Four Myths about Agriculture

Last week I defined the symptoms that point towards the fatal stagnation of agriculture in the country. This week I will try to present a prognosis and next week, in the concluding column I hope to outline the actions required to revive agriculture back to a healthy state.

Four myths haunt agriculture business in Pakistan. I, as a lone voice, have failed to dispel these myths despite trying for the past fifteen years at all levels, from the farmer to the policy makers. Stagnation of agricultural productivity since mid-nineties is a hostage to these myths, like a dying patient being treated by superstitious witch doctors.

We can often learn from history but history does not repeat itself (another myth we shall take up some day). In case of agriculture, unfortunately we cannot learn much from our past. Agriculture sector maintained a healthy growth of between 4 and 6 percent in the four decades prior to nineties despite poor markets, lack of infrastructure, credit limitations, successive land reforms and low technology. This has provided a false sense of security that we must have done something right in the past; and doing more of the same will turn agriculture around. Hence the government keeps going back to the beaten track of old policies (and farmers demanding the same too) – supply side assistance, subsidies, support prices etc. It doesn’t work anymore. Let us identify the drivers of growth from the sixties to the nineties.

There were three major factors propelling agricultural growth: First, the expansion of physical resources. Development of water resources under the Indus Basin Treaty with India opened up new lands with irrigation facilities. This had a direct impact on crop acreages as statistics would bear out. Second, genetic breakthroughs in three out of the four major crop – wheat, Rice and Cotton – provided quantum leap in yield potential of major crops. The green revolution of the sixties in grain crops was followed by a cotton revolution in the late seventies and eighties. Land reforms had compelled large farmers to adopt mechanisation which spread to small farmers subsequently. High yielding varieties, with mechanisation and inputs from multinationals like Esso (fertilizers) and Ciba-Geigy (pesticides) provided the impetus that provided growth in yields per acre. Third factor was the good basic farming sense of the people who were not new to agriculture and had farmed lands for two thousand years. Expansion of land and water resources combined with varieties, machines and inputs produced growth levels that sustained momentum for three decades.

By the mid-nineties all these factors had disappeared. Land and water resources had expanded to the limits. If anything environmental degradation in the form of water logging and salinity has begun to reduce availability for agriculture. Genetic breakthroughs are no where in sight. If anything, new varieties are being bred for resistance to pest, viral and fungus infections, not high yields. New varieties in Pakistan have lower yield potentials than those of yesteryears. Mechanisation has not gone beyond replacement of bullocks, it is in fact tractorisation. Even that is stagnating as sales of tractors has stagnated for the past ten years. Crop inputs have deteriorated as brand names were knocked out by cheap generics without an effective regulatory system, and huge profit motives started adulteration on a grand scale in fertilizers and agro-chemicals. Finally the good sense of the farmers has gone out of the window as under economic pressures they have taken a whip to the tired soils. Today most farmers are mining soils with no consideration for soil conservation. The progressive degradation in form of secondary salinity and sodicity from tubewell waters, and nutrient deficiencies due to incorrect and insufficient application of fertilizers has begun a process of what I term, ‘the desertification of Punjab and Sind’. Yield barriers are a direct manifestation of soil impoverishment today.

The second myth about agriculture relates to alternative use of natural resources, or rather the lack of it. The current mix of crops in the country is a legacy of the days when import-substitution was the mantra of the economic gurus. Wheat, sugarcane and cotton were promoted for saving foreign exchange and feeding domestic industry without considerations for ecological suitability or competitive advantage. Rice is the only major crop that fits these criteria. In wheat Pakistan has recently become competitive as subsidies are gradually phased out in developing countries, and even then competing with large scale rain fed wheat production through irrigated wheat is a dicey bet. Sugarcane production is like running a tractor on high-octane petrol engine. It is a poor converter of water – water for one acre of cane can produce ten acres of potatoes, five acres of oil seed crops and three acres of cotton. Water is the limiting resource in Pakistan, not land. And domestic sugarcane industry is as efficient as a steam engine. No wonder that domestic sugar is 40 to 60 percent costlier than global prices. Cotton is another losing battle with ecology. World experience has proven over the past hundred years that transplanting genotypes across continents is not sustainable. As far as we had desi cotton there was harmony; with injection of pima and north American cotton genes our varieties are succumbing to outbreaks of pests and leaf curl virus. We have hit a gene-ceiling of 10 million bales that will not break. Cotton and sugarcane cultivations have become hostage to the needs of uncompetitive industry whereas industry should exist to process the produce. Rice is doing well but market failures, domestic and international, impede its limited growth potential.

Myth number three: That government can and should be the custodians of Research and Extension services. The middle tier is totally missing, i.e. development of production processes. Research produces fundamental knowledge that is of little commercial use. Development of tools and processes convert the fundamental knowledge into commercially applicable technologies. Extension services are the conduit for spreading the production technology (crop technology) to commercial farms. No where in the world, or the developed world, has public sector successfully undertaken these functions. I cannot delve into the history of agricultural development in the West here but let me name a few agencies that played a crucial role in agricultural development. Agricultural journals play the most important role in US as far as extension and spreading of information is concerned. Virtually all mechanical inventions were made by progressive farmers in the US. Germany selected fifty odd farmers after the War and supported them with engineers to innovate new agricultural machines and technologies that are prevalent today. In France all applied research and extension work is done by Farmer Associations funded by a crop cess that is collected through a mandatory provision of law. Genetic breakthroughs and invention of chemicals is the domain of large companies, multinationals in most cases. Development of machines and processes (after invention by farmers) is done by large agricultural machine manufacturing companies like Massey Ferguson, John Deer or Ford etc. Government departments are there to provide information, liaison and regulatory support to the industry. Only in third world countries do governments create white elephants for Research and Extension that do hardly more than provide unproductive employment.

Lastly, the myth, that keeping food prices low is a political imperative, erodes agricultural dynamism. Government interventions invariably end up in chronic food deficits or surpluses.

Theodre W. Schultz, winner of the 1979 Nobel Prize in economics writes, "When the political market suppresses the entrepreneurial role of farmers, countries cannot succeed in modernizing agriculture efficiently. Political prices cut two ways. In a number of high-income countries, farm products are overpriced and food is dear. In many low-income countries food is kept cheap at the expense of farmers, there are food shortages, and such pricing forecloses the production of food more cheaply over time. In such low-income countries, more and cheaper food will only be forthcoming provided that it is profitable for farmers to modernize agriculture. But the profitability and success of agriculture in many low-income countries are much impaired by governments.”

Next week, in the concluding part, we will speak about future options and a road map based on chartering new paths and not clinging to the myths of the past.

To be concluded..

Iqbal Mustafa
20 December 2003

1350 words