Short-term Fiscal Agriculture Packages Not Sufficient To Address Problems Faced By Agriculture Sector: FPCCI

PESHAWAR (UrduPoint / Pakistan Point News - 26th july, 2016) : Federation of Pakistan Chambers of Commerce & Industry (FPCCI) said on Tuesday that agriculture sector which is contributing around 25% to the GDP, was not receiving the attention it should be accorded as the country's reliance was on its Primary produce for both exports and domestic usage.

In a statement here, Chairman Regional Standing Committee on Horticulture export of FPCCI Ahmad Jawad said that the average annual growth of agriculture sector in Pakistan dropped from 5.4 per cent during 1980-90 to 2.2 per cent during 2011-16.

The growth during the past fiscal year (2015-16) plummeted to -0.2 per cent mainly contributed by -6.3 per cent decline in the crop sector. He said Public sector's capacity to invest in agriculture has been on the decline.

Due to lack of modernization in agriculture, average growth in yields for cotton and wheat declined from 9 and 2.6 per cent respectively between 1980-90 to -2.2 and 1.4 per cent respectively between 2011-16. Prime Minister's Agriculture Package of Rs 341 billion and extension of the some fiscal incentives in the Federal budget 2016-17 for the agriculture sector were not the solution.

"We must admit that such short-term fiscal packages cannot be an answer to structural problems faced by the agriculturists", he added. These problems included rising input costs faced by the farmers, indirect taxes on inputs and farm operations, subsidies and support price benefits not reaching the poorest of the poor in the farming sector, lack of innovation in seed varieties, missing technology to modernize the crop harvesting, cultivation, storage and marketing, weak access to agriculture credit and water shortages threatening the irrigated lands.

"In order to reverse this dismal situation, it is important to put in place a carefully formulated long-term plan for the revival of this sector.

The Planning Commission, Ministry of National Food Security and Research (MNFSR), provincial agriculture and agriculture extension departments, and provincial planning and development departments are best placed to collaborate and put forward a comprehensive national plan on agriculture for the approval of Council of Common Interests and the Parliament", Jawad remarked. Similarly timely and formal credit to farmers remains a challenge.

The government will need to review the mark-up rates faced by farmers on a regular basis. Private commercial banking sector also needs to be encouraged through interventions from Ministry of Finance and State Bank of Pakistan, to increase micro credit in agriculture extension. Jawad further said a revision of Fiscal Responsibility and Debt Limitation Act should protect food security allocation and direct these protected expenditures towards poorest districts in the country.

One additional criterion for selection of these districts should be malnutrition. The government should also revisit the zero-hunger program which was halted due to budgetary constrained.