Key Takeaways
- Prime Minister Shehbaz Sharif emphasizes agriculture as key to economic revival.
- Despite sector's importance, budget allocations and policy execution lag behind.
- Reforms needed in research, market distortions, and private investment.
Prime Minister Shehbaz Sharif has highlighted the potential of agriculture and livestock for Pakistan’s rapid economic recovery. However, his assertion that these sectors can drive growth within a year highlights the gap between ambition and policy execution.
Agriculture contributes significantly to Pakistan's economy, accounting for nearly 25% of Gross Domestic Product (GDP) and employing over one-third of the labor force. Livestock alone makes up more than 60% of agriculture’s value addition, with Pakistan ranking among the world’s largest milk producers.
Despite these advantages, the sector faces numerous challenges. Policy neglect, institutional decay, and inconsistent incentives have led to a crisis that has eroded foreign exchange reserves and weakened food exports. The current federal and provincial budgets barely reflect the sector's importance, despite repeated references to economic transformation.
Farmers are expected to increase production while facing rising costs, unpredictable pricing, market manipulation, inadequate storage facilities, and weak value chains. These factors continue to undermine their incomes. Mr Sharif’s emphasis on technology, artificial intelligence (AI), disease control, and value addition is commendable but insufficient without addressing underlying policy issues.
The current situation is exacerbated by the import of billions of dollars' worth of food and raw materials for industries like textiles and clothing. Food exports have also weakened over time, further eroding foreign exchange reserves. This is particularly concerning given Pakistan’s ongoing reliance on external financing.
To drive inclusive growth, reforms are necessary in several areas. Strengthening research, developing indigenous vaccines, improving traceability systems, correcting market distortions, expanding rural credit, investing in climate resilience, enhancing irrigation efficiency, and creating incentives for private investment across agricultural value chains are essential steps.
While every government promises to transform agriculture, few are willing to undertake the necessary reforms. Declarations that agriculture can revive the economy will remain aspirational as long as policy reforms are avoided. The current focus on technology alone cannot compensate for dysfunctional policies that fail to address fundamental issues like high fertiliser prices and rising energy costs.
In conclusion, while Prime Minister Shehbaz Sharif’s emphasis on agriculture is timely, it must be accompanied by concrete actions and reforms to truly drive economic growth and improve farmers' livelihoods.
