The maximum frequently known challenge of Pakistan’s agriculture sector is certainly one of subpar farming yields in comparison to regional and international averages. The factor is well-understood and is in most cases attributed to small- and subsistence scale farms missing the capital adequacy to invest in productivity-enhancing gear, be it yield bettering inputs corresponding to seeds and fertilizers or cost-saving measures such as drip irrigation.
But take a look at the disaster from farmer’s viewpoint, and it turns into obvious that the issue isn’t one among inadequate liquidity or lack of information alone. A cursory analysis of farmgate and wholesale costs of agri produce from the decade signifies that the issue could just as easily be described with regards to farm economics, governed by way of fundamentals of supply and insist.
It isn’t difficult to understand the main at play. After all, it’s intuitive that costs in farm produce markets, as when it comes to some other items and services market, decline during periods of extra provide while emerging in times of shortage.
Except, the problem is especially exacerbated due to sector-specific dynamics. One, because farming output is seasonal, produce from maximum farms in each and every area reaches the tehsil/district ghalla market all over the similar period. This implies that a brief surplus is created right through a very brief window, resulting in crashing of commodity prices.
Two, inadequate on-farm garage amenities because of small and subsistence-scale reasonable farm sizes, coupled with bimodal rising season signifies that farmers to find themselves forced to instantly offload their produce, enticing in distressed sales.
While farm produce warehouse and garage facilities are peddled as a tool to carry fee steadiness all the way through harvest season, its application is contended. After all, even supposing growers choose to retailer produce in warehouses as a substitute of coming into in distressed sales, prime levels of warehoused shares on region-wide basis may nonetheless be indicative of a provide glut. This in flip is certain to stay costs at below farmer target-levels, with additional cost of garage (hire) and financing charge of loans taken to satisfy liquidity necessities for following sowing season.
The problem is mostly prominently showcased in seasonal price-volatility of perishable commodities, especially vegetables and end result. The ongoing scarcity of tomatoes due to not on time harvest, as an example, follows excess provide remaining 12 months when growers needed to waste tons of crop to achieve price stability.
Thus, while reaching champion yields has become the holy grail of agriculture, it won’t turn out to be the panacea it is thought to be. Therefore, the pertinent query to ask is what tools exist to align farm economics with national yield objectives, with the intention to create incentives for growers to put money into yield enhancing inputs.
One possible answer lies in growing ease for regional trade, such that domestic call for now not presents the primary target market of agricultural produce. Absence of agricultural warehousing clearly precludes this type of large-scale initiative, but a strategy to that challenge seems to be on the horizon with the entry of collateral control companies and creation of collateral receipt financing regulations via SBP.
However, the sheer loss of quality infrastructure, country-specific standards and certifications items a problem of even higher enormity. This is especially restrictive in the case of perishables; imagine that during FY18, of the overall meals workforce exports of $four.8 billion, sixty p.c of receipts got here from non-perishables similar to rice, wheat and sugar, whilst fruits and vegetables contributed $zero.64billion or simply 13 % in spite of upper related crop value whether or not measured in line with acre or according to input-to-output ratio, in line with indicative costs of production calculated by means of AMIS.
Given the subpar value-add of agricultural GDP – 18.5 percent against percentage in labour employment of 38.5 p.c – national objective of maximizing crop yields can handiest be achieved as soon as farm economics is aligned in that direction. This calls for identity and looking for get admission to to focus on markets for farming produce through developing purpose construct infrastructure and value chains.
If there may be any lesson to be found in seventy-year history of Pakistan’s agri sector, it’s that dwelling eternally on farm-and-food safety nexus or home food sufficiency wishes has gotten us nowhere. At its heart, farmers are marketers identical to another, and would possibly reply better to monetary incentives moderately than appeals to sense of patriotic duty.