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Farmers’ package: all depends on implementation




  • First came the Economic Survey and then the Budget for the year 2004-5. Policy declarations, speeches and statements of the President of Pakistan , the Governor of the State Bank and the federal finance minister aimed at providing facilities to and enhancing productivity of the agriculture sector preceded these documents.

    The leaders focused on the farming community with the purpose of ameliorating its lot. The picture they presented has been disappointing but they have promised hope and pledged good intentions. How they would be translated in to deeds and where would they lead the sector?

    The thrust of the President’s address to a Kisan Conference was a better deal comprising numerous deals and concessions for the sector; the Finance Minister recorded a dismal growth rate; the Governor, State Bank, underlined problems besetting the farming community and crop output. What has come out is a vicious circle identified at the highest level.

    Some solutions were also prescribed. They have however been there for years and get repeated endlessly but no forward movement is made. Can the circle be broken without new and positive initiatives? That does not sound likely. Ailments are chronic; tried cures are hardly the medicines for recovering health.

    The basic issue has neither been discussed nor is any effort on the anvil to resolve it. A lamentable lack of expertise marks the management of the sector. Nothing is done to handle things on a professional, contemporary manner with the result that the performance of the country’s agriculture is declining by the year.

    The finance minister rock-rolled his way to a U-turn comparable with Pakistan’s policy on Afghanistan. Last year, he had declared a high growth rate for the sector despite shortfall in two major crops. One of them was the strongest base of exports while the other provided basic food for the population; the crops were cotton and wheat.

    The argument has been reversed for 2004-05: negative performance for these crops has been cited as reason for low growth of the agriculture sector this time.The Minister’s expertise and acumen are not to be challenged but how is shortfall in two major crops calculated for rise in one case and decline in the other while other factors remain unchanged?

    Accepting this line of argument calls for extra talent for gullibility that may be in abundance in officials directly involved in authoring sacred documents of the government or beneficiaries of budget but it may be in scarce supply among other people. To say the least, the minister is not convincing.

    The beneficiaries can be identified in most areas covered by the budget but those from the farming community have been doubly blessed. Men of means from any walk of life can import what an average citizen regards as a luxury car.

    A similarly placed agriculturist can have his car and his tractor and purchase any other farm machinery that he requires or wants to have it on his farm, usually a model farm on favourable terms.

    The policies proclaimed in the budget should go a long way towards making rich farmers richer and if that is not sufficient, the proposed reduction in withholding tax from six percent to two percent should fill whatever gap leading members of the farming community wish to bridge.

    Fertilizer inputs have also been extended concession in withholding tax but hopefully that advantage would be passed to every user though it is too much to expect. The exemption of sales tax from farm machinery import of ‘tractors, bulldozers, combined harvesters and on a number of other agricultural implements’ belong to the same category of benefits to the farming community: not every farmer can import such machinery and those who can afford already ahead of the rest of the farming community.

    Perhaps these measure would close the rich-poor distance in so far as when the income of members of the farming community are calculated, highest and lowest incomes would be added and divided to conclude that per farmer income has increased.

    The methodology for drawing a conclusion would be the same that is applied to determine per capita income. This, however, is not to say that the budget contains nothing for the poor of the farming sector.

    The proposed relief of Rs100 on the per bag price of phosphatic fertilizer is a measure that should reach every farmer. The only apprehension is that the quality of fertilizer sold to him may not be standard. It should be ensured that he is not taken on another ride.

    The small farmer should also benefit from the proposed exemption of sales tax from all locally manufactured machinery. The application of ten per cent duty on imports would provide protection to the local manufacturer but the prices of indigenous implements would need to be watched: the manufacturers should not feel that it is time for them for a free run in the market.

    Needless to point out that the landless farmer has been left out of all propositions; he apparently does not exist for Islamabad. They are the poorest of the poor of not merely the farming sector but the most deprived segment of the society.

    At the present approach towards alleviating poverty, one cannot visualize that they will ever have their day; this certainly does not look possible in the foreseeable future.

    It is heartening to note those at the helm at the highest level in the country realize that poverty exists in rural areas of the country; their statistics may not be universally regarded as authentic but the fact that they are aware of the phenomenon is welcome news. Not so their agenda for countering it.

    One imagines that the nine points of State Bank Governor are not his personal view but assessment and ideas by decision makers. A few days prior to the budget, the Governor laid down a nine point agenda to counter poverty. There can be little disagreement with his vision.

    He was clear that low productivity of the agriculture sector was major factor in poverty and suggested that it should be overcome by dissemination of agriculture research, lining of watercourses, better marketing of agri-produce, by boosting the livestock sector and other already identified measures for the betterment of the sector and enhancement of its performance.

    (The Finance Minister found a remarkable way of supporting the livestock sector in the Economic Survey by shifting slaughtering to the manufacturing sector. The need for juggling with slaughtering in this manner is incomprehensible and one wishes the minister or some spokesman of the Finance Ministry explains the rationale, as has been done to counter criticism about statistic on poverty.

    From the look of things, the implications of the decision can only be negative). His observation that agricultural productivity was crucial for increasing incomes in rural areas and that poverty cannot be effectively reduced without higher performance by the farming sector is one hundred percent authentic.

    But agendas are not enough to do that; there must be a plan and professional implementation machinery. The existing machinery has failed and the government does not seem to have any idea of what can be done. That does not augur well for the sector. If anything, the situation spells more decline in the performance of the sector.

    Curtesy: The DAWN

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