Agriculture is the mainstay for the country? Explain.
Answers
Agriculture sector, which is considered as the backbone of the economy has yet to come out with its full strength to serve economic needs as well as food security of the country with a nation of 200 million plus population.
The agriculture sector plays a central role in Pakistan’s economy. It is the second largest sector, accounting for over 21 percent of GDP, and remains by far the largest employer, absorbing 45 percent of the country’s total labor force. It is unfortunate that excessive involvement of politics in this sector has hampered its growth in the real sense, there is a need for radical reforms to let this important sector to play its due role in nation building.
It will not be out of place that the cotton production which provides the basic raw material to the huge textile industry remains unpredictable for various reasons including lack of research, quality seeds and modern techniques to increase its per acre yield.
COTTON PRODUCTION
It is important to note that after missing the cotton production target by 25 percent in the outgoing fiscal year, the government has set a target of 14.0 million bales for the upcoming season compared to a target of 14.1 million bales last season.
However, owing to better crop price in the outgoing season, area under cultivation for cotton is expected to increase, however, there are lingering threats on the production on account of canal water shortage in Punjab. In the global perspective, the production in the upcoming year is expected to increase backed by growth in India and China while global stock levels are expected to decline by 6 million bales.
Domestic cotton price is expected to take the lead from international trend, however, the water shortage might put pressure on price, if sustained.
In order to ensure productivity of all the major crops like cotton, wheat, rice, sugarcane etc the Governor State Bank of Pakistan Ashraf Mahmood Wathra has urged the banks to understand the needs of the economy and focus on agri financing as it is a viable business activity having huge cash flows, and significant contribution in GDP with strong backward and forward linkages.
The governor said this in a meeting of the Agricultural Credit Advisory Committee (ACAC). He highlighted the active role played by the Central Bank for promoting agri finance in the country. He emphasized that over the years State Bank of Pakistan has adapted itself into the role of a facilitator and developmental partner of financial institutions to accelerate the growth of agriculture finance in the country.
The financial institutions need to strengthen their agricultural finance policies, increase dedicated human resource, simplify lending procedures, rationalize lending rates, work diligently for creating mass awareness and develop other prerequisites for building lending portfolios and timely provision of credit to farmers and harness untapped potential of agri credit demand in the country.
Agriculture is the mainstay of Indian economy because:
(i) Two thirds of the population is dependent on agriculture and it generates large scale employment.
(ii) It provides food for teeming millions.
(iii) It provides raw materials to many agro-based industries like cotton, rubber, sugar.
(iv) Export of agricultural products earns valuable foreign exchange like tea, spices.
(v) It contributes to 26% of gross domestic product (GDP).
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