Potential for 'white revolution'

With international agricultural product prices the way they are, Pakistan can benefit significantly from good crops. Domestic wheat floor price has been raised to Rs 950 per 40 kg by the government recently and this will surely, if we have good weather and other conditions, create strong incentives for the farmer to benefit from. And if more people sow wheat and the weather is kind and we have a bumper crop, wheat will not only contribute handsomely to the growth of GDP, it could potentially give us exportable surplus or could, at the least, save us the foreign exchange that we spend on importing wheat.

Similarly if rice, cotton and sugar do well, we could post strong agricultural growth and this could go a long way in arresting the fall in GDP growth and overall performance of the economy. And if sustained even for a couple of years, it has the potential of giving us the break that we need to improve the economy and move it to a sustainable growth path.

But there are many things that have to go right before we can have this scenario being played out. The weather has to stay favourable, we have to manage supplies of other inputs (fertiliser, seed, pesticide, capital), we have to ensure availability of water at the right time and in the right amount, and we have to manage crops well when they come in. Still, the potential is there. High world food prices have made agriculture, relatively, quite lucrative again. And given the low elasticity of demand for most agricultural products, especially on the food side, we should be able to benefit significantly if things go well.

Another area that has always been identified as having 'potential' has been livestock and dairy area. We have heard a hundred times and more that Pakistan is the fifth or the sixth largest milk producer in the world, that in terms of productivity we are not producing even half of what we could produce, that we are processing less than 5 percent of the milk produced, that we are not going into value-added diary products and so on. But we have been hearing these and related things for more than a couple of decades now. The obvious question is, if the potential is so clear, why have we been not able to achieve it?

Both agriculture and livestock are very important sectors for Pakistan. Not only do they have the potential to give us substantial growth and exportable surplus, they have high employment and poverty reduction potential as well. Most of rural labour is still employed in agriculture and livestock sectors and is even trained for this work. If agricultural/livestock sector productivity increases, it will have substantial effect on rural employment as well as rural incomes. Furthermore, since most of Pakistan's poor live in rural areas, gains in agriculture/livestock sector could work as the strongest anti-poverty programme we could mount.