Energy Crisis in Pakistan

Serial No. Topics Page No. 1 Introduction Objectives Methodology 1 2 Land Utilization 2 3 Significance of Agriculture Sector 2 4 Comparative analysis of Agriculture Sector 4 5 Current Status of Agricultural Technology 5 6 Emerging Issue 6 7 Solution of Issue 7 8 Adoption of New Technology 8 9 Technology & Growth 8 10 Conclusion 9 11 Reference 10 Table of Contents Technological Development in Agriculture Sector in Pakistan: Introduction Pakistan is an agrarian country in south Asia. More than 55% population of this country linked with the agricultural sector and on the other hand in GDP proportion this sector has participated just only 22%. In this report we will review all the aspects of this sector Agriculture has an important role in generating economic growth. Agriculture affects the economy in three ways namely, first, it provides food to consumers and fibers for domestic industry, second, it is a source of scarce foreign exchange earnings and third, it provides a market for industrial goods. Historical Growth Performance Agriculture Growth Years Percentage 1960's 5.1 1970's 2.4 1980's 5.4 1990's 4.4 2000's 3.2 2010s 2.0 Source: Federal Bureau of Statistics Despite its critical importance to growth, exports, Table incomes, and food security, the Agriculture sector Agriculture has been suffering from the secular decline (Table 1). Years, Percent Growth in the sector, particularly in the crop sub‐ sector, has been falling for the past three decades. Productivity remains low, with yield gaps rising Critical investments in new seeds, farming technology and techniques, and the water infrastructure are not being made. Without major new investments in Agriculture, it is unclear how prepared Pakistan would be to tackle emerging challenges such as declining water availability and climate change Objective of the Study: In this study we try to find out the correlation between technological development and GDP growth in the agricultural sector. In this regard we also study the current status of technology of agriculture sector of Pakistan and their role in the development, how the Government of Pakistan plays their role to improve this sector. Furthermore we study the previous performance of this sector in technological point of view. Methodology For this report we choice the content analysis study. Because such type of study is suitable for this report. For content analysis we go through an economic survey of Pakistan 1980 to 2012. Some data we collect to the Federal Bureau of Statistic’s reports. We also add different research reports and articles to make it more authentic. All article reports, and economic survey’s references giver in Reference chapter Land Utilization Cultivated Area Million Hectares Years Total Area Reported Area Forest Area Not Available Area for Cultivation Culturable waste Current fallow Net Area Sown Total Area Cultivated Area Sown more then once Total Cropped Area 1 2 3 4 5 6 7 8 9 10 11 1980-85 79.61 57.61 3.46 24.34 8.85 4.85 16.11 20.96 5.71 21.82 1986-90 79.61 58.06 3,48 24.35 8.83 4.95 16.45 21.40 5.99 22.44 1991-95 79.61 58.50 3.60 24.44 8.91 5.42 16.13 21.55 6.01 22.14 1996-00 79.61 59.28 3.78 24.45 9.09 5.67 16.29 21.96 6.45 22.74 2001-05 79.61 59.48 4.02 24.39 8.94 6.86 15.27 22.13 7.51 22.78 2006-10 79.61 57.08 4.21 23.45 8.20 4.93 16.28 21.21 7.52 23.80 Data shows land utilization for cultivation in Pakistan till 1980 to 2010 Source: Federal Bureau of Statistics 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 and Pakistan has one of the highest proportions of the irrigated cropped area in the world. Most of Pakistan is classified as arid to semi-arid because rainfall is not sufficient to grow agricultural crops, forest and fruit plants and pastures. About 68 percent of the geographical area has an annual rainfall of 250 mm, whereas about 24 percent has an annual rainfall of 251 to 500 mm. Only 8 percent of the geographical area has an annual rainfall exceeding 500 mm. Hence supplemental water is required for profitable agricultural production, either for irrigation or through water harvesting. Significance of the Agricultural Sector in the Economy Years No of Tube wells Production of Tractors Production of Meat (000 Tons) Milk (000 Tons) Fisher Production (000 Tons) Total Forest Production (000 Cu. mtr.) 1980-85 339,840 13,841 1,581 15,481 483.0 1,072 1986-90 374,099 16,628 1,872 17,120 621.7 691 1991-95 463,463 17,063 2,114 18,966 541.9 684 1996-00 609,775 35,038 1,957 25,566 614.8 364 2001-05 984,294 44,095 2,271 29,438 580.6 282 2006-10 921,229 69,245 2,965 36,299 925.7 356 This table show agricultural growth and its proportion in economy Source: Federal Bureau of Statistics Agriculture is an important sector, providing food to the fast-growing population of the country. According the 1998 census, the total population of Pakistan is 130 million. With a population growth rate of 2.6 percent there is a net addition of 3.4 million people each year. In 1947 the population of Pakistan was 32.5 million; in 50 years it has increased fourfold. During this period the production of wheat, the major food crop, has increased only 2.9 fold. During 1970/71 the amount of wheat imported was 0.3 million tons; it has increased to 4.1 million tons in 1997. Tremendous efforts have been carried out to narrow the gap between population growth and food production. Agriculture contributes about 24 percent of the gross domestic product (GDP) and employs 47 percent of the national employed labor force. The contribution of the agricultural sector to the GDP has declined gradually since Pakistan came into existence, from over 50 percent in 1949-50 to about 24 percent in 1996-97. Agriculture still remains the major sector of the GDP composition. A major part of the economy depends on farming through production, processing and distribution of major agricultural commodities. In foreign trade agriculture again dominates, through exports of raw products such as rice and cotton and semi-processed and processed products such as cotton yarn, cloth, carpets and leather production .Agriculture is essential for sustainable improvements in internal and external balances. Of the total export earnings, the share of primary commodities and processed and semi-processed products constituted almost 60 percent of the total exports. There have been some structural changes over time, but the contribution of agro-based products has more or less sustained its position. Comparative Analysis of Agriculture Sector Development Now we will put a light on the performance of the agricultural sector. From 1947 to 1953, agriculture remained sluggish due to: (1) Influx of refugees from India, (2) Allotment of land to non- agricultural refugees which reduced the interest of farmers and, (3) Lack of technological change etc. In the six year program (1951-57) which was suspended for two years before its completion, emphasis was laid for the establishment of industries. Agriculture remained stagnant during this period, rather declined due to an increase in water logging and salinity. Pakistan had to import over 1 million of tons of wheat in 1952 to meet the acute food shortage. The Planning Machinery then, realized that agriculture shouldn’t remain neglected and it should be developed along with the industry. In the First Five Year Plan (1955-60), it was mentioned that with increasing population, rapid industrialization, growing urbanization and substantial increase in money supply, a constant and rapid increase in food grain was essential to maintain economic stability and to provide a base for economic growth. This sector, however remain neglected till 1958 due to various reasons. The lack of adequate institutional credit system, absentee landlordism, uneconomic holdings, defective land tenure system etc. adversely affected the agricultural productivity. The average annual growth rate of agriculture sector was 1.3% from 1955-58. In the First Plan, the targets of increasing food grain production by 9% and cash crops from 15% to 33% were not achieved. The increase in the food supply was negligible. The increase in production of cotton was 2% and of jute 5% only. In the Second Five Year Plan 1960-65, the Government was determined to achieve self sufficiency in basic production raising dietary standards through increased supply of fish, fruit, vegetable, livestock etc. expanding the output of cotton and jute to the maximum extent possible. In order to achieve the above objectives, it took a few effective steps like the agrarian reforms, the adoption of modern technology, and the provision of credit facilities to the farmers etc. During the Third Five Year Plan 1965-70, there was a remarkable shift in agricultural until 1968. The use of adequate water and improved practices in the cultivation of various crops raised the agricultural production by 6.2% in 1961-62 to 11.75% in 1967-68. From 1968 to 2002, the agricultural sector indicated a fluctuating growth pattern. The agricultural production on the whole presented a gloomy picture. The growth rate declined from 4.5% in 1968-69 to 2.5% in 1976-77. There were various factors for the decline in agricultural output. The strained relations between the tenants and the landlords, salinity and water logging, high prices of inputs, natural calamities, pest and plant diseases, use of low yield seeds etc., etc. were responsible for low yield in the country. Status of Agricultural Technology in Pakistan Years Crops/Area (Million hectares) Improved seed Distribution (Tons) Water Availability (MAF) Fertilizer off-take (000 N/T) Credit Distribution (R.S Million ) 1980-85 21.82 83.27 119.62 1892.9 14,915 1986-90 22.44 63.93 125.12 21,47.61 16,198 1991-95 22.14 76.87 129.65 21,83.10 22,373 1996-00 22.74 194.30 133.28 2,832.00 39,688 2001-05 23.13 226.07 137.78 3,804.00 137,474 2006-10 23.80 305.82 142.00 3,426.00 166,335 Data shows the technological development performance Source: Federal Bureau of Statistics Agricultural technologies have popularly been classified as mechanical technologies and biological technologies. Mechanical technologies relate generally to those technologies which are embodied in machines and appliances such as tractors, tube-wells, threshers, diggers, combine, etc. used in performing different farm operations. Typically, mechanical technologies enable farmers to expedite farm operations and thus enable the same labor to cultivate more land and increase cropping intensity. Similarly, the diffusion of these technologies results not only in higher cropping intensity but also in quick planting and harvesting of crops, and handling of the output. Although these technologies have a positive effect of cultivated area and cropping intensity but they do not necessarily increase yield of crops. Biochemical technologies, on the other hand, relate to new, more input responsive seed varieties, use of chemical fertilizer and controlled application of irrigation water. Application of these technologies, in general, induces the substitution of labor and industrial inputs of land. Besides, these technologies increase crop yields. Biological technologies have also been regarded as the cause and effect of the Green Revolution that occurred during 1960s and 1970s in different countries of the world. In Pakistan, the Green Revolution started during the early 1960s, although some of the modern inputs were introduced in the late 1960s. The main ingredients (inputs) of the Green Revolution witnessed here were identified as HYVs, fertilizers, pesticides, tractors and irrigation. Emerging issues of Agriculture Sector in Pakistan No mechanism has been adopted to eradicate the soil erosion and even after harvesting nothing is done to improve or restore the soil energy. Therefore, the fertility of soil is decreasing day by day. The thickness of the fertile layer of soil in Pakistan is more than 6 inches but the average yield is lower than other countries where a layer of fertile soil is only 4 inches. Water wastage is very high in our country. The archaic method of flood irrigation is still in practice in the whole of the country which wastes almost 50 to 60 percent of water. A new irrigation system called drip irrigation system has been introduced in many parts of the world. This not only saves water but also gives proper quantity of water according to the needs of plants. Owing old methods of cultivation and harvesting, Pakistan has low yield per acre that means the average crop in Pakistan is just 1/4th of that of advance states. Whereas Nepal, India and Bangladesh are using modern scientific methods to increase their yield per acre. For this purpose, these states are using modern machines to improve their yield.  Water logging and salinity is increasing day by day. No effective measures have been taken to curb it. As the storage capacity of the dams is decreasing so the water availability per acre is also decreasing. Therefore, the farmers are installing more and more tube wells to irrigate their crops. This is why salinity is becoming the major issue in most parts of Punjab and Sindh. The only mean of communication in rural areas is T.V or radio so it is urgently needed on the part of these mass communication resources to air the programs related to the new agricultural techniques and allied sciences. But these programs should be telecast in regional or local languages. Because lack of guidance is the main reason of farmers backwardness. The communication gap between well qualified experts and simple farmers has not been bridged. Availability of these experts is not ensured in rural areas as they are reluctant to go there. Pakistan is rich in fertile land yet the land is being wasted in different ways. 79.6% million hectares of land is cultivable whereas only 20.43% million hectares is cultivated. Improved Technology for Solution New technology is needed for areas with shortages of land or water, or with particular problems of soil or climate. These are frequently areas with a high concentration of poor people, where such technology could play a key role in improving food security. Agricultural production could probably meet expected demand over the period to 2030 even without major advances in modern biotechnology. However, the new techniques of molecular analysis could give a welcome boost to productivity, particularly in areas with special difficulties, thereby improving the incomes of the poor, just as the green revolution did in large parts of Asia during the 1960s to 1980s. Needed for the twenty-first century is a second, doubly green revolution in agricultural technology. Productivity increases are still vital, but must be combined with environmental protection or restoration, while new technologies must be both affordable by, and geared to the needs of, the poor and undernourished. Biotechnology offers promise as a means of improving food security and reducing pressures on the environment, provided the perceived environmental threats from biotechnology itself are addressed. Genetically modified crop varieties - resistant to drought, water-logging, soil acidity, salinity and extreme temperatures - could help to sustain farming in marginal areas and to restore degraded lands to production. Pest-resistant varieties can reduce the need for pesticides. However, the widespread use of genetically modified varieties will depend on whether or not food safety and environmental concerns can be adequately addressed. Indeed, the spread of these varieties, in the developed countries at least, has recently slowed somewhat in response to these concerns, which must be addressed through improved testing and safety protocols if progress is to resume. Meanwhile, other promising technologies have emerged that combine increased production with improved environmental protection. These include no-till or conservation agriculture, and the low-input approaches of integrated pest or nutrient management and organic agriculture. Adoption of New Technologies A price policy may serve as an incentive for farmers to increase their production. There is convincing evidence in Pakistan that a shift from an unfavorable to a favorable price policy for agriculture was the main motivating force behind the Green Revolution in Pakistan. Some important dimensions of the domestic agricultural price policy are discussed below. Governmental role of Technological Development in Agricultural Pakistan has subsidized agricultural inputs since the mid-1950s. Initially, chemical fertilizer was subsidized in order to popularize its use. The list of subsidized inputs and the rate structure of the subsidies were expanded in later years so that towards the end of the sixties, almost all the agricultural inputs including fertilizers, insecticides, seeds, irrigation water, tube-well installations, and the operation and purchase of tractors and tractor-related equipment was subsidized in one or the other form (Aresvik, 1967; Kuhnen & Fritjof, 1989). In the 1970s, subsidies were curtailed to some extent in response to input price increases that occurred in the wake of world worldwide recession, oil embargo, credit crunch, war with India, and steep devaluation of Pakistani Rupee (Chaudhry, 1982). Although subsidies were applied to most inputs during the seventies, the government decided to under pressures from the IMF and the World Bank resolutely remove them from the beginning of the 1980s (GOP, 1980). As a consequence, there was a total withdrawal of subsidy from seeds, insecticides, tube wells, and tractors. Phased withdrawal of fertilizer subsidy was also undertaken, culminating in the case of nitrogenous fertilizers in 1984-85 and in the case of phosphorus and potash fertilizers in 1989-90 (World Bank, 1996). Technology and Growth It is variously argued that the technology makes a positive contribution to higher growth rate of agriculture. For instance, there is documented evidence of private tube-wells installations increasing cropping intercity by 50 percent (Muhammad, 1965). The short duration of the high-yielding varieties (HYVs) of wheat and rice and the availability of chemical fertilizers have produced similar results (Gill, 1973) The quickness of operations permitted by tractor cultivation augmented the cropping-intensity effects of tube-wells and HYVs (Lawrence, 1970). The yield-increasing effects of the above technologies were equally important. Each of the tube-wells and HYVs of wheat and rice raised crop yields by 50 percent (Muhammad, 1965; Gill, 1973). The new varieties of cotton, introduced in the 1980s, have a yield potential of 3 to 4 times that of the traditional varieties (Chaudhry 1994 and Chaudhry 1995). Conclusion This study attempts to assess the structural change, technological innovations, and nature of technological change in the agricultural sector of Pakistan. Firstly, we saw the impact of land reforms on the distribution pattern of the cultivated land in the country surprisingly; the land reforms introduced in Pakistan so far have exercised no direct significant impact on its agrarian structure. They have not made any significant increase in the cultivated area of the country barring a slight increase in the early seventies. However, they seem to have induced conversion of large into small farms. As such, the proportion of area under small farms has increased and the ratio of tenancy to ownership has decreased to some extent The use of modern varieties of rice and wheat has increased on all farms in the whole of Pakistan. Relatively, the use of the new varieties of wheat and rice is more widespread in Punjab and Sindh than in other provinces. Similarly, the use of fertilizer, pesticides, etc. has also increased over time indicating the occurrence of technological change in the agricultural sector of the country Chronological data show that agricultural productivity has been growing due to use of new varieties of seeds and application of modern technologies. Application of modern techniques of production shows that, first, an important part of productivity growth of land is attributed to use of new seeds in Pakistan. Second, land reallocation toward high value crops is the key source of agricultural growth during the post-Green Revolution period. Predictable patterns of the engine of productivity growth of land are generally consistent with prospect that use of new varieties of seeds and improvement in agricultural technology are important factors to the realization of farmers ‘economic rationality. References: Ahmad, Bashir, & Chaudhry M. A. (1987) Profitability of Pakistan‘s Agriculture. The Pakistan Development Review 27:4, 457-470. Aresvik, & Var, (1967). Strategy and Outlook for Agricultural Development in West Pakistan. Unpublished paper, prepared for the ―Symposiium on the Strategy of Agricultural Planning in Developing Countries. At the All-Pakistan Science Conference held at the University of Sindh, Jamshoro. Bastin, Geoffrey, Q., Sadia,S., & Kazmi, Z. A. 2008. Wheat-flour Industry in Pakistan. Competitiveness Support Fund. Islamabad, Report discusses food security and supply and demand situation of wheat and wheat flour. Chaudhry, M. G. (1982). Green Revolution and Redistribution of Rural Incomes: The Pakistan Development Review, 21:3 173-205 Chaudhry, M. G. (1989). Structural change in Pakistan’s Agriculture. Islamabad: Pakistan Institute of Development Economics. Chaudhary, M. A. (1994). Regional Agricultural Underdevelopment, Green Revolution and Future Prospects, (A case study of Pakistan). Paper presented at 10th Annual General Meeting, Pakistan Institute of Development Economics. Chaudhry, M. G. & Shamim A. S. (1995) Agricultural input Subsides in Pakistan: Nature and Impact. The Pakistan Development Review.34:4, 711-22. Chaudhary, M. A. (1996). Perspective On Development Planning In Pakistan Bilal Books (Lahore) Pp.202-245. Ghulam, M. (1965). Private Tubewell Development and Cropping Patterns in West Pakistan. The Pakistan Development Review, 5:1, 1-53. Government of Pakistan, (1980). National Agricultural Price. Islamabad: Ministry of Food, Agriculture and Cooperatives. Food and Agriculture Division. 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