Annual Economic Survey for FY20 has largely validated the provisional estimates announced by the P-block nearly a month ago. Agricultural sector’s miraculous performance is being touted as the saving grace, which grew at 2.67 percent over previous year, contributing 50bps to overall negative economic growth rate of 0.38 percent.
Little surprise then that agriculture’s share in GDP managed to surpass industry by a narrow margin. But the most surprising story is in the meat – Livestock – which in a first since FY04 has edged ahead of Manufacturing, both Large- and Small-scale put together. (For more, read “Agri-GDP, if wishes were livestock”, published on October 14, 2019)
But first, some context. The Survey claims that agriculture sub-segments witnessed an across the board improvement, barring cotton ginning whose fate was long sealed due to poor crop outlook. (For more, read “Cotton – good intentions are not enough”, published on October 14, 2019) Yet, the Survey’s estimate for cotton does not fall far enough, considering that cotton arrivals reported by PCGA as of yesterday stood at 8.57 million bales against 9.17million reported by the Survey.
And the inconsistency does not stop there. Until last month, the much-celebrated Sugar Inquiry report had criticized speculation regarding decline in sugarcane production, claiming that crop output had in fact improved over the previous season. The Economic Survey shows that the crop output has indeed declined, albeit marginally. Although crop’s contribution to overall GDP is marginal, it offers a curious case of “mysterious reporting sources”, as earlier it was claimed that the Crop Reporting Department relies on data reported by mills to collect estimates, except the figure reported by ES is neither in line with industry estimate nor that of Inquiry Report.
And when it comes to mysterious reporting, it is Livestock growth that is most shady. The sector is one among few such as Housing Services, and Small-scale manufacturing to have never recorded a negative growth in country’s history. These unrelated economic segments have only one thing in common: all are equally hard to measure.
Scratch a little more beneath the surface, and the house of cards that is agricultural GDP comes down crashing. Recall that Livestock is 60 percent of agricultural GDP, whose envious average growth of 3.4 percent over the last decade appears impervious to all types of disaster: floods (FY10); drought (FY18); or grain shortfall (FY19).
It needs reminding that this country is yet to conduct a Livestock Census, last of which was conducted 15 years ago. A lot has changed since, with provincial livestock departments of both Punjab and Sindh concluding that the stock of animals has in fact fallen.
Yet, statisticians at both P- and Q-blocks continue to apply historic parameters to conveniently extrapolate impressive growth in dairy and meat output year after year. This for a sector whose economic footprint is greater than the entire Large-Scale Manufacturing (LSM) segment.
Had output of any manufacturing industry or wholesale segment been so grossly over- or under-stated, the skies would have fallen; proving fodder for a prime-time scandal on 9’o clock news. To put things in perspective, consider that contribution to GDP of sugar and textile industries stands at just 2 and 8.5 percent, respectively – and the misplaced priorities of policymakers may become abundantly obvious.
The case of other agricultural sub-segments such as Fishery and Forests is hardly any different, although their low contribution to GDP may justify neglect.
But that rationalization may not be sufficient for the “Other Crops” segment, which has six times the share of cotton ginning. Yet, what constitutes ‘other crops’ is unclear, as impressive growth contribution on the back of moong and chillies alone raises suspicion. (For more, read “Other Crops” section in Chapter 02, Agriculture of Economic Survey). There is no information on performance of vegetables and fruits, not even for staples such as tomatoes, or for major exports such as mangoes or oranges.
Pakistan’s agricultural GDP estimation exercise stands on thin ice and is rife with issues of transparency which will not go away by a mere re-basing exercise. The methodology for both data collection, and crop performance surveys must be made publicly available more readily.
For those still faithful to official data, one parting thought. The Survey reports that maize has been FY20’s best performing crop, recording robust growth of 6 percent. Yet, private sector corn seed companies are adamant that maize output has in fact fallen, due to frequent heat waves during last kharif. So much for saving graces.