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Pakistan must study impact before signing NDMA with India




  • Farmers’ groups from Sindh, Punjab and KPK have urged the government and Commerce Ministry to carefully examine the infrastructure of agriculture sector of India and Pakistan before dismantling the trade barriers for non-discriminatory trade which will render the local industry uncompetitive against the highly subsidised Indian agricultural goods. 

    The Sindh Abadgar Board in a recent meeting to review the impact of NDMA on Pakistan Agriculture sector, stated that a comparative analysis of agricultural industry of both countries will be sufficient in clarifying that asymmetry exists in the subsidies that are extended to the farmers in both countries. Indian subsidies to its agriculture industry are $50 billion which is 15.3 percent of GNP. On the contrary, Pakistan’s total agricultural GDP is $50 billion and the subsidies are less than 1 percent of the GDP.” 

    They added: “Urea in India is Rs 650 per bag which is around Rs 1,094.1 in Pakistani currency; in Pakistan cost for the same bag ranges from Rs 1,786 to Rs 3,600.” 

    “Furthermore, electricity is almost free in India for farmers while its prices in Pakistan have already become extremely unaffordable. Diesel an important input is also subsidised in India while it is not so in Pakistan,” they mentioned. Farmers’ groups said in addition to this, given the availability of modern machinery, energy resources for electric tube wells and the sheer allocation of budgetary funds for the agriculture sector, Pakistan is far behind from India. 

    They added India’s restrictive trade regime that possess barriers more vigorously to Pakistan, has blocked us in the past to enjoy any significant access to Indian market through different NTBs which effectively raise costs for the exporters. Farmers’ groups also regretted that there is also unequal distribution of water in both countries. Moreover, the construction of new dams by India on the rivers in Pakistan’s share has also increased the existing scarcity of water that further compounds the disadvantage for Pakistani farmers and hampers the future of agricultural sector, thus, causing decrease in the agriculture production in Pakistan. 

    The Sindh Abadgars said the production of different crops that have been affected by low water availability include cotton, sugar cane and rice. According to economic survey of Pakistan 2010-2011, the rice yield dropped to 2,039 kilograms per hectare from 2,387 kilograms per hectare. Similarly, the sowing area of sugar cane has been reduced significantly only because of water availability from 1,029,000 hectares to 943,000 hectares in 2009-10. Wheat also showed negative trends. If this drop rate continues in the yield of different crops, Pakistan would face a famine like situation by 2025. 

    A group of farmers from Batagram, Thakot and Sadu Khan Area said when we talk about bilateral trade government fails to address the core issues that are worsening the situation at our end. We need to adopt a similar strategy like India where the regime of import tariffs and para-tariffs has provided more effective protection to sectors in which Pakistan might potentially have a relative comparative advantage, for example, in textiles. 

    They acknowledged that most industries are against trade with India at the pace and terms being dictated. However, it appears that economic sovereignty is being forsaken. They added: “Even within the ranks of PML-N, there is concern. Some are concerned but their voices are being drowned by members close to US and IFIS. Others don’t understand the subject and get influenced by economists working purely on theory. India has never practised theory but only self-interest. It’s about time Pakistan too raises its voice of self-interest and negotiate better. Sri Lanka and Bangladesh lessons need to be learnt.” 

    An Expert in the agriculture sector said “this step would be suicidal. Even the most liberal of countries like USA do not have free trade policy with regards to agricultural imports.-PR 

    Copyright Business Recorder, 2014

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