision of modern health facilities as a right, not a favour should be the next priority of the government
5. The importance of enhanced rural education for the development of both farm and nonfarm sectors is incontrovertible, as it is a strong determinant of the level of farm income and wages earned in RNF activities.
6. Along with education, more specific skills and training are necessary to transform agriculture from a subsistence economy to a modern, developed one.

Environmental Sustainability

The massive use of chemical fertilizers and pesticides, coupled with the pumping out of brackish subsoil water through tube wells, has now resulted in the loss of soil fertility at alarming rates. Whether it was ignorance, incompetence, or a lack of resources, the disastrous consequences of short-sighted policies are now wreaking havoc on the lives and livelihoods of the people engaged in agriculture. Add the looming threat of climate change, and we have a perfect recipe for disaster.

There is thus an urgent need to take adaptive and mitigating measures to not only stop environmental degradation but also reverse the trend. Creating awareness among the farmers about the looming threat of climate change/environmental degradation and popularizing good, sustainable agricultural practices among them should be the first priority of the state in developing countries. We will have to synchronize the extension services of the provincial agricultural departments and the marketing outlets of the private agro service providers to promote environment-friendly practices among the farmers.

Improving Rural Non-farm Sector

Providing almost 50% of income and jobs in rural areas, the Rural Non-farm Sector has strong forward and backward linkages with agriculture and presents tremendous opportunities for providing value addition to primary production at the farm level. Unfortunately, this sector has been neglected by policymakers due to what FAO calls an ‘institutional vacuum"—no ministry owns it. Besides serving as an immediate market for the farmer's farm products, and increasing their access to food, the RNF sector provides farmers with much-needed credit in times of need without much hassle. Furthermore, a developed RNF, including agro-processing, distribution, and the provision of farm inputs, may increase the profitability of farming.

There is thus an urgent need to fill this ‘institutional vacuum’ by developing efficient agri-based supply chains that link the agriculture sector with its corresponding upstream and downstream links in the rural nonfarm (RNF) to the national and international markets. To create these linkages, governments should create an enabling environment by taking action in four interrelated areas, namely

1. Improving the general education level and technical/managerial skill formation in the rural non-farm sector
2. Encouraging the establishment of modern agricultural produce wholesale markets through public-private partnerships. At the same time, the government should introduce a warehouse receipt system for easy realization of sale proceeds to farmers
3. Encouraging processing and value addition of agricultural produce to fetch better value, creating links between rural and national wholesalers, and helping them subsequently enter export markets.
4. Integrating informal money lending with formal banking institutions to increase the outreach of formal credit and reduce the scope of fleecing farmers by money lenders

Promoting Agricultural Investment

We need to enhance the productivity of the agricultural sector, reduce the cost of production, improve its quality, and meet global food safety standards to make its produce competitive in a rapidly globalizing world. This is only possible if we make substantial investments to increase efficiency in all agricultural operations. Unfortunately, the flow of investment funds towards agriculture, which has recently picked up, is still far below the desired levels. The government should therefore encourage the private sector through appropriate fiscal and non-fiscal incentives to construct agro-based industries as well as infrastructure for the storage and processing of agricultural goods. We need to motivate domestic and foreign investors to invest in seed production, fruit and vegetable processing, and agri-infrastructure development and encourage the development of commercially viable non-farm rural agriculture enterprises.

Gender Balance

Rural women are under three pressures-nature, society, and family; which treat them unfairly in terms of status, ownership of resources, job opportunities, and empowerment. The third Millennium Development Goal is about promoting gender equality and empowering women, which sets an ambitious target of eliminating gender disparity in all levels of education by 2015. However, we cannot make much progress in this respect while clinging to centuries-old ideas about the role and status of rural women, denying their meaningful participation in political decision-making and socioeconomic development. Although women make up the majority of the world’s poor, much of their work as housewives and agricultural producers is unpaid, and their contribution towards the rural economy is never acknowledged. Lack of female empowerment has its own direct and indirect social and economic costs, ranging from high rates of undernutrition, and infant mortality to wasted human capital and low labour productivity . All these result in the underdevelopment of agriculture, which adversely affects the overall economic growth of a country.

Without ensuring appropriate gender balance over a reasonable period of time under a targeted plan of action in all its programmes for agriculture and rural development, a developing country cannot achieve the goals of the eradication of hunger and poverty, and food security for all. One way to redress this imbalance is to improve healthcare and family planning facilities in rural areas to relieve them of excessive childbearing burdens. The state should actively involve civil society organizations to launch special rural female literacy and education campaigns by offering attractive monetary rewards. It would not only help with their empowerment but also reduce domestic violence. Similarly, ensuring women’s access to resources and assets, including ownership of land, by creating awareness about their rights and promulgation and strict enforcement of legal framework could go a long way toward ensuring the financial independence of the women in the countryside. This could be augmented by providing them with opportunities to develop market-oriented skills and remunerative employment in rural areas.

Improving Rural Governance

It is not an easy task to dismantle centuries-old rural governance structure and replace it with modern, formal, contract-based rural public management in a short period of time, but can be done in the long term. Start with education, literacy, and skill formation, which will shake the foundations of this feudalistic structure. Establish alternate dispute resolution mechanisms to replace the informal system heavily dependent on big landlords, supported by the police and petty revenue officials. Local bodies' elections should be held as per a fixed schedule, which will bring in the leadership interested in improving rural infrastructure, the best guarantee of their fast journey to urban culture.

Conclusion

Learning from history, we should remember that all over the world, it is the agricultural revolution that has preceded the industrial revolution and not vice versa. We should therefore carry out fundamental structural and institutional changes in the political economy of our agricultural sector to prepare it to be at the vanguard of the overall economic transformation of the country.

1. Areas needing urgent attention are input use efficiency, reducing production/post-production losses, credit availability, and bringing more areas under cultivation through intercropping and tunnel farming.
2. In the short term, rural infrastructure, agricultural terms of trade, promoting investment, formulating land use policy, farm mechanization, and improving the rural non-farm sector.
3. In the long term, agricultural education, rural governance, gender mainstreaming, adapting to climate change threats, and introducing modern forms of production relations.

To sum up, we need to

1. increase productivity by increasing efficiency in all agricultural operations through public as well as private sector investment in R&D and Extension, promoting farm mechanization to reap efficiency gains, encouraging commercial farming through appropriate legal/regulatory frameworks, modernizing its marketing channels, and investing in R&D, extension, and rural infrastructure.
2. increase the profitability of the agriculture sector to ensure that farmers get proper returns for their efforts and others are attracted to invest in this sector by rationalizing input and output prices, reducing production and post-production losses and developing efficient marketing infrastructure
3. make agricultural produce internationally competitive, whether used domestically or exported, by reducing the cost of production, improving quality and ensuring Sanitary and phytosanitary (SPS) compliance
4. ensure the environmental sustainability of the agricultural sector in the face of increasing land degradation, declining water availability, and the looming threat of Climate Change by promoting environment-friendly good agricultural practices through incentives and rewards, awareness campaigns, and the promulgation of appropriate legal frameworks.
5. ensure that the fruits of improved productivity in the agricultural sector are equitably distributed among all stakeholders by making public sector goods and services available to all stakeholders without distinction

From the book” Agricultural Sector of Pakistan: Challenges and Response”, published by Amazon and available at

Agricultural Sector of Pakistan: 2nd Edition: Challenges & Response