Agriculture Policy in Pakistan

Agricultural Policy and Development         4(4-0)

Policy

Guidelines of Government for taking appropriate action.

Agricultural Policy

Agricultural policy describes a set of laws relating to domestic agriculture and imports of foreign agricultural products. Governments usually implement agricultural policies with the goal of achieving a specific outcome in the domestic agricultural product markets.

Review of Past Policies and Agricultural Development

By using the instruments of agricultural policies, past governments had taken various steps for agriculture development in order to ensure that outcome of farmers were in accordance with the national objectives.

Policy Objectives

Agricultural policies consisted of various measures taken by the Government to achieve specific objectives. Under our circumstances, the main objectives of agricultural policy were as;

1. Better distribution of agricultural assets.

2. To improve farmers income.

3. To ensure equitable terms of trade for agricultural sector vis-à-vis non-farm sector.

4. To accelerate agricultural growth.

5. To ensure balance growth in production to fulfill domestic requirements.

6. To ensure greater investment in agriculture.

7. To provide cheap food and industrial raw materials.

8. To increase exportable surplus in order to increase foreign exchange earnings.

9. To reduce imports of agricultural commodities through import substitution.

10. To ensure stability of prices for producers and consumers.

Policy Package

The package of agricultural policies generally used in Pakistan consists of following two categories;

1. This category fixing prices of agricultural output and inputs, measures relating to their domestic as well as international purchase and sale, import and export duties, foeriegn exchange rate etc.

2. This category involves redistribution of land ownership as well as the conditions of tenancy and inheritance.

Negative Pricing Policies

In the beginning, the Government’s main objective was to provide cheap food to urban consumers and industrial workers, cheap raw materials to agro-based industries and to transfer resources from agriculture to urban sector for investment. In the light of these objectives, the main pricing and trade policies followed upto mid 1960s were as follows;

a. Monopoly procurement of wheat and rice at fixed low prices.

b. Heavy export duties on cotton which kept low prices for the farmers but benefited the local industry.

c. Restrictions on inter-provincial and inter-district movement which depressed prices in surplus producing areas.

d. Prices of vegetable ghee controlled at low level depressing prices of cotton seed and oilseeds.

e. Agricultural imports at concessional prices depressing local prices.

f. Overvalued exchange rates which depressed prices of agricultural exports.

Positive Pricing Policies

 The shift from negative to positive pricing policies has been gradual. The first major correction in the overvalued exchange rate was made in early 1972 when the rupee to dollar exchange rate was decreased from Rs. 4.76 to Rs. 11 per dollar. Therefore rupee exchange rate was adjusted to bring it closer to the market rate. Monopoly procurement was changed into volunteer procurement in 1960s in case of wheat and much later in case of rice. Export duty was also abolished in case of rice in the recent past in case of cotton. Agricultural imports at concessional prices have also been reduced and phased out steps have also been taken to increase the prices of vegetable ghee. The two important phases of these policies worth-mentioning such as input subsidy and raining output prices.

Land Tenure System

Land tenure means a system which (i) describes the ownership of land (ii) the conditions of occupancy of land (iii) the manner and responsibility of payment of land revenue to the State.  

Land Tenure System in Pakistan

There are three types of land tenure prevalent in Pakistan as;

1.Royotwari Tenure System

2. Mahalwari Tenure System

3. Zamindari Tenure System

1. Royotwari Tenure System: Royotwari system was introduced by the British Rulers in Bombay, Madras and Sindh. Under this system, every register holder of land was recognized as its proprietor. He was made responsible to pay revenue direct to the government. He was giving liberty to sublet his holding of land or transfer it by gift or mortgage. This system is now prevalent in the province of Sindh.

Merits:

a. The cultivator was in direct relation with Government, as there was no middlemen involved.

b. Due to status of proprietor, cultivator tried to make all possible improvements in land.

c.  He worked long and late.

d. The system created a class loyal to the Government.

e. It helped in maintaining social and political stability.

Demerits:

a. The Royotwari tenure was introduced by Bitish Rulers to create a loyal class which helped them in continuation of their rule in India.

b. On account of sub-letting of the land by occupies, the number of landless labour is on the increase.

c. The size of land has become smaller.

d. Improved techniques of cultivation cannot be used.

2. Mahalwari System: Mahal means village. This system was adopted by British Rulers in Agra, Outh (India) and in the provinces of Punjab and NWFP now in Pakistan. In this system, individuals are the owners of the small units of land. These are called peasant proprietor. The peasant proprietor mostly cultivate their land themselves with the help of their families. Under this system, the land owners are jointly and individually liable for the payment of land revenue to the Government. Generally, the payment is made through the village numberdar who is given 5% of the total revenue collected by the State.

Merits:

a. It is helpful to efficient cultivation.

b. It helped in creating socially just, self reliant and stable peasantry.

c. It helped in raising production.

Demerits:

a. The excessive pressure of population on land has let to the fragmentation of holdings.

b. The peasant proprietors living in cities have now given land on rent to tenants who pay rent either in cash or kind.

c. As tenants enjoy no security, so they have no incentive for investing capital.

d. As the mechanized cultivation is not adopted on small units of holdings, the required agricultural progress is not being achieved.

3. Zamindari System: The British Rule created a loyal class by giving them vast areas of land on permanent basis. In beginning these persons were made responsible for the payment of land revenue. Later on these collectors of land revenue were conferred proprietary rights.

Defects:

a. The zamindari system has not proved beneficial for the society.

b. The feudal lords exploited the rural masses for over a long period of time.

c. The system has given rise to feudalism at the top and slavery at the bottom.

d. Landlords have become the absentee parasites.

Land Reforms

Land reforms are the measures which are taken by the Central Government to redistribute the ownership of land in favour of tillers of soil, provide security of tenants, promise equality of status and opportunities to different sections of the rural population.

Land reforms involves two types of changes;

i. Land redistribution: This involves breaking up of tenancy conditions which leads to change in the scale of ownership.

ii. Tenancy reforms: It leads to improvements in tenancy conditions with no change in the distribution and ownership of land.

Need for land reform

Land reform is undertaken in a situation where great disparities in wealth, income and power exist in agriculture. In order to eliminate inequalities in land holdings and all elements of exploitation, the Government of Pakistan introduced agrarian reforms from time to time. First land reforms were introduced in 1958, then in 1972, 1977. These reforms to some extent have decreased the land holding of zamindars.

Measures of Land Reforms

Land reforms include following measures;

i. Taking over ownership of land on the basis of compensation.

ii. Placing of limitations on future acquiring of land by certain classes of people.

iii. Tenancy reforms are introduced which aim at reducing rents, giving security to tenants against eviction and giving opportunity to acquire permanent rights over land by payment of fixed compensation.

Land Reforms Introduced in Pakistan

Since 1947, three attempts have been made to introduce land reforms in Pakistan.

1. Muslim League Land Reforms Committee 1948: Muslim League Land Reforms Committee in 1948 submitted recommendations to the Government for reducing land ownership ceiling and improving tenancy conditions in the country. The main recommendations were (i) a landlord cannot have more than 150 acres of canal irrigated land and 450 acres of barani land and the area in excess of above limit should be distributed among cultivators

2. Land Reforms of 1958: Late Muhammad Ayub Khan (Field Marshal) also took few modest steps to reduce the land holdings of feudal and provide security to tenants. Under such reform, a perso could not own more than either 500 acres of canal irrigated land or 100 acres of barani land. Over and above the limit, the land was to be taken by the Government after the payment of suitable compensation to the owners.

3. Land Reforms of 1972 and 1977: Late Mr. Zulfiqar Ali Bhutto also introduced land reforms in 1972 and 1977. These reforms were radical and impressive. Under such reform in 1972, the ceiling of land ownership was reduced to 150 acres in case of irrigated land and 300 acres of barani land. While in 1977, the indidual land holding was reduced to 100 acres of irrigated land and 200 acres of barani land.  However, these reforms could not be implemented in their true spirit. The landlords have more or less succeeded in retaining the possession of their lands on one ground or the other.

Impact of Land Reforms on Pakistan Economy

The land reforms which have been stopped half way. These reforms as and when implemented in their true sense will have the following beneficial effects on the economy;

1. About 7% feudal lords holding 53% of total land will almost be reduced to insignificance.

2. The tenants will pay revenue to the State and come in direct relationship to it.

3. The exploitation of rural masses will come to an end.

4. When tenants become the owners of land, they will have the incentive to introduce improvements on land. The magic of private property will turn sand into gold.

5. The rent received by the State from the new peasant proprietors will be spent to promote social welfare.

6. The effective breakup of big land holdings will reduce income disparities.

7. Self cultivation on owned land will minimize unemployment.

8. Effective land reforms will streamline the administration of land revenue and agricultural taxation.

9. It will truly lay foundations of a relationship of honour and mutual benefit between the land owner and the tenants.

10. Political hold of the landlords in the assemblies will be weakened.

11. The abolition of zamindari, is socially desirable as it will have no exploitation of one interest by another. It is economically justifiable as it will help in raising agricultural productivity.  

  

 

 

Irrigation Policy in Pakistan

Sustainable agricultural development depends on sustainable water use.  Irrigation allows for better and more diversified choices in cropping patterns and the cultivation of high-value crops.

The following irrigation policy in Pakistan will be adopted for enhancement of agriculture development in a country;

1. Government will declare the Irrigated Area where the irrigation facility is available.

2. Projects shall be formulated guided by the principles of Integrated Water Resources Management to ensure water availability for all stakeholders, return of investment, investment sharing and self-insurance against natural calamities.

3. For expanding year round irrigation, water reservoirs, rainwater harvests and ground water resources shall be developed, conserved, promoted and utilized as supplementary sources to the seasonal rainfall.

4. Master irrigation plan shall be prepared for transfer and management from water-surplus large river basins to the water deficit area.

5. The Department of Irrigation shall in co-ordination with the Water and Energy Departments to develop and manage the water reservoirs projects deemed appropriate mainly for irrigation purposes. The probable production of electricity by using these water reservoirs and other irrigation system shall be encouraged. Department of Irrigation shall encourage the governmental or private or joint venture investment for the development and management of the project as per the prevailing law.

6. Available ground water resources shall be developed and utilized just like the surface water reservoirs and arrangements shall be made for conservation, promotion and control in quality.

7. The policy of involving private sector in construction, operation and management of the irrigation system shall be pursued.

8. The irrigation system constructed by Government shall be transferred to the users on the basis of work plan and the possession and ownership of the land and other infrastructures belonging to transferred system shall be provided to the users as per the prevailing law.

9. Capability of local bodies and users association shall be strengthened to ensure their effective participation in the planning, construction, operation and management of small and medium irrigation systems. Efforts shall be made to involve non-governmental organization in the development of new technology in such irrigation projects.

10. Participation of local bodies, users associations and communities shall be increased by disseminating the information regarding the project in a effective and timely manner.

11. The provisions of quantitative measurement in the irrigation facility shall be introduced. The effectiveness of monitoring the irrigation will be held on the basis of water quantity provided for each crop, irrigated area and increase of production.

12. The knowledge and skill of the manpower involved in the irrigation sector shall be continued from training and shall enhance the research capability.

13. The legal and institutional reform shall be made for the achievement of the objectives of irrigation Policy.

Subsidy and Support Prices:

Subsidy: Subsidy is a financial grant provided by the Government for minimizing the burden of high prices on general consumers. The basic aim of provision of subsidy is to reduce the price to a level easily accessible to ordinary consumers. Subsidy is also provided for inducing somebody to do a certain work or adopt a certain practice. Government has been providing subsidies on fertilizers and pesticides for popularizing fertilization and plant protection practices among the farmers. Provision of subsidy is also a mean of stabilizing prices.

On one hand Government announced support prices for agriculture products to protect their producers against the price declines and on the other hand, it provides subsidies on certain items to reduce the burden of consumers.

Support Prices: The floor prices fixed by the Government for agricultural products are actually the support prices or procurement prices. These give support to the agricultural prices to keep them on certain reasonable level. The support prices in Pakistan are announced by the Government on the recommendations of Agricultural Price Commission (now called Agricultural Policy Institute). These prices are announced just before the start of sowing season and hence are helpful to the farmers in planning their farm operations. The main purpose of the announcement of support prices is to restrict the prices of commodities not to decrease beyond the level of support prices announced. If the price decreases beyond this limit, the government is ready to purchase the commodity on support price and if prices are high, the growers can sell their output in the open market.

Agriculture Price Commission (now called Agriculture Policy Institute) fixes these support prices on the basis of cost of production estimates and considering various other factors. There are two methods used for the determination of support prices;

1. Cost of Production Approach:

2. Parity Approach:

1. Cost of Production Approach: The cost of production approach suggests that farmers should be guaranteed regarding the suitable price of the crop and a balance could be maintained in between different competing crops. For example, the wheat with respect to area competes with cotton and rice. Therefore, some specific balance in between the prices of these commodities could be helpful in attaining the target of these three crops.

The cost of production of different crops may vary due to following factors;

a. Lack of organized market.

b. Cost may change due to inflation and changes in price.

c. Technology also affects the cost of production.

d. Influence of feudal/ big landlords on announcement of support prices.

2. Parity Approach: The parity approach used to remove imbalance in between the terms of trade between agriculture and non-agriculture sectors. Through this approach, a balance will be maintained between good sold by the farmers and the good purchased by the farmers.

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