2013

AGRICULTURE SECTOR OF PAKISTAN

Course: Analysis of Pakistan Industries Submitted to: Sir Shahid Hameed Submitted by: Arsalan Latif-10074 Delshad Karanjia-10045

Contents
Introduction ............................................................................................................................................ 4 OVERVIEW OF THE ECONOMY ................................................................................................................ 5 Historical Performance of Agriculture Sector ......................................................................................... 6 1950s .................................................................................................................................................. 6 1960s .................................................................................................................................................. 7 1970s .................................................................................................................................................. 7 1980s and 1990s ............................................................................................................................... 8 2000s .................................................................................................................................................. 8 Performance of Agriculture .................................................................................................................... 9 Crop situation.......................................................................................................................................... 9 Major crops: ........................................................................................................................................ 9 Cotton ............................................................................................................................................. 9 Sugarcane ...................................................................................................................................... 10 Rice ................................................................................................................................................ 10 Wheat............................................................................................................................................ 11 Minor crops ....................................................................................................................................... 12 Oil seeds ........................................................................................................................................ 12 Forestry ......................................................................................................................................... 12 Livestock........................................................................................................................................ 13 Poultry ........................................................................................................................................... 13 Fisheries ........................................................................................................................................ 13 Porters Five Forces Analysis ................................................................................................................. 14 Five Force Model............................................................................................................................... 15 Threat of new entrants ................................................................................................................. 15 Threat of substitutes ..................................................................................................................... 15 Bargaining Power of Suppliers ...................................................................................................... 15 Bargaining Power of Buyers .......................................................................................................... 15 Rivalry among competitors ........................................................................................................... 15 THE GREEN REVOLUTION ...................................................................................................................... 16 ISSUES OF GREEN REVOLUTION ............................................................................................................ 16 The Issue Of Tubewells: .................................................................................................................... 16 TRACTORIZATION: ............................................................................................................................. 17 REGIONAL AND INCOME DISPARITIES: ............................................................................................. 17

ELITE FARMER STRATEGY AND CAPITALIST DEVELOPMENT:............................................................ 17 SOCIAL AND POLITICAL EFFECTS: ...................................................................................................... 17 AGRICULTURAL GROWTH-1977 ONWARDS.......................................................................................... 17 LAND REFORMS..................................................................................................................................... 18 1959 Land Reforms: .......................................................................................................................... 18 1972 LAND REFORMS: ...................................................................................................................... 18 AGRICULTURAL PROBLEMS IN PAKISTAN: ............................................................................................ 19 SOLUTIONS FOR AGRICUTURAL PROBLEMS ......................................................................................... 20 CONCLUSION......................................................................................................................................... 20 BIBLIOGRAPHY: ..................................................................................................................................... 21

Introduction
Agriculture sector of Pakistan has always been the backbone of our economy. It has contributed to economic growth of the country either directly or indirectly. Agriculture is considered important since it provides food to consumers and raw materials to domestic industry; it also contributes to foreign exchange earnings as well as providing a market for industrial goods. Agriculture sector continues to be an essential component of our economy providing 21% to our gross domestic product (GDP) and providing employment opportunities to almost 45% of the countrys labour force. Around 60% of our rural population depends on the agriculture sector for their livelihood. It ensures food security, generates economic growth and plays a vital role in reducing poverty. The agriculture sector consists of crops, livestock, fishery and forest. Major crops include wheat, cotton, rice and sugarcane. Minor crops include oilseeds, other pulses, potatoes, onions, chillies, garlic. Pakistan experienced a growth of 3.1% in the year 2011-2012 in the agriculture sector as compare to 2.4% in the previous year.

Agriculture growth rate from 2005-2012: Year 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12(P) Source: Pakistan Bureau of Statistics Growth (%) 6.3 4.1 1.0 4.0 0.6 2.4 3.1

Pakistan has two major crops seasons, Kharif crops (Rice, sugarcane, cotton, maize) which are sowed during April-June and are harvested during October-December. Rabi crops (wheat, gram, tobacco, barley) are sowed in October- December and harvested during April June.

OVERVIEW OF THE ECONOMY

Years of political instability and lack of foreign investment have resulted in slow growth of the economy. Because of these internal political conflicts and lack of consistency when it comes to economic policies, Pakistan is still underdeveloped. Agriculture sector employing more than half of the countrys population and contributing one-fifth of the output has always been a major factor to growth in the country. Textile industry is the major source of export earnings but concentration of exports to few markets and very few export items has not allowed this sector to reach its full potential. The unemployment rate (official) which stands at 6% fails to tell the whole story as most of the economy is still under developed. Over the years, low development, elevated inflation which is managed by increase in food prices has led to more poverty. Inflation has worsened; it stood at 7.7% in 2007 and rose to around 12% in 2011 before coming down to 10% in 2012. As a consequence of government as well as economic instability, Rupee has depreciated to unprecedented low levels. Balance of payment crisis has forced to the government to agree to IMF standby agreement. Even though the economy has stabilized, it has failed to recover as foreign investment to the country has not returned because of investors fear about the security situation as well as the energy crisis which has crippled our economy. Remittances from overseas Pakistani have reached around 9 billion in the first eight months of this fiscal year(2012-13) and remain the only bright spot. Pakistan stays stuck in the low income, low growth traps with growth averaging around 3% from 2008-2012. In order to bring external investment to the country and enjoy economic growth, there is a need to address the on-going energy crisis and issues concerning government revenues. Investment in the social sectors such as education and health is also pivotal.

Historical Performance of Agriculture Sector

Pakistan at the time of its birth inherited an agricultural economy. The cultivated area, particularly of Punjab was considered the bread basket of the subcontinent. In the initial years, agriculture sector was ignored despite it being the largest contributor to the economy. The focus of all government efforts was to initiate the process of industrialization. Agriculture sector employed around 80% of the population and contributed around 73% to foreign exchange earnings, provided raw material for cotton, jute, vegetable, sugarto countries and served as market for industrial goods.

1950s
The focus during the initial years of Pakistan remained on industrial development and the agriculture sector was not given due attention. Pakistan exported agriculture products and imported manufacturing machinery. Since agriculture was the man export sector, the use of currency overvaluation, export taxes, high tariffs and quantitative restrictions on imports is an example of how terms of trade were turned against agriculture and in favour of the industries. Because of these policies, domestic industries made high profits and had a growth of around 23% per year between 1949-50 and 1955-56. This growth was led by cotton textiles as well as increase of 50% when it comes to cloth production also played a role. During this period agriculture sector paid a heavy price because of the government policies promoting industrialization.According to Professor. Lewis agriculture sector received Rs.3.94 for per dollar marketing and paid Rs.9 per dollar its purchases. There were significant transfers from the agriculture sector to other areas particularly the industrial sector of the economy. These transfers were around 30% of the value added in agriculture. During the period 1955-58, agriculture grew by only 1.4% which was even less the growth in the population which was 2.6% per annum.

PERIOD 1950-51 1951-52 1952-53 1953-54 1954-55 1955-56 1956-57 1957-58 1958-59 1959-60

GROWTH(%) 2.55 -9.06 0.18 15.23 -2.21 2.09 2.27 1.92 4.0 0.29 Source: Federal bureau of statistics

1960s
This was period in which agriculture sector experienced a high growth rate of 5.1%. After anti agriculture policies during the 1950s, it was during this period that policies were formulated to boost agriculture growth. Green Revolution is an important event that took place during this period. The growth during this period was because of the following reasons: Around 79,000 tube wells were installed by the government during this period. Irrigation facilities were provided to deal with the water issues During 1965-1970, government provided HYVs (High Yield Variety seeds), fertilizers and pesticides to supplement the tube-wells and irrigation facilities. Cheap soft loans were provided to farmers Tractors were also made available to farmers at cheap rates. As a consequence of these actions, agriculture output grew and sector itself experienced high growth rates in some of the years of this decade. Output of major crops increased because of these measures. Wheat production grew by 91% whereas rice production experienced growth of around 141%. Period 1960-1965 1966-1970 Growth(%) 3.78 6.26

1970s
This period was marked with Nationalization which had an adverse impact on the industries as well as the agriculture sector. The performance of agriculture during this decade was not good with annual average growth rate of 2.4% in agriculture sector. Crop production had a growth rate of 0.49%, output of rice, cotton and sugarcane fell persistently in the initial years of the 1970s though it improved in the latter part of the decade. The performance of agriculture was affected by several reasons which included diminishing impact of new variety seeds, virus attack on cotton, droughts and floods, uncertainty because of the land reforms, strained relations between tenants and landlords. Period 1971-72 1972-73 1973-74 1974-75 1975-76 1976-77 Growth(%) 3.47 1.67 4.18 -2.12 4.47 2.53

1980s and 1990s

Agriculture sector revived during the 1980s and had an average growth of 5.4%. Several factors contributed to this growth which included reviving the private sector after Bhuttos nationalization, improved adjustment of prices, new cotton varieties and establishment of large scale private farming. During the period of 1984-85 and 1989-1990, production of cotton and livestock increased whichfurther boosted agriculture growth.Agriculture performance slowed during the 1990s for various reasons such as floods, political instability, lack of availability of water and increase in production costs. During the year 1996-97 agriculture had a growth rate of 0.12%.

2000s
In early 2000, agriculture growth was affected because of droughts in province of Sindh and Baluchistan and thus had a negative growth. Modest growth rates of 4.1% and 2.2% were experienced during the year 2002-03 and 2003-04 respectively. However availability of water, suitable climate conditions, modern seeds and pricing policy improved agriculture performance as it showed growth of 6.5% during 2004-05.

Performance of Agriculture
Agriculture sector during the fiscal year 2011-2012 experienced growth rate of 3.1% mainly because of the growth in sub sectors of agriculture other than minor crops. Major crops contributed 31.2% to agriculture value added and had a growth of 3.2% during 2011-12 as compare to negative growth rate of 0.2 in the previous year. The growth in major crops was because of the positive performance of Rice (27.7%), Cotton(18.6%) and Sugarcane(4.9%). Minor crops during this period had a negative growth of 1.3% as compare to growth in 2.7% in 2011. They contributed 10.1% in value addition in agriculture.

The livestock sector which has 55% of agriculture share was consistent in its performance growing by 4% just as the previous year. Fishery grew by 1.8 in 2011-2012 as compare to 1.9% in the previous fiscal year. There was improvement in the sector of forestry as it posted a positive growth rate of 1% against negative 0.4% in the previous year.

Crop situation
Major crops:
Major crops such as wheat, maize, rice and sugar cane account 91% of the value added and this value added by major crops contribute around 32% to the overall agriculture value addition. The four major crops that is wheat, rice, cotton and sugar cane contributed 6% to the GDP. Cotton Cotton is a cash crop that contributes to the national economy by providing raw materials to the textile industry. Cotton accounts for 7.8% of value added in agriculture and contributed 1.6% to Gross domestic product (GDP). During the fiscal year 2011-12 Cotton production was around 13.6 million bales which were 18% higher than the previous year. Some of the reason for this increase in production was because of use of BT cotton, control over Cotton leaf curl virus and sucking pest which increased yield per acre. Following figure highlights the production of cotton in the last five years:

Sugarcane Sugarcane is another important cash crop that provides raw material for sugar and sugar related items. For farmers in the country it is one of the most significant sources of income. Sugar cane contributed 3.7% of the value added in agriculture and 0.8 % to the GDP. There was a 4.9% increase in sugarcane production this year as compare to last year. Period Production(million tons) 2010-2011 55.3 2011-2012 58 The increase in production was for several reasons: Lucrative prices in the market for last years production Availability of inputs However yield per hectare this year was negative 0.9% as compared to last year which accounted growth of 6.9%. The main reason or this increase in yield per hectare was the floods in the year 2010 which made soil more fertile. Sugarcane production for the last five years is highlighted below:

Rice Pakistan is one of the finest producers of rice. This crop is a major source of foreign exchange earnings. Rice contributes 1% to the GDP and accounts 4.9% to value addition in agriculture. The crop production saw a significant increase of 27.7% than last year and main reason for this increase was increase in the amount of area sown. Table below explains the changes in the level of production and area cultivated.

Wheat Wheat is always given important when the government is formulating agriculture policies as it is the largest food grain source of the country and basic staple food for most of the countrys population. Wheats contribution to GDP is 2.6% and 12.5% to value added in agriculture. Due to standing water and other climate conditions, sowing of wheat was delayed and thus it is because of that the yield per hectare experienced a negative growth of 4.2% as compare 11% previous year. The decrease in area used for wheat production was also due to the fact that the farmers were not able to dispose wheat produced last year.

Minor crops
Minor crops of Pakistan are oilseed crops which include cottonseed, sunflower, groundnut, soybean, potato, onion etc. the performance of minor crops was not better than the previous year as it showed a negative growth of 1.3% as compare to 2.7% growth the previous year. Oil seeds The major oilseed crops include cotton seed, mustard, sun flower and canola. Cotton seed is a major contributor to edible oil production as it contributes around 60%. In order to meet the requirement of edible oil which at this point is 2.045 million tons, only 34% is contributed by local production whereas most of it is imported causing import bill to rise to 224billion as compare to 2.61 billion the previous year. Following is a table of area and production level of oil seed crops during 2010-11 and 201112:

Forestry Forestry for the past few years has been insignificant experiencing negative growth rates. Although during the fiscal year 2011-2012 it grew by just 1%. This sector is the main source of lumber, paper, latex and medicine. During the year 2011-12 forestry provide around 92000 cubic meters of timber and around 262 cubic meters of firewood which is slightly greater than the previous year.

Period 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Growth(%) -5.1 -13.0 -3.0 2.2 -0.4 1.0

Livestock Livestock is considered very important when it comes to economic development. This sector provides milk, food security and daily cash income. For poor and landless farmers, it is argued to be more secure source of income and also facilitates in employment generation at the rural level. Livestock contributed around 11.6% to GDP and 55.1% to agriculture value added. Major products are milk and meat. The production and consumption level of these product is given below for the last two years :

Source: Ministry of National food security There has been a 13.9% increase in the export of meat during the year 2011-2012. Livestock sector hopes to attain more than 5% growth in meat and around 8% growth in the milk area by shifting towards more commercial market oriented farming than previously subsistence livestock farming. Poultry Being one of the most organized sectors of agriculture, it generates employment and income for almost 1.5 million people. Contributes around 6.4% in agriculture and 11.5% in livestock. 25% of the total meat production is provided by poultry meat. It has been one of the most dominant sectors when it comes to growth contribution around 8 to 10 percent per annum. Poultry development policy entails Sustainable supply of poultry meat, eggs and other value added products to domestic and international at competitive prices Disease control Using technology to facilitate production Training and educating farmers It hopes to achieve 15-20 per cent growth annually

Fisheries It contributes 0.3% to the GDP. Fisheries are a major source of livelihood for coastal inhabitants. Although it contribution to the GDP is not that much but it contributes through export earnings as around 84,890 million tons of fish and fish preparation were exported

during July-March 2011-2012. Pakistan earned around $222.8 million from these exports to China, Thailand, Middle East and Japan. The government both at federal as well as at the provincial level is taking steps to further improve this sector. These steps include: Strengthening of extension services Development of value added products Introducing new fishing methodologies Increasing per capita consumption of fish Improving social and economic condition of fishermen

Porters Five Forces Analysis

Sugar Industry
At the time of Pakistans inception, there were only two sugar mills in the country meeting only 6% of the total domestic demand in 1948-49. In order to become self-sufficient, foundation of the sugar industry was laid in the early 1950s. Another reason was to tackle the balance of payment issue. However, after all these years, poor policies and lack of initiative on governments part, Pakistan has failed to achieve complete self-sufficiency.Rapid development in the sector was observed during the 1990s mainly because of liberalization and easy credit strategies which allowed inflow of private investment. Manufacturing of machinery and equipment locally helped growth during the 90s. Pakistan is the fifth largest producer of sugar cane crop amongst countries which produce sugar cane. Sugarcane is an important industrial and cash crop of Pakistan serves as raw material for numerous products such as alcohol for pharmaceutical industry, ethanol used for fuel and bagasse used for paper and fuel. Sugar industry of Pakistan is second largest after textile. More than 80 sugar mills are present today in the country. The total sugarcane productions for the year 2011-12 stand at 58.03 million tons showing an increase from the previous year. Around 4.638 million tons of sugar was produced surpassing the set target of around 4.4 million tons. The high production of sugar and inventory of the previous year kept the prices subdued.Currently per capita consumption of sugar is around 25 kg. Province Sindh Punjab KPK Sugar Mills 32 45 5

Five Force Model

Threat of new entrants Capital outlay required to set up a sugar mill is not as significant as compare to other industries. Also sugar being moderately capital intensive industry, there are no momentous recurring capital expenditure which may serve as an entry barrier. Inconsistent policies in the industry also make it unattractive for the new entrants. The low standard of infrastructure also makes it unattractive for new entrants. Over dependence on the agriculture sector also leaves little scope for economies of scale. However government regulations along with lobbying by powerful existing players may create barriers and make it difficult for new entrants to enter the industry.

Threat of substitutes There are very few substitutes available. Gur and artificial sweeteners are considered as close substitutes. While market for artificial sweeteners is quite tiny and Gur being popular majorly in KPK and tribal areas, these do not pose any serious threat. Honey is another substitute but an expensive one. It would be safe to say that there are no major threats to the industry when it comes to substitutes.

Bargaining Power of Suppliers Bargaining power of supplier is high even though the raw material used in the production is homogenous. Unions and landlords producing sugar cane are powerful and may increase prices of the raw materials. Since the demand for sugarcane is high as it is the main raw material in the sugar industry, sugar mills have to comply. Now mill owners are buying land to grow sugarcane so theyre not exploited in terms of prices by the suppliers. However they fail to produce in large volumes and since the production is seasonal, timely delivery of raw materials is very important.

Bargaining Power of Buyers Since sugar is an essential and basic commodity the bargaining power of buyers is very low. Another factor is lack of substitutes or if any they are expensive. Sugar mills can transfer the cost they have incurred while bargaining with the suppliers by charging high prices to consumers.

Rivalry among competitors Rivalry among the competitors is moderate. Since most of them sugar mill owners are together when it comes to making decisions. However certain sugar mills tend to make decisions that are in their benefit ignoring small mills.

THE GREEN REVOLUTION

In the early 1950s the growth of the agricultural sector was just 1.43% which when compared to the growth rate of the population, was not even enough to cover half of the overall rate of population growth. This sector had to face many problems, one of which was the policies that the government had announced. These policies were completely biased against the agricultural sector. The industrial sector was given preference over the agricultural sector as the ruling party at that time believed that all the attention and funding should go to the industrial sector for it to flourish. Because of the imbalance and problems being caused because of lack of attention and funding provided to the agricultural sector, the countrys survival was at stake. So it was only towards the end of the 1950s that the government realized that growth in this sector was essential for the economy and survival of the country. The increase in agricultural growth rate could be witnessed in two phases. In the very first phase which was from 1960 to 1964/5, the main cause of increase in the growth rate was improved irrigation facilities, most importantly the availability of water being provided to this sector. A large number of tubewells were installed which further facilitated the farm areas being covered. In 1965/6 to 1969/70 which was the second phase where the agricultural sector had further flourished. In this phase the irrigation facilities that were being provided in the earlier phase were now supplemented by a technology package that comprised of good quality seeds (HYV- High Yield Variety seeds), chemical fertilizers and pesticides. The HYV seeds that were provided were of two types, one was for wheat and the other for rice. These seeds required large source of water so only those areas that had the tubewells were able to gain advantage from this package. This package along with the improved water facilities contributed to the large growth in the agricultural sector which showed the increase in wheat production upto 91% whereas the rice production grew by 141%.

ISSUES OF GREEN REVOLUTION

The Issue Of Tubewells:
The installation of tubewells was no doubt an important source of water for irrigation but it had a large number of issues that were to be addressed before the technology package could be permitted. 1) Location: The installation of tubewells was very limited and was mostly done in the districts of Punjab where there was easy supply of water. The areas outside Punjab, NWFP and Balochistan faced immense difficulty in installing the tubewells as the area was hard and stony and there was shortage of water which made it even more expensive. In Sindh, the water that was available was quite saline and could not be used for irrigation so only a few tubewells were installed there. These issues led to an increase in interregional disparities. 2) Size and cost: the installation of tubewells was expensive which limited the number of land owners who could afford it. Other than that, only those people who possessed over 25 acres of land could install tubewells. 3) Ability to borrow: only those land owners who could provide collaterals or possessed over 25 acres of land were given loans for the installation of tube wells.

TRACTORIZATION:
In the late 1950s there were about 2000 tractors in the country and with the passage of time and the success of green revolution led to a rapid increase in the number of tractors. The issue of tractorization was similar to that of the tubewells. Only those land owners who had more than 100 acres of land could buy these tractors.

REGIONAL AND INCOME DISPARITIES:

Green revolution was one of the major reasons of the regional and income disparities that were created as there was no equality in terms of the benefits that the new technologies offered be it tractorization or tubewells. The rich farmers were getting richer as whereas the poor farmers were unable to gain benefit from the new and improved facilities as the new seeds required proper supply of water and the poor farmers were unable to install tubewells.

ELITE FARMER STRATEGY AND CAPITALIST DEVELOPMENT:

Green revolution was said to be an Elite farmer strategy as only those farmers who were rich or were in the position to afford the installation of tubewells and could purchase the tractors, benefitted from this revolution. It is also believed that the green revolution has played a major role in the development of capitalist farming as it was only adopted by those who owned more than 100 acres of land and also that those farmers who had given their lands to the sharecroppers took it back which led to an increase in the farmers overall production. As the demand for manufactured products started to increase, new markets started emerging and accumulation of income started increasing in the hands of elite farmers.

SOCIAL AND POLITICAL EFFECTS:

The social and political effects on the economic factors were: 1) Rural-urban migration took place as there was displacement of labor at both high and low ends. 2) Consumerism increased 3) The big farmers started realizing the importance of education.

AGRICULTURAL GROWTH-1977 ONWARDS

YEAR
1976-77 1977-78 1982-82 1993-94

AGRICULTURAL GROWTH RATE

2.5% 4.2% 4.9% 2.8%

REASON
Increase in growth was because of the usage of good quality fertilizers and pesticides. Decline in growth rate was

1995-96

6.7%

2000-01 2002-03 2003-04

-2.2% 4.1% 2.2%

2004-05

7.5%

because of wheat and sugar crisis. The crisis was somewhat controlled and the growth rate was balanced The decline in growth rate was due to drought situation The rate grew as the shortage of water was comparatively less Rain and pest attack caused an immense decline in the growth rate The availability of rain water and good quality fertilizers along with easy cheap loans to farmers led to an increase in the growth rate.

LAND REFORMS
The history of Pakistan comprises of a long and varied range of Land reforms. Majority of which have just been attempts without any specific reason. The overall structure and the nature of land holding was under the process of change but it didnt turn out to be successful as the most of the representation in the Central Council f Muslim League was done by the landlords of Sindh and Punjab. Landlords played a major role in the Muslim League where out of 503 parliamentary members, 163 were landlords who were the chief ministers of Sindh, NWFP and Punjab.

1959 Land Reforms:

The military regime of Ayub Khan undertook this reform in 1959 to change the overall tenancy regulations and also to establish certain ceilings for land holdings at 500 acres of irrigated land and 1000 acres of un-irrigated land. The landlords took advantage of the fixed terms of the ceiling of ownership, by transferring their excess land to their family members as the ceiling was fixed in terms of individual rather than family holdings. In this reform the landlords were allowed to keep the excess land of the ceiling even on individual basis so many of them handed over only a small portion of their land which was uncultivated as they would receive a compensation and therefore many benefitted by handing over their uncultivated land. Another important feature of this reform was that the resumed land was to be given to landless tenants but by 1967 only 20% of land was given to landless tenants and the rest was auctioned to rich farmers.

1972 LAND REFORMS:

The features of 1972 reforms also known as the Bhutto reforms were same as the 1959 land reforms. The only difference was that the ceiling was comparatively low as it was to be laid

on 150 acres of irrigated land and 300 acres for un-irrigated lands. Another distinction was that the landowners were not given any compensation for handing over their land and that share of land was to be given to the landless tenants free of charge. Also that those land lords who had acquired land under the 1959 reforms and had their dues outstanding, had their dues written off and were not required to make any more payments. Under this reform only 42% of land was resumed in Punjab and 59% in Sindh. The problem with the implication of ceiling under this reform was with the PIUs as their values remained constant whereas everything effecting their value had changed. As a result of which, the land lords who had 12000 PIUs were able to keep 400 acres of excess land in Punjab and 480 acres of land in Sindh.

AGRICULTURAL PROBLEMS IN PAKISTAN:

Pakistan is an agricultural state and is therefore mostly dependant on the progress of this particular sector. This sector is important as it more than half of the population is living in the rural areas and is directly involved in it. The agricultural sector is facing many serious issues yet the major chunk of money comes from this particular sector. Following are the major problems faced by the agricultural sector of Pakistan: 1) Lack of Mechanism: Soil erosion has been a serious issue and no proper mechanism has been established to overcome this problem. The fertility of soil is declining day by day as no measures are taken to restore the energy of the soil. 2) Water wastage: The old method of flood irrigation-Archaic method is still used in Pakistan because of which 50% to 60% of water is wasted. 3) Cultivation and harvesting: old methods of harvesting and cultivation are still being practiced in many parts of the country because of which the yield per acre of our country is very low when compared to that of other countries. 4) Exploitation of farmers: the number of small farmers is increasing in our country and these farmers do not get loans or credit facilities to purchase good quality seeds, fertilizers and pesticides. 5) Feudalism: large portion of land is owned by the feudal and due to lack of employment many people work on their land which does not create any incentive for them and nor does it attract any investment. 6) Water logging and salinity: In most parts of Punjab and Sindh the storage capacity of dams is declining day by day because of which many of the farmers are installing tubewells for irrigation. As a result, salinity and water logging have now become a major issue for our country. 7) Literacy of the farmers: majority of our farmers are illiterate, poor and unaware of the latest technology and irrigation methods because of which the loan provided to them by the ADBP are used by them to repay their debts and solving their family issues instead of using it adopting new techniques of irrigation.

8) Communication gap: as the only means of communication in the rural areas is T.V or radio the communication gap between the farmers and the experts is widening with the passage of time and no efforts are being made to overcome this issue. 9) Industrialization: With the rise of industrialization the migration of people from the rural to urban areas is increasing and now the fertile lands are being used for construction purposes.

SOLUTIONS FOR AGRICUTURAL PROBLEMS

1)

2) 3) 4)

5)

6)

7) 8)

New agricultural policies should be formed that focus on overcoming the problems of small farmers. Farmers should be made aware of the latest technology and new methods of irrigation. Feudalism should be abolished and taxes should be levied on the agricultural income. Productivity enhancement programmes should be conducted to improve the farmers knowledge. Corporate farming should be encouraged as it would help those farmers who possess large fertile lands but cannot manage it. Dams should be constructed on Indus Jhelum and Chenab rivers to enhance the storage capacity and to save the crops. Vegetables and fruits should be exported as this will help in commercializing agriculture. Certified institutions should be established to monitor the quality of seeds being produced and distributed.

CONCLUSION
Pakistans agricultural sector has great potential and is also a major contributor to the GDP of the country. It provides employment to the farmers and other people living in the rural areas. Therefore the government should divert its attention towards this sector and should take the necessary steps to improve the condition of this sector. By converting the uncultivated lands into agricultural land productivity of crops can be increased for which proper reforms are required. Also the farmers should be provided access to the latest technology and subsidies and cheap, easy loans should be provided. Agricultural tax can play a major role in helping the government to lower its deficit.

BIBLIOGRAPHY:
http://www.finance.gov.pk/survey/chapter_12/02-Agriculture.pdf http://www.cssforum.com.pk/css-compulsory-subjects/current-affairs/59678-agricultural-problemspakistan-their-solutions.html

http://www.pide.org.pk/pdf/PDR/2005/Volume4/359-386.pdf

http://www.livinghistoryfarm.org/farminginthe50s/crops_16.html