Role of Agriculture in Pakistan Economy

Agriculture is a vital sector of Pakistan's economy and accounted for 25.9 percent of GDP in 1999-2000, according to government estimates. The sector directly supports three-quarters of the country's population, employs half the labor force , and contributes a large share of foreign exchange earnings. The main agricultural products are cotton, wheat, rice, sugarcane, fruits, and vegetables, in addition to milk, beef, mutton, and eggs. Pakistan depends on one of the world's largest irrigation systems to support production. There are 2 principal seasons. Cotton, rice, and sugarcane are produced during the kharif season, which lasts from May to November. Wheat is the major rabi crop, which extends from November to April. The key to a much-needed improvement of productivity lies in a more efficient use of resources, principally land and water. However, change is dependent on the large landowners who own 40 percent of the arable land and control most of the irrigation system, which makes widespread reform difficult. Assessments by independent agencies, including the World Bank, show these large landholdings to be very unproductive. Pakistan is a net importer of agricultural commodities. Annual imports total about US$2 billion and include wheat, edible oils, pulses, and consumer foods.

Pakistan is one of the world's largest producers of raw cotton. The size of the annual cotton crop?the bulk of it grown in Punjab province?is a crucial barometer of the health of the overall economy, as it determines the availability and cost of the main raw material for the yarn-spinning industry, much of which is concentrated around the southern port city of Karachi. Official estimates put the 1999-2000 harvest at some 11.2 million 170-kilogram bales, compared with the 1998-99 outturn of 8.8 million bales and the record 12.8 million bales achieved in 1991-92. The government recently actively intervened in the market to boost prices and to encourage production. A major problem is that the cotton crop is highly susceptible to adverse weather and pest damage, which is reflected in crop figures. After peaking at 2.18 million tons in 1991-92, the lint harvest has since fluctuated considerably, ranging from a low of 1.37 million tons in 1993-94 to a high of 1.9 million tons in 1999-2000.

The 2000-01 wheat crop was forecast at a record 19.3 million tons, compared to 17.8 million tons produced during the previous year. This increase is due largely to favorable weather and a 25-percent increase in the procurement price to about US$135 per ton. About 85 percent of the crop is irrigated. Despite the record production, Pakistan will continue to be a major wheat importer. The government has imported an average of US$2.4 million annually over the past 5 years. The United States and Australia are the major suppliers. Demand for wheat is increasing from Pakistan's rapidly growing population as well as from cross-border trade with Afghanistan.

Pakistan is a major rice exporter and annually exports about 2 million tons, or about 10 percent of world trade. About 25 percent of exports is Pakistan's famous fragrant Basmati rice. Rice is Pakistan's second leading source of export earnings. Private traders handle all exports. Pakistan's main competitors in rice trade are Thailand, Vietnam, and India.

Tobacco is grown mainly in the North-West Frontier Province and Punjab and is an important cash crop . Yields in Pakistan are about twice those for neighboring countries largely due to the extension services provided by the industry. Quality, however, is improving only slowly due to problems related to climate and soil. Farmers have started inter-cropping tobacco with vegetables and sugarcane to increase returns. About half of the total production is used for cigarette manufacturing and the remainder used in traditional ways of smoking (in hand-rolled cigarettes called birris, in water pipes, and as snuff). The share of imported tobacco is increasing gradually in response to an increased demand for high-quality cigarettes.

Minor crops account for only 5 percent of total cultivated area; these include oilseeds (sunflower, soybean), chilies, potatoes, and onions. Domestic oilseed production accounts only for about 25 percent of Pakistan total edible oil needs. As a result, Pakistan spends more than US$1 billion annually in scarce foreign exchange to import edible oils, while its oilseed processing industry operates at less than 25 percent of capacity due to an inadequate supply of oilseeds. For 2000-01 total oilseed production was forecast to decrease 10 percent to 3.6 million tons. The government has highlighted development of the oilseed sector as a priority.

Pakistan's fishing industry is relatively modest, but has shown strong growth in recent years. The domestic market is quite small, with per capita annual consumption of approximately 2 kilograms. About 80 percent of production comes from marine fisheries from 2 main areas, the Sindh coast east from Karachi to the Indian border, and the Makran coast of Baluchistan. Ninety percent of the total marine catch is fish; the shrimp which constitute the remainder are prized because of their greater relative value and demand in foreign markets. During 1999-00, total fish production was 620,000 tons, of which 440,000 tons consisted of sea fish and the remainder were fresh-water species. About one-third of the catch is consumed fresh, 9 percent is frozen, 8 percent canned, and about 43 percent used as fish meal for animal food.

Livestock accounts for 40 percent of the agricultural sector and 9 percent of the total GDP. Principal products are milk, beef, mutton, poultry, and wool. During 1999, the livestock population increased to 120 million head. That same year Pakistan generated 970,000 tons of beef, 640,000 tons of mutton, and 190,000 tons of poultry. In an effort to enhance milk and meat production, the government recently launched a comprehensive livestock development project with Asian Development Bank assistance. Poultry production provides an increasingly popular low-cost source of protein. Modern poultry production is constrained by high mortality, high incidence of disease, poor quality chicks, and poor quality feed, combined with an inadequate marketing system. Frozen poultry have only recently been introduced.

Forests cover an area of 4.2 million hectares or about 5 percent of the total area of Pakistan. The principal forest products are timber, principally for house construction, furniture, and firewood. Many of the country's wooded areas are severely depleted as a result of over-exploitation. The government has restricted cutting to protect remaining resources?though corruption often jeopardizes environmental efforts?and has lowered duties to encourage imports. Forestry production has since declined from 1.07 million cubic meters in 1990-91 to 475,000 cubic meters in 1998-99. Pakistan imports an estimated US$150 million of wood products annually to meet the requirements of a growing population and rising demand by a wealthy elite.

Read more: http://www.nationsencyclopedia.com/economies/Asia-and-the-Pacific/Pakistan-AGRICULTURE.html#ixzz2FDOu5rYn

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