Fields of discontent

Source: Published in Current Affairs on Wednesday, September 23, 2015

PPP CHAIRMAN Bilawal Bhutto Zardari has perhaps rightly criticised the Sharif government over farmers’ issues in Punjab. However, he needs to be reminded that his party’s government is doing no different with growers in Sindh; rather, it is doing worse. This is in sharp contrast to commitments made by the PPP in its election 2013 manifesto, in which it promised to announce an agriculture policy every year, fix the support price of wheat, rice, sugarcane and cotton besides providing agriculture subsidies at par with other countries.

The PPP has honoured none of its pledges. This, despite the fact it is its mainly rural vote base that has brought it to power in Sindh for the second consecutive term. The Sindh government has passed three provincial budgets since 2013 without taking any concrete steps towards achieving the objectives spelled out in the manifesto, and growers’ protests against unjust prices of crops continue unabated.

After the 18th Amendment, agriculture is a devolved subject. But Sindh lacks even an agriculture policy. Rural economy depends on cash flows obtained from back-to-back crop seasons, which have a direct impact on the socio-economic conditions in the area. Major crops’ seasons in 2014 and 2015 have been disastrous for producers price-wise.

Last year’s crisis in the sugarcane crushing season was unprecedented. Sugar mills, as always, kept dictating terms to the government while furious farmers took to the streets to condemn the indifference of the provincial government — rather the PPP leadership — in unambiguous terms in the face of a powerful group’s interference. Cane producers weren’t getting the notified sugarcane price (Rs182 per 40kg) because millers were questioning the government’s authority to fix the price. Farmers had to fight it out in the superior courts to get the notification implemented, something that should have been a simple matter of the government enforcing its writ.

The PPP has honoured none of its pledges to farmers.

However, the powerful sugar mill owners’ lobby persisted in refusing to pay the notified price. Eventually, the Sindh government paid a subsidy of close to Rs4 billion to millers from the taxpayers’ money while leaving a differential of Rs10 per 40kg for the apex court to decide upon. Growers resent the nexus between government and the millers.

Farmers fear that this cane season will be no different. According to economist Dr Kaiser Bengali, the sugar industry is used for political patronage. He believes imported sugar could be cheaper than that locally produced and that mill owners get subsidies and rebates on export of sugar while denying farmers just price for the crop.

The agriculture sector is largely subsidised in many countries. Subsidies keep inputs’ prices artificially low to benefit farmers, considering the fact that distortion in the international market affects commodities’ prices directly. Farmers are willing to invest more in crops provided cost of production remains on the lower side with inputs available at least on controlled rates. However, the provincial government remains least concerned about the narrowing gap between cost of production and commodity prices.

Rice growers who produce exportable Irri-6 variety are getting a price offered to them in 2008 while per acre cost of production has increased manifold. Declining prices in the rice sector are bad news because rice pumps foreign exchange into the national kitty.

With the exception of 2009-2010, Sindh has been unable to achieve cotton sowing and bale production targets despite Pakistan’s GSP-Plus status. Although the drop in cotton production could be attributable to the floods in recent years, the lack of a price regulatory mechanism that successive governments — not the incumbent one alone — have been unable to put in place, has also played a role.

Moreover, investment in research and development of different seed varieties has been minimal and must be increased. Farmers increasingly use imported hybrid rice seeds because of their higher productivity; the use of indigenous seed, which is cheaper, is therefore declining. However, research and development can help increase the latter’s yield potential. Per acre productivity is low because farmers avoid using the required quantum of inputs due to price distortion.

Inadequate development outlay in the agriculture sector prevents its modernisation. And in absence of modernisation, the potential in the land cannot be properly exploited to enhance the productivity of different crops. Transparency in various schemes to benefit farmers such as subsidised tractors must be ensured. High efficiency irrigation systems such as drip and sprinkler irrigation methods are routine in the developed world but in Sindh even the average farmer doesn’t have access to them, let alone the small farmer.

The situation is not intractable. An institutionalised and integrated framework involving the concerned ministries can address these issues. We should expect young Bilawal Bhutto Zardari to see what is happening in his home province.

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Written by Mohammad Hussain Khan

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