The Impact of Infrastructure on Pakistan's Agricultural Sector

Transcription

1 The Journal ofdeveloping Areas 28 (July 1994) 46~86 The Impact of Infrastructure on Pakistan's Agricultural Sector ROBERT E. LOONEY Agriculture is the largest of the sectors contributing to economic activity in Pakistan; it provides over 25 percent of the country's Gross Domestic Product (GOP), employs over 50 percent ofthe labor force, and sustains 75 percent ofthe population. The sector directly accounts for over 25 percent oftotal exports, with cotton textiles and other agro-based manufactured exports accounting for an additional 35 to 40 percent oftotal exports. In FY 1989/90 the sector accounted for over 15.3 percent of the public sector development plan (including the fertilizer subsidy), 18.5 percent of private fixed investment, and 11 percent of total fixed investment. I Because ofits importance, Pakistan's agricultural sector has been examined at length. 2 While not denying the significance of factors such as pricing policies, subsidized inputs, the Green Revolution, farm size distribution and yields, land reform efforts, and the impact of research and extension on crop yields, the purpose ofthis paper is to examine a relatively neglected area likely to be critical to the sector's long-run viability-infrastructural development. 3 In particular, it seeks to determine what role infrastructure has played in the sector's growth. Has infrastructure initiated growth, or passively responded in order to alleviate bottlenecks created by growth? Have deficiencies in infrastructure been a major constraint on the sector's expansion? If so, what areas of infrastructure appear most productive for expanding future agricultural output? Trends in Agricultural Output Pakistan's agricultural sector has alternated periods ofvigorous output growth with years ofstagnation or productivity decline. In the 1950s low output growth Professor, National Security Affairs, Naval Postgraduate School, Monterey, CA by Western Illinois University. All rights reserved.

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3 470 RobertE.Looney was due to the disruptive effects ofpartition from India, water shortages resulting from a waterdispute with India, and badweather (drought in 1950/51 and 1951/52, and floods in 1954/55 and 1955/56).4 The Green Revolution spurred recovery in the early 1960s. Growth became more intense in the late 1960s, and agricultural output grew at an average annual rate of 5.6 percent for a decade. In the early 1970s agricultural growth slowed owing to unfavorable weather (floods in 1972/73 and 1973/74, and drought in 1974/75)/ and because the Green Revolution's gains (new varieties ofwheat, grown with controlled water, fertilizers, and pesticides) leveled off. The resumption of rapid growth in agriculture coincided with the launching ofpakistan's Fifth Five Year Plan (FY 1979/83) in FY 1978/79. Average annual growth in agricultural value added was greater than 4 p.ercent during the plan period, nearly twice the 2.3 percent per annum rate of the preceding five years. The Sixth Plan (FY 1984/88) focused on attaining greater self-sufficiency in agriculture. The major components ofthis strategy were diversification ofcrops, strengthening the institutional framework, structural adjustments in the patternof production and distribution, adoptionofbetteragronomic practices, modernization ofagriculture, and increasing productivity (especially ofsmall farmers) in order to create exportable surpluses. 6 The average annual growth rate ofthe agricultural sector during the Sixth Plan period was 3.8 percent as against a target of 4.9 percent. Cotton production increased substantially owing to the use ofhigh-yielding varieties ofseed, higher fertilizer application rates, and improvedplant protection measures. The production of sugarcane, rice, and wheat, however, were below the targets set in the plan. The decline in sugarcane production may be attributed inter alia to the failure ofresearch institutes to develop high-y'ielding varieties for general cultivation at attractive support prices for sugarcane from 1981 to 1986, and the lack of cooperation between sugar mills and cane producers. In the case of rice, a shortage ofwater at the transplanting stage, low rainfall, pest attacks, the lack of a high-yielding variety ofrice, and monopoly procurement of rice at low prices resulted in decreased production. Finally, wheat production was affected by adverse weather in 1986/87 and 1987/88. The overall performance ofthe livestock subsector was close to 6 percent per year as envisaged in the plan. 7 Over the past decade, the agriculture sector has undergone major technological and policy transformations. By introducing technical changes offering production incentives, and increasing the availability offertilizer, water, and credit, Pakistan has increased its exportable surplus of cotton and is close to self-sufficiency in wheat. For the period the corresponding figure was 4.3 percent, up from 3.3 over the period (table 1). Since then overall growth has been maintained at similar levels (table 2). As in most semiarid developing countries, however, considerable variations exist in anpual and seasonal production owing to adverse weather, pest incidence, and uncertain irrigation supply.8 Pakistan's agriculture is also characterized by regional disparities: Sindh and Punjab are the granary of Pakistan, whereas North West Frontier Province (NWFP) and Balochistan are the food-deficit regions. Average wheat yields in

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