DTIC ADA529918: The Impact of Infrastructure on Pakistan's Agricultural Sector

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by  Defense Technical Information Center

TheJournalofDevelopingAreas28(July 1994) 46~86
The Impact of Infrastructure on
Pakistan's Agricultural Sector
ROBERT E. LOONEY
Agriculture is the largest ofthe sectors contributing to economic activity in
Pakistan; it provides over 25 percent ofthe country's Gross Domestic Product
(GOP),employsover50percentofthelaborforce, andsustains75percentofthe
population.Thesectordirectlyaccountsforover25percentoftotalexports,with
cotton textiles and other agro-based manufactured exports accounting for an
additional 35 to40 percentoftotal exports. InFY 1989/90the sectoraccounted
for over 15.3 percent of the public sector development plan (including the
fertilizer subsidy), 18.5 percent ofprivate fixed investment, and 11 percent of
total fixed investment.
I
Becauseofitsimportance,Pakistan'sagriculturalsectorhasbeenexaminedat
length.2 While not denying the significance offactors such as pricing policies,
subsidizedinputs, the Green Revolution, farm size distribution andyields, land
reform efforts, and the impact of research and extension on crop yields, the
purposeofthispaperistoexaminearelativelyneglectedarealikelytobecritical
tothe sector'slong-runviability-infrastructuraldevelopment.3Inparticular, it
seekstodeterminewhatroleinfrastructurehasplayedinthesector'sgrowth.Has
infrastructure initiated growth, or passively responded in order to alleviate
bottleneckscreatedbygrowth?Havedeficienciesininfrastructurebeenamajor
constrainton the sector's expansion? Ifso, what areas ofinfrastructure appear
most productive for expanding future agricultural output?
Trends in Agricultural Output
Pakistan'sagriculturalsectorhasalternatedperiodsofvigorousoutputgrowth
withyearsofstagnationorproductivitydecline. In the 1950slowoutputgrowth
Professor,NationalSecurityAffairs,NavalPostgraduateSchool,Monterey,CA93943.
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470 RobertE.Looney
wasduetothedisruptiveeffectsofpartitionfromIndia,watershortagesresulting
fromawaterdisputewithIndia,andbadweather(droughtin 1950/51 and 1951/52,
andfloods in 1954/55 and 1955/56).4TheGreenRevolutionspurredrecoveryin
theearly 1960s. Growth becamemoreintenseinthe late 1960s,andagricultural
outputgrew atan average annual rate of5.6 percent for adecade.
In the early 1970s agricultural growth slowed owing to unfavorable weather
(floodsin 1972/73and1973/74,anddroughtin 1974/75)/andbecausetheGreen
Revolution'sgains(newvarietiesofwheat,grownwithcontrolledwater,fertilizers,
and pesticides) leveled off. The resumption of rapid growth in agriculture
coincidedwiththe launchingofPakistan'sFifthFiveYearPlan(FY 1979/83)in
FY 1978/79.Averageannualgrowthinagriculturalvalueaddedwasgreaterthan
4p.ercentduring the plan period, nearlytwice the 2.3 percentperannum rate of
the preceding five years.
The SixthPlan (FY 1984/88)focused onattaininggreaterself-sufficiency in
agriculture.Themajorcomponentsofthisstrategywerediversificationofcrops,
strengtheningtheinstitutionalframework,structuraladjustmentsinthepatternof
productionanddistribution,adoptionofbetteragronomicpractices,modernization
ofagriculture,andincreasingproductivity(especiallyofsmallfarmers) inorder
to create exportable surpluses.6
TheaverageannualgrowthrateoftheagriculturalsectorduringtheSixthPlan
period was 3.8 percent as against a target of 4.9 percent. Cotton production
increasedsubstantiallyowingtotheuseofhigh-yieldingvarietiesofseed,higher
fertilizerapplicationrates,andimprovedplantprotectionmeasures.Theproduction
ofsugarcane, rice, and wheat, however, were belowthe targets set in the plan.
Thedeclineinsugarcaneproductionmaybeattributedinteraliatothefailure
ofresearchinstitutestodevelophigh-y'ieldingvarietiesforgeneralcultivationat
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
shortageofwateratthetransplantingstage, lowrainfall,pestattacks, the lackof
ahigh-yielding variety ofrice, andmonopolyprocurementofrice at low prices
resulted in decreased production. Finally, wheat production was affected by
adverseweatherin1986/87and1987/88.Theoverallperformanceofthelivestock
subsectorwas close to 6percentperyearas envisaged in the plan.7
Overthepastdecade,theagriculturesectorhasundergonemajortechnological
andpolicytransformations.Byintroducingtechnicalchangesofferingproduction
incentives,andincreasingtheavailabilityoffertilizer,water,andcredit,Pakistan
has increased its exportable surplus ofcotton and is close to self-sufficiency in
wheat. Forthe 1980-88periodthecorrespondingfigurewas4.3percent,upfrom
3.3 over the 1965-80 period (table 1). Since then overall growth has been
maintainedatsimilarlevels(table2). As inmostsemiariddevelopingcountries,
however,considerablevariationsexist inanpualandseasonalproductionowing
to adverse weather, pest incidence, and uncertain irrigation supply.8
Pakistan'sagricultureisalsocharacterizedbyregional disparities: Sindhand
Punjab are the granary of Pakistan, whereas North West Frontier Province
(NWFP) and Balochistan are the food-deficit regions. Average wheat yields in