Crop-roundup: disappointment does not equal failure

“Agri-growth likely to register decline” read the front page of this newspaper on Monday, on the back of missed sowing targets and poor performance of major crops in the ongoing fiscal. The report goes on to express ‘bafflement’ over government’s persistent optimism, noting that the 3.5 percent sectoral growth target is likely to be missed.

While the major crop segment performance thus far has proved to be a disappointment, the ‘bafflement’ raised over agricultural growth needs to be qualified.

First, a theoretical but necessary comment. While crops such as wheat and cotton are synonymous with agriculture in popular imagination, their contribution to sectoral GDP stands at little more than 25 percent. Livestock remains the primary contributor to the sector with its two-third share, with remainder supplied by minor crops, fishery, and forestry.

Second, although lower output for major kharif season crops such as cotton and sugarcane has dominated the media narrative, the extrapolation is misleading. Historically, these two cash crops have together contributed no more than one-third of ‘crop-wise output of major crops’.

Moreover, while cotton’s performance is significantly lower than targeted – output is lower by at least thirty percent – target output for cane is only lower by six percent. Given its comparably smaller share of 15 percent within major crops, the effect on sectoral GDP should be marginal.

Even within kharif season crops the contraction is far from universal. Rice and maize, with sectoral contribution closely following in cane footsteps – at 13.5 and 10.5 percent, respectively – both exceeded sowing targets by over five percent. Output for the both crops is expected to record major jumps over the previous year performance and current year targets, owing to healthy yields. In fact, maize yield is projected to kiss five tons per hectare for the first time, placing the country in the top quartile of major producers globally.

But most significantly, the gloom surrounding agri-growth predictions appears to be missing the most important piece of the puzzle: wheat. The rabi season leader alone contributes forty percent of major crop output. Federal Committee for Agriculture’s wheat output estimate for the just began sowing season targets over seven percent growth over the previous year.

While it is true that targets in Pakistan are set to be missed, the timely upward revision in wheat support price to Rs 1365 per 40kg could mean that the season may not prove to be a disappointment after all. If CPI tracking is any guide, whole-sale rates for 40kg wheat bag are already in the range of Rs 1,500 – 1,600; increasing the likelihood of grower making investment in yield enhancing inputs such as optimal fertilizer and pesticide use.

And with fair amounts of tweaking and window-dressing to livestock, meat and dairy output estimates – all thanks to lack of action on long overdue Livestock Census – means that the agri-growth target should not be out of sight, at least on paper.

The only remaining bottleneck to sector’s performance will be spending-power of cotton-wheat farmers, whose losses due to cotton crop failure may hinder capacity to make investment on off-season cropping season.

To that end, the government has still not run out of time to take remedial measures. But that may only occur if it ceases to remain in denial over the extent of cotton crop failure. Talk about betting against insanity.