Rising Incomes in Agriculture Sector Boost Pakistan's Rural Economy

[Riaz Haq]

Since taking the reins of power almost three years ago, the coalition government in Islamabad, which is led by the Pakistan Peoples' Party, has been increasing the support prices of wheat and other agricultural commodities every year. This policy has had the following effects:

1. It is transfering the additional new income of about Rs. 300 billion in the current fiscal year alone to the ruling party's power base of landowners in small towns and villages, from those working in the urban industrial and service sectors.

2. It has driven up food prices dramatically for all Pakistanis, particularly hurting the poor people the most.

3. It has reduced government tax revenues because the agricultural income is not taxed by either the federal or the provincial governments, and resulted in growing budget deficits.

4. It has significantly increased demand for consumer and industrial goods and services in the rural areas.

5. It has forced the State Bank of Pakistan to maintain a tight monetray policy which is drying up the much-needed credit for the industries and the average consumers alike.

In 2008, the government pushed the procurement price of wheat up from Rs. 625 per 40 kg to Rs. 950 per 40 kg. This action immediately triggered inflationary pressures that have continued to persist as food accounts for just over 40% of Pakistan's consumer price index. According to State Bank of Pakistan (SBP) analysis, cumulative price of wheat surged by 120 per cent since 2008, far higher than the 40 per cent between 2003 and 2007. it is also many times greater than the international market price increase of 22 per cent for wheat in the same period. Similarly, sugar prices have surged 184 per cent higher since 2008, compared with 46 per cent increase during 2003-07.

The transfer of additional Rs. 300 billion to Pakistan's agriculture sector during the current fiscal year 2010-2011 by higher prices of agriculture produce and direct flood compensation to 1.6 million affected families at the rate of one hundred thousands rupees each will boost economic confidence in the countryside. It will generate rural demand for consumer items including consumer durables such as fans, TVs, motorcycles, cars, refrigerators, etc.

The big feudal landowners have been the biggest beneficiaries of the PPP's gift of high crop prices. However, the policy has helped small farmers as well, as shown by a recent survey reported by The Nation newspaper. The survey of 300 farmers in Sind's Sukkur district was conducted by Sukkur Institute of Business Administration for the State Bank of Pakistan (SBP). It has highlighted the following about district's rural economy:

1. In Sukkur district, majority of the farmers are subsistence farmers. 31 percent of them own less than 5 acres of land, and another 34 percent own up to 12.5 acres of land.

2. They spend an average of Rs. 1,611 a month on their children's education, with some of them spending up to Rs. 12,000 a month.

3. Wheat, rice, cotton and sugarcane are the major crops being cultivated by 93 per cent, 58 percent, 37 percent and 12 percent of the respondent farmers in that order.

4. 24 percent of them are also growing fruits including dates, mangoes and bananas.

5. 22 percent of the respondent own livestock.

6. About half (49 percent) use privately purchased seeds for wheat cultivation, 33 perecent use their own retained seed and 18 perecent use the seed purchased from Public Sector Seed Corporations.

7. On average, a farmer uses 96.73 Kg chemical fertilizer per acre with the maximum and minimum of 350 Kg and 40 Kg respectively. The average per acre cost of wheat production is Rs. 10,670.

8. All 300 farmers are using tractors for cultivation and preparing land for crops, and some are using tractors for fetching their crop produce to market.

Already, the upside of the government policy is that Pakistan's rural economy is being spurred by high crop prices that may help the GDP growth this year and next. Increased farm incomes are whetting the rural households' appetite for industrial and consumer goods in 2011 and beyond.



A key indicator of growing rural economy is the double digit increase in the sale of tractors. Millat Tractors Limited, the largest supplier of tractors in Pakistan, had record sales of 41,500 tractors in the calendar year 2010, an increase of nearly 11% over 37,537 tractors sold in 2009. Of these 41,500 tractors, a record 5000 tractors were sold in the month of Dec, 2010 alone, acording to The Nation newspaper. Millat sold 10,000 units under Benazir Tractor Scheme and 5,000 units under the Sindh government tractor scheme in the last fiscal year. Another 10,000 units were sold as part of the Punjab government scheme, 70 per cent of the units were sold, according to Dawn News.

Earlier, the sales of Fiat and Massey Ferguson tractors grew to 1,632 and 3,194 units in September 2010 from 537 and 3,100 in August 2010. The overall sales of these tractors rose to 13,931 during July-September 2010 as compared to 12,690 units in the same period of 2009, according to Dawn news.

Over 50 per cent of the motorcycles and 40-45 per cent of cars in Pakistan are purchased by people living in rural areas. Total car sales in July-September 2010(including Suzuki Bolan) rose by 12 per cent to 30,030 units as compared to 26,812 units in the same period of 2009, according to Pakistan Automotive Manufactureres Association PAMA). Furqan Punjani of Topline Securities said car sales are expected to reach 154,000 units by the end of June 2011.

In addition to rising demand for cars and tractors, there is also an upward trend in two-wheeler sales. The cumulative sales of motorcycles in July-September 2010 rose to 126,701 units from 105,862 units in the same period of 2009.

While it is good to see Pakistan's rural farm economy perk up, it is also important to recognize that the overall national economic outlook can not improve significantly unless the growing budget deficits and rising inflation are brought under control. And this will require the ruling feudal elite to pitch in by paying their fair share of income tax on their rising farm incomes. It is time for them to lead by example.

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[Riaz Haq]

#Pakistan exported #food commodities worth $500m in July-Aug 2017. #exports #rice #wheat #fish #sugar

https://www.geo.tv/latest/159391-pakistan-exported-commodities-worth

The country earned US$ 512.3 million by exporting different food commodities during the first two months of the current financial year as compared the earnings of the corresponding period of last year.

During the period from July to August 2017, food group exports from the country increased by 30.6 percent as compared the exports of the same period of last year.

According to the data of Pakistan Bureau of Statistics, since the last two months exports of rice grew by 40 percent as around 428,993 metric tons of rice worth US$ 223.97 million were exported.

The rice exports, during first two months of last financial year, were recorded at 3810,861 metric tons, which were worth US$ 159.54 million, it added.

Meanwhile, the exports of basmati rice grew by 10.35 percent and about 59,433 metric tons of basmati rice, worth US$ 62.741 million, were exported as compared the exports of 59,192 metric tons, valuing US$ 56.857 million, in the same period, last year.

The exports of rice other than basmati also witnessed an increase of 58.98 percent, around 369.580 metric tons of rice costing US$ 161.198 million exported as compared to the exports of 251,669 metric tons worth US$ 102.888 million last year.

From July-August, 2017-18, fruit and vegetable exports increased by 8.74 percent and reached at 56,280 metric tons worth of US$ 20.58 million against the exports of 73,751 metric tons of US$ 18.88 million of the same period last year, it added.

The other commodities which witnessed an increase in their exports during the period under review include fish and fish production, which increased by 19.63 percent, wheat and sugar increased by 100 percent respectively. 

It may be recalled here that imports of the food commodities into the country also witnessed an increase of 27.18 percent and about US$ 1.123 billion was spent on the import of different food items to fulfill the domestic requirements.

[Riaz Haq]

THE EXPRESS TRIBUNE > BUSINESS
Balochistan can earn Pakistan up to $1 billion a year

https://tribune.com.pk/story/1543268/2-balochistan-can-earn-pakista...

Balochistan alone has the potential to earn Pakistan up to $1 billion a year from fruit and vegetable exports, according to initial findings of All Pakistan Fruit and Vegetable Exporters, Importers & Merchants Association (PFVA).

But this will happen if international good practices are adopted, added the representative organisation of fresh food exporters that has recently completed a consultative process with stakeholders in Balochistan to develop a road map for the sector.

“The PFVA’s vision would provide long-lasting solutions of problems like food security,” a press release quoted former PFVA chairman Waheed Ahmed as saying.

A PFVA delegation recently met Balochistan Governor Mohammad Khan Achakzai, growers and trade organisations and briefed them about the vision of the association to develop a national policy of horticulture.

The PFVA is gathering support throughout the country for its upcoming “National conference on Horticulture” which will be organised in February 2018.

The association briefed the governor and held consultative meetings at the Quetta Chamber of Commerce to increase the participation of farmers and other stakeholders in highlighting issues of the sector.

The current share of export volume of fruits and vegetables from the province is $45 million, which can be enhanced to $1 billion by establishing Research and Development facilities, Ahmed said.

Pakistan suffers due to low volume of exports overall, aggravating economic issues like a widening trade and current account deficit. Experts have time and again highlighted the need to increase exports and tap sectors other than textile to address economic issues.


The PFVA says that the establishment of grading, processing and packing plants as common facilities in various parts of Balochistan is imminent to achieve this objective. The governor assured to render full support and assistance is setting up common facilities centres in Balochistan, the release added.

Pakistan exported $641 million worth of horticulture products in fiscal year 2016. However, PFVA officials say the country can touch a volume of up to $7 billion within a decade if the federal and provincial governments frame friendlier policies.

[Riaz Haq]

Pakistani farmers fast adopting tunnel farming techniques
November 11, 2017 By:Samaa Web Desk Published in Blogs Be the first to comment!

https://www.samaa.tv/blogs/2017/11/pakistani-farmers-fast-adopting-...

Tunnel farming is not less than a windfall for farmers in Punjab and other upper parts of Pakistan as vegetables grown two months ahead of the actual time window fetch three to five times more price.

Recent uppish trends in the prices of the kitchen crops especially tomatoes and onions have made off-season veggies technology more popular among the farmers.

“I sold cucumbers grown at my farm at a rate of Rs 50 per kilogram last month. But these are now fetching now Rs 22 per kilogram in the whole sale market, almost twice the prices these are sold for in season,” says Allah Rakha, an owner of a farm in Kharianwala in Central Pakistan province of Punjab.

Tunnels, the structures comprising steel pipes covered by plastic sheets have lately mushroomed in Pakistan’s plains, mostly in central Punjab districts of Sheikhupura, Nankana Sahib and Gujranwala, following the suit of farms in Khyber Pakhtun Khawa, the north-western province.

Besides Cucumbers, other high-value vegetables grown in Pakistan through tunnel farming include- tomatoes, chilies, Caspicum (Shimla Mirch) and gourds.

The nurseries of tomatoes, chilies and caspcus are being transplanted these days in Punjab and the crop is expected to be at fruiting stage by February.

The technology not only helps produce the crop at least two months earlier than the traditional cultivation season but also saves the crop from all sorts of severe weather and handling related problems. In Punjab, the provincial government is providing subsidy for the purchase of drip irrigation gadgets while USAID is providing technical and financial assistance to growers in Khyber Pakhtun Khawa. But due to lack of awareness, the area under tunnel farms in Punjab is not more than 350 acres which is just iota when compared to millions of acres of agriculture land in the province.

“More and more growers should turn to this technology; We are ready to provide all sorts of assistance,” says Dr. Zafaryab Hyder , Director General Agriculture Extension, Punjab.

In spite all the constraints, the new technology has opened new vistas of prosperity for the farmers who had been victim of subsistence culture over the last several decades. Just a decade ago, the people of Punjab had to relish on the vegetables grown in the neighboring provinces of Sindh, Khyber PakhtunKhawa and Balochistan at exorbitant prices. The vegetables like bitter gourd, okra, peas , tomatoes, chilies , cucumbers from other provinces fetched atleast twice as compared to those produced in the Punjab just a couple of months later. However, the introduction of tunnel farming has produced new array of opportunities, initially for the progressive farmers who can get price for tomatoes, capsicum (Bell Peppers) thrice in early time window than the traditional season of cultivation. The owners of land tracts with tunnel farming are mostly educated youth, mostly agriculture graduates and Masters’ in Business Administration. They are no more being exploited by the middle man.

Rather, they provide high-value off-season vegetables directly to hotels and departmental stores. Besides vegetables, even the growers of strawberry in Lahore and Sheikhupura districts have adopted the tunnel farming to protect their crops from the severe weather conditions. With the passage of every day, the future of this new technology is becoming more and more bright especially the fertile agricultural lands of Punjab. The future of tunnel farming seems bright in Pakistan as growers have started embracing the technology lately.

However, the ongoing smoggy weather in the Central Pakistan has cast ill-effects on the crop with hindering the photosynthesis process much needed for the plant growth. Growers fear that per acre yield may decline drastically if the unfavorable weather conditions continue.

[Riaz Haq]

THE EXPRESS TRIBUNE > BUSINESS

 

Rags to riches: Tunnel farming: the swift money maker

By Saquib Saeed

Published: June 7, 2015

https://tribune.com.pk/story/899495/rags-to-riches-tunnel-farming-t...

Tunnel farming is a low-tech, but highly unconventional vegetable growing technique that started in the early 2000s in Pakistan. Currently, it is centred in the districts of Arifwala, Vehari and Mailsi in central Punjab with little emerging pockets in Faisalabad, Jhang, Multan and Rahim Yar Khan.

According to estimates of the Punjab agricultural department, there are more than 200,000 acres of tunnel farms in Punjab and the trend is growing. A very high urbanisation rate in Pakistan keeps creating greater demand for vegetables in the urban centres.

Currently, most tunnel farms remain between 10 to 20 acres in size and begin cultivation in autumn. That’s when support structures made out of bamboos, steel or aluminum pipes and steel wire ropes are erected around the plantation. These structures form rows that are 4 to 5 feet wide and have a height that’s between 3 to 12 feet. Known as low tunnels, walk through tunnels or high tunnels in their parlance. The higher the structure the more expensive it is to erect. Polythene sheets are spread on top of the structures, creating tunnel like cocoons within which vegetables are grown.

The winter sunshine passes through the transparent polythene sheets and its heat is trapped inside; while in the cold weather, the frost and the winter rains are kept well outside. This makeshift greenhouse deceives the vegetables into believing that it’s time to flower and fruit. As the weather warms up, the polythene sheets are removed.

The vegetables from tunnel farms arrive two to three months earlier than the same varieties grown conventionally in the open. Consumers no longer have to wait till April; they can savor their favourite vegetables in early spring or even in the middle of winters. Off-season arrival ensures that they command higher prices. This remains the single most important economic driver for tunnel farming.

Tunnel farmers routinely achieve an astonishing 500% yield over conventional farmers. Surprisingly, it’s not done by using exotic seeds or fertilisers. Instead, tunnel farmers adopt low-tech methods. All of their inputs such as the bamboo sticks, metal pipes, steel wire ropes, and polythene sheets, fishing lines, seeds, fertilisers and insecticides remain mundanely commonplace. What’s surprising is the innovative use that they put these inputs to; and with stunning results.

Mulching is one such technique in which they cover the ground with black polythene sheets and puncture evenly-spaced holes in it. Vegetable seeds are sown into these holes. This eliminates weeds that consume and ultimately waste the nutrients. Devoid of sunlight, nothing else apart from the plant itself can grow. The sheet also trap moisture in the ground and prevents its rapid evaporation. Conventional farming loses up to 50% of its water to rapid evaporation, tunnel arming doesn’t.

While within each row, thin fishing lines are strung as mesh to provide vertical space for the vegetables to grow. Most vegetables have indeterminate growth, much like creepers and vines. These mesh provide vertical pathways for the plant to grow. Depending on the height of the tunnel, each plant therefore grows at least three to five times larger in size and its reach than its conventionally grown, on ground twin. Consequently, it also bears more fruits.

Tunnel farmers also apply three to five times more chemical fertilisers and micro nutrients than conventional farmers. Every day, they patrol their tunnels much like a spinning mill owner would patrol his spindle frames. The ripe vegetables are identified, picked, weighed and sold daily under their watchful eyes.

----------------

Within a single season, he not only recovers his initial investment but can easily double his land holding for the next growing season. That’s the well-trodden path most beginners have taken in their rags to riches stories. In the process, they have also inspired countless others to follow their footsteps.

For the smart and the nimble, tunnel farming has opened up new opportunities where the barriers to new entrants remain surprisingly low. Where little investment and a lot of knowledge and innovation together with hard work can create unprecedented upward mobility.

Karachi has the largest demand in the country for vegetables. It also has the highest disposable income in the hands of its consumers. Most of Karachi’s off season vegetable demand is met from tunnel farms of central Punjab.

Karachi’s young and educated entrepreneurs can make use of this opportunity. They can lease cheap and plentiful land from absent land lords in lower Sindh, where prices remain at 1/4th the level of Punjab. By creating tunnel farms, they can replicate the success of their Punjabi counterparts, much closer to home.

The writer is an entrepreneur who has worked in Bangladesh’s garment sector 

[Riaz Haq]

USAID helping boost Pakistan’s chili production

https://www.thenews.com.pk/latest/246635-usaid-helping-boost-pakist...

The U.S.-Pakistan Partnership for Agricultural Market Development (AMD), along with the Trade Development Authority of Pakistan (TDAP) and Government of Sindh held a conference in Karachi that brought together public-private stakeholders to discuss issues and challenges pertaining to Pakistan’s chili sector.

USAID Deputy Mission Director Oghale Oddo, Federal Secretary Ministry of National Food Security & Research, Fazal Abbas Mekan, and Secretary Agriculture, Government of Sindh, Sajid Jamal Abro, participated.

“We are proud of the role USAID has played for many years to support the development of Pakistan’s agriculture sector. The U.S. government is hopeful that these efforts will help Pakistan emerge as a major player in the international market,” said Deputy Mission Director Oghale Oddo. “We are confident that we can help Pakistani chili exports become more competitive in the international arena by introducing innovative technology and providing technical assistance.”

Through discussions and interaction during the conference, stakeholders reviewed and endorsed AMD’s efforts and shared solutions to problems faced by the industry.

USAID launched the U.S.-Pakistan Partnership for Agricultural Market Development in February 2015 to improve the ability of Pakistan's commercial agriculture and livestock sectors to compete in international and national markets in the four target product lines; meat, high value and off season vegetables, mangoes, and citrus.

This partnership acts as a catalyst for development and investment in the target product lines, helps improve the quality and increase the quantity of exportable agricultural produce, and promotes cooperation among farmers, processers, exporters, and buyers of Pakistani agricultural products in international (non-U.S.) markets thus resulting in increased incomes and generating employment opportunities for Pakistani people working in the targeted product line.

[Riaz Haq]

#Pakistan develops two new varieties of #banana. These high-yielding varieties will have more shelf life, a basic requirement for #export. Banana is cultivated over an area of 80,000 acres in Pakistan but per acre yields are low- Profit by Pakistan Today https://profit.pakistantoday.com.pk/2020/11/19/pakistan-develops-tw...

Pakistan has achieved a breakthrough in banana production, as the country’s apex agricultural research institution has developed two varieties of the fruit for cultivation in Sindh.

“The new varieties — NIGAB-1 and NIGAB-2 — will boost banana production in the country, which will further help in meeting domestic requirements as well as export targets,” said Pakistan Agricultural Research Council (PARC) Chairman Dr Muhammad Azeem Khan. He lauded the scientists involved in the development of NIGAB varieties.

According to details, the new varieties of banana were developed at the National Institute for Genomic and Advanced Biotechnology (NIGAB) of the National Agricultural Research Centre, where 300,000 disease-free plants have so far been produced through tissue culture.

These high-yielding varieties will have more shelf life, a basic requirement for export.

The two varieties have been approved by the Sindh Seed Council for commercial cultivation in the province, which is the largest grower of the fruit in the country.

Statistics showed that banana is cultivated over an area of 80,000 acres in Pakistan. However, according to the Food and Agriculture Organization (FAO) of the United Nations, per-acre yield in Pakistan is lower when compared to India and China, which produce more than ten tonnes per acre.

Bananas are the world’s most exported fresh fruit with the volume of $10 billion per year. They are an essential source of income for thousands of rural households in developing countries. However, agrochemical-intensive production along with declining producer prices has given rise to many environmental and social challenges.

As per the FAO, global production of bananas and tropical fruits is projected to grow at 1.8pc per year between 2019 and 2028, after registering 2.3pc per year growth in the previous decade. Under the baseline scenario, production is expected to slightly exceed 255 million tonnes by 2028.

[Riaz Haq]

FY2020-21: Tractors assembling witnesses 59% growth in 11 months

https://dailytimes.com.pk/791852/fy2020-21-tractors-assembling-witn...

Owing to incentives offered by the government under its Agriculture Fiscal Package to mitigate the harmful impacts of COVID-19 pandemic and mechanization of agriculture sector, local tractor production witnessed about 59.03 percent growth in 11 months of current fiscal year as compared the production of corresponding period of last year.

During the period from July-May, 2020-21, 45,432 tractors were locally assembled as compared the assembling of 28,568 tractors of same period of last year, according the provisional quantum indices of Large Scale Manufacturing Industries (LSMI) for May 2021. The provisional quantum indices of Large Scale Manufacturing Industries (LSMI) for May 2021 with base year 2005-06 have been developed on the basis of latest data supplied by the source agencies. On month on month basis, the local production of tractors registered about 15,31 percent increase as about 4,105 tractors were locally manufactured in May, 2021 as compared the production of 3,560 tractors of same month of last year, according the data.

It is worth mentioning here that the government had initiated Rs1.5 billion sales tax subsidy on locally-manufactured tractors under agriculture package announced to revive the economically important sector and approved withdrawal of 5 percent sales tax on locally-manufactured tractors for one year. The government in May, 2020 announced a fiscal package of over Rs1.2 trillion in the wake of COVID-19 pandemic. Economic Coordination Committee of the cabinet division approved the package proposals. Out of the package, Rs50 billion was earmarked for relief to agriculture sector that contributes 18.9 percent to GDP and absorbs 42.3 percent of labor force. The package also includes Rs6.861 billion for provision of financial relief in terms of markup subsidy on bank’s loans to farmers, besides announcing sales tax relief measures to promote mechanization in agriculture sector to enhance per-acre crop yield. Pakistan produces tractors with a variety of working capacities in technical collaboration with foreign manufacturers, including New Holland Tractors and Massey Ferguson.

[Riaz Haq]

Pakistan sugar production for 2023/24 is forecast to rise 250,000 tonnes to 7.1 million due to the recovery in sugarcane area harvested from the flood-damaged crop the year before.

http://www.ukrsugar.com/en/post/pakistan-sugar-production-is-foreca...

It is reported by USDA in its May report.

https://apps.fas.usda.gov/psdonline/circulars/sugar.pdf

Sugarcane production is forecast up 3 percent to 83.5 million tons due to the expected recovery in area. Favorable prices are encouraging farmers to maintain sugarcane area vis-à-vis planting other crops. Farmers’ preference toplant sugarcane is also due to the crop’s resiliency to weather hazards compared to alternative crops. Sugarcane is produced in three provinces, with Punjab accounting for 68 percent of total production, followed by Sindh with 24 percent, and Khyber Pakhtunkhwa (KPK) with 8 percent. The Bahawalpur division of Punjab and the Sukkur division of Sindh account for more than half of the total sugarcane area. Sugarcane is planted in two different seasons: spring planting runs from February to March and the fall season is from September to October. Punjab and Sindh farmers plant sugarcane in both seasons, while most cane in KPK is planted in spring. Yields per hectare are relatively low due to lack of high yielding varieties, water shortages, and uneven fertilizer distribution.

Pakistan has been one of the top eight sugar producers for the past 3 years and is forecast to be the seventh largest exporter in 2023/24. Sugar consumption is estimated up 150,000 tons to 6.3 million supported by population growth and higher supplies. Despite the rise in production, sugar exports are forecast down 200,000 tons to 800,000 as the government seeks to curb exports. Fearing domestic price increases, the government is expected to be reluctant to approve too many exports this year by monitoring the market situation on a fortnightly basis to decide on the timing and quantity of exports. Stocks are expected to be flat.