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1 Introduction 1
2 Land use farming systems and institutions 1
3 Performance of Agriculture Sector 3
4 Agriculture sector important role in Pakistan¶s economy 4
5 Sub-Sector Identification 5
6 SWOT for Livestock/ Meat Sector 7
7 Comparison of current and past trends 8
8 Agriculture sector in India 9
9 Decline of Agriculture in Pakistan 10
10 Rural Development Program 11
11 Federal Budget on Agriculture in 2009 11
12 Government policies to improve Agriculture sector 12
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With a population of more than 160 million people, agriculture is the single
largest sector in Pakistan, contributing 21 percent to the gross domestic product (GDP)
and employing approximately 44 percent of the workforce. More than two-thirds of the
population lives in the rural areas and their livelihood continues to revolve around
agriculture and allied activities. Agriculture contributes substantially to Pakistan's export
earnings and as supplier of raw materials to industry. Because of its central importance
in reviving the economic growth and reducing poverty, the Government of Pakistan
(GOP) has identified agriculture as one of the major drivers of economic growth.

Agriculture performed poorly in 2007-2008, growing at 1.5 percent against

the target of 4.8 percent. This poor performance is attributed to the poor performance of
major crops (cotton, wheat, sugarcane, and rice) and forestry registering a negative
growth of 3.0 percent and 8.5 percent respectively. Livestock, minor crops (lentils,
pulses and oilseeds) and fisheries did reasonably well to offset the negative
performance of major crop and forestry to arrive at 1.5 percent growth in agriculture in
2007-2008. The major oilseed crops include cottonseed, rapeseed, sunflower, soybean
and safflower. The total consumption of edible oil is estimated at approximately 3.5
million tonnes. More than 70 percent of this demand is met through import of crude oil
(primarily palm oil) or obtained by crushing imported oilseeds. Livestock, the second
largest sub-sector, accounts for 52.2 percent of overall agriculture value added,
contributes 11.0 percent to GDP and affects the lives of 30-35 million people in rural
areas.


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The total geographical area of Pakistan is 79.6 million hectares. About 27

percent of the area is currently under cultivation. Of this area, 80 percent is irrigated. In
this regard, Pakistan has one of the highest proportions of irrigated cropped area in the
world. The cultivable waste lands offering good possibilities of crop production amount
to 8.9 million hectares. Growth in cropped area is very impressive: from 11.6 million
hectares in 1947 to 22.6 million hectares in 1997.

Agriculture is largely dependent on artificial means of irrigation. Of the total

cultivated area, about 82 percent or around 17.58 million hectares is irrigated, while
crop production in the remaining 3.96 million hectares depends mainly upon rainfall. At
present about one-fifth of the cultivated land in Canal Command Area is affected by
water logging and salinity to varying degrees.
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A number of adverse development hit agriculture sector to record a dismal 1.5 percent
growth during FY08. This significantly lower than the 4.8 percent target for the year, as
well as, the lowest growth since FY03. A weaker output by major crops overshadowed
the record sugarcane harvest and relatively improved performance of minor crops;
livestock and fishing sub-sectors during FY08.



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A disappointing performance of major crops sub-sector is largely attributed to resource
management issues and absence of a clear pricing policy. For instances reduction in
cultivated area under cotton, wheat and rice was a result of water shortages at sowing
time. A significant 25.3 percent rise in agri-credit during FY08 helped farmers to partly
compensate the impact of high fertilizers prices.

Despite setback in major crops in FY08, prevailing high prices of agriculture

commodities suggest that Pakistan, being an agrarian economy, to enhance earning
potential of the farmers should focus on modernizing agriculture sector with greater
emphasis on crop diversification and its value chain. Crop diversification experiments in
major agriculture producing countries, for instance, crops for bio-fuel, suggest that
Pakistan could also benefit from favorable global prices. This need to improve price
transmission mechanism to ensure that the benefits reach the farmers.

In federal budget FY09,some measures were announces including in subsidy on DAP

fertilizer to promote balance mix of fertilizers, exemption of excise duty on fertilizers and
pesticides, increased allocation for maintained of reservoirs and improve irrigation
network to boost the agriculture sector productivity. The impact of these policies is likely
to be complemented by introduction of crop insurance scheme initiated by SBP, to help
farmers invest in their crops without fear of heavy losses.

Agriculture Sector Performance

FY07 FY08 Growth rate Growth rate
FY07 FY08
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Agriculture VA of which 1,132.0 1,148.9 3.7 1.5
Major crops 400.8 388.9 8.3 -3.0
Minor crops 124.9 599.2 -1.3 4.9
Livestock 577.4 599.2 2.8 3.8
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Cotton 12.9 11.7 -0.8 -9.3
Wheat 23.3 21.8 9.4 -6.4
Rice 5.4 5.6 -1.8 3.7
Sugarcane 54.7 63.9 22.4 16.8

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Meat production 2,618.0 2,704.0 4.1 3.3
Milk production 32,996.0 34,0064.0 3.2 3.2
Fish production 578.0 640 -3.5 10.7
Forest production 366.0 280.0 -9.4 -23.5

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Improved seed substitution 284.8 266.3 12.2 -6.5
Fertilizer off-take 3.7 3.6 -2.6 -2.7
Sale of tractor 54,052.0 53,203.0 10.8 -1.6
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Credit disbursement 168.8 211.6 22.8 25.3

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› Contributing 24 percent towards GDP
› Provide food to about 130 million people
› Earning about 60 percent of the country¶s total export earning
› Providing employment to 47 percent of the total wok force
› Providing the main source of live hood for the rural population of Pakistan
› Providing raw material for many industries and a market for many locally
produced industrial products.
Pakistan is one of the world's largest producers and suppliers of the following according
to the 2005 Food and Agriculture Organization of The United Nations and FAOSTAT
given here with ranking:

{ Chickpea (2nd)
{ Cotton (4th)
{ Sugarcane (4th)
{ Milk (5th)
{ Onion (5th)
{ Date Palm (6th)
{ Mango (3rd)
{ Tangerines, mandarin orange, Clementine (8th)
{ Rice (8th)
{ Wheat (9th)

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mmmmmmmmmmmmmmmmmm Improved performance of fisheries sector in FY08, owed to both marine
an inland fish catch, due to higher prices in domestic as well as international markets.
This growth is remarkable as better feed and management for inland fishing offset the
negative impact of water levels in reservoirs and rivers during the year. Fish production
from marine also recovered well in FY08 and posted a respectable growth 0f 10.5
percent as against 7.1 percent decline in FY07. Pakistan needs to improve hygiene and
environmental conditions in handling fish and its products, to increase its share in EU
and Japanese markets. Surveys suggest that suggest that huge fishing potential is
available in Pakistan territorial limits. Utilization of this, however, requires investments,
research and introduction of suitable technology. Further, there is an urgent need to
have a comprehensive long-term National Fisheries Policy for sustainable growth
management of fishery resources.

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Maine 353 390
Inland 225 250
Total 578 640
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Marine 3,470 3,836
Inland 13,136 14,595
Total value addition 16,606 18,431
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Value addition by forestry sub-sector declined for the fifth year in a row.
This continued disappointing performance is mainly due to massive deforestation
unabated cutting of trees and forests as well as poor law and order situation in Northern
areas. As a result, timber and fire wood production from forests fell to 280 thousand
cubic meters- lowest level ever. It is interesting with the rise in area under forests until
FY03. Since than the area increased by 4 percent, but production feel by massive 66
percent. The major reason of this delink is probably poor law and order situation
coupled with strong local demand FYO6 onwards due to massive reconstruction after
October 2005 earthquakes in affected areas. On the positive side, a gradual increase in
the area under forest during law few years is likely to start paying dividends in the years
to come. Therefore a strong recovery is possible in forestry in coming years.

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The most important crops are wheat, sugarcane, cotton, and rice, which
together account for more than 75% of the value of total crop output. Pakistan's largest
food crop is wheat. In 2005, Pakistan produced 21,591,400 metric tons of wheat, more
than all of Africa (20,304,585 metric tons) and nearly as much as all of South America
(24,557,784 metric tons), according to the FAO. Pakistan is a net food exporter, except
in occasional years when its harvest is adversely affected by droughts. Pakistan exports
rice, cotton, fish, fruits (especially Oranges and Mangoes), and vegetables and imports
vegetable oil, wheat, cotton, pulses and consumer foods.

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Pakistan claims to be the fifth largest producer of milk, yet there is still a
deficiency. The per annum milk production is around 2,200 liters. The known pure breed
is presently available at the farms in Friesian (mainly at the Army Dairy Farms) and the
cross breeds are Cholistan Jersey and Sahiwal Friesian. The low milk yield can be
attributed to a poor genetic pool and inappropriate feeding and farm management.
Engro Foods and local dairy farmers have imported dairy cows from Australia. Satisfied
with the quality of semen and embryos imported from Canada, the Remount Veterinary
and Farm Corps (RVFC) of the Pakistan Army may repeat the order for the same
products with Semex Alliance. Similarly the provincial livestock departments also have
similar demands for animal genetics.

The Canadian High Commission is also working with the GOP on finalizing
the health certificate for the export of Meat Bone Meal (MBM) and day old chicks from
Canada to Pakistan. Pakistan is also encouraging investors to establish modern export
quality slaughter houses and meat processing facilities.
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› A low input production system prevails, with less veterinary products used.
› The large size of national herd.
› The population is growing fast and meat supply cannot keep pace.

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› Nutritional and feed shortages are prevalent.

› There is lack of processing facilities.
› Health hygiene, awareness poor.
› Weal SPS regulatory framework.

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› New markets for Halal mear Malaysia and Indonesia.

› Donor support to manage SPS issues.
› Domestic and foreign private sector investment interest.

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› Imports, particularly from India.

› Loss of existing markets through competition and their introduction of better
quality and safer meat products.
› The introduction of exotic disease.

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An important contributor to the slowdown in GDP growth was investment demand in the
country reflecting investors¶ cautious response to political uncertainty, law and order
situation and inflation expectations. The FY08 contribution of investment demand in
overall GDP remained the lowest in last four years at 0.7 percent. In contrast to a
relatively balanced FY07 growth, the major impetus to FY08 growth came from a sharp
rise in private consumption demand. This appears to have further strengthened
inflationary pressures in the economy.

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The developmental factors that contributed to the overall economic growth of India. The
period after 1990, witnessed progressive increase in the annual average Gross
Domestic Product (GDP) of the Indian economy hovering around 4.5% to 5%. The
astronomical rise of Indian Information Technology, Indian BPO and the Indian
telecommunication industry, propelled the growth of GDP of India to around 6%, during
the period from 1988 to 2003. After a long lull period, the agriculture sector of India
registered a strong growth of 4%.

The snapshots of the economy of India in 2006-2007 are as follows -

› The Gross domestic capital formation in 2005-06 grew by 23.7%

› FDI amounted to US$12.5 billion and outpaced portfolio investment of US$6.8
billion
› Central Public Sector Enterprises to invest Rs.165, 053 crore in 2007-08
› New 162 production sharing contracts awarded to Petroleum and Natural Gas
sector
› SMEs witnessed steady increase in outstanding credit
› Foreign trade and merchandise exports expected to cross US$125 billion by the
end of the fiscal
› Provision for tourist infrastructure increased to Rs.423 crore
› Bank's differential rate of interest scheme provided finance at the rate of 4% to
weaker sections
› Seven ultra mega power projects were under process
› Provision for national highway development programmed to be increased to
Rs.9, 945 crore
› Farm credit target of Rs.225, 000 crore was allotted for the financial year 2007-
08 with an addition of 50 lakh new farmers to the banking system
› Defense expenditure allocation to increased to Rs.96, 000 crore
› IT allocation for e-governance to increased from Rs.395 crore to Rs.719 crore.

The bullish run of the GDP India 2006-2007 was led by the following sectors -

› Information Technology
› Telecommunications
› Electronics and hardware
› Oil and natural gas
› Pharmaceuticals and biotechnology
› Retail
› Textiles
› Infrastructure
› Construction
 › Airlines
› Health care
› Hospitality
› Power and utilities
› Transport and logistics

The stupendous rise of the Indian GDP during the financial year
2006 - 2007 can be credited to the simplified economic policy of the Government of
India. These economic policies simplified the process of business registration, cross-
border trade, and payment of taxes, eased access to credit and strengthened investor's
interest. These liberal economic policies of Government of India accelerated the growth
of Indian industries, especially manufacturing, construction, and service industry.

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› Climate; Irrigation and Land utilization

› Problems of water Logging and salinity
› Weights in Agriculture sector
› Institutional arrangements

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› Total Geographical area of Pakistan is 79.6 million hectares
› 27% is under cultivation
› 80% irrigated
› Cultivable waste lands amount to 8.9 million hectares

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| Total geographical area receives only 250 mm of rain
| Two types of crops are being irrigated
| Kharif
| Rabi
| Canal system
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{ To encourage the villagers to respond to modernizing norms

{ To achieve the self sufficiency in every aspect
{ To develop small projects such as approach or feeder roads,
{ repair or construction of small schools or dispensary buildings

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› Agriculture package aims at reducing cost of production, increasing output,
enhancing water availability and raising income of faming sector.
› The budgetary proposal has been positive for farming sector in the form higher
subsidy of 32 billion rupees compared with 25billion rupees last year.
› Subsidy on DAP has been raised by Rs 530 to Rs 1000/50kg bag, would reduce
the price of DAP and encouraged use of fertilizers, in turn in enhancing crop
yields.
› Exemption of general sale tax on fertilizers and pesticides, wood also boost
demand for urea, DAP and pesticides.
› Elimination of 5 percent excise duty on crop insurance to encourage crop
insurance scheme.
› Withdraw 10percent custom duty on import of rice seed-enhance plantation of
better seeds-increase rice yield.
› Allow duty free import of bulldozers/laser land leveling technology help improve
water efficiency at farm gate.
› Under white revolution program Rs.1.5 billion would be spend on dairy milk
development.
› Farm level income world increase on the back of higher marker prices/demand.
› Formal sector agri-credit disbursement increased, because of higher input
demand/prices.
› Allocated Rs.75billion for building new dams and improve the existing irrigation
network-increase irrigation water availability.

If fully implemented the package would encouraged, mix use of fertilizers, increase use
of pesticides to cope with fast spreading disease, enhance grower confidence to
earn/save more, improve water availability at farm gate and increase agriculture
production. All this will help increase production, export, boost economy and reduce
poverty in rural economy.
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Government sets price level of commodities little higher than equilibrium price,
called support policy it is FOR Giving incentives to the farmer Upward revision of
minimum support prices for selected crops like Wheat, Rice etc. The Government
has allocated Rs 200 billion for agriculture credit disbursements for the year 2007-08
which is 25 percent higher than the allocation of the preceding year i.e. Rs 160
billion. Out of the total credit target of Rs 200 billion, Rs 96.5 billion were allocated to
commercial banks, Rs 60 billion to ZTBL, Rs 8 billion to Punjab Provincial
Cooperative Bank Ltd., and Rs 35.5 billion to Domestic Private Commercial Banks.
The agricultural loans extended to the farming community during July- March, 2007-
08.
› Agricultural loans amounting to Rs. 138.6 billion were disbursed during (July-
March, 2007-08) as against Rs.111.2 billion during the corresponding period
last year
› Registering an increase of 24.6 percent.
› The share of ZTBL in supply of total agricultural credit by institutions
decreased and was 28.6 percent during (July±March, 2007-08)
› 47 percent of the total agricultural credit disbursed during July/March 07&08.
› Domestic private bank has increased by 21.6 percent of the total agricultural
credit
› Ministry of Food, Agriculture & livestock (MINFAL) launched an integrated
development programme entitled ³Crop Maximization Project (CMP)´ in 15
districts of the country.
› The project aimed at providing inputs for crops through Revolving Fund for
the financial assistance of the farmers in the project area.
› Establishment of Zarai Tarqiati Bank Limited (Z.T.B.L.)
› Role of Commercial Bank
› Role of State Bank of Pakistan
› Easy Procedure
› Timely Disbursement
› Recovery Rate
› Package of All Inputs
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