LAHORE: The proposed development budget 2020-21 for the agriculture sector in the Punjab province, the food basket of the country, has almost been halved amid a double whammy of locust invasion and Covid19 endemic threatening its productivity.
Against the earmarking of Rs 15.5 billion in 2019-20 as development expenditure, the PTI government has allocated just Rs 8.065 billion under Annual Development Programme (ADP) 2020-21, slashing the amount by nearly 48 percent if compared with budget estimates of last year. Even Rs 4 billion that has been proposed to be allotted for locust control in 2020-21, the total funds for agriculture sector will remain fewer than last year’s outlay.
As per budget documents, the agriculture sector, while not affected much by Covid-19, has been impacted by pests and locust attack leading to lower output than predicted. The impact of Covid-19 has been tilted towards the urban areas so far, with the agriculture sector mostly stable. However, the sector depends on various inputs and effective logistics that need to be managed as this sector employs 14.5 million people and provides food to the country.
As the agriculture sector has largely escaped the severity of pandemic, the disruptions in supply chains due to the lockdown impacted availability of agriculture inputs as well as sale of production. Unfortunately, this sector is facing the brunt of one of the worst ever locust attacks. The vulnerability of the sector to external threats is large and needs to be managed through focused interventions to improve agriculture extension services, promote better and more resilient varieties of seeds and crops, etc. Further, several interventions are proposed for cushioning financial situation of small and medium level farmers through crop insurance, credit availability, etc.
According to budget documents, it is important that support to this sector is managed, as it employs 14.5 million people and is a food line to the entire Province. Despite determination shown for supporting the agriculture sector at least in budget documents, the speech of the worthy finance minister remained devoid of such stuff. Unlike previous years speeches when government’s financial support was used to be described in the initial part, the finance minister mentioned outlay for the agriculture sector at almost end of his speech. Agriculture was the 34th point in his budget speech out of total 44 points.
Similarly, the provincial Finance Minister touted the financial plan for year 2020-21 as an inclusive budget. However, he has barely been able to include agriculture and food security in his priority areas while formulated outlay for provincial budget. Agriculture and food security was on the sixth place out of seven-point priorities in allocating funds for various sectors.
This all happened despite that fact that it was noted in the budget documents that the economy of Pakistan, particularly that of Punjab, is predominantly agrarian and it remains the food basket for the entire country. Government expenditure on agriculture sector in Pakistan has shown to have medium to long run positive relationship with economic growth. The agriculture sector provides food security, raw inputs to agri-based industry fetching sizeable exports revenue and provides livelihood to a large segment of the population. The agriculture’s share in Punjab’s economic structure comprises 20 percent while fiscal space for the uplift of agriculture and livestock sectors combined has been estimated at just two percent.
In addition to the current non-development expenditure in FY 2020-21; the government of Punjab has committed resources for several initiatives that aim at strengthening the agriculture sector and providing necessary support to struggling agriculturists.
An amount of Rs1.350 billion is allocated for Crop Insurance Program, farmers shall be provided subsidy on agricultural inputs to the tune of Rs4 billion and an amount of Rs1.860 billion is earmarked for Interest Free Loan Schemes for farmers. Additionally, initiatives like construction of modern silos through Public-Private Partnerships, development of high value agricultural outputs through sprinkler and drip irrigation systems and establishment and improvement of food testing laboratories can potentially revolutionize the agriculture sector, which still remains the backbone of the economy. Budgetary allocations for agriculture during FY 2021-20 are expected to help in improving research, extension and field services to farmers. The Major Projects/ Programmes of ADP 2020-21 include Punjab Economic Stimulus Programme -- Micro, Small, Medium Enterprises (MSMEs), Punjab Economic Stimulus Programme -- Rural Accessibility Programme (Phase-II), Rural Enterprises for Agriculture Development (READ) and Crop Maximization through Creative Farming.
As an initiative about a related development, it is proposed in the budget that a ‘One Health Council’ for an integrated approach for deep-rooted health issues and outbreak of diseases. The proposed Council should have concerned stakeholders including agriculture, livestock, food safety, police, etc. Moreover, the Framework addresses the issues and complications caused by zoonotic diseases and highlights the work that needs to be undertaken for to prevent them. Food safety, biosafety, and biosecurity are other areas that the Government will now be inevitably focussing on. The Government will have invest to upgrade health facilities across Punjab, thereby serving the cause of Regional Equalization too.
Elaborating funding approach for year 2020-21, it is stated that the Vision for Punjab’s Agriculture sector is Transforming Punjab’s agriculture into a market-driven, diversified and sustainable sector through integrated technologies, transparency and value-for-money. In terms of its employment structure, there are more than 37 million employed in the province. Since Covid-19 outbreak the sector remains one of the most vulnerable of the economy in terms of the food security situation. As per the estimates issued by Pakistan Institute of Development Economics (PIDE) the vulnerability remains at 87.7% for Punjab. According to another estimate the size of the agriculture sector may contract by 2 to 7% owing to the compromised sowing abilities of the farmers.
Although the sector has not suffered as big a loss as the manufacturing or the services sector however, the disruptions in supply chains may impact the availability of quality seeds, fertilizers and other inputs. To address these issues the government of Punjab will introduce interventions to ensure that the agriculture sector is well protected. Investments will be planned to support food security, ensure availability of inputs for agriculture and address the locust threat. Furthermore, changes in crop mix will be encouraged and climate smart investments will be made. Agriculture sector’s total outlay for the year 2019-20 was at Rs.15.5 billion.
Amidst such predicament, the government of Punjab has adopted targeted spending strategy for the FY 2020-21. It has been planned to execute 39 on-going and 5 new schemes for which provision of Rs. 8.065 billion is being allocated.
