According to the Ministry of Pakistan, Government of Pakistan, agriculture sector during 2021-22 registered a remarkable growth of 4.40 percent and surpassed the target of 3.5 percent and previous year’s growth of 3.48 percent. The Experts identified that this growth is chiefly driven through high yields, attractive output prices and supportive government of Pakistan strategies, better availability of certified seeds, pesticides and agriculture credit. It is also important to note here, the crops sector outperformed and registered a growth of 6.58 percent during FY2022 against 5.96 percent previous year.
At sub sectors level, important crops, other crops and cotton ginning depicted a significant growth of 7.24 percent, 5.44 percent and 9.19 percent, respectively, against last year’s growth of 5.83 percent, 8.27 percent and -13.08 percent. Statistics in the economic survey showed that the growth in production of important crops namely cotton, rice, sugarcane and maize are estimated at 17.9 percent, 10.7 percent, 9.4 percent and 19.0 percent respectively. The cotton crop grew from 7.1 million bales recorded previous year to 8.3 million bales during FY2022; rice production grew from 8.4 million tons to 9.3 million tons; sugarcane production grew from 81.0 million tons to 88.7 million tons; maize production grew from 8.9 million tons to 10.6 million tons respectively, while wheat production declined from 27.5 million tons to 26.4 million tons. Other crops having share of 13.86 percent in agriculture value addition and 3.14 percent in GDP, grew by 5.44 percent on the back of increase in the production of pulses (29.82 percent), oilseeds (24.75 percent), vegetables (11.52 percent), fruits (1.53 percent) and fodders (0.36 percent).
The Experts also identified that water availability during Kharif 2021 registered at 65.1 million acre feet (MAF) as against to 65.1 MAF of Kharif 2020. Rabi season 2021-22 reached at 27.4 MAF, showing a decline of 12 percent over Rabi 2020-21. Furthermore, Pakistan imports significant amounts of wheat, pulses, and oilseeds from the Russia and Ukraine. Previous year, imports from Russia and Ukraine contributed for 77.3 percent of total wheat imports, 19.3 percent of total pulses imports, and 10.4 percent of total oilseed imports into Pakistan. Moreover, although Pakistan is not primarily dependent on these two states for fertilizers and fossil fuels, it is likely to bear the brunt of rising international prices for fertilizers and energy. Because of high fertilizer prices and drought in some parts of the country, the government of Pakistan has missed its wheat production target of 28.90 million metric tons (MMT) for FY2022 season. Therefore, Pakistan will most likely need to import 3.0 MMT of wheat in the next few months. Wheat prices were already rising to historic levels, but with the ongoing conflict between the Russia and Ukraine, international wheat prices are now at their highest level in the last few decades. The increased cost of production domestically, because of increased fertilizer and energy prices, are predicted to raise the price of wheat in the Pakistani market. The Experts also recorded that cooking oil and ghee are also essential food commodities in Pakistan. The country’s annual requirement for edible oil is around 4.1 MMT. In 2021, Pakistan produced only 11 percent of edible oil required for domestic consumption, and the rest of 89 percent was imported. Since the beginning of the conflict, the price of cooking oil in the country has increased by 14.2 percent, and that of vegetable ghee has risen by 15.8 percent in just 6-week. This increasing trend is likely to persist as the international edible oils market may experience a considerable shortfall due to the conflict. To increase the performance of this sector, State Bank of Pakistan (SBP) assigned the indicative agriculture credit disbursement targets of Rs 1,700 billion for FY2022 which is 24.5 percent higher than last year’s disbursement of Rs 1,366.0 billion. Presently, 50 formal financial institutions are offering agriculture loans to the farming community, which include 5 major commercial banks, 14 medium-sized domestic private banks, 5 Islamic banks, 2 specialized banks (ZTBL & PPCBL), 11 microfinance banks besides 13 Microfinance Institutions/Rural Support Programmes (MFIs/RSPs). During FY2022 (July-March), banks have disbursed Rs 958.3 billion which is 56.4 percent of the overall annual target and 0.5 percent higher than the disbursement of Rs 953.7 billion made during the same period last year. Further, the outstanding portfolio of agricultural loans has increased by Rs 30.9 billion i.e., from Rs 601.8 billion to Rs 632.7 billion at end March 2022 as compared to same period last year. In terms of outreach, statistics also showed that the number of outstanding borrowers has reached to 3.2 million in March 2022.