As we start this series on agriculture, we will first focus on crops in Pakistan. Macro Pakistani has discussed the question of lagging agricultural productivity in the country – a phenomenon that easily puzzles the casual observer. This is considering what we would expect our priorities to be as an agrarian economy.
Wouldn’t simple changes and tweaks to our agricultural policies and planning take us out of our current macroeconomic predicaments? Perhaps, yes – both in the short- and long-term. But there are no easy fixes to fundamental issues & no easy targets to blame.
In fact, we shouldn’t be finding anyone to blame – we should take some insight from the past but not dwell entirely on it. The past’s relevance should not be understated, as Pakistan’s history is intertwined with the issue of land reforms, and its politics have revolved around water resources. More recently – sugar price fixing scandals and wheat procurement disasters have dominated the headlines.
The future holds tremendous promise, with room for adopting innovations in both technology and finding improvement in inputs. Our introspections into challenges and failures should not overshadow the fact that Pakistan is still currently the 4th largest producer of cotton, 5th largest producer of sugarcane and 7th largest producer of wheat in the world.
Fundamentals of Agriculture in Pakistan
Before we tackle the behemoth of a sector like agriculture head on, it would be prudent to break down what the sector and topic in itself entails, and how it is connected to the larger economy. For simplicity, we will leave livestock, forestry and fisheries beyond the scope of the series and focus primarily on crops in Pakistan. Instead of focusing on prices, which have been rising, we will try to understand why growth of quantity of crops has been sluggish.
Pakistan has two primary crop seasons. Kharif (sowing in April or May and harvest from October to December) crops include rice, sugarcane, cotton and maize. Rabi (sowing starting in October to December and harvest in April or May) crops include potatoes, wheat, oilseed rape and tobacco.
Source: Pakistan Bureau of Statistics
Choosing from one of the many directions to start telling our story – we will start our series on crops in Pakistan from the basics of an economics course: allocation of scarce resources and the supply-demand curve.
Resource allocation boils down to both government interventions and farmer decisions at the micro level. Most criticism and focus is leveled at the governance level but it is important to recall the actual decisions driving the economy are farmers responding to incentives for either subsistence or profit.
As in any sector, both top-down policies and bottom-up organic markets intersect to create a full picture. Using these tools of analysis, in this series, we will see how this intersection explains:
- Why is sugarcane a major crop despite long-term sustainability concerns about waterlogging and salinity?
- Despite having the highest potential for value chain addition, why has Pakistan not focused its resources on the cotton crop?
We have what we have
The term ‘resource allocation’, involves the act of allocating. But the resources we are given tend to be fixed by our geography and historical circumstances.
The crops in Pakistan we grow tend to be dictated by our agro-ecological zones, temperature and climate. Crop compatibility also depends on how much water we get from rainfall, river systems or groundwater. The soil we have plays a primary role – explaining why large swathes of land in areas as the Cholistan Desert in South Punjab and Tharparkar in Pakistan’s Sindh are uncultivable.
If we look at ourselves as a country, we have a large amount of arable land ripe for cultivation. While in terms of proportion, we may have a lower percentage of arable land than our regional competitors may, our capacity provides economic promise. We can argue that it may be wise to tap this promise before tackling more difficult issues like manufacturing productivity that often come in later stages of developmental progress.
The latest data from the World Bank estimates that arable land in Pakistan is about 40% of total land area. The inequality in proportion of cultivable land that we showed exists between countries also extends to inequality within countries and their subdivisions. This has profound consequences on determining political landscapes such as ours.
Take the case of Balochistan, a province that covers 43.6% of Pakistan’s land. Out of its total area of 34.7 million hectares, due to climate, soil and practices – hardly 2 million (5.9 per cent) is cultivated. This textbook information explains one of the reasons socio-economic development in the province has lagged. This in turn has given way to stark inequality amongst provinces and the resulting qualms between them since our country’s incorporation.
Our Diverse Landscape
Moving away from national level issues down to our personal experiences, these agro-ecological zones explain why travelling to the Middle East, Europe or the United States – a good portion of the mangoes available have been imported from Pakistan. Although not completely unique in the region (China, India, Thailand & Indonesia produce more), subtropical climates make Pakistan one of the few countries that grow mangoes at scale, producing 1.7 million tonnes of mangoes per year.
If you start driving through the interior of Sindh starting from Karachi, you will soon start to see large banana plantations. However, these plantations largely disappear by the time you come closer to Punjab. Sindh produces approximately 135,000 tonnes of banana annually, accounting for 80% of the country’s produce. This is because the warmer, more humid climates of Sindh – particularly lower Sindh districts like Mirpurkhas and Sanghar are ideal for banana production.
Although I have used the example of some of our exotic fruits – the same principles dictate which crops we grow, where we grow them and how their yield varies across geographies – be it fruits, vegetables or wide acreage crops like rice, wheat or cotton. Continuing later in this series over the next few weeks, we will take a brief expedition exploring how our climatic and soil inheritance determine our range of possibilities for crops in Pakistan.
Besides the global issue of climate change, we have a limited role in influencing climate. Farming in controlled environments, the exception to climate dependent agriculture, does not yet constitute a national direction for our largely unsophisticated economy despite recent growth.
Our potential for introspection and change can only operate with the boundaries of natural circumstances. The best example of this is how our average yields (measured by local farmers in maunds per acre) are constrained by low soil organic matter. Yet, wide changes in practices such as effective utilization of manure can remedy this natural disadvantage.
Water management is another key example of utilizing natural resources. Our river system starts from the Indus River. The history of civilization in our geographic locality started from settlements around the Indus River and the name of our most populous province comes from the five tributaries of the Indus. Rainfall, our other source of water, is dictated primarily by the Monsoon and Western Depression weather systems.
Water resources in Pakistan are volatile. Take, for example, in the 2019-20 Rabi season, the total water availability reached 29.2 MAF (million acre feet), which is almost 20% less than the standard 36.4 MAF available. Steps for effective water management helps reduce volatility in yields and helps farmers plan ahead.
Our vast irrigation system consists of canals, dams and barrages that we use to channel these resources. Their development has been within the hands of successive governments dictating water policy. After exploring this topic, you may have clarity on your next local bank branch visit where a government ad will convince you to contribute to a national dam fund. A reading of the history of dams in Pakistan and their effectiveness (or lack thereof) will help see if the political zeal to crowd-source infrastructure projects is ultimately justified.
Stock Tickers and Crop Nutrition
Within the bounds of what is possible to grow, a farmer reflexively grows what sells in the market and can fetch a good price. Since an individual farmer usually is not a price mover, the incentive is to grow as much as it is possible to sell. The quantity they happen to sell is usually capped by the crop’s growth.
Increasing the marketable yield of a crop is usually what the farmer would like to optimize for the highest revenue. On the national level, to control commodity prices, the government is incentivized to ensure continuous supply and high production to keep prices low for consumers.
Although, incentives for both farmers and governments are aligned in optimizing yields, this is almost never quite realized. We will explore the reasons for these failures. Yields are partially a function of ideal weather and adequate water supply – but also heavily dependent on farming inputs.
Farming inputs are another area where building from natural circumstances intersects creates room for opportunities. Growing crops in Pakistan is an uphill task since we have a dearth of soil organic matter (SOM). Efficient use of manure and other methods can help us ease the way and will cover a part of our larger discussion on soil parameters such as soil acidity (pH) and electrical conductivity (EC).
Urban Pakistanis must have come across stock tickers for fertilizer companies such as EFERT and FFBL. What do these companies make and how is it connected to yields in Pakistan? Despite being one of the highest users of nitrogen (one of the three primary macronutrients needed for crop growth) per hectare in the world, Pakistan has one of the lowest yields. We will introduce concepts such as Nitrogen Use Efficiency (NUE) in our series on plant nutrition to reconcile these two facts.
Room for Innovation
From this discussion, we may think that we can carefully tweak and optimize yields by controlling nutrition, water supply and other determinants. While this is true in terms of continuous performance over years – the truth is that randomness has a huge role to play in the yield for any individual year. Some years bring harsh heat waves, flooding or debilitating pest attacks. We will discuss pesticides and other inputs that may act as partial insurance against random factors that increase volatility in crop production.
We cannot understate the importance of seeds from which crops grow – their quality and constant availability for high yields. The quality of a seed plays a massive role in improving yields. A part of a comprehensive national strategy would have to include the development of new high yield varieties (HYV). These varieties are used to create the genetic blueprint for crops with high production potential. What is the history of the development of HYVs and why have we been lagging lately? We’ll be answering this over the next few weeks – along with a discussion on new technological movements such as precision agriculture that offer promise for farmers.
At Macro Pakistani, we hope to create awareness and bridge the gap between the knowledge of our largely urban audience and the rural affairs that form the backbone of our economy. Since agriculture is a tough topic to tackle comprehensively in digestible pieces, we will limit our scope of discussion. We will not be talking about landowning distribution, government subsidies or support prices. Additionally, we will not be going into extensive details about particular crops, only giving a generalized macro-view of analyzing crops in Pakistan.
Next week we will release our first full article on the characteristics of Pakistan’s soils!