Rs 70 billion pumped into rural economy
The Nation, From Our Correspondent
11/25/2002

FAISALABAD–The government has pumped in Rs 70 billion to the rural economy by procuring 8.3 million tons of wheat. In a three-year progress report, it was claimed that outgoing government had introduced fundamental reforms in the agriculture sector. Progress made due to various policies and programmes adopted so far in this sector are most impressive.
Previously, Pakistan, on an average, was importing two million tons of wheat at a cost of $ 300 million per annum. The present government gave incentive to the growers by raising the purchase price of wheat from Rs 240/- to Rs 300/- per 40 kg. Farmers responded to this initiative positively responded and made Pakistan an exporting country in one year. Our annual exports are 1-2 million tons; worth $ 230 million. Government was able to pump in Rs 70 billion to the rural economy by procuring 8.3 million tons of wheat.

Pakistan has faced a severe drought over the last few years. Responding to water-shortage, the cropping pattern was changed. Cotton was introduced in Balochistan on an area of 100 thousand acres, substituting rice. This yielded 120 thousand bales of good quality cotton, free of contamination. Rice production was discouraged in Pat Feeder canal command area, the right bank of Indus River in Sindh and in the cotton growing belt of Southern Punjab. Improved quality of the produce has been attained through incentives. A cotton programme was launched, offering incentive prices to the growers. Plans are underway to provide premium prices for high recovery of sugarcane and improved quality of wheat for export purposes.
Government tried to remove market imperfections by allowing free movement of wheat across provincial/national frontiers. A credit line for the private sector for building of storages and commodity procurement, improving market information system and building cold storage chains has been established.
Livestock provides 25 to 30 per cent of its income to the rural economy. It is also a net source of earning foreign exchange. 12.3 per cent exports of the country are earned through livestock and livestock products. Realising this fact, the government has attached high priority to this sector and launched livestock development programmes for improvement of animal nutrition, animal health and disease control, improvement of marketing for livestock and livestock products, establishment of modern slaughter houses and liberalisation of the trade policy to allow export of live animals and animal products.
To counter the effects of years of drought, the federal government decided to provide a grant of Rs 1 billion to the provinces to provide subsidy for installation of tubewells, both shallow and deep, in areas of extreme difficulty of water supply for irrigation and drinking purposes. The blue print of the scheme has been completed and these tubewells will be installed during the next year.

A record sale of 98000 tractors in 1999-2001 was achieved by the private sector as a result of government policy to promote farm mechanisation through provision of liberal credits and concessionary tariff structure (zero duty, zero sales tax). The annual sales prior to this period were 15000 tractors. In addition,
280 combine harvesters, arranged under grants were supplied to farmers at 50 per cent concessionary rate. This has helped reduce post-harvest losses and also improve quality of the product.
The credit ceiling for agricultural sector has been raised from Rs 40 billion to Rs 60 billion and a simplified one-window operation has been introduced in Punjab. Other provinces have been asked to follow suit. Commodity credit is now being advanced for long gestation crops like tea and oil palm in order to enable the farmers to earn livelihood during the period of no crop returns.

Pakistan has to spend 700 million dollars per annum on the import of edible oil. A number of new initiatives have been taken to bridge the gap between consumption and domestic production. These include a blending ratio of 35:65 for soft and hard oil to improve quality of ghee as well as to generate demand for soft oil. Solvent oil extraction industry was persuaded to purchase farmers’ produce at Rs 560/- per 40 kg. As a result sunflower area increased in Sindh and Punjab. Sarson is being replaced with non-toxic crop, Canola (Sweet Sarson). The current area under Canola is 60 thousand acres, with a production of 18 thousand tons. Local hybrids of Sunflower and Canola are being developed, and cultivation of olive through grafting and top working is being introduced. A number of water reservoirs are being constructed to expand water-holding capacity of the country. These include Gomal Zam, Mirani Dam, Thai Flood Canal, and Katchi Canal/Rabi Canal. These water bodies would help bring additional area under cultivation and usher in an era of prosperity to the farming communities in deprived areas.

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