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Discuss the various steps taken by government to encourage the agriculture sector or

discuss the various measures adopted to promote agriculture sector

Following agricultural policies have been adopted by the government of Pakistan to promote the
agriculture sector:

1. Land Reforms :-
In order to overcome the defects of land tenure systems, the government of Pakistan adopted
land reforms in 1959 and 1972. These reforms have reduced the concentration of land ownership.
2. Irrigation Facilities :-
The government has constructed the various dams like, Mangla and Terbela.Various Barrages
like Kotri, Taunsa and Guddu have been constructed to provide irrigation facilities to the
3. Mechanization :-
The use of tractors and other machines is increasing. The government has encouraged the use of
machinery in agriculture sector by providing the credit facility for machinery.
4. Storage Facility :-
The government has paid special attention to the storage facility and allocated sufficient amount
for storage facility in the 8th five year plan.
5. Agriculture Price Policy :-
Agriculture price commission was set up in 1981 to recommended support prices for the
agricultural output and prices are revised every year to increase the income of the farmer.
6. Input Price Policy :-
The government provides subsidies on fertilizers and machinery to encourage the framers in the
previous years.
7. Credit Policy :-
The government is providing loans to the farmers through commercial banks, ADBP and the
Federal Bank of Co-operative to the small farmers.
8. Agricultural Education :-
The agricultural college Faisalabad was set up to meet the agriculture sector needs which was
later on turned into agricultural university. Two research institute were set up in Peshawar and
Hyderabad. In the 8th five year plan adequate funds had been provided for agricultural research.
Agricultural college is opened in Multan.
9. Agricultural Extension :-
The importance of extension work has been recognized by the government for improving
agricultural production. In the 7th five year plan the NCA had proposed an allocation of
sufficient amount for his service.
10. Plant Protection :-
The chemicals are mainly provided by the private sector for the plant protection. But government
is also not careless and it has allocated sufficient amount for it in the 8th five year plan.
11. Improved Seeds :-
The government of Pakistan is making her utmost efforts to provide adequate supply of good
quality of seeds to the framers. During the sixth five year plan a sum of Rs. 477 million were
allocated and in 8th five year plan also sufficient amount was allocated.

12. Agricultural Marketing :-
To provide the proper return to the farmers PASSCO was established in 1973, In the 8th five
year plan government had paid special attention to the marketing facilities.
13. Cooperative Farming :-
The government of Pakistan has encouraged the co-operative farming and had spent Rs. 65
million on the co-operatives.
14. Live Stock :-
It is an important sub-sector of our agriculture. It contributes about 30% of agriculture GDP. In
the sixth five year plan sufficient amount was spent on this sector to improve the quality of live
15. Soil Analysis :-
It is very useful for the better utilization of land. In the 7th and 8th five year plan planners have
realized its importance.
16. Consolidation of Land :-
The government has issued the consolidation act to promote the efficiency of the framer and the
productivity of land.

What is the importance of cooperative marketing and discuss its problems and suggestions
to improve it?

Cooperative Marketing :-
A co-operative marketing society is basically a trading firm. All the members of the co-operative
marketing society sell their product through society.

The importance of cooperative marketing society can be judged by the following facts.

1. Proper Reward of Production :-
Bargaining power of society is greater than the single farmer. So a farmer will get the fair reward
of his product.
2. Storage Facility :-
A co-operative marketing society will also provide the facility of storage to its members. The
resources of the society will be adequate to provide this facility.
3. No Middleman :-
The major benefit of this co-operative marketing society is that a farmer will save himself from
the middleman. So the income of the framer will increase and his economic condition will
4. Elimination of Speculation :-
A co-operative marketing agricultural product and eliminates the speculation and wastage of

Following are the main problems of the co-operative marketing :

1. Lack of Finance :-
The co-operative marketing society is facing the problem of finance in developing countries. The
member of the society advance the money to the society to increase the volume of business. The
co-operative marketing society does not have adequate resources to meet the requirements.
2. Small Scale :-
The co-operative marketing society operates on small scale, because its volume of business is
small. So it can not meet the needs of the members.
3. Ineffective Administration :-
The qualified managers can not be employed by the society and the performance of the
administration remains poor.
4. Delay in Marketing Decision :-
The working of the co-operative marketing society is also affected badly by the delay in
decisions because it takes sometimes to call the meeting and consulting the members.
5. Lack of Storage and Transport Facilities :-
The above facilities are necessary for the efficient operation of the shops. The market societies
usually do not have adequate storage and transport facilities.
6. Poor Performance of Shops :-
The co-operative marketing shops performance is very poor and they do not pay the money to
the farmers in time.
7. No Co-Operation :-
The members of the society are not co-operative minded. So it is the major cause of the failure of
co-operative marketing.
The problems of co-operative marketing can be solved by adopting the following measures :

1. Credit Facility :-
In order to increase the business volume of the society, government should provide the finance
facility to the society. In this way society can increase the scale of business.
2. Services of Qualified People :-
The co-operative marketing society should hire the services of trained and qualified managers to
improve the performance of the society.
3. Transport Facility :-
The government should provide the transport facilities like roads to link the rural areas with the
markets. It will encourage the society members.
4. Spirit of Co-operation :-
The members of the society should increase the spirit of cooperation among them.
5. Standardization :-
The cooperative societies should pay special attention to the grading and standardization of the
6. Improvement In Storage Facility :-
The cooperative marketing society should provide the maximum storage facilities to the farmers
to save the wastage of crops.
What is the agricultural marketing and what are the main defects of agricultural

Agriculture Marketing :-
All the activities like transportation processing, storage, grading are including in the agriculture
marketing. These activities are inadequate in the economy of every country.

An organized marketing system ensure better returns to the farmer. It also stables the market
prices. It protects the interest of both consumers and producers. But in most of underdeveloped
countries agricultural marketing is not well organized and farmers are facing many problems to
sell their products.

Following are the main problems of agricultural marketing :

1. Lack of Transportation Facility :-
It is the main obstacle in the way of efficient marketing. The rural areas are not linked with the
market by roads. A lot of agricultural product is wasted due to transport problem.
2. Poor Quality of Product :-
Farmer is not using the improved seeds and fertilizers so quality of production is very poor and
its prices are low in the market.
3. Role of Middleman :-
The middleman also takes a big share of farmer's income without doing anything. A poor farmer
borrows the money from them and sells his product at lower rates.
4. Lack of Grading :-
In case of agricultural commodities the mixing of good and bad products is very common in
developing countries like India and Pakistan. There is no proper method of grading these crops.
It creates a problem of marketing inside and outside the country.
5. Lack of Credit Facilities :-
The credit facilities are not adequate to meet the farmer's requirement. Poor farmer is borrows
the money from private money lenders at tied conditions.
6. Problems of Produce Collection :-
The collection of produce from small farmers is very expensive and a difficult process. It is a
great problem for the efficient marketing.
7. Lack of Storage Facility :-
The storage facilities are required by the producers as well as by the government. The farmers
need storage to sell their product at a suitable time. The government needs stores for keeping
reserve stocks. Due to lack of storage facilities a lot of product is damaged on railway stations
and in open air.
8. Weight and Measures :-
In various parts of weight and measures are not same. So a farmer suffers a loss at the time of
buying selling of his product.
9. Market News :-
Most of farmers in underdeveloped countries are uneducated and they knows nothing about the
market conditions. So farmer is unable to achieve the real price of his product.
Following measures can be adopted to improve the agricultural marketing :

1. Improved Transport Facilities :-
The government should increase the road facilities and rural areas should be linked with the
markets. It will enable the farmer to sell his product in the market directly in the hands of
2. Increase in the Credit Facilities :-
The government should increase the credit facilities to the small farmers. No doubt all the
commercial banks are providing this facility to the farmers but still it is not sufficient.
3. Increase in Storage Facility :-
The government should provide loan to the framer for storage facilities. The government should
also construct the stores to keep the stocks of various goods.
4. Market Reforms :-
The government should improve the market system in the country. Market committee should be
reorganized. Markets inspectors should check the prices of agricultural products. The strict laws
should be introduced.
5. New Markets :-
The government should build the new markets near the producing centers. It will enable the
farmer to get proper reward.
6. Cold Storage :-
This i an important part of organized markets. These are very useful for the perishable goods like
fruits and vegetable. The government should expand the scope of cold storage.
7. Market Information :-
Market demand and supply condition can be provided to the framers through radio, T.V and
newspaper. The government should also pay special attention to this side.
8. Grading of Product :-
There are various agencies which are busy in grading agricultural product. There is a need to
expand these organizations for effective of marketing system,
9. Marketing Research :-
The government should allocate a sufficient amount on marketing research to make the
agricultural marketing more effective.

Discuss the benefits and costs of agriculture tax or Why the agriculture tax should be
imposed ?

Tax on Agriculture :-
It is very old issue in Pakistan. A number of commissions were set up in the past to decide this
problem. In 1963, in 1972 and in 1990 this matter was taken very seriously.
A common man simply says that when govt. of Pakistan is imposing taxes on all the areas even a
govt. servant who's receiving more than six thousands per month is paying tax, so why the
agricultural income is exempted from tax. The budget deficit of Pakistan is increasing day by
day. This deficit can be reduced by imposing tax on agricultural income.
Following are the main arguments in favor and against the agriculture tax :


1. Canon of Equality :-
The traders, producers, industrialist, servants are paying taxes. So why not the agriculturist.
There are big land lords in the country. So they should also contribute their share to the state.
2. Subsidies to the Farmers :-
Govt. provides subsidies on inputs, like fertilizers and electricity. Govt. also provides them loans
on low rate of interest. The burden of taxes is small as compared to concessions. So farmer must
pay the tax on his income.
3. Increasing in the Value of Land :-
As the infrastructure facilities like roads, electricity, and education is increasing the value of land
property is also increasing. Govt. is spending a huge amount on these facilities, so it should
receive the agriculture tax.
4. Greater Share in GDP :-
The agriculture share in GDP is 26% while its contribution to total tax collection is 4% so there
is logic to impose the tax on agricultural income.
5. Low Rate of Savings :-
According the contribution in GDP of this sector its savings are low. This sector is spending the
money very lavishly. So another way is that compulsory savings should be received from this
6. Income Tax is Elastic :-
Income tax on agriculture is more elastic than land revenue. As the out put per acre is increasing
due to better inputs revenue of the Govt. should also increase.


1. Large Number of Taxes :-
Farmer says that there are large number of direct, indirect and hidden taxes on this sector. Ushar,
land revenue and patwari tax is already available, so there is no justification of this tax.
2. No Proper Return :-
Agriculturist says that various Govt. export corporations and middleman purchases this is
product at low price and he is not getting the proper reward of his product. So why he should
also pay the such tax.

3. Unfavorable Weather :-
Some people say that there is no uniformity of income in this sector. It varies from year to year.
If nature is kind and weather is favorable then income is better otherwise not. So agriculture tax
may no be imposed.
4. Case of Subsidies Benefit :-
Farmer argues that he is not receiving the benefits of subsidies due to the black marketing of
the dealers and agents. Due to the poor marketing system a middle man is looting them from
both hands. So there is no justification of such tax.
5. Transfer of Tax :-
Some people say that such tax will be shifted from landlord to tenant and consumer. tenant is
already living below the subsistence level.
6. Big Landlords Will Escape :-
Technically big lords have very small holdings in their account. Because in the books they have
transferred lands to save themselves. So they will escape from the tax net and there will be small
collection of revenue.

What are the problems of rural credit in Pakistan and suggest measures?
Following are the problems of rural credit in Pakistan :

1. Complicated Procedure :-
Our farmer is uneducated and he can not complete the formalities to obtain the loan.
Complicated procedure is the main obstacle in the way of borrowing.
2. High Rate of Interest :-
Our farmer is poor and rate of interest is very high so it discourages the farmer to get the credit.
3. Lack of Planning :-
In Pakistan there is a lack of credit planning. In order to meet the credit requirements of
agriculture sector there is a heed of preplanned expansion programme for the agriculture sector.
4. Small Farmers Ignored :-
In Pakistan commercial banks always ignored the small farmers keeping in view the repayment
problem. Because everybody hesitates to lend the money to poor person.
5. Lack of Information :-
In the villages people are uneducated and banks are also not available. So they do not know the
information about credit and the procedure of borrowing.
6. Lack of Contact :-
The credit officers have no contact with the farmers. So due to this reason our farmer can not get
the loan.
7. Uncertain Weather :-
Our farmer fears to borrow that if crops damages due to floods or untimely rains then how he
will repay.
8. Low Yield :-
In our country the production per acre is very low and rate of profits are also low. So it reduces
the loans repayment ability of the framers.
9. Problem of Security :-
Our small farmers can not get the credit because they are unable to offer security to the credit
institutions. Even they are unable to provide guarantee of two persons.

10. Credit Timings :-
Farmer gets the loan to purchase the seeds fertilizers and other inputs. Sometimes the credit is
not provided in time to the framer and he fails to use these inputs.
11. Unproductive Use :-
A large share of credit which is provided to the farmers is misused. Our farmer uses the credit on
death birth occasions lavishly.

Our government has taken various measures to remove the problems of the rural credit. These
are following :

1. Establishment of Agricultural Finance Institutions :-
The government established ADFC in 1952 and ABP in 1957 to finance agriculture. In 1961,
they were merged into ADBP which is main source of agriculture finance.
2. Federal Bank for Cooperative :-
It was set up in 1976 to provide finance to this sector and it has played very effective role in
providing rural credit.
3. Reorganization of Cooperative Societies :-
The cooperative societies have been reorganized. The provincial cooperative banks and societies
are playing effective role to finance the agricultural sector.
4. Agricultural Credit Advisory Committee :-
It was set up in 1976 by the government solve the problems of rural credit.
5. Special Scheme :-
In 1977 the commercial banks introduced a s[special scheme to extend larger amount of credit to
agriculture sector.
6. Interest Free Loans :-
The commercial banks are providing finance to small farmers without interest and some times on
low rate of interest.
7. Recovery of Loans :-
A provision has been made in law for recovery of agricultural loans as arrears to lend revenue.
Recovery is also made at the time of harvesting.
8. Pass Book System :-
The pass book system has been introduced to simplify the procedure of borrowing.
9. Mandatory Credit Target Scheme :-
This scheme was introduced in 1972. According to this scheme commercial banks are given
mandatory targets for credit agriculture sector by the state bank.
10. Credit in Kind :-
To ensure the proper use of credit the bank have been advised to give supervised finance in kind.
11. Bank Branch in Rural Areas :-
Banks are being encouraged to set up the branches in rural areas. They will also keep close
contact with the farmers and increase the credit facilities.
12. planned Credit Expansion :-
Present government has given proper attention to the planning and development of the country.
For agriculture sector NCCC was set up in 1972. Every year it reviews the credit plans.
13. Transfer of Technology :-
The banks are appointing the credit officer who have acknowledge of advance technology. They
will transfer it to the farmers and it will be very useful for the agriculture sector.
14. Security :-
In the past people were rigid minded and they disliked to mortgage their property. But now our
farmer is ready to provide security. The credit officers are also authorized to advance credit
without keeping security.
Due to measures production is increasing day by day and we are self sufficient in food in-spite of
3% rate of population per annum.

Write a note on the Agriculture Development Bank of Pakistan (ADBP) or examine the
role of ADBP in increasing the agriculture product

Agriculture Development Bank of Pakistan (ADBP) :-
For the development of agricultural sector government established the agricultural development
finance corporation in 1952. While agricultural bank of Pakistan was also established in 1957 for
the same purpose. So government decide to establish one institution. In 1962 agricultural
development bank was established by merge-ring the two.

Management :-
A board of directors supervises the policies and operations of the agricultural development bank
of Pakistan. Board consists of one president and less than five members. The president is chief
executive of the board. He also presides over the meeting. The president and members are
appointed by the government of Pakistan.
The paid up capital of the bank amount is Rs. 4000 million and paid up capital Rs. 3214 million
as on 30th June, 1999 the bank has 347 branches, 49 regional office and 1465 mobile credit
officers. All the shares belong to the government. Now govt. has decided to sell its 10% shares to
the public.
i. Borrowing of the State Bank.
ii. Federal Government Funds.
iii. Foreign Credits.
iv. Borrowing by sale of debentures.

Head Office and Branches:-
The head office of the bank is situated at Karachi. The total numbers of branches are 347 at. Its
branches are available in every where in Pakistan.

Functions :-
ADBP is also performing the other functions like accepting deposits. lending, borrowing and
collection of cheques but its major function is to finance the agricultural sector in Pakistan. It
provides short term, medium term and long term loans for the following purposes :

1. Finance for Inputs :-
This finance is provided by the bank for the purchase of seeds, fertilizers and chemicals. This
finance is provided for short term period, less than one year.

2. Finance for Technology :-
In the present age farmer uses the modern equipments like tractor and thrashers. So ADBP
provides the loan for medium term and long term loans for these purpose. By using these things
the per acre yield is increasing and economic condition of the farmer is not improving.
3. Finance for Forestry and Fishery :-
ADBP also provides credit for the animal husbandry, poultry, forestry and fishery to improve the
economic condition of the rural population. In this way the rate of unemployment is falling and
the rate of migration to urban areas has been also controlled.
4. Finance for Storage :-
Storage facilities are not available in our country and due to this a lot of production is wasted.
ADBP provides credit for the construction of storage in the country.
5. Finance for Special Crops :-
ADBP provides special attention to the cotton and rice which are exported to other countries,
because a lot of foreign exchange is earned by these crops.
6. Credit for Related Industries :-
The bank provides loan to those industries which are directly related to the agriculture. For
example cottage industry is also financed by the agricultural development bank. There is simple
procedure of advancing the loan. Pass book system has been introduced and loans are also
provided against the crops.
7. Small Scale Enterprises :-
The ADBP launched this programme in 1992. Its main objective is to improve the conditions of
small farmers.
8. Rural Credit Programme :-
This scheme was started in 1987 by the ADBP. Its objective was to extend the credit facility to
the people of rural areas at their door step. Credit limit was Rs. 50 thousands for second loans.
9. Women Lending Programme :-
This programme is operative in 16 regional offices. It is covering 22 branches. ADBP has given
Rs. 471 million to rural women for various projects up to 30-6-1999.
10. Recovery and Profit :-
The recovery position is not satisfactory. It has reserved 61% loans but its profit is increasing
day by day.

What are the main sources of rural credit or Discuss the credit institutions and their role in
the agricultural development of the country
All the less developing countries are facing capital shortage problem. In Pakistan, our farmers
conditions is also very poor and he is unable to use the modern technology. So credit is playing
important role for the development of rural areas.

Sources of Rural Credit :-
Following are the main sources of agricultural credit :

1. Village Shopkeeper and Middleman :-
In our villages shopkeepers commission agents in the market provide loan to our farmers. They
charge very high rate of interest. There terms and conditions are also much tied.
2. Landlords :-
In Pakistan there is a landlord system the tenants borrow the money from the lords and they
receive heavy charges. They also misuse them during the selection of the Assembly members. So
many problems take place in the way of democracy.
3. Friends Relatives :-
Friends and relatives also provide loan in the rainy days. It has been estimated that 25% of the
total demand of the farmer is met by these above three sources.
4. Tactical Loans :-
These were provided by the government to purchase machinery, cattle's, seeds, rebuilding of
houses destroyed by the floods. These were issued by the revenue department. These are
playable within one to 8 years. But in fact the practice of these loans has been finished.
5. Commercial Banks :-
In the early years independent commercial banks ignored the agriculture sector. But after
nationalization now proper attention is paid to the agriculture. Now the 45% of the total rural
credit is issued by the commercial banks. Even commercial banks are providing interest free
loans to the small farmers for the improvement of agricultural output.
6. State Bank :-
The state bank does not directly finance the agriculture. It provides loan at concessional rates for
this sector to the cooperative banks and ADBP.
7. National Bank Role :-
In 1972 national bank of Pakistan started first time a surprised credit scheme for the farmers and
later it was adopted by all the commercial banks. Now various other schemes have been
introduced for the farmers.
8. National Credit Consultative Council :-
The government of Pakistan established the national credit consultative council in 1972 to
review the overall credit in the economy. It makes recommendations to the government with
regard to the credit expansion among various sections.
9. Agricultural Credit Advisory Committee :-
It was also set up 1972 its objective was to watch the credit provided to this sector. It had also
improved the credit availability for the agriculture sector.
10. Cooperative Banks :-
It is the oldest source of agriculture credit. The loan is supplied to the framers through the credit
societies. These societies provide credit to the small farmers for the purchase of agricultural
inputs such as seeds and fertilizers. The federal cooperative was also established in 1976 with the
provincial cooperative banks. This source provided 15% of the total rural credit which is issued
in Pakistan.

11. Agricultural Development Bank of Pakistan :-
The ADBP provides short term, medium term and long term loans to the agriculture sector. loans
are granted in cash and in kind. It provides loan for the purchase of inputs, machinery, and for
cottage industry in the rural areas. It is specialized institution for the rural credit.

What are the prerequisites of successful agricultural credit or rural credit programme ?

Agriculture Credit or Rural Credit :-
Following are the prerequisites of successful rural credit programme :

1. Character of the Borrower :-
The lender should keep in view the reputation and purpose of borrowing. If one farmer is honest
and capable to use the loan for productive purpose then he must be tended.
2. Appointment of Credit Officers :-
The lending agency should appoint the credit officer who has rural background. If a credit officer
belongs to the farmer's family then he can understand the problems of the farmers in better way.
3. Regular Relationship :-
The relationship between the borrowers and credit officer should be regular. It is very useful in
obtaining and repaying the loan. If the farmer has no contact with the banks then they will be
unable to avail the credit facility on low rate of interest.
4. Mobility :-
The credit officer should always remain on tour. He should check utilization of credit at the spot.
At the time of sowing and harvesting he should go in the fields.
5. Individual Responsibility :-
The loans should be advanced to an individual farmer and two person should give guarantee any
person delays then other two persons will also ask him for the repayment because they will also
be responsible.
6. Credit in Kind :-
Credit should provided in the shape of kind and not in the shape of cash. For example if we
advance the loan in kind of seeds or fertilizer to the farmer then he will be unable to use this loan
for other purpose.
7. Credit at the Door Step :-
Credit must be provided at the door step in this way a lot of precious time of the farmers can be
saved. For example if the bags of seeds are at the door then he is unable to sew them.
8. Productive Approach :-
The loan should be provided for the productive purposes. It should also be according to the
requirement of the farmers. If the loan is excess or less than the actual requirements then it will
not be useful.
9. Simple Procedure :-
The procedure of borrowing should be very simple and there should be one source of taking
loans. If a farmer has to contact different sources then he will hesitate to borrow.
10. Preference to Small Farmers :-
The small farmers should be preferred while advancing the loan. Most of small farmers are very
poor and they cannot use the modern inputs. So the small farmers will be able to cultivate the
land properly. In this way per acre output can be maximum.

What is the difference between rural and agricultural finance and discuss the importance
of agriculture credit and also discuss its various kinds
There is a small difference between the agricultural finance and rural finance.

1. Agricultural Finance :-
Its link is only with the growth of agriculture. For example the production of cotton, wheat, rice
2. Rural Finance :-
It covers all the aspects of socio economic life of the rural areas. It covers agriculture, animal
husbandry, fisheries by forestry as well as development of transport water education and health.

In the modern age agricultural credit or rural is very important for the agricultural development.
While misuse of credit creates more problem instead of increasing the production. The
importance of credit can be judged by the following facts :

1. Use of Modern Technology :-
In the most of the developing countries farmer is poor and he can not purchase the tractor, tube-
wells, seeds and fertilizers. So the farmers require credit for financing short term and long term
2. Purchase of Cattle :-
The farmers borrow money to purchase the buffalo, cow, goats to increase the production of milk
and meat. Poultry farms are also established by borrowing the money from various financial
3. Low Income :-
The marketing conditions of the developing countries are not favorable for the farmers. There is
middle man and broker in the way of farmer and consumer. So the farmer can not sell the
product at fair price the revenue of the product is low and farmer borrow the money to meet his
basic needs.
4. Customs and Tradition :-
Sometimes farmer borrows the money on death, birth occasions to complete the customs and
traditions. He spends a lot of money on marriages by borrowing loans. So loan is misused.
5. Natural Climate :-
Natural climate like floods and crop diseases also destroy the financial condition of the farmers.
To face the problems Govt. should advance the loans.
6. Suits :-
The farmers spend a lot of money on civil and criminal suits. They can not meet their expenses
by their earned income. So they borrow the money.
7. Population Pressure :-
Population pressure is increasing on the land. In India and Pakistan 70% population, depends
upon agriculture directly or indirectly. The high birth rate reduces the income of the farmers. So
to meet the basic needs of the family, farmer is bound to borrow the money.

8. Repayment of Parents Debt :-
The framers sometimes have to repay the debt taken by their parents from the various sources.
So for this repayment farmer borrows the money.
9. Credit for Development :-
Sometimes farmer wants to cultivate the barren land or he wants to improve his economic
conditions by starting some development projects. So credit is very useful for using the idle
10. Purchase of Land :-
Farmer also borrows to purchase the additional land from various sources.

Agriculture credit is classified under these heads :

1. Short Term Credit :-
This type of credit is obtained for a period of one year or less than one year. It is required for the
purchase of seeds, fertilizers and other production cost.
2. Medium Term Credit :-
The duration of medium term loans is from one year to five years. The medium term credit is
used for the purchase of instruments live stock and improvement of water courses.
3. Long Term Credit :-
This type of credit is required for a period of more than five years. These loans are used for
making improvements of land. The tube-wells are installed and additional land is purchased by
the farmers with this credit. Sometimes old debts are also repaid.
4. Productive Loan :-
Productive loans are those which increase the productivity and the income of the farmers. For
example the credit used on purchase of needs, fertilizer, and tractor is a productive credit.
5. Unproductive Loan :-
These are those loans which do not increase the production and income of the farmer for
example the loan consumed on marriage is unproductive.
In the less developed countries most of farmers mainly uses the loan for unproductive purpose.

Define agricultural price policy and what are the objectives of agricultural price policy

Agricultural Price Policy :-
This policy is a tool to influence the price of agricultural product. It is on incentive to the
producer to produce a particular product according the desired quantity.

Importance of Price Policy :-
The price of agricultural product fluctuate more quickly as compared to the industrial product.
So these changes in prices affect the income, standard of living of the farmer and rural
population. Even these also affect the trade of other goods.

Example :-
In India and Pakistan if the price of cotton or wheat falls any year, it also affects the trade and
other business badly. The farmers aggregate demand falls, which affects the whole economy.
The govt. in this situation interferes so that prices may not fluctuate beyond a particular limit.
Because if the price of any particular product falls any year, then next year farmers never
cultivate that product. It creates shortage next year in the market. So agricultural price policy has
greater importance in the developing countries of the world.

Objectives of Price Policy:-
The objectives of agricultural price policy may differ from country to country. These depend
upon the stages of development in a country. Anyhow, following are the important objects of
agricultural price policy:

1. To meet the domestic consumption requirement govt. promotes balanced increase in
2. To provide price stability in the agricultural product.
3. To meet the national targets by the planners.
4. To provide the wheat to consumer to reasonable price.
5. To provide raw material to the industries at reasonable price.
6. To increase the production and exports of agricultural product.

Methods of Adopting Agricultural Price Policy :-
To regulate the prices of product govt. taken the following measures :

1. Administrative Price :-
Govt. tries to maintain a favorable prices acceptable to both farmer and producer. But generally
both the parties remain unhappy. If govt. increases the price of agricultural product, then
consumer suffers. As govt. of increased the price of wheat to encourage the farmer, public
criticized the govt. badly. On other side if goods are prices low then farmers suffers and
production is affected adversely. Govt. tries to protect the interest of the both parties.
The administrative prices consists upon the following the prices :
i. Support Prices :-
Every year govt. fixes the support prices of important crops. The prices are announced before the
sowing time, to encourage the farmers.

ii. Issue Prices :-
To protect the consumer interest govt. provides specified quantity of goods to the consumer at
the prices which are lower than market prices.
iii. Procurement Prices :-
Govt. every year maintains a particular stock of a product. This stock is used at time to time of
emergency and shortage for the purchase of the desired agricultural product govt. announces
procurement prices. These prices are generally reasonable.

2. Changing in Demand and Supply :-
Sometimes govt. producers some portion of the product it reduces the supply in the open market
then price level rises. Govt. allows the sellers to sell their product at market price. Sometime
govt. exports the surplus product. It reduces the supply, price level rises. The farmer sell product
at reasonable price.

3. Improvement in Facilities :-
The govt. can influence the price of the product by providing the facility of where house and
roads and markets. Due to these facilities farmer can sell his product at reasonable price.
Most of the different countries have also revised its agricultural price policy keeping in view the
problems of the farmers and consumers.
The price support policy is implemented through various departments. Food, Cotton and Rice
export corporation. Agricultural marketing and storage limited, and ghee corporation are playing
very effective role in this regard. Wheat, rice, cotton, sugarcane, sunflower etc. Prices are set
through the price support policy.

What is importance of livestock? Discuss its problems and suggestions for the development
of livestock

The livestock population in India and Pakistan consists of buffalo's, cows, goats, poultry, camels,
donkey, horses etc.
Live stock is an important source of food meat, butter and power. In India and Pakistan it is sub
sector of agriculture. The importance of livestock in the economic development can be judged by
the following facts :

1. Source of Food :-
Livestock provides some basic foods like meat, milk , butter, eggs and fish which is an important
source of balanced diet. Healthy nation cannot survive without balanced diet.
2. Importance for Agriculture :-
About 75% of agriculture depends upon the cattle for the cultivation of the land, because
machinery is very costly and it is not with in the reach of small farmers.
3. Use of Transportation :-
The cattle's are also used for the transportation. Our agriculture product is mainly transported
from rural areas to urban areas by the cattle's. The product is transported to the market with the
help of animals.

4. Supply of Raw Material :-
Livestock also provides the raw material like skins and wool to the industry. The production of
hides and wool is increasing from year to year.
5. Source of Foreign Exchange :-
Some animals like buffalo, cow and fish provides valuable foreign exchange. In visible exports
their share is admirable.
6. Share in GDP :-
Livestock share in the GDP is 8% which shows that it is an important sector of our economy.

In India and Pakistan the quality and quantity of livestock is very poor as compared to the
advanced countries.
Following are the important problems of livestock :

1. Slaughter of Animals :-
As the population is increasing in India and Pakistan the slaughter of goats, buffalo and cows is
increasing day by day. So it has created shortage of animals.
2. Lack of Grazing Grounds :-
As the population is increasing land holdings are reducing and people are sowing only food
crops instead of grass.
3. Imperfect Market :-
The market of milk, ghee is not well organized. The owner of milk giving animals are at mercy
of milk sellers. Villages are not connected with the markets by metaled roads, so product is
4. Lack of Livestock Farms :-
We have no well established livestock farms in our region. There is also no arrangement for
cattle show in various parts of the country which may encourage the farms.
5. No Proper Care of Cattle's :-
Our farmer is unable to keep the cattle's in sheds. The animals are facing the extreme cold and
hot weather conditions. So these are caught by the various diseases.
6. Lack of Veterinary Hospitals :-
In India and Pakistan the facility of hospital is not sufficient for the animals due to this large
number of cattle's die, without treatment.
7. Low Per Capita Out Put :-
In South Asia per capita out put is very low as compared to the advanced countries, for example
milk giving per capita out put is only 92.9 liter, which is very low.
8. Lack of Milk Plants :-
In India and Pakistan milk plants are also not sufficient. There are very few plants in all our the
country. So they are not sufficient to process the milk and variety of milk product.
9. Inferior Quality of Cattle :-
In India and Pakistan the quality of cows, buffalo are generally inferior and costly. People are not
interested to do this business on large scale.
10. Low Prices of Milk and Milk Products :-
The prices of milk, ghee and cream are very low in villages. The sellers of milk and ghee are not
attracted to increase the milk giving animals. The middle man purchases the product on low rate
and sell at high rate.

11. High Prices of Animals Feed :-
The price of animals feed is increasing day by day but the rate of output is low. So the owner of
cow and buffalo suffers a loss when he compares the price of feed and the prices of the milk.
12. Prohibition in Cities :-
Now the government is not allowing the people to keep animals in urban areas. It has also
discouraged the people to keep animals in their houses.

Note :- This measurement section is only prepared on Pakistani Government Policies.

The government of Pakistan is trying to improve the quality and quantity of livestock and their
products, in the country. The government has adopted the following measures. The government
has adopted the following measures :

1. Separated Department :-
In 1973, the government created the separate department of live stock to develop the condition of
2. Research Centers :-
In Pakistan 33 livestock farms/experiment stations have been established in the four provinces
and one in Bahadur Nagar for research on breeding, feeding and marketing.
3. Poultry Farms :-
There are more than 3450 commercial poultry farms which produce meat eggs in the country.
The govt. has also provided various incentives to poultry industry.
4. Establishment of Veterinary Hospitals :-
The government has established 588 hospital and 1100 veterinary for the treatment of animals.
5. Artificial Insemination :-
This programme is also working successfully. This facility is provided in 305 centers of the
country to develop this sector.
6. Milk Plant :-
In Pakistan 20 milk plants are operation to process about 600 tons of milk and milk products
7. Foreign Assistance for Livestock :-
Iran and Pakistan has cooperated with each other for the development of livestock.
The Newzealand government is also assisting Pakistan for the establishment of animal
husbandry. Australian government has offered 50,000 cattle's head as a gift for promotion of
milk plant. World Bank is also providing assistance for livestock development a pilot project
near Pattoki to increase the livestock production.
8. Private Sector Should be Encouraged :-
The private sector should be encouraged for the establishment of dairy farms, and poultry farms.
For this purpose machinery facilities should be provided.
9. Credit Facilities To the Farmers :-
Credit facilities should be provided to the farmers without for cattle breeding. They should be
also allowed to import the animals.
10 Control on Slaughtering :-
The government should also take effective steps to reduce the rate of slaughtering in the country.
Govt. can increase the number of meatless days.
11. Increase in Hatcheries :-
There are only 48 hatcheries in the country which are inadequate than our needs. We should
increase the production of chickens and eggs by expanding the poultry industry.

What is Co-operative farming or What are the causes of failure of cooperative farming and
suggest the measures to improve it

Cooperative Farming :-
Co-operative farming is a voluntary organization in which the farmers pool their resources. The
object of this organization is to help each other in agriculture for their common interests. In other
word it is a co-operative among the farmers of limited means.

The cooperative farming has been tried successfully in various countries like United Kingdom,
Germany, France and Sweden. Following are the main advantages of cooperative farming :
1. Consolidation of Small Units of Land :-
Majority of the farmers keep the small units of land. So they cannot employ the improved
methods of cultivation. Cooperative farming enables them to consolidate their small units of land
for better utilization.
2. Use of Machinery :-
A poor farmer cannot purchase the machinery but a cooperative society can easily purchase the
various machines. The use of machines will not only reduce the cost of production but will
increase the per acre yield.
3. Supply of Inputs :-
A cooperative farming is in a better position to get the adequate and timely supply of essential
agriculture inputs like fertilizer and seeds.
4. Creates Love and Brotherhood :-
A cooperative farming society creates the brotherhood and love for the members because they
work for their common interest.
5. Fair Price of the Product :-
A co-operative farming society will bargain in the market and will sell the product at maximum
price. The income of the individual farmer will increase.
6. Guidance and Training :-
A co-operative society guides the farmer to increase their efficiency and production.


1 Attachment With Land :-
The farmers are not willing to surrender the rights of land infavour of the society because they
have too much attachment with it.
2. Lack of Cooperative Spirit :-
The spirit of cooperation and love is lacking among farmers. They are divided in various sections
on cast basis. There is no unity among them, so they are not ready to become the member of the

3. Illiteracy :-
In poor countries farmers are mostly illiterate and they are not ready accept any change in the
cultivation process. Still some of them are using the old methods of cultivation.
4. Lack of Capital :-
The co-operative farming societies are also facing the capital shortage problem and these are
unable to meet the growing needs of agriculture. Credit facilities to these societies are also not
5. Dishonesty :-
The management of cooperative often turns out to be dishonest. The selfishness of the members
make the cooperative farming society ineffective.
6. Re-Payment of Debt :-
Sometimes debt is not re-payed in time which creates many problems for the financial
institutions. Some members do not realize their responsibility and it becomes the cause of failure.


1. Increase in Education :-
The government should increase the rate of education to make the cooperative farming more
effective. Importance of cooperative farming society should be explained to the farmers.
2. Changes in the Recovery Process :-
The government should remove the defects in the recovery process. It will increase the efficiency
of financial institutions and there will be reduction in defaulters.
3. Moral Persuasion :-
The management can ask the members of the society in friendly manner for the re-payment of
debt. When crop is in the market, loan can be recovered easily.
4. Removal of Corruption :-
The government should discourage corrupt people and people should also be co-operative with
the government to make cooperative farming more effective.

What do you mean by farm mechanization and discuss the importance of farm
mechanization for agriculture or Discuss the advantages and disadvantages of farm

Farm Mechanization :-
Farm mechanization means the use of machines and technology in the agriculture sector. The use
of tractor, tube-wells and plant protection measures are included in the farm mechanization. So
in the farm mechanization the use of machinery is greater as compared to the labour.

Importance or Advantages of Farm Mechanization :-
In underdeveloped countries the per acre yield is low because our farmer is not using the
machines and technology in the agricultural operation. Keeping in view the performance of farm
mechanization, So most of developing countries has decided to provide loans to the farmers for
the purchase of tractors and tube-wells. Its importance can be judged by the following facts :

1. Increase in the Cultivable Area :-
The use of machines like tractor and bulldozers will enable the farmers to bring more areas under
cultivation. A large area of barren land can be cultivated more easily.
2. Irrigation Facility :-
In poor countries the canal irrigation facilities are inadequate. The installation of more tube-wells
will relieve the cultivators from uncertainty of water supply which will increase the production.
3. Transportation Facility :-
Tractor and Trolly is also used for transferring the agriculture product from one place to another.
A huge amount of product is wasted due to non availability of transport.
4. Reduction of Cost :-
The use of machinery decreased the cost of production and due to this income of the farmer
increases. It also improves the quality of production.
5. Saving of Time :-
The use of machinery saves the time of the farmers which can be utilized for other purpose.
Many acre land can be cultivated with tractor in few hours.
6. Increase in Efficiency :-
The use of machinery increases the efficiency of the worker and rises the out put per worker. So
the income and efficiency of workers improves.
7. Water-logging Solution :-
In poor countries every year thousands acre land is destroyed by the water logging. We can
remove the water-logging through installation of tube-wells.
8. No Dependence Upon Animal Power :-
The use of machinery reduces the dependence upon animal power which is costly and slow.
There is always a fear of animal death when it is over burden.
9. Relief to Farmer :-
The use of machinery has relieved the farmer from hard work and has increased the production
of agriculture sector. Before the use of machinery ploughing and thrashing was a hard job.

Disadvantages of Farm Mechanization :-

1. Increase in Unemployment :-
In the poor countries the rate of unemployment is already high. So the use of machinery in
agriculture has increased the rate of unemployment in the country. It is useful in those countries
where labour is not available or labour is costly.
2. Not Suitable for Small Holding :-
The use of machinery is not profitable for small holdings. The majority of the farmers in
underdeveloped countries is the owner of small holdings. For instance, owner of a 5 acre land
can not purchase tractor.
3. Costly Machinery :-
In the poor countries farmer is unable to purchase the expensive machinery due to poverty.
While labour is cheap in the poor country. Costly machinery increases the cost of production.
4. Lack of Technical Knowledge :-
In the underdeveloped countries majority of farmers are uneducated and they cannot handle the
machines. So misuse of machinery causes a great loss to the farmer.
5. Lack of Foreign Exchange :-
Foreign exchange is required to make payments for imported machinery. There is a shortage of
foreign exchange in poor countries. So it becomes difficult to import the machinery.
6. Preparing Facilities :-
In most of developing countries maintenance and repairing facilities are not available in the rural
areas. The break down of the machinery will cause delay in agricultural operation.
7. Lack of Energy Resources :-
Oil, Gas, and Electricity are the main source of energy. These are essential for the farm
mechanization but there is shortage of these resources in the most of underdeveloped countries.
Prices of oil are increasing day by day.
8. Lack of Capital :-
In the developing countries farmers are very poor and they are unable to purchase the tractor and
heavy machinery.
9. Lack of Credit Facilities :-
In the poor countries, the credit facilities are inadequate so the farm mechanization can not be

Keeping in view the above facts we conclude that farm mechanization increases the agriculture
productivity. It increases the income, saving and investment of the farmers. In the other word we
can say that farm mechanization is very useful for the development of agriculture sector.
Now in the today modern world every country has also realized importance of farm
mechanization and has encouraged the import of machinery. Most of countries providing loans
on low rate of interest to the farmers.

Discuss the major food crops and cash crops of Pakistan and suggest measures to improve
Wheat, rice, maize, grams and pulses are included in the food crops. The cash crops are cotton,
tobacco and sugarcane.


1. Wheat :-
It is the basic food crop of Pakistan. The area of wheat cultivation is increasing in Pakistan. The
per acre yield has also increased due to the introduction of new wheat varieties and use of
modern technology. But still Pakistan is facing the food shortage problem. Now Pakistan has
achieved nearly self sufficiency in wheat. Smuggling of wheat to India and Afghanistan is still
2. Rice :-
It is also an important food crop for the people. It is also an important source of foreign
exchange. The average per acre yield is also increasing day by day and now it is 1800 kg per
hectre.There is a stiff competition in the export of rice. The government of Pakistan is trying her
best to improve the quality and quantity of the product. Research efforts are being made to
introduce new varieties. The flow of inputs and credit is also being increased. It has encouraged
the farmers and increased per acre yield.
3. Maize :-
It is an important food as well as raw material for edible oil production. It is also used in the
poultry food. The major portion of this crop is growing in NWFP. The average is 1250 kg per
hectre. The performance of this crop is very poor due to the inadequate facilities. There is a need
of proper attention to improve this crop. The main reason for the poor performance is the lack of
adequate seed supply and inadequate practices.
4. Gram and Pulses :-
These are an important of protein and balanced diet. In 1994-95, 1430 thousand hectre areas was
cultivated under pulses and production was 740 thousand millions tons. The yield per hectre was
530 kg. The production decreases due to inadequate rate. The government is providing new
varieties of seed to improve the production.
5. Barley and Millet :-
These are also food crops. These are cultivated in the dry and sandy areas. Now their
consumption has decreased. But it was used in the poultry feed. The per acre yield is low due to
inadequate fertilizer and poor land preparation.

1. Cotton :-
It is an important cash crop of Pakistan. Its yield per hecter is 770 kg. It is not only an export
earning crop but it is also provides raw material to local industry. The rate of production has
increased. The domestic consumption is 4.1 million bales. While 4.8 million bales are exported.
The increase in the production of cotton is due to the introduction of newvarieties of seed. The
government is also providing the credit facilities to the farmers for spray and fertilizers. To give
incentive to the farmers. Government also fixes the high price of cotton. It has encouraged our

2. Oil Seeds and Vegetable Oils :-
Rape, sunflower and soybeans crops are grown for oil. However the major source of domestic oil
production is cotton seed. The average yield of oil seed is 700 kg/hectre. If we want to improve
the production of oil seed we should import the better quality of seed from other countries.
Government should also provide the various incentives to the farmers for the cultivation of oil
seeds. We should pay special attention to the development, harvesting and thrashing of oil seeds.
It is an important cash crop of Pakistan. Pakistan has achieved the self sufficiency in early
3. Sugar Cane :-
In Pakistan sugar industry is one of the largest industries. It is cultivated on large area. The
average per hectre is 35 tons. There is a need of special attention to the sugar cane industry. At
present 1/3 of sugar-cane product is wasted in transit from farms to mills. Credit and inputs
facilities are also not sufficient. The excise duty should also be reduced to encourage the
farmers.Due to increase in sugar consumption Pakistan has to import the sugar from time to time.
Due to research and development of new varieties and agro economic practices have to be
imported. Inputs and credit both are readily available. We can increase the efficiency of sugar
mills through higher recovery and full use of by products.
4. Tobacco :-
Pakistan is meeting all the domestic requirements of tobacco and also exporting tobacco in the
form of cigarettes. It is cultivated in Sindh, NWFP and Punjab province. New varieties should be
developed to increase the production is mainly concentrated in lower Indus Basic Plane of the
Punjab. We are only exporting the refine quality of tobacco in the shape of cigarettes.

What are the main problems of agriculture sector? suggest remedies or What are the
causes of low agriculture productivity

Problems of Agriculture Sector or Causes of Low Per Acre Yield :-
Pakistan's economy is basically an agricultural. It contributes 23.87% of GDP. About 55%
labour force is engaged with this sector but there are many obstacles in way of its development.
Following are the main problems of agriculture sector :

1. Lack of Capital :-
Our farmer is poor and they can not use the latest machines and better seeds. He always remains
under debt. So due to lack of capital. production remains low.
2. Lack of Credit Facilities :-
Credit is important for the small and big farmers to improve the production. But in Pakistan
credit facilities are insufficient to meet the requirements. Second problem is that credit is
misused by the farmers.
3. Leasing System :-
Our leasing system also discourages farmer. The landlord and the tenant both can not take
interest in the improvement of land. So it affects the production badly.
4. Water Logging and Salinity :-
It is the main problem of the agriculture, in Pakistan a large area is affected by it which has
reduced our production particularly in the province of Sindh.
5. Smuggling :-
It is estimated that 25% food grains of Pakistan is smuggled to India and Afghanistan, so it
creates shortage of food in Pakistan.
6. Old Methods of Cultivation :-
Our farmer is uneducated and they uses the old methods of cultivation which causes the low
production. They are unable to use the modern technology due to non-availability of credit and
7. Natural Circumstances :-
In Pakistan, our agriculture products also remains low due to the unfavorable circumstances. For
example ,in 1973 and 1980, flood destroy our crops.
8. Inadequate Supply of Water :-
In Pakistan irrigation facilities are limited and due to this we can not cultivate our barren lands so
production remains low.
9. Increase in Population :-
In Pakistan rate of population growth is faster than the food production. It creates the food
shortage problem, and also problem of unemployment. Afghan refuges has also increased the
size of population.
10. Small Holdings :-
In Pakistan land is divided into small units due to law of inheritance. Small units can not be
cultivated properly and per acre yield remains low.
11. Single Cropping :-
There is low level of cropping intensity in the farm sector. The area under double cropping is
limited and production remains low.
12. Under Utilization of Land :-
In Pakistan there is only 25% cultivable land out of 80 million hectares and there is a huge waste
of natural resources. Due to this our production is low.

Measures to Improve the Agriculture Sector or Measures to Remove the Food Shortage

1. Extension in Cultivation :-
The agriculture product can be increased by increasing the cultivable area. It can be increased by
using the barren lands and including the water logging.
2. Intensive Cultivation :-
It means to cultivate the same areas which is already under cultivation by using better seeds and
modern techniques of production. It increases the production.
3. Supply of Inputs :-
The productivity can be increased by using the modern inputs like improved seeds and fertilizer.
The government should provide the adequate supply of these inputs to the farmers at the lower
4. Use of Machinery :-
There is a need of modern technology for the improvement of agricultural product. The
government of Pakistan has also realized the importance of machinery. So agricultural
development bank and agricultural development corporation is providing the machinery on low
5. Establishment of Credit Institutions :-
The government should establish the various financial institutions which may provide the credit
to the small farmers on low rate of interest. In Pakistan the government has established the
specialized credit institutions to provide the loan to the farmers.
6. Control on Waterlogged :-
The productivity of agriculture sector can increase by reclaiming the areas affected by water
logging. Tube wells should be installed in those areas.
7 Incentive to the Farmers :-
The prices of the agriculture product should be at such level that it may encourage the farmers. In
Pakistan rural development programme has been started to improve the economic condition of
the rural areas. The government also fixes reasonable prices of wheat, rice, cotton and sugar to
encourage the farmers every year.
8. Consolidation of Land :-
Small holdings in different areas can not be cultivated by one owner properly. So it is better to
consolidate all the pieces of land at one place. Keeping in view this problem the government of
Pakistan issued the act 1960 consolidation of land.
9. Market Facilities :-
The government should improve the agricultural market. The rural area should be linked with the
urban markets by the roads. The farmers may be able to get the fair return of their product.

Discuss the importance of agriculture for Pakistan

Importance of Agriculture in Economic Development :-
The role of agriculture in our economy is great indeed. The economy of Pakistan is still agrarian.
Agriculture sector provides the basic for the industrial sector. It is the main source of national
income. The role which agriculture sector plays in the economic development can be discussed
as under :

1. Base for Economic Development :-
The people of poor countries believes that the industrialization is necessary for the economic
development. Industrialization without an improvement in agriculture sector is not possible.
Many industries like cotton textile and sugar are directly dependent on agriculture sector. So it
provides base for economic development.
2. Source of Food :-
Pakistan is facing the food shortage problem and it can be solved only by improving the
agriculture sector. Agriculture sector provides food like, rice, wheat and fruits to the growing
3. Source of Employment :-
Agriculture employs 55% of the labour force in Pakistan. In Pakistan about 70% population is
living in rural areas and 80% of the rural population is engaged with this sector.
4. Important Source of National Income :-
Agriculture is an important source of national income in Pakistan. In 1949 its contribution in our
national income was 60%. Now its share has decreased to 23.87% of the GDP.
5. Source of Raw Material :-
In Pakistan agriculture sector provides raw material to the industries. Most of the industrial units
in our country get the raw material like cotton, sugar cane from agriculture sector.
6. Foreign Exchange Source :-
Exports of Pakistan mainly consists upon raw material. About 36% of the total foreign exchange
is received from agriculture. Cotton and rice are the main export items.
7. Source of Economic Prosperity :-
Economic prosperity can be achieved through agriculture. So the improvement in agriculture is
essential to increase the income of the people. The standard of living is related to the agriculture
8. Source of Manpower :-
Agriculture families provide young men for the armed forces of our country. Surplus rural
manpower is shifting to the industries and other countries to earn the foreign exchange. Due to
the absorption of surplus workers in industries their income increases.
9. Source of Revenue :-
Agriculture is also the source of revenue for the state. Government imposes taxes on land and
agriculture products to increase the revenue. So it is also the main source of revenue.
10. Source of Capital Funds :-
An improvement in agriculture leads to an increase in the income of the farmers which increases
the saving and investment in the country in various sectors.
11. Extension of Market :-
The development of agriculture sector extends the agriculture and non-agriculture market. The
increase in the farmer's income will increase the demand of various industrial products which
encourages the further production.
Keeping in view the above facts we cannot ignore the agriculture and the agriculturist in any
development programme. No doubt agriculture sector is the back bone of our country.