AGRICULTURAL AND INDUSTRIAL SECTOR BETTERMENT IS A KEY FOR THE

DEVELOPMENT OF PAKISTAN, AND MANAGEMENT IS A KEY PROBLEM

Pakistan from its birth has faced so many problems infect every type of problem those problem can be inequality, war, economic, terrorism means we can say that Pakistan has never seen a constant peace in its time. As already discussed that Pakistan has faced every problem but the main problem that Pakistan is facing from its birth is economic problem and this problem has occurred because of mismanagement and lack of planning. Also we can say that the problem has occurred because the main source of Pakistan’s income that is Agriculture is backward or we can simply say that it is not fulfilling the demands of the people because of lack of technology while when we talk about the industry of Pakistan then it has also not made any good contribution for the development of Pakistan. But this thing is true that if Pakistan wants to get developed then it must have to develop first Agriculture and its industry. So let’s have glance on Pakistan’s agriculture and Industrial sectors.

Agricultural Sector in Pakistan

Background

Pakistan has a rich and vast natural resource base, covering various ecological and climatic zones; due to which the country has great potential for producing all types of food produce. Agriculture has an important role in generating economic growth. Agriculture affects the economy in three ways namely, first, it provides food to consumers and fibers for domestic industry; second, it is a source of scarce foreign exchange earnings; and third, it provides a market for industrial goods.

Land use, farming systems and institutions

The total geographical area of Pakistan is 79.6 million hectares. About

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27 percent of the area is currently under cultivation. Of this area, 80 percent is irrigated and Pakistan has one of the highest proportions of irrigated cropped area in the world. Most of Pakistan is classified as arid to semi-arid because rainfall is not sufficient to grow agricultural crops, forest and fruit plants and pastures. About 68 percent of the geographical area has annual rainfall of 250 mm, whereas about 24 percent has annual rainfall of 251 to 500 mm. Only 8 percent of the geographical area has annual rainfall exceeding 500 mm. Hence supplemental water is required for profitable agricultural production, either from irrigation or through water harvesting.

Agriculture is largely dependent on artificial means of irrigation. Of the total cultivated area, about 82 percent or around 17.58 million hectares is irrigated, while crop production in the remaining 3.96 million hectares depends mainly upon rainfall. The Irrigation Canal Command Area (CCA) has been grouped into classes on the basis of the nature and severity of its limitations water logging, salinity, sodality and texture. At present about one-fifth of the cultivated land in CCA is affected by water logging and salinity to varying degrees. An additional area of 2.8 million hectares suffers from sodality. Notwithstanding huge investments, the water table  was 0 to 1.5 m under 2.2 million hectares of irrigated land, 1.5 to 3 m under 6 million hectares and 0to 3 m under 8 million hectares. Thus Pakistan needs to overhaul its entire drainage and reclamation strategy reduces its cost and makes it efficient.

Significance of the agricultural sector in the economy

Agriculture is an important sector, providing food to the fast-growing population of the country. According the 1998 census, the total population of Pakistan is 130 million. With a population growth rate of 2.6 percent there is a net addition of 3.4 million people each year. In 1947 the population of Pakistan was 32.5 million; in 50 years it has increased fourfold. During this period the production of wheat, the major food crop, has increased only 2.9 fold. During 1970/71 the amount of wheat imported was 0.3 million tones; it has increased to 4.1 million tones in 1997. Tremendous efforts have been carried out to narrow the gap between population growth and food production.

Agriculture contributes about 24 percent of the gross domestic product (GDP) and employs 47 percent of the national employed labor force. The contribution of the agricultural sector to the GDP has declined gradually since Pakistan came into existence, from over 50 percent in 1949-50 to about 24 percent in 1996-97. Agriculture still remains the

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major sector of the GDP composition. A major part of the economy depends on farming through production, processing and distribution of major agricultural commodities.

In foreign trade agriculture again dominates, through exports of raw products such as rice and cotton and semi-processed and processed products such as cotton yarn, cloth, carpets and leather production .Agriculture is essential for sustainable improvements in internal and external balances. Of the total export earnings, the share of primary commodities and processed and semi-processed products constituted almost 60 percent of the total exports. There have been some structural changes over time, but the contribution of agro-based products has more or less sustained its position.

Overview of agricultural sector development

Significant progress has been made in development of the agricultural sector in Pakistan since the time of independence in 1947. At that time, the Indus Basin was irrigated with an extensive system of canal irrigation, sown with low-yielding traditional seed varieties, fertilized mainly with animal manure and cultivated by means of animal draught power and by hand.

In the early 1960s, conditions that favored more rapid growth were put in place: the Indus Water Agreement was signed under the chairing of the World Bank; the Indus Basin Development Fund was established with multicolor support; the government improved the terms of agricultural trade; and tube wells were installed as a viable investment. That decade witnessed a green revolution in Pakistan, and crop production accelerated during the first part of the decade, primarily because of the increased use of inputs.

During the past 50 years a significant increase in production of the major crops has been achieved. Wheat production rose from 3.3 million tones in 1950/51 to 18.6 million tones in 1997/98. Similarly during this period rice production rose from 0.86 million tones to 4.32 million tones. There was also a records increase in cereal production. The production of cotton reached 9.4 million bales during 1996/97.Sugarcane production reached 5.3 million tones during 1997/98.

Policy measures in the last four years, i.e. from 1993/94 to 1996/97, were positive for the agricultural sector. Undue benefits provided to the industrial sector over the years were reviewed and modified. The agricultural sector as a result responded with new buoyancy. Export taxes on agricultural commodities were reduced or eliminated, which

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benefited the agricultural sector. In the policy reforms package, better support prices, better tillage and soil preparation practices and adequate and timely availability of fertilizer and certified seed have added to the positive response from the farming community. In 1996/97, production of wheat reached a level of 16.7 million tonnes, and there was also a 13.7 percent increase in the production of Basmati rice. The overall production of rice registered an increase of 8.5 percent - the total production of rice during the year was 4.3 million tonnes, compared with 3.97 million tonnes in the previous year.

There was, however, a decrease in the production of pulses, particularly of gram, during 1996/97 to 832 000 tonnes from 918 000 tonnes during the previous year (1995/96). Production of potatoes and onions in 1997/98 is estimated at 1 205 000 and 1 160 000 tonnes respectively, as compared with 963 000 and 1131 000 tonnes in 1996/97.

Over the past 20 years some important structural changes have taken place in the sector. In particular, livestock has emerged as an important sub sector, today contributing more than one-third of agricultural GDP, compared with about 28 percent 20 years ago. Similarly, fisheries and forestry, while still minor contributors to agricultural GDP, have grown rapidly. Structural changes have also taken place within the crop sector. Cotton is now as important as wheat in terms of value added with a one-fifth share of total earnings. Rice and sugar have, however, fallen from a 20 percent share in the early 1970s to 15 percent today.

INDUSTRIAL SECTOR

The Industrial sector as a whole grew by 8.4 percent during FY 2007-08, while the large scale Industrial (LSM) is estimated to grow by 8.8 percent and small-Scale Industrial (SSM) by 8.1 percent. The data for 100 industrial items for three Quarters of the year 2007-08 implied that LSM growth may be higher during Jul-Mar of FY 2007-08 as compared with the corresponding period of the last year, but Suggests that the 13.0 percent growth target of LSM sector for the year 2007-08 may not be achieved. Major industries supporting the recovery in LSM included textiles, Sugar, cement and basic metals. The automobile industry, however, registered a Slowdown in growth during July-March 2007-08 relative to the corresponding period of the year 2005-07.

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However, industries such as fertilizer, paper and board and Engineering showed a decline in production during this period mainly due to Weakness in demand and temporary shut down for maintenance as well as Expansion. Infrastructure bottlenecks and power shortage are major constraints in achieving the Industrial targets of 13 percent for the year 2007-08.

An investment of Rs 3,285 million from PSDP was planned to be undertaken during2007-08 in the industry sector. The major projects initiated during the year under Review include Auk Hunan Auk Nagar, five Advanced CAD/CAM Training Centers, Technical Up-gradation of Garment Industry, Agro-food Processing Facilities at Multan, Sports Industries Development Centre, Sialkot, Gujranwa1ala Business Centre, Gujranwala Tools, Dies and Moulds and Water Desalination Project Gowanda, Baluchistan.

Textile

In view of anticipated competition with countries like China and India in the global Markets particularly in the backdrop of opening of Chinese export of textile and Clothing in European Union and USA in 2008, efforts are being made to make the Textile and clothing sector to be more dynamic and competitive. To achieve this Objective, a separate Textile Industry Ministry was created and a number of projects Including Lahore, Faisalabad, Karachi Cities and Karachi Textile City projects have Been planned in the public sector with an investment of over Rs 3.5 billions, of which Two projects Lahore Garment and Faisalabad Garment Cities have been initiated During 2007-08 with an investment of Rs 998 million.

Commerce

In order to accelerate export, an investment of around Rs 3 billion was planned in the Commerce sector. A number of projects including Social Accountability SA-8000, Expo Centre Lahore, Pakistan School of Fashion Design, Lahore and Trade and Transport Facilitation projects were initiated during the year under review.

Investment of Rs 1,987 million is estimated for these projects during FY 2007-08.Two major projects of Pakistan School of Fashion Design Lahore and Expo Centre, Lahore is expected to be completed by June, 2008.shift in the production paradigm to Technology and knowledge

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based industrialization, with a focus on the quantitative and the qualitative growth of an integrated and competitive industry in the private Sector. The inefficiencies of import substitution must give way to an export led Strategy. The share of knowledge and technology intensive engineering, electronics, Pharmaceutical, chemical and non-metallic mineral products, would be strengthened And enabled through fiscal and tariff means as well as building of alliances with International partners. Sectors and products with comparative advantage such as Textiles, food and agro-processing would similarly be fostered.

A focused policy thrust, supported by adequate resources, will be adopted for raising the threshold levels of the technology and skills base which will result in better Productivity and quality. However, this needs to be accompanied by diversification, as well as physical and social infrastructure, standardization, and certification to Match the growth requirements. Pakistan will be made a business friendly Country through lowering cost of doing business, facilitation mechanism, reduction of Procedures, intrusive inspection laws, and co-ordination of policies at the federal and provincial levels. The private sector is the key stakeholder in the growth strategy, andWould receive its due emphasis, while the role of public sector would be that of catalyst and an efficient regulator to ensure competitive market structure. Private and Public sectors are required to go side by side to solve problems and formulate the Tools and mechanisms needed to overcome constraints and exploit opportunities.

Challenges and Constraints

The Industrial sector still revolves around the traditional low value added Industries, whose share in world trade is continuously declining. The investment in Upgrading technology is low and diversifying into emerging markets, products and Processes are either slow or nearly constant. An efficient, international quality supply Chain, which is so essential for local industry to flourish, is missing, partly due to Insufficient scale of economies, and partly due to bundling of raw material, parts and Modules by the multinationals in their assembly oriented companies, which Discourage a local vendor industry to flourish. Major constraints in achieving the goal Of rapid industrialization, are given below:

Productivity Levels: A serious constraint in achieving global

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Competitiveness has been the low productivity level. Without the development of a widely embedded skills base, competence and productivity, global trading Challenges cannot be achieved.

Skills: Pakistan is facing both a skills shortage, and skills gap in key

modern technologies. This reduces optimum operation of plant and

machinery.

inadequate and Unreliable Power Supplies: Inadequate and unreliable Power supply, a major constraint, is getting worse and causing poor Competitive rating.

Saturation of Capacity: Many key sub-sectors such as steel,

automobiles, Fertilizer, paper and paper board, chemicals etc. are

facing saturation of Capacity.

Transport and Communication Infrastructure: Current road and

rail Network is inadequate even for immediate demands, and even

more poorly Maintained. Port congestion and port charges are high,

adding cost and lowering competitiveness.

Certification and Standards: While some progress has been made,

many of manufactured products still lack proper certification for quality

and safety, which hinders their wider acceptance locally and globally?

Policies, Strategies and Measures

Achieving accelerated industrialization is the foremost goal by capitalizing upon National strengths and mitigation of weaknesses. The challenge for Pakistan is not to rediscover industrial policy, but to re-deploy it in a more effective manner in the National, regional, and global context. The policy framework will be based upon the Advance industrial economies, where focus is on the entire value chain. The Provision of facilities for public testing laboratories and public R&D, vocational and Technical training, infrastructure and communications, are all necessary inputs which Are regarded as a public good for the Industrial sector. Value addition in Products and processes will be strengthened through backward and forward Linkages, productivity levels will be increased through human resource development, Technical and vocational training, and strengthening research and

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development.

All sectors have been opened for private sector investment, and equal treatment is Available to foreign and local investors. The basic thrust of the Plan will remain Industrial and technology driven growth within a framework, which encourages Economy of scale, value addition and diversification of products and processes. Major policy measures planned to be adopted for the year 2008-08 include the Following:

Diversification and Pioneering Industries: One the foremost objectives are to diversifies the Industrial mix and generates new areas of comparative Advantage. Incentives will be available for new activities, whether they are ‘New’ products, processes or technologies, so that the range of activities is expanded. Enterprises especially those engaged in light engineering, or those in sub-sectors declared as ‘pioneering’ industries, will be encouraged to foster Joint ventures and productivity enhancement

Industrial Zones, Corridors, Clusters and Estates: Present urban/Industrial centers cannot accommodate the expected increase in industrial And Industrial activities. Industrial corridors, estates, and industrial parks are therefore planned to be set up by Provincial Governments along the Motorways, expressways, and railways with full support of the Federal Government.

Growth and Investment Targets

In order to achieve the goal of sustained industrialization, a growth rate of 10.9 Percent has been targeted for the Industrial sector including 12.5 percent for Large scale Industrial and 8.5 percent for Small Scale Industrial. An Allocation of Rs 18.85 billions has been earmarked for both the Industry, Textile and Commerce sectors which the highest one is ever made in these sectors. It consists of Rs 8.483 billions in the Industry sector, Rs 1.098 billions in Textile Sector and Rs1.589 million In the Commerce Sector. Major projects to be carried out in Industry Sector during 2008-08 include: Agro-food Processing Facilities at Multan (Rs 79.87Million), Auk Hunan Auk Nagar (AHAN) (Rs 70.379 million), Gujranwala Business Centre, Gujranwala, (Rs 13 million), Sports Industries Development Centre Sialkot(Rs 178.84 million); Technical Up-gradation of Garment Industry all over Pakistan(Rs 100 million), five advanced CAD/CAM Training Centers (Rs

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139.4 million),Gujranwala Tools, Dies and Moulds Centre (Rs 295.000 million), 2MGD Water Desalination Project GAWADAR Baluchistan (Rs 188.87 million). Major projects in the Textile sector include 03 Garment Cities at Lahore, Faisalabad and Karachi, Implementation of Export Plan and establishment of two Fiber Testing Laboratories. Major projects to be carried out in Commerce Sector include SA-8000, Pakistan School of Fashion Design, Lahore, Trade and Facilitation Project and Expo Centre,Lahore.

Now here every thing is clear, we saw that Pakistan got developed in few times but suddenly due to some reasons the development process got failed there are number of reasons behind this but the number one reason is management, or we can say not sincere management, because we know that if management is sincere then it will work really heartily for the betterment of that project and problems in any project can occur only at that time when there management is not sincere and also not able to complete that task, so management has remained a big problem in Pakistan.

We know that Pakistan highly depend upon the agriculture and if the agriculture sector is not properly given attention then Pakistan can never get developed.

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