The uplift in Pakistan’s major crops performance has been one of the most notable achievements of the now ousted PTI government. Provisional GDP data reveals that the important crops segment grew at an average rate of 6.3 percent per annum over the last three fiscal years (per new base). Why then is the GoP aiming for a decline this year?
During PTI’s last week in power, the Federal Committee on Agriculture announced the crop target for kharif season 2022-23, lowering the outlook for three out of four major kharif crops. The intuitive explanation for the underwhelmingforecastappears to be that it is in line with precarious situation of inputs availability, especially fertilizer and canal water. Given high prices and shortage of fertilizer globally, and return of drought-like situation in some areas, FCA anticipates an underperformance by the cropping sector.
Although the explanation may appeal to common sense, it is incorrect. For two seasons now, the FCA has forecast lower output for three major kharif crops – rice, maize, and sugarcane – in the hopes of reviving interest in cotton. This despite that acreage under these crops (except rice) has not risen significantly over the past five years, averaging at 1.3Mn Ha in the case of both sugarcane and maize. Quantum jump in the output of both crops in recent years has predominantly come on the back of improved productivity. Yet, FCA does not seem too keen to see more growth. Why?
A less charitable explanation may be that the FCA now routinely sets mediocre targets so it may outperform them. Although convenient, this fails to explain why FCA would set itself outlandish targets in the case of cotton, only to underperform year-after-year in a stunning fashion.
It appears that folks at MNFS&R may not be putting a lot of manhours in target-setting. The driving principle behind kharif crops target output appears to be restoration of area under cotton. Target acreage under substitute crops is reduced proportionately to raise cotton acreage. Target yields are then adjusted to achieve appropriate target output levels.
It seems little to no attention is paid to either demand for substitute crops or farmers’ interest. Clearly, if output of substitute crops such as rice or maize has increased year after year, it must be in response to rising demand or else farmers would witness slowdown in profitability, forcing a switch to alternate choices either way.
If FCA’s targets were met, a sudden decline in output would not justaffect GDP growth, no matter how cosmetic. In case of sugar, rice or even maize for example, it may also cause domestic price spiral. On one hand, GoP – and commerce ministry in particular – hopes to raise the quantum of rice exports to fresh heights. Would the goal remain achievable if domestic output fell drastically, leading to calls for ban on export (as is being witnessed currently in the case of maize)?
If FCA hopes for its crop targets to be taken seriously, it must stop the wishful thinking and fix realistic targets, bearing in mind not only domestic demand, but also farmer interest, crop viability, and profitability.
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