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  • R&D helps overcome challenges through public-private partnership

For the past half century, we have been hearing that agriculture is the mainstay of Pakistani economy or Pakistan is an agricultural country. Although, over the years, direct contribution of agriculture has declined, it is still the second largest sector after services as it contributes almost 23 per cent to the GDP and employs over one-third of our labour force. When we talk about agriculture, most people think that it comprises of crops alone, however, livestock (poultry) is also included in this sector through which 70% of foreign exchange is earned on export of dairy products and leather goods by way of forward and backward integration. Major crops include wheat, cotton, rice, sugarcane and maize. Out of these five, wheat and rice are the main crops as Pakistan is the 10th largest producer of rice and 7th largest producer of wheat.

The sector is marred by various challenges such as lack of land reforms and mechanisation, slow growth, poorly functioning agriculture markets, lack of research to increase seed quality and ineffective subsidy programs. Rising population and climate changes have added further pressure on both domestic food supply and the country’s economic development. If Pakistan is to come out of the quagmire it is in, it has to consistently achieve GDP growth rates of above seven per cent for the next 25 years. Agriculture is one area from where we can extract maximum growth in least amount of time and in minimum possible amount of investment. The policies of 60s and 70s have now gone redundant as the role of private sector has increased significantly. Research and development in agriculture is the missing link for which private sector could play its part.

Another important requirement for agriculture is mechanised farming on a large scale but there is a common myth that if implemented, a large chunk of labour force will become unemployed. What the policy makers and bureaucracy fail to understand is that this workforce could be utilised in other industrial sectors. Some of the factors that could contribute to higher yields per unit area are improved irrigation infrastructure and techniques, better water management, enhanced credit facilities for farmers, government programmes aimed at improving agricultural extension services and the establishment of research institutes focused on research and development. Public-private partnership is the key in this regard.

Among all types of agricultural expenditures, agricultural research and development is the most important in increasing agricultural productivity and ensuring food security. Various studies have been conducted to explore the relationship between public investment and agricultural productivity. In case of Pakistan few attempts have been made to determine the relationship between agricultural research and agricultural output with the conclusion that agriculture research has a positive and significant impact on agriculture productivity and yields high rate of return. The need of the hour is expansion of agriculture produce markets and enforcement of an efficient and transparent market clearing mechanism to get fair market prices for farmers. This could be done through following suggestive measures:

  1. Expansion of existing and creation of new warehouses along with crop grading system in key locations across Pakistan under public-private partnerships.
  2. Deregulation of the seed market apart from a few commercially important seeds.
  3. Reduction in import duty on farm machinery to increase productivity.
  4. Incentivisation for farmers to conserve water, adoption of regenerative agriculture to effectively control weeds and be more market driven with their crop mix.
  5. Expansion of existing and creation of new markets for value addition, e.g. organic farming, SME level processing to provide cheaper inputs for local manufacturers (reduce import burden) and encouragement of high-value exports, etc.
  6. Encouragement for private banks to roll-out digital loans for quick access with easier terms of repayment and launch warehouse receipt financing.
  7. Imposition of a research emergency and spearheading scientific cooperation initiatives with other countries to strengthen agricultural research.
  8. Transformation and expansion of agri-extension program to provide effective on-farm technical support.