2011-12: a mixed affair for major crops

Pakistan has missed its wheat production target and the expectations of a bumper crop this season have not been materialised. The latest Economic Survey estimates wheats production during 2011-12 at 23.5 million tons, i.e., 6.7 percent below previous years figure of 25.21 million tons. The yield declined to 2,714 kg per hectare from a high of 2,833 kg per hectare in 2010-11. The cultivation area for wheat - which contributes 12.5 percent of the value added in agriculture and 2.6 percent to the GDP - also declined by 2.6 percent to reach 8.66 million hectares. It must be noted that at the onset of the Rabi season in October last year, there was a growing concern that Pakistan might miss its wheat production target of 25 million tons. For one, the flood waters were not receding in lower parts of Sindh. In addition, the availability and spiraling costs of key farming inputs - including fertilizers and the utilities - had dejected the farmers. Moreover, wheat growers had to wait long and hard for any announcement of revision in the support price, which eventually came, but very late, by November end. These factors, along with the unfavourable climatic conditions at the sowing time, weighed heavily on the decisions of growers, especially those with small landholdings. Despite dismal performance of wheat crop, the overall contribution of the major crops to agriculture and the GDP has been positive. The Survey states that the major crops showed a collective growth of 3.2 percent in FY12 (-0.2% in FY11), and accounted for 31.9 percent of agricultural value added. The four major crops contributed six percent to GDP and 29 percent to the value added in agriculture in FY12. Growth in the cotton crop has been especially robust, as the crops production reached 13.6 million bales in FY12, showing a year-on-year growth of 18.6 percent. This is in part due to a 5.4 percent increase in plantation area to 2.68 million hectares and a solid improvement of 12.6 percent in yield to 815 kg per hectare. Rising use of BT cotton and control over cotton leaf curl virus and sucking pests helped the cause. Rice production grew by an impressive 27.7 percent to reach 6.16 million tons in FY12. The crop was sown on 2.57 million hectares, which is 8.7 percent more area than previous year. The crops yield also improved by 17.5 percent to reach 2,396 kg per hectare - an all-time high for rice in last five years. Attractive market prices and better availability of inputs during the sowing season pushed the sugar cane acreage to over one million hectares. Therefore, despite the yield decline of 0.9 percent to 55,486 kg per hectare, the crop surged to a production figure of 58 million tons in FY12. Yield deterioration has been attributed to high base effect from FY11 and water logging in lower Sindh post-2011 floods. The fact that the cotton and rice crops are performing better than wheat (and to some extent sugar cane) makes a strong case for a market-based, private-sector led commodity market in the latter. It is time that the wheat market is also liberalised to incentivise increased acreage and achieve higher yields.