June 6, 2012

Pakistan's agriculture industry fails to meet growth aim

The agriculture sector of Pakistan gained 3.1% against its 3.4% goal, although the performance was still a little better than the previous year.

The growth was mainly due to better growth of major crops, however, the performance of minor crops was not up to the mark, according to the Economic Survey 2011-12.

Agriculture sector has the critical importance to growth, exports, incomes, and food security reducing poverty and the transforming towards industrialisation. It is the second largest sector of the economy contributes 21% to GDP, generates productive employment opportunities for 45% of the country's labour force and 60% of the rural population depends directly or indirectly upon this sector for its livelihood.

According to the survey, major crops accounted for 31.9% of agricultural value added and experienced a growth of 3.2% in fiscal year 2011-12 with negative growth of 0.2% in 2011. The significant growth in major crops is contributed by rice, cotton and sugarcane.

Minor crops contributed 10.1% value addition in agriculture and exhibited a negative growth of 1.3% in 2011-12 against 2.7% growth of 2011. The livestock sector, which has a 55.1% share in the agriculture, grew by 4.0% in 2011-12. The fishery sector grew by 1.8% as against last year's growth of 1.9%. Forestry sector posted a positive growth of 1% this year as compared to negative growth of 0.4% last year. While on the one hand, the sector is a primary supplier of raw materials to downstream industry, contributing substantially to Pakistan's exports, and on the other, it is a large market for industrial products such as fertiliser, pesticides, tractors and agricultural implements, it said.

During 2011-12, the availability of water as a basic input for Kharif 2011 (for the crops such as rice, sugarcane and cotton) has been 10% less than the normal supplies but 13% higher than last year's Kharif 2010 season. The water availability during Rabi season (for major crop such as wheat), is estimated at 29.4 MAF, which is 19.2% less than the normal availability, but 15% less than last year's Rabi crop.

Major crops, such as wheat, rice, cotton and sugarcane account for 91% of the value added in the major crops. The value added in major crops accounts for 32% of the value added in the agriculture. Thus, four major crops (wheat, rice, cotton, and sugarcane) on average, contribute 29% to the value added in overall agriculture and 6.0% to GDP.

The minor crops account for 10.1% of the value added in overall agriculture. Livestock contributes 55.1% to agriculture value added-much more than the combined contribution of major and minor crops (41.9%).

Cotton which accounts for 7.8% of value added in agriculture and 1.6% to GDP, its production stood at 13.6 million bales during July-March 2011-12 higher by 18.6% over last year (11.5 million bales). Sugar cane the major cash crop and its value added in agriculture and GDP is 3.7% and 0.8% respectively posted production of 58 million tons against 55.3 million tons last year. Rice accounts for 4.9% of the value added in agriculture and 1% of GDP. Its production estimated at 6.16 million tons from 4.823 million tons showing 27.7% growth. Wheat contributes 12.5% to the value added in agricultures and 2.6% to GDP its production stood at 23.5 million tons during July-March 2011-12.