LAHORE: The dire straits of Pakistan’s economy could have a domino effect on the country’s agricultural sector too, with farmers saying that they feared a substantial decline in annual yields following a decrease in the use of agronomical inputs.
A sharp increase in the price of diesel from Rs 98.76 per liter to Rs 112.94 — after the previous government’s term ended on May 31 — is another factor that could contribute toward an increase in the cost incurred by agriculturists.
“The inflation has pushed farmers to reduce the use of agricultural inputs by 10 to 15 percent, which may cause a decline in annual crop production by 5 to 10 percent,” Ibrahim Mughal, Chairman Agri Forum Pakistan, told Arab News.
Endorsing farmers’ opinion that the annual production may decrease due to the impact of inflation and currency devaluation, Sahibzada Mehboob Sultan, Minister for National Food Security and Research, told Arab News: “The country is going through a critical phase with the economy under stress but the government is working to support the farmers and strengthen the agriculture sector.”
The State Bank of Pakistan (SBP), in its third quarterly report 2017-18, added: “Wheat production stood at 25.5 million in FY18, down 4.4 percent from last year and missing the target of 26.7 million tons set for FY18. The country was not able to match last year’s performance as both area and yield declined in FY18 by 2.7 and 1.8 percent respectively.”
“The cotton production stood at 11.9 million bales during FY18 missing the envisaged target of 13.6 million bales,” the central bank added.
The SBP also highlighted that the rupee’s more than 15 percent depreciation against the US dollar may push inflation to the targeted level of six percent in FY19.
However, Pakistan’s Finance Minister Asad Umer, while addressing the National Assembly on October 30, allayed the fears of farmers by saying that the “government supports the agriculture sector by reducing the electricity rates and provision of soft loans to help farmers”.
Lamenting the losses incurred sue to the current state of the economy, Ibrahim Mughal, a veteran farmer, said: “The currency devaluation has also increased farmers’ cost of agricultural inputs in the local market.”
He added that the economic disaster was a direct result of an agricultural crisis, Mughal added that “agriculture is the mainstay of the country’s economy and has the potential to turn it around”. “As agriculture largely contributes to Pakistan’s exports, the country’s trade deficit can be met by focusing on the sector by enhancing exports and curtailing imports,” he added.
The central bank states that the sector  contributes 18.9 percent to the country’s GDP, while employing 42.3 percent of its labor force.
Farooq Bajwa, President Farmers Associates of Pakistan, told Arab News: “The substandard inputs such as seeds, fertilizers, pesticides and herbicides are badly affecting the growth of the agriculture sector. The increasing price of diesel will badly hit the farmer’s interest as approximately 3 to 3.5 billion liters of diesel is used annually in tube-wells and tractors. No other source of energy like petrol, LNG, CNG or LPG
Sultan, on the other hand, blamed the previous governments for the current economic state of the country, adding that they turned a blind eye to the agricultural sector. He said that a revision of gas prices led to an increase in the rates of fertilizers. “There are no quick fix solutions,” he said, yet the government is giving subsidies on electricity and pesticides to help the farmers. “The government will gradually overcome the impact of diesel and currency devaluation,” he added.
Pakistan’s former Finance Minister Dr. Salman Shah, while talking to Arab News, said that the high cost of agricultural inputs may not decrease crop production but would definitely reduce farmers’ profits.
Shah, an expert in agricultural economy, highlighted that government was not supporting farmers in imparting knowledge and technology, farm and water management or extending services to improve productivity. “The Agriculture University didn’t impart knowledge or conduct research to help improve the sector,” he added.
Punjab Finance Minister Makhdoom Hashim Jawan Bakht added that Pakistan’s annual agricultural yield is already low in the region, even as the government continues to work on a comprehensive policy to improve techniques in order to increase the per acre yield. “Interest-free loans and the reduced tariff on tube-wells to farmers are steps in that direction,” he told Arab News.