The Journal ofDeveloping Areas 28 (July 1994) 46~86

The Impact of Infrastructure onPakistan's Agricultural Sector

ROBERT E. LOONEY

Agriculture is the largest of the sectors contributing to economic activity inPakistan; it provides over 25 percent of the country's Gross Domestic Product(GOP), employs over 50 percent ofthe labor force, and sustains 75 percent of thepopulation. The sector directly accounts for over 25 percent oftotal exports, withcotton textiles and other agro-based manufactured exports accounting for anadditional 35 to 40 percent of total exports. In FY 1989/90 the sector accountedfor over 15.3 percent of the public sector development plan (including thefertilizer subsidy), 18.5 percent of private fixed investment, and 11 percent oftotal fixed investment. I

Because ofits importance, Pakistan's agricultural sector has been examined atlength.2 While not denying the significance of factors such as pricing policies,subsidized inputs, the Green Revolution, farm size distribution and yields, landreform efforts, and the impact of research and extension on crop yields, thepurpose of this paper is to examine a relatively neglected area likely to be criticalto the sector's long-run viability-infrastructural development. 3 In particular, itseeks to determine what role infrastructure has played in the sector's growth. Hasinfrastructure initiated growth, or passively responded in order to alleviatebottlenecks created by growth? Have deficiencies in infrastructure been a majorconstraint on the sector's expansion? If so, what areas of infrastructure appearmost productive for expanding future agricultural output?

Trends in Agricultural Output

Pakistan's agricultural sector has alternated periods ofvigorous output growthwith years of stagnation or productivity decline. In the 1950s low output growth

Professor, National Security Affairs, Naval Postgraduate School, Monterey, CA 93943.

© 1994 by Western Illinois University. All rights reserved.

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470 RobertE.Looney

was due to the disruptive effects ofpartition from India, water shortages resultingfrom a water dispute with India, and bad weather (drought in 1950/51 and 1951/52,and floods in 1954/55 and 1955/56).4 The Green Revolution spurred recovery inthe early 1960s. Growth became more intense in the late 1960s, and agriculturaloutput grew at an average annual rate of 5.6 percent for a decade.

In the early 1970s agricultural growth slowed owing to unfavorable weather(floods in 1972/73 and 1973/74, and drought in 1974/75)/ and because the GreenRevolution's gains (new varieties ofwheat, grown with controlled water, fertilizers,and pesticides) leveled off. The resumption of rapid growth in agriculturecoincided with the launching of Pakistan's Fifth Five Year Plan (FY 1979/83) inFY 1978/79. Average annual growth in agricultural value added was greater than4 p.ercent during the plan period, nearly twice the 2.3 percent per annum rate ofthe preceding five years.

The Sixth Plan (FY 1984/88) focused on attaining greater self-sufficiency inagriculture. The major components of this strategy were diversification ofcrops,strengthening the institutional framework, structural adjustments in the pattern ofproduction and distribution, adoption ofbetter agronomic practices, modernizationof agriculture, and increasing productivity (especially of small farmers) in orderto create exportable surpluses.6

The average annual growth rate of the agricultural sector during the Sixth Planperiod was 3.8 percent as against a target of 4.9 percent. Cotton productionincreased substantially owing to the use ofhigh-yielding varieties ofseed, higherfertilizer application rates, and improved plant protection measures. The productionof sugarcane, rice, and wheat, however, were below the targets set in the plan.

The decline in sugarcane production may be attributed inter alia to the failureofresearch institutes to develop high-y'ielding varieties for general cultivation atattractive support prices for sugarcane from 1981 to 1986, and the lack ofcooperation between sugar mills and cane producers. In the case of rice, ashortage ofwater at the transplanting stage, low rainfall, pest attacks, the lack ofa high-yielding variety of rice, and monopoly procurement of rice at low pricesresulted in decreased production. Finally, wheat production was affected byadverse weather in 1986/87 and 1987/88. The overall performance ofthe livestocksubsector was close to 6 percent per year as envisaged in the plan. 7

Over the past decade, the agriculture sector has undergone major technologicaland policy transformations. By introducing technical changes offering productionincentives, and increasing the availability offertilizer, water, and credit, Pakistanhas increased its exportable surplus of cotton and is close to self-sufficiency inwheat. For the 1980-88 period the corresponding figure was 4.3 percent, up from3.3 over the 1965-80 period (table 1). Since then overall growth has beenmaintained at similar levels (table 2). As in most semiarid developing countries,however, considerable variations exist in anpual and seasonal production owingto adverse weather, pest incidence, and uncertain irrigation supply.8

Pakistan's agriculture is also characterized by regional disparities: Sindh andPunjab are the granary of Pakistan, whereas North West Frontier Province(NWFP) and Balochistan are the food-deficit regions. Average wheat yields in