1. Agriculture Input Policies (Overview) – Pakistan
Initiative on The Role of Fertilizer and Seeds in Transforming Agriculture in Asia
Sohail Jehangir Malik PhD
Chairman
Innovative Development Strategies (Pvt) Ltd
and
Visiting Senior Research Fellow IFPRI
Presented by
Professor Stephen Davies
Program Leader Pakistan Strategy Support Program
ReSAKSS-Asia Program
A Technical Consultative Workshop
September 25-26, 2013
Cambodia

2. Pakistan Today: An Economy under stress
• Inequitable Distribution of Resources - especially Land
• Rapidly growing population – majority with little or no
education, skills or access to productive resources
• Energy Crises – Fully Blown
• Debt Crisis - Burgeoning
• Water Crises – Looming around the corner
• Poor Governance
– Inadequate Policy Analyses, Poor Quality Data, Diminishing
Domestic Capacity to formulate or Implement Reform
– Increasing Reliance on Donors for analyses and support
• Circumstances out of Pakistan’s control
– War on terror – domestic terrorism
– Earthquakes – Floods
These Constraints have severely affected availability of resources –
And Agriculture struggles as a step child within this crippling
environment

3. Agriculture in Pakistan’s Economy
Agriculture
Sector
Industrial
Sector Services
Sector
Real GDP
-5.5
-3.5
-1.5
0.5
2.5
4.5
6.5
8.5
FY-06 FY-07 FY-08 FY-09 FY-10 FY-11 FY-12 FY-13
Percentage(%)
Years
Growth Rates of GDP and its Subsectors –
Variable and Declining
Source: Economic Survey 2012-13
Agriculture
Major Crops
Livestock
5.0
10.0
15.0
20.0
25.0
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
Percentage(%)
Years
Share of Agriculture, Major Crops & Livestock in
GDP

4. Agriculture in Pakistan’s Economy
0
5
10
15
20
25
30
35
40
45
50
FY-00 FY-06 FY-09 FY-10 FY-11 FY-12
PercentageoutofTotal(%)
Years
Share of Agriculture in GDP declining and Percent
of Total Labor Force in Agriculture large and
almost constant esp. since FY09
Source: Economic Survey 2012-13
Wheat
Rice
Cotton
500
1,000
1,500
2,000
2,500
3,000
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13P
Yield(kg/hectare)
Years
Yield (kg/hectare) of Three Major Crops
Labor Force Agriculture

5. The emphasis on Four Major Crops
Rice
Wheat
Cotton
Sugarcane
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
Percentage(%)
Years
Share of Imp Crops in Value Add of major Crops
Rice
Wheat
Cotton
Sugarcane
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
Percentage(%)
Years
Share of Imp Crops in Real GDP
Source: Economic Survey 2012-13

6. Agriculture in Pakistan’s Economy
• Agricultural production is
– Critical to Pakistan’s food security and relieving malnutrition
– A major source of employment and income for the majority of
the population - Pakistan’s rural poor
– The source of raw material for the textile industry that
generates most of the foreign exchange earnings
• But Agriculture Growth has not matched Potential

7. Substantial yield gaps
tons/hectare
2
0
1
8
1
6
1
4
1
2
1
0
Potential Achievable (progressive farmers' yields) National average
Source: PARC, 2011.

8. Political Economy of Agriculture
The Challenges to agricultural growth have been well known for several decades
1. flat (low) yields and large yield gap;
2. low productivity of water;
3. non-reliability of water services;
4. under-performance of rural factor and input markets;
5. Rapidly declining investment - especially public investment - serious under-
investment in research and technology development and dissemination/extension
Many factors hinder Pakistan’s agricultural growth
(and hence employment and rural poverty reduction)
– Unequal land distribution – and resultant skewed distribution of power and policy
biases
– Inefficient allocation and use of irrigation water
– government intervention in markets
– Step motherly attitude to agriculture in all policy decision making and resource
allocation except decisions that lead to elite capture
– Serious disconnects between the center and the provinces in decision making and
implementation – one size fits all policies - overly focused on Wheat and fixated
on 4 crops only (wheat, cotton, sugarcane and rice)
– Regulatory environment that discourages investment and reduces market
efficiency

9. These Challenges and Factors are well documented in all the
official Agriculture Policy Documents since the late 1980s
1. Report of the National Commission on Agriculture (NCA)
1988 highlighted the neglect of agriculture and provided a
Grand Overall vision to the year 2000 with agriculture in the
center.
2. The National Agricultural Policy 1991 lamented the
continued neglect of agriculture and repeated the
recommendations of the NCA
3. The Agricultural Perspective and Policy of 2004 (NOT
OFFICIALLY ENDORSED) repeated the challenges and
recommendations of the NCA with minor changes
4. The (UNOFFICIAL) Draft National Agricultural Policy 2013
(NOT OFFICIALLY ENDORSED) repeats verbatim the
challenges and recommendations of the earlier Documents

10. Pakistan’s Overall Policy Making – largely driven the Federal
Planning Commission - Does Not give Agriculture its due
role or required resources
• Long Term Plans and Policy Visions
– Five Year Plans – started in 1955 – intermittent – currently start of 11th
Five Year Plan (starts 2014)
– Poverty Reduction Strategy Papers – (Ministry of Finance in late
1990s). PRSP 2 formulated in mid 2000s - discontinued
– Vision 2010, Vision 2030 and now Vision 2025 (starts 2014)
• Previous Plans lacked sectoral integration and paid only lip
service to agriculture
– Agriculture is NOT seen as the engine of growth and employment
generation – inadequate focus on the growth linkages of agriculture.
• ONE SIZE FITS ALL APPROACH despite diverse
resources, requirements and capacities at the subnational
(Provincial and District) Levels where implementation has to
take place.

12. The Development Policy Process in Pakistan
Where is the Policy Research??
Routine Resource Allocation mechanism under current resource constraints gives NO
priority to Agriculture
• Preparation of approach paper
• Formulation of technical working groups in all
sectors
• Preparation of sectoral chapters by working
groups and their presentation before Planning
Commission
Consultations with all Federal
Ministries for input
Consultations with all Provincial
Govts. for input
Sent to all Federal Ministries
and Dev. Partners for comments
and input
Sent to all Provincial Govts.
for comments and inputt
Finance Division
(Resource Availability)
Economic Affairs Division
(Foreign aid availability)
Finalization of draft plan by Planning
Commission and its presentation before
President/Prime Minister
Submission to National Economic Council
(NEC)
Circulation of approved plan to all Provincial
Govts. And Federal Ministries for
implementation
Transformation of plan into viable
projects/programs
EconomicPl
an
Requirements, programming
and negotiations for external
economic assistance
External debt management

13. Inadequate Supply Driven
Policy Research
Weak of Absent
Linkages to Policy
Source: Birner and Malik
(2010)

14. Some Key Agricultural Input Policy Issues
Seed
• High yield, disease free
certified seed to meet huge
yield gap
• Adherence to safe seed
replacement cycles
• Certified and improved seed
• Unregulated burgeoning
seed Industry with little or
no R&D capacity – IPR
issues
• Breeders Act, Seed
Act, Seed Policy
• Public private-partnerships
Fertilizer
• Adverse impact on fertilizer
use due to price hikes incl. gas
• Nutrient mix unbalanced
– Farmers lack of awareness in
optimal use and traditional
preference for nitrogenous
– Distorted relative prices
– Limited or no soil testing
• Adulteration and Timely
Availability
• Increasing subsidies since
2009-2010
– Rs 500 per 50 kg potash
– Rs 1400 per 50 kg on urea
– Total Rs. 14.5 bln
– Plus 50 % subsidy on price of
gas

15. Some Key Agricultural Input Policy Issues
(contd.)
Farm Mechanization
• Traditional bias against
mechanization as labor
displacing etc.
• Credit and capital
constraints
• 2011 estimate 0.9 hp per ha
as against FAO
recommendation of 1.4 hp
• Subsidy - elite capture and
political misuse
• Developing market for
mechanization services
Water
• Fluctuating availability from surface and
ground water sources between 122
MAF in 1998 and 138 MAF in 2010
• Seasonal variation and climate change
– Water reservoirs deplete to
minimal levels in December to
February when water requirements
for wheat otherwise a low delta
crop are largest
• Policy Distortions and biases towards
high delta crops – sugarcane, rice and
maize
• System losses, water delivery efficiency
and on farm water use efficiency
• Low O&M, political interference, theft
and corruption
• Increasing non-farm water use
• Pricing, distribution, maintenance and
water users
• Rain fed Areas Issues

16. Some Key Agricultural Input Policy Issues (contd.)
Research and Extension
• Investment levels very low –
private sector almost absent
• Inefficient use of available
public resources – bulk on
establishment charges –
operational research only
about 3 to 4 percent of total
• Inconsistent with national
needs and not demand
oriented
Farm Credit
• Essential for modernization
• Access to credit limited by
collateral and information
constraints and prone to
political abuse
• Policy Distortions and
inadequate market
development
• Limited Geographical
spread of the rural financial
market – micro finance
evidence mixed and

17. The Critical Constraints to Pakistan’s Agriculture Input Policy Reform… Numerous
Strategies over the decades…Same Issues… Same Recommendations ……Little
Success
1. Extremely elaborate strategies but poor translation and lack of attention to detail
and implementation capacity and processes
2. Inadequate Policy Research weak Extension and the Disconnect between the two
3. Lack of integration of agriculture (input) policy with overall policy reform and lack
of integration of various inputs. Agriculture Policy Implementation based on
residual resources available
4. One size fits all policy not conducive to meet diverse sub-national requirements
5. Modernizing Agriculture is not seen as an overall policy priority - Agriculture policy
a means for accessing subsidies by influentals (elite capture)
6. Thin Markets and Weak Institutions – neglected in policy
7. Poor governance poor implementation and lack of accountability
8. Absence of M&E and lesson Learning - decade after decade same issues - same
recommendations - no progress
The Pakistan Fertilizer and Seed Sector Studies being presented here
Provide the Specific Details for the two subsectors!

18. Thank You So Much