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the dilemma of agriculturists

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    Pakistan: The dilemma of agriculturists

    The crisis affecting the sugar industry since the start of this crushing season is likely to incur losses of more than Rs 20 billion to the growers. For the first time, the current price of sugar per kilogramme is less than the per kilogramme price of flour being sold in different parts of the country. Economists term this as “reverse crisis”, in which market players bring the price of a commodity to an extreme low to cause heavy losses to the producers or growers. So, market players earn huge profits. This, unfortunately, is not just the case with sugarcane growers or with flour millers but a major crop of central Punjab citrus growers is currently a victim of this exploitation.

    Agriculturists are having difficult times. They are unable to get just and fair market price for their products for which they work untiringly. Around 70 percent of the population is involved in agricultural related activities. The repercussions of this exploitation, now spreading from one crop to the other, are going to be extremely hazardous for the national economy and in reducing poverty. Agriculture being the largest sector in terms of employment generation with its share in the GDP around 21 percent shows a stark difference from the developed economies where agriculture’s share remains less than 5 percent. Leading economist G.M. Meir writes, “A development programme cannot afford to emphasise industrialisation at the expense of agricultural development.” Economic growth is defined as transfer of labour from subsistence agriculture to the market-orientated industry. But this needs essential prerequisites that would be discussed in the lines to follow.

    The duality of an economy means that there exists both agricultural and industrial production with varying proportions. It is a common phenomenon in all the developing countries. With a huge number of population living in the rural areas, this duality is striking the country’s economy. During the last six years, economic progress has increased the income and prosperity indicators of this economic duality. According to Dr A.H. Khan, “The profits of the banking sector have almost tripled. The foreign exchange reserves have risen from one billion dollars to $ 12 billion, though the latest figure seems to have been artificially boosted by selling valuable national assets at a throwaway price to foreign firms. But there remained a horrible stagnation in the agricultural sector. The average growth rate of agriculture remained just two percent while the rural population growth rate surpassed the agriculture growth, resulting in rising poverty.

    As far as the question of linkages of rural labour force with the modern industry is concerned, there must be a literate labour force, technically efficient and physically healthy. There exists no such situation in the country as we have alarming human development indicators. This approach had its marvelous success stories in the East Asian Economies. They are reaping the benefits. The share of agriculture in the GDP is constantly decreasing while of industry and services is on the rise.

    Coming back from the theoretical models of economic development to the current miseries of the farmers and growers of the country. Let us analyse a few evidences of exploitation. The Rs 60 price for sugarcane for the crop-growing provinces was set by the government before the start of the current crushing season. The Pakistan Sugar Mills Association (PSMA) agreed on the price but on condition of keeping the ex mill price of sugar at their own convenience. As a result, the price in the market dropped. Who raises it and who drops it is a separate debate but much about it is known by the many. Now growers are getting even less than Rs 40, that too with delayed payments.

    The average sale of an acre is now around Rs 30,000 for a crop that lasts and occupies land for the whole year. The average yearly expense, including transportation and labour costs is not less than Rs 15 to 20,000. So a whole year’s saving from an acre is now not more than Rs 10,000. That is extremely negligible and meager to enable the growers’ community to cope with the current high inflationary periods.

    Citrus and particularly its variety kinnow is grown over almost two lakh hectares mostly in district Sargodha and its adjoining areas. As per Federal Bureau of Statistics, its production in the year 2005-06 was around 2.2 million tones. Kinnow remains one among now the few fruits that are being exported from Pakistan. The export quality is graded and waxed for longer storage in now more than 100 kinnow Processing Plants. Initially, the owners of these plants were big Karachi-based industrialists and export volume was negligible. Later, more and more people entered into the business and finally they did the same in the current season for the kinnow. Citrus remains a full-year crop. The grower nurture it the whole year to finally have some reasonable price. The current price set by the processing plants is meager and just enough to enable the farmer to meet his costs of the year and prepare for the next season’s orchard management. Profit margin from a citrus orchard is getting thinner each year.

    It can be argued that the market and its uncontrolled forces have the right to adjust prices as per supply of demand of any particular commodity. But, unfortunately, there is hardly any other sector in Pakistan, particularly those involved in the industrial production, that are united and eager to form cartels. The victims and affected are agricultural growers and producers. The beneficiaries are all those who use agricultural products as raw material or for final product manufacturing. Rural poverty is likely to further increase if this on-going exploitation does not come to an end. Social indicators and efforts to improve human development indicators would remain unproductive and ineffective. The expected rise in petroleum product prices and current artificial shortage and higher prices of essential fertilisers is further pushing the farmers towards the wall.

    There exist government departments and employed staff to check the problems confronting the agricultural sector. The fault remains in the implementation. The issue of pricing is perhaps not their responsibility. But someone concerned must have to think about it now.

    PS: An article of mine, ‘Fall of higher education’, was published in The Post on January 22, 2008. The Higher Education Commission (HEC) sought explanations about my credentials from the Vice Chancellor Sargodha University where I used to teach. Finally, on the insistence and directions of the HEC’s higher authorities last week, I was terminated from my job at the university. The reasons given by the Vice Chancellor include, writing about the HEC. I wish the HEC had the moral courage to respond to criticism. It could have explained if it believed I had furnished wrong information. Unfortunately, direct action is preferred in this country.

    The writer is a freelance columnist with a background in research


    Publication date: 2/5/2008

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