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E Y E O N Y E A R 2009

A G R I C U LT U I S E C TO R

IN THE YEAR 2009

Inspi te of s t ructural shif t towardsindustrialization, agriculture sectoris stillthe largest sector of the economy with

deep impact on socio-econom ic setup . Itis the source of the livelihood of almost44.7 percent ofthe total employed labourforce in the country. With the presentcontribution to GDP at 21.8 percent,agriculture sector is the mainstay oftherural economy around which socio-economic privileges and deprivationsrevolve. Thus given for its stretched

distinct forward and backward linkagesparticularly with the industrial sector,a large impact on balance of payments

and highest share in employment,agriculture sector has assumed anadded significance in backdrop ofglobal food crunch and food security.No strategy of economic reforms canbe realized without sustained andbroad based agricultural developmentwhich is critical for raising livingstandards, alleviating poverty assuring

TabI 2.1 Agriculture Growth (Percent)

Year

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09(P)

Agriculture Major MinorCrops Crops

4.1

2.4

6.5

6.3

4.1

1.1

4.7

6.8

1.7

17.7

-3.9

7.7

-6.4

7.7

1.9

3.9

1.5

0.4

-1.0

10.9

3.6

P = Provisional

Soure: Fed eral Bu reau of Statistics

food secur i ty, gen erat in g buoy antmarket for expansion of industry andse rv ices , and making subs tan t i a l

contribution to the national economicgrowth.

Agriculture has grown at an averagerate of 4.1 percent per annum since2002-03 with variations, from 6.5percent to 1.1 percent. The fluctuationin agriculture has largely stemm ed froma fluctuation in major crops which intum is the result of the behaviour ofmother nature, pest attacks on crops.The trends in agriculture growth since2002-03 are reported in table 2.1

The performance of agriculture sectorhas been stronger than expected during2008-09 as against the target of 3.5percent and last year's performance of1.1 p ercent, overalI agriculture this yearis estimated to grow by 4.7 percent onaccount of bumper wheat, rice and maizecrops estimated as 23.42. 6.9 and 4.0million tons respectively.

Hence major crops accounting for 33.4percent o agricultural value addedregistered stellar growtl of 7.7 percentas against negative 6.4 percent las year.Minor crops contributing 12.0 percentt< overall agriculture grew by 3.6percent as agains 10.9 percent last year.The performance o livestock - thesingle largest contributor to overalagriculture (51.8 percent) grew by 3.7percent ir 2008-09 as against 4.2 percentlas t year. The f ishery perfo rme d

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E Y EON YEAR 2009

positively at 2.3 pereent;thougl the previous yearsgrowth stood at 9.2 percentForestry has beenexper ienc ing nega t ivegrowth since 2003-04 andthis year too has postednegative growth of 15.7percent in a row.

Pak is tan ' s agr icu l tu ra loutpu t is close ly linkedwith the supply ofirrigation water. As shownin Table 2.2, against thenormal surface wateravailability at canal headsof 103.5 million-acre feet(MAP), the overall (bothfor K harif and Rabi) wateravailability has been lessin the range of 2.5 percent(2005-06) to 20.6 percent(2004-05) . Re la t ive lyspeaking, Rabi seasonfaced more shortage ofwater than Kharif during these years.

During the current fiscal year (2008 -09) ,the availability of water for Kharif 2008(for the crops such as rice, sugarcane andcotton) has been 0.3 percent less thanthe normal supplies and 5-5 percent less

than last yea r's Kharif (see Table 2.2).The water availability during Rabiseason (for major crop such as wheat),is, however, estimated at 24.9 MAP,

which is 31.6 percent less than thenormal availability, and 10.7 percentless than last year's Rabi.

i. Crop Situation

There are two principal crop seasonsin Pakistan, namely the "Kharif, thesowing season of which begins inApri l -June and harvest ing duringOctober-December; and the "Rabi",

fa b le 2.2 Actual Surfce wa ter availability

Period

Average system usage2002-032003-042004-052005-062006-072007-082008-09 (P)Source: IRSA

Kharif

67.162.865.959.170.863.170.866.9

Rabi

36.425.031.523.130.131.227.924.9

Totalover the avg.

103.587.897.482.2100.994.398.791.8

Million Acre Feel

% incn/decr.

..-15.2-5.9-20.6-2.5-8.9-4.6-11.3

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E Y E ON Y E A R 2009

which begins in October-December andends in April-May. Ric e, sugarca ne,cotton, maize, mong, mash, bajra andjowar are "Kharif crops while wheat,gram, lentil (masoor), tobacco, rapeseed,barley and mustard are "Rabi" crops.

Major crops, such as, wheat, rice, cottonand sugarcane account for 89.1 percentof the value added in the major crops.The value added in major crops accountsfor 33.4 percent of the value added inoverall agriculture. Thus , the four majorcrops (wheat , r ice , cot ton, andsugarcane), on average, contribute 29.8percent to the value added in overallagriculture and 6.5 percent to GDP. Theminor crops account for 12.0 percent ofthe value added in overall agriculture.

Livestock contributes 51.8 percent toagricultural value added - much m ore thanthe combined contribution of major andminor crops (45.4%).

MAJOR CROPSCotton :

Cotton is the important non-food cashcrop and a significant source of foreignexchange earnings. Cotton accounts for7.3 percent of the value added in

agriculture and about 1.6 percen t to GDP.The crop was sown on the area of 2820thousand hectares, 7.7 percent less thanlast year (3054 thousand hectares). Theproduction is estimated at 11.8 millionbales for 2008-09, higher by 1,1 percentover the last year's production of 11.7mil l ion bales . However, the cot tonproduction was 14.5 percent less than thetarget of 14.11 million bales mainly due tothe shortage of irrigation water, less useof DAP to cotton crop, attack of CottonLeaf Curl Virus (CLCV), mealy bug andwhite fly on the crop and last picking ofcotton was affected due to higher pricesof wheat announced by the Govemment.

Bt, Cotton :

Cotton Leaf Curl vims (CLC V) has beenthe major problem in achieving the highercotton production. In order to improveper hec tare yield of cotton crop , Ministry*of Food & Agriculture (MINFA) has been

working on a two pronged strategy i.e.,developing the technology throughindigenous capabilit ies as well asinvitingthe Multi-National Companiesto bring in the latest cotton productionand protect ion technologies for

enhancing cotton production in thecountry.In this respe ct, letter of intent(LOT ) and mem orandum ofunderstanding has been signed withMonsanto company for introductionof latest technology (bollg ard -II) in thecountry to maximize cotton production.National Biosafety Com mittee (NEC ) ofMinistry of Environment has alsoauthorized biosafety clearanc e to eightcotton varieties with bollard-! trait.

Area, production and yield of cottonfor the last five years are givenIn Table2.4 and Fig. 2.1.

World Cotton Situation

World cotton production is projectedto decline by about 10 percent in 200 8-09 , to 108.8 million bales (480 lbs each),mainly due to decline in world cottonarea caused by increased competitionfrom alternative crops. Significant

portions of cotton area were divertedto grains and oilseed production dueto more attractive prices than cotton.The world yield is also esti ma tedsi ight ly down mainly due tounfavorable weather. The world yieldis projected down to 763 kilograms perhectare fromthe record of 788 kilogramsper hectare reached in 2007-08. Thede cl in e in world cot to n area isregistered for the second consecutiveseason.

The projected decrea se in worldproduction in 2008-09is also driven byan expected fall of production in theUnited States to 13.0 million bates from19.2 million bales of last year.

Table 2.3

Year

2003-04

2004-05

2005-06

2oown

2007-08

2008-09 (P)

Production of Major C rops (000 Ions)

Cotton

10048(-1-6)

14265(42.0)

13019(-8.7)

12856(-1.2)

11655(-9.3)

11819(1.4)

Sugar

53419(2.6)

74244(-11.6)

44666(-5-5)

54742(22.6)

63920(16.8)

50CW5-(21.75)

Rice

4848(8.3)

5025(3.6)

5547(10.4)

5438(-2.0)

5563(2.3)

6952(24.9)

Maize

1897(92)

2797(47.4)

3110(112)

3088(-0.7)

3605(16.7)

4036(11.9)

Whe:

19500(1.60

21612(10.8)

21277(-1.6)

23295( 9 ^ )

20959(-10.0)

23421(11.7)

P = Provisional(Juty-March)

Source: Ministryof Food and Agricuture

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