A Massive Debt Industry in Pakistan
Misery of Poor Farmers in Pakistan
Political Goods, Era of Seed Politics
Farmers claim that the soaring costs of farm inputs and energy, inefficient markets and short-sighted official policies have made farming largely unprofitable in recent years and are the primary cause of the deep mess in the food security and massive debt industry of Pakistan. The single best recession hedge of the next 10 or 15 years is an investment in farmland corporate agriculture as ''the need of the hour.’ or neo colonism.
40% of the world’s farmers but only 9% of the world’s farmlands owned by them. . U.S. EU, India, China, Brazil, subsidies make it more difficult for food exporters. Pakistan to Compete on the international market. Competition from U.S. Eu, subsidized agribusiness – both domestically and internationally – has shrunk agricultural capacity in developing countries, making it difficult for farmers to quickly grow more food now in response to rising prices. A long term solution to the food crisis is very difficult so long as U.S. agricultural policies continue to distort the market.
According to Investment Minister Waqar Ahmad Khan investors would be allowed to take away the entire crop to their countries even if Pakistan suffered food deficit. These firms would enjoy tax holiday for 10 years. Juxtapose it with the hue and cry for taxing domestic farmers, and preferential treatment becomes evident.
The situation is especially dangerous for subsistence farmers, who, failing to compete with capital-intensive corporate farming, are swept aside, often resulting in social chaos
Feudalism is the real problem and all other problems stem from it. The feudal lords and their allies constitute only five per cent of our agricultural households and own 64 per cent of our farm land. The rest of the 95 per cent are only their political vote-bank
73 per cent of the total 6.6 million families involved in farming hold less than 12.5 acres of land while 14 per cent of them are landless tenants. Only eight per cent farmers have more than 12.5 acres of land. The economic miracles in South Korea, Taiwan and Japan arose from their land reform programmes. it didn’t hurt when the farmers are dying. But with the markets crashing, the media is now crying. “Act fast, go big. It is not only about bulls and bears anymore. Pakistan encompassing 48,066 villages according to the latest
Counts these rural areas house 67.5%3 of the population.
Pakistan is using 97 percent of its surface water resources and mining its groundwater to support one of the lowest productivities in the world per unit of water and per unit of land Pakistan has a total geographical area of 79.6 million hectares. Of these 9.1 million hectares of land is cultivable waste. As regards crop agriculture, total available farm area is around 50.4 million acres and the total number of private farms stands at 6.6 million,
They say that out of total lands area, 80 million hectares, 21 million hectares is cultivable. Agriculture and small-scale forestry and fishing contributed 25 percent of GDP and employed 40 percent of the labour force. Forests occupy 3.59 Mha and culturable waste area is 22.04 Mha Around 70 percent of the cropped area is in Punjab, followed by perhaps 20 percent in Sindh, less than 10 percent in the North West Frontier Province, and only 1 percent in Balochistan
Considering that 80 per cent of Pakistan’s cultivated area of about 17 million hectares is irrigated network. Agriculture’s contribution to gross domestic product has declined from slightly over 25 per cent in 1990 to 19 per cent by 2008. Women workers are 69.9 per cent in comparison to 38.4 per cent men but less than 2 per cent women own land. Corporate forming should not be promoted. Allotment of forest land to the influential persons has to be revoked and re-allotted to the peasants on the condition of re-forestation. The total land area of the country is about 803,940 square kilometres. About 48 million hectares, or 60 percent, is classified as unusable for forestry or agriculture and consists mostly of deserts, mountain and demographic settlements. less than half of all rural households own any agricultural land, while the top 2.5 per cent of households account for over 40 per cent of all land owned
The total cropped area in Pakistan is about 22.2 million ha. The share of food grain crops is 54 percent, followed by cotton and sugar cane 20 percent; pulses 6 percent; oilseed crops 3 percent; fruit/vegetables 4 percent and other crops about 13 percent. wheat is the main food crop. It occupies about 36.3 percent of the total cropped area, followed by cotton with 14 percent, paddy with 9.5 percent, sugar cane with 4.5 percent, maize with 4.5 percent and other crops with 20.8 percent.
The government regularly provides public money to the speculators of stock markets and also wastes billions of rupees in name of subsidy on fertiliser. Add Rs100 billion subsidy to the Water and Power Development Authority (Wapda), the Pakistan Electric Supply Company (Pepco) and Rs30 billion to the PIA. But the same facility is being denied to farming.. .
The agriculture sector does not need Rs400 billion subsidies. It only requires that more money in six-month loans to get back to its feet. It is a case of wrong priorities rather than paucity of funds.
Pakistan, at present, faces food shortages which are likely to become more actute in near future. Scarce water availability and continuous degradation of soil due to water logging and salinity, water and wind erosion, sodicity, flooding and pounding are some of the major obstacles in the achievement of self sufficiency. In order to achieve the envisaged growth target in agriculture, irrigation water requirements as estimated for the year 2000 and 2013 would be 176.5 and 254.6 BCM (143.1 and 206.4 MAF) respectively. With the three major dams completed, the water availability for the future has been estimated to be 156.2 BCM (126.6 MAF) in the year 2025.
Land productivity is then nearly Rs 30,000 per acre. Cultivated land available is around one-half acre per capita (and more as cultivable land) across the rural population of over 100 million. For a conservative threshold of Rs 10,000 the average rural citizen could escape poverty with around one-third of an acre as citizen entitlement
The farmers’ cost of production has jacked up exorbitantly in the recent years on the back of rising prices of the farm inputs like fertilizers, pesticides, fuel, seed, land rent and electricity. The mounting cost of agriculture production has particularly hit and compounded problems of the crop sector, which has long been trying to grapple with a number of other challenges – erosion of soil fertility, persistent water shortages, lower productivity, unavailability of quality seed, etc.
Growers spent almost Rs300 billion in 2008 on account of a sharp spike in the prices of such farm inputs as fertilizers, pesticides and seed for their major crops – wheat, sugar cane, cotton, maize, etc – as compared to around Rs150 billion in 2006, a jump of around 200 per cent in just two years.
The cost of other major inputs like electricity and diesel too has gone up manifold over the years, affecting viability of the sector. “The rising cost of production could be one of the possible reasons for the reduction in cultivable land area to 52.2 million in Pakistan 54.4 million acres in 2006 from 55 million acres in 2002,”in 2008 the total cultivable land area is 50.2 million in Pakistan. “Farming is no longer a profitable profession. It is really a massive debt industry in Pakistan.
Land related problems like depleting soil fertility, soil erosion, water logging and salinity needs immediate attention to achieve yield potential of crop. The other option is to take up new lands for agriculture.They estimate that everyday approximately 500 acres (1 acre = 4,840 square yards) of farmland is taken out of agriculture by the expansion of settlements, roads, factories and many other in Pakistan..They predict that if this trend continues then after every decade approximately a million acre or more of crop land would be taken out of agriculture in our country which is far more than other countries of the region.
Soil scientists say that during every five minutes, one acre fertile farmland is taken out from agriculture, because of this problem. Over the years, about 40 per cent of the irrigated cropping land in Pakistan, which produces around 90 per cent of the total agricultural output of the country, has come under water logging
The economic miracles in South Korea, Taiwan and Japan arose from their land reform programmes .Land reform is a controversial issue in Pakistan. At independence in 1947, a large proportion of the arable land was concentrated in a small number of large estates, many of them owned by absentee landlords and cultivated by tenant farmers. Land reforms introduced in 1959 provided some security of tenure to tenants but did little to break up the large estates.
In the 1970s the government of Zulfikar Ali Bhutto introduced more extensive land reforms. The amount of land any individual could own was significantly reduced, and landlords were not compensated for the land they surrendered. Most of the expropriated land was distributed to tenants, but the government retained land that was not suitable for farming. Landlords strongly resisted the reforms, however, and the government bureaucracy was somewhat lax in enforcing them. In the end, the reforms never shook the landlords but bring them in PPP led Government as sitting member of National Assembly
In ZIA Regime all land was return back to landlords in Pakistan which was given to poor peasant during land reforms of Bhutto regime .By the end of the 20th century; about half of the country’s arable land was held by only a small percentage of wealthy landowners
Even after three waves of land reforms, 3,529 zamindars have 5,13,114 holdings of more than 100 acres in the irrigated areas, and 3,32,273 holdings exceeding 100 acres in un-irrigated areas. Some 7,94,774 Khatedars have 54,64,771 land holdings of less than 12 acres in irrigated areas. In un-irrigated areas 1,44,098 are reported to have 16,28,826 holdings of less than 24 acres.
The two big global crises that have erupted over the last 15 months – the world food crisis and the broader financial crisis that the food crisis has been part are together spawning a new and disturbing trend towards buying up land for outsourced food production. There are two parallel agendas driving two kinds of land grabbers. But while their starting points may differ, the tracks eventually converge.
They estimate that everyday approximately 700 acres (1 acre = 4,840 square yards) of farmland is taken out of agriculture by the expansion of settlements, roads, factories and many other in Pakistan. They predict that if this trend continues then after every decade approximately a million acre or more of crop land would be taken out of agriculture in our country which is far more than other countries of the region.
Soil scientists say that during every five minutes, one acre fertile farmland is taken out from agriculture, because of this problem. Over the years, about 40 per cent of the irrigated cropping land in Pakistan, which produces around 90 per cent of the total agricultural output of the country has come under water logging
Area of productive land was being damaged by salinity at a rate of about 40,000 ha per year. In the latest WAPDA Survey covering 16.72 Mha, both surface and profile salinity/sodicity was established through chemical analysis of solids. This survey indicated that in terms of slightly, moderately, and a strongly saline soil, about 25 per cent of the area is affected by surface salinity. Comparison with past surveys has indicated that the land affected by surface salinity has decreased 42 % in the early 60’s to about 25 % in 1977-79.
The present irrigation system comprises 3 storages reservoirs, 21 barrages/headworks, 12 inter-river long canals, 2 major syphons and 45 main canals. The total length of main canals, link canals, branches and distributaries etc. is about 56,360 km. The system has about 100,000 outlets and length of farm channels and water courses is about 1.61 M km. The annual canal head withdrawals are presently about 140 BCM
Land rent, weeding, fertilizers, irrigation, insecticides and harvesting, there are some other field operations which are not mentioned here but they have been taken into account for calculating per hectare and per kg cost of cereals and other cash crops
According to the fertilizer use survey five major crops: wheat, cotton, sugar cane, rice and maize account for about 87 percent of fertilizer consumption. Wheat accounts for about 45 percent followed by cotton with a share of 23 percent. Sugar cane is the third crop; nutrient use per ha is highest on this crop. The share of fruit and vegetables is 5.6 percent
World fertilizer prices have raised more than oil or any other commodities in the last 18 months. Of the three main types, diammonium phosphate (Dap) sold for US $250 per tonne in January 2007 but has risen to $1,230 per tonne. Potash-based fertilisers have risen from $172 to over $500 a tonne, and nitrogen based fertilisers have risen from $277 to over $450 per tonne.The prices of most fertilizers have at least tripled over the past 1½ years. Urea, the most common nitrogen fertilizer, has risen in price from an average of US $281 per ton in January 2007 to $402 in January 2008, then $815 in August. Diammonium phosphate (DAP) rose from $252 per ton in January 2007 to $688 in January 2008, then $1,216 in August. Muriate of potash rose from $172 in January 2007 to $300 in January 2008 to $838 in August.
DAP is available at Rs 470 per 50-kg in India while the farmers in Punjab are being provided electricity free of cost there It is important to mention here that the rate of DAP in Pakistan is above Rs 3200 per 50-kg bag, which is the main reason behind the increasing input cost in the agricultural sector in Pakistan because the Pakistani government is not giving any kind of subsidy to the farmers on fertilizers or electricity.
The prices is fallen in world market in September 2008 but in Pakistan fertilizer prices is January 2009 too high and you get fertilizer is black market and with baton charge and long queue due to NFC and cartel hoarding .2nd fertilizers is monopoly of 4 big companies with TCP corruption .
With out public sector contribution you can not achieve the goal but Government is selling all public fertilizers company to ARMY Empire Fauji Foundation in Pakistan. In order to boost production and hold down food prices in the short run, the government needs to subsidise diammonium phosphate (DAP) as its use has dropped substantially due to a 300 per cent price hike in just one year
Pakistan has signed the WTO agreements and therefore, has to phase out its protection and support to agriculture
On the other hand, the country has allowed around 650 private seed companies to create a total chaos in the domestic seed market. A vast majority of them do not have even basic infrastructure to produce and multiply seeds, leave alone go deep into need-based research. They are selling seeds of unknown origins and varieties under different names. Over 50 per cent cotton farmers were duped last year in the name of BT seed when the Country has not approved even one variety of such seed three public sector seed agencies function in Pakistan. Although the national seed companies own and operate 57 seed processing units, selling different seeds with different names and rigging the entire market and duping the farmers resulting in the worst food crisis.
At present, TNCs like DuPont, Monsanto, Novartis, Pioneer Group, AgriVo and ICI are marketing seeds in Pakistan. selling seeds of wheat, paddy, cotton, maize sunflower, pulses and vegetables-
In case of wheat, only 18 to 20 per cent farmers use certified seed. In rice, the ratio is hardly 10 to 15 per cent. For sugarcane, two per cent seed is treated. Cotton and corn are two relative exceptions, where usage has touched 30 to 32 per cent in case of former and 40 per cent in the case of latter country’s major crops.
In case of agriculturally advanced countries, the ratio for cereal crops is 70 to 80 per cent, maize 100 per cent, rice 70 to 80 per cent and oilseed crops 100 per cent.
No rule exists in Pakistan regarding the safe residual limit for application of different pesticides to various crops, vegetables and fruits. Around 45 multinational companies in association with local agents by way of import, and other 13 local pesticide manufacturing plants are meeting the pesticide requirements of the country Pesticide companies, and the giants are Ciba Giegy, Jaffar Brothers Ltd., ICI, Granulars Ltd. The firms have its own dealers and marketing network all over the country. It also sells its products directly to the big farmers by giving them dealership.
By 1981, some 3677 metric tonnes (MT) of pesticides were used on land and the amount has increased every year since then. In 1990, the consumption was 14742 metric tonnes which shot up to 43219 metric tonnes in 1996. This quantity came down to 20394 metric tonnes in 2006-07.But Quantity increase in 2007- 2008
Diesel is applied on more than 850,000 tube-wells and 650,000 tractors in Pakistan. Diesel was available at Rs 38 per litre in February this year but now its price has jumped to Rs 65 per litre. “The farmers are unable to afford Rs 27 per litre increase in diesel price and this (increase) will badly production because the farmers have to irrigate the fields by running tube-wells when the country’s agriculture is facing severe water shortage”, the price of crude oil in international market is decreased and less than $33 per barrel but Pakistan the price of diesel is not coming down yet .A exporting nation to food deficit country by PPP led government policies soon will bring the fruit for poor farmer and IMF $7.6 billion dollar loan will also screwed the farmers in Pakistan.
The private tubewells account for withdrawal of 46.2 BCM (38 MAF) and public tube wells account for 12.3 BCM (10 MAF). The annual ground water potential of areas of outside the Indus Basin is estimated at 1.74 BCM (1.41 MAF). Electric tube wells account for about 13 percent of the total tube well population in Pakistan.
The price of one unit of electricity is highest in Asia according to USA Aid. Can a poor farmer compete after WTO agreement? The installation of large number of private tube wells helped farmers to exploit groundwater from fresh groundwater areas to supplement their surface supplies, which increased cropping intensities in irrigated areas. Current estimates show that about 58 percent of the agricultural area is being irrigated by tube well water either in isolation or in conjunction with the canal water. The diesel pumps used in Pakistan are usually not designed according to internationally specified standards.
Use of fertilizer and pesticide per cropped hectare has increased from 53 to 140 kg and 0.03 to 2.74 respectively over the period 1980 to 2008. Consumption of electricity and petroleum on per thousand cropped hectare basis has increased from 9.83 to 42.89 GWH and 8.22 to 24.90 kg. respectively over the period 1980 to 2007. Number of tubewells has increased from 1000 in 1950 to 1.1 million in 2008
Amount of money that must be spent on supporting the rural citizens in urban towns. Secondly, small farms have proven to contribute more to production in agricultural output per unit area than larger farms (two to ten times more productivity in Third World). History itself is evidence of success of small-farm based communities as opposed to corporate farming.
Pakistan loses 30 to 40 per cent of its perishables at the post-harvest stage.
The interest was floating between 10 to 20 percent. But amazingly it was found higher in Barani Punjab to the extent of 20 percent which was followed by Balochistan 17 percent. Alternate sources of credit for farmers, which are informal sectors, provides loans to farmers at 36 per cent to 60 per cent
Large landowners, who tend to represent only 4 percent of rural households, get 42 percent of formal loans. Landless and subsistence farmers, who represent more than 69 percent of rural households, receive only 23 percent of formal loans.
The Bank of Punjab, set up by a province which produces over 80 per cent of agriculture, could spare only Rs4 billion for farmers and the Punjab government put an amount of Rs200 million in subsidising the loan. The provincial agriculture budget is not even one-tenth of what police gets on an yearly basis. loans improve household welfare but, although large farmers receive most of the finance, the impact of credit is greater for small farmers than for large farmers. Large landowners use formal loans unproductively
Only Rs350 billion loan is to be provided for the sector by the banking sector. Even these Rs250 billion are not entirely linked to, or limited to, farming sector alone. They are given to farmers who may use them even for social or industrial purpose.
Alternate sources of credit for farmers, which are informal sectors, provide loans to farmers at 36 per cent to 60 per cent. The Provincial Cooperative Bank in Sindh was closed down in 1989 and since then never allowed to function because it failed to recover about Rs1 billion loans from big farmers of the province. Mark-up rates and pricing mechanism for agro-financing found that banks were earning much more from farm portfolio as compared to overall returns on loan portfolio.
The middlemen sometimes secure up to 50 per cent or even more by exploiting extreme conditions in the market. Farmers cannot sell their produce directly to processors, factories and markets due to strong network of middlemen. If farmers take their produce directly to markets, they have to face many problems due to close links of middlemen with brokers, commission agents, transporters and market committees. Commission agents refuse to buy produce from the farmers due to self-created low demand
Producers earn a margin of Rs0.95 to Rs4.75 per kg, contractors’ margin varies from Rs1.55 per kg to Rs5.76 per kg, commission agents earn a margin of Rs0.09 per kg to Rs1.22 per kg, while margin for wholesalers varies from Rs0.94 per kg to Rs1.53 per kg, and finally retailers earn a net margin of Rs1.30 per kg to Rs6.23 per kg for different fruits, respectively. In case of vegetables, the producers were found earning a margin of Rs3.71 to Rs14.02, commission agents as Rs0.28 to Rs0.89, wholesalers between Rs0.75 and Rs1.52 and margins for retailers ranged from Rs1.55 to Rs2.93, respectively
The amount of Indian subsidy is staggering. During 2008-09, it allocated Rs462 billion (Pakistan rupee) subsidy on fertiliser, Rs256 billion on irrigation and Rs200 billion on power. In addition, it also granted Rs72 billion to what it called marginalised (small) farmers through different ways, including writing off their loans.
To ensure better price, the government sets procurement price high – sugarcane at Rs80 per maund and wheat Rs720 per maund – and then subsidises urban consumers. Last year, it also allocated another Rs440 billion for urban consumers to protect them from high food prices.
Pakistan must learn from Indian experiences how it is managing efficiently a huge subsidy regime of Rs1.9 trillion. Pakistan has so far not been able to manage even Rs60 billion without massive bungling
New Neo Colonism just arriving in Pakistan The provinces have identified 6.764 million acres of land for corporate agriculture farming by local and foreign investors. Punjab has identified 6.631 million acres, Sindh 29,842 acres, Balochistan 0.1 million acres, and the North West Frontier Province (NWFP) has pointed out 3,449 acres of state land that is available for corporate agriculture farming corporate farming would mean the end for small farmers who cannot compete with ‘‘highly sophisticated and mechanised multinational companies.’’ More than 80 per cent of Pakistani farmers own less than two hectares of land. Many of them have none.
In this article I did not talk about the biggest land lord and leader of Corporate Agribusiness Pakistan Army in Pakistan, I will tell you how much land is under the Army corporate farming and who is paying the price especially the Punjab big brother .Just one question can Pakistani poor farmer can survive in such Atmosphere. What you think about, Agricultural sector is not a Massive debt business
Is it not seems that planning is completed to give away the free land to GCC and our Fertile land to our Moslem brothers, friends for corporate farming .I am looking answer from you after reading the valuable, time consuming and length work .I Really apologies to you for time consuming article reading
Usman karim based in Lahore Pakistan [email protected]