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Agriculture Sector Performs Poorly, Gap Between the Rich and Poor Widens in Pakistan

by Gopalan on  June 12, 2008 at 11:40 AM General Health News   - G J E 4
 Agriculture Sector Performs Poorly, Gap Between the Rich and Poor Widens in Pakistan
The agriculture sector performed poorly and grew by only 1.5 per cent in Pakistan during 2007-08 against the target of 4.8 per cent. Also the gap between the rich and the poor has widened. Food insecurity is haunting the country.
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Major crops and forestry declined by three per cent and 8.5 per cent respectively. Livestock, minor crops and fisheries somehow averted an apparent collapse of the entire agriculture sector, Dawn newspaper reports.

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Cotton, which accounts for about 1.6 per cent of gross domestic product (GDP) and a major source of foreign earning, grew less than last year. The country produced 11.7 million bales, compared to 12.9 million bales last year.

The survey says that heavy rainfall in May 2007 in Punjab, where sowing was already 2.2 per cent less than last year, caused poor germination. Cotton sowing in Sindh was 6.6 per cent less than last year. A severe attack of the leave curl virus also hit the crop.

Similarly, the wheat production target of 24 million tons was missed by 1.5 million tons. The output was 21.7 million tons -- 6.6pc less than last year and 9.9pc less than the target. The reasons were about 40pc less use of fertilisers and availability of 23.3pc less water for the Rabi season. The price of a 40kg DAP fertiliser increased to Rs3,000 from last year's Rs850.

The survey showed that the country was unable to produce the annual 124kg per capita flour. An analysis of the last 12 years showed that the per capita flour target had been missed for eight years.

Among major crops, sugarcane performed well. The country produced 63.9 million tons of sugarcane because of a 20pc increase in the sowing area.

Pakistan also missed the rice target of 5.57 million tons. The production was 5.56 million tons, three per cent less than the target and 2.5pc lower than last year's production. Rice is a cash crop and accounts for 1.1pc of GDP.

Besides the gap between the rich and the poor has widened, writes Mubarak Zeb Khan.

However, according to the Economic Survey 2007-08, the inequality was accompanied by a decline in absolute poverty.

The ratio of the highest to the lowest quintile, which measures the gap between the rich and the poor on the basis of consumption, deteriorated from 3.76 in 2000-01 to 4.2 in 2005-06 at the national level, indicating a growing rich-poor divide.

The inequality based on consumption expenditure is generally less than inequality based on income.

As the gap is calculated on the basis of food intake, the unexpected surge in food price reduced the purchasing power of the people, pushing them below the poverty line. "With a dramatic surge in food prices during the current fiscal year 2007-08, it will be naive for policy-makers and economic managers to ignore or downplay the likely impact of this on Pakistan's poverty dynamics," the report said.

The survey showed that consumption inequality was higher in urban than in rural areas. Moreover, urban inequality increased faster than the overall inequality during 2005-06.

Finance Minister Naveed Qamar said the poverty figures had been taken from previous surveys but the formula had remained the same based on calorie numbers.

He said the government would adopt a new approach for curbing poverty and not hide the real picture. "No one can hide poverty through statistics. It is clearly visible in daily life."

The survey said: "The double-digit food inflation of more than 15 per cent during July-April 2007-08 is likely to be a major contributor to eroding the gains of poverty reduction. Whether the incidence of high inflation and the performance of key macro indicators during the current fiscal year will have any bearing (and to what extent) on the poverty profile in the country in 2007-08 will only be known once the results of latest round of Pakistan Social and Living Standard Measurement (PSLM) Survey data are available in the last quarter of 2008-09."

High inflation and the performance of key macro indicators during the current fiscal year will have a far reaching impact on the poverty profile in 2007-08.

Various poverty bands - extremely poor, ultra poor, poor-declined between 2000-01 and 2005-06. However, the proportion of quasi non-poor increased from 35 to 36.6 per cent.

Source: Medindia
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