Punjab’s green muscle to beat economic crisis

[Naveed Yaseen]

By Mansoor Ahmad
PUNJAB can play a key role in economic revival of the country by adopting a dedicated approach to its agriculture, ensuring availability of fertilizers to small landowners and supporting women involved in the sector. Economists have lost hope of the economic revival through the manufacturing sector as the declining rupee, high inflation and interest rates have made industrial production commercially unviable.

The availability of fertilizers is crucial for the next wheat crop and the provincial government should ensure their availability at fair rates. Rates of fertilizers have increased internationally but their increase in the country is higher than the global trends. The rates of urea in the international market have increased from $223 per tonne in 2006 to $434 in the current year but its rates have tripled in the local market despite the fact that the federal government provides huge subsidy on natural gas to the fertilizer companies that makes local cost much lower than the global rates.

The rates of phosphate fertilizers have increased from $44 per tonne in 2006 to $288 in 2008. The price of Di-Ammonium Phosphate (DAP) has increased from Rs700 per bag in 2006 to 5,500 per bag now. The increase in rates is in line with that of the global DAP rates, however, the government is providing Rs 2,200 per bag subsidy on it. The rates, therefore, should be in the range of 3,000-3,400 per bag.

Women in agriculture constitute at least 50 per cent of the workforce and they play a pivotal role in growing, processing and preparing food. Global agricultural experts have realised that despite the contribution of women in agriculture, it is not recognized that they face specific challenges and constraints, including lack of access to agricultural inputs and complementary assets.

Under the present scenario, the Punjab government should exploit every stakeholder in the agricultural sector to boost the production. Concerted efforts must be made to raise awareness of the gender implications of the food crisis among policymakers, many of whom are new to the agricultural sector. As an initial step, women’s access to productive resources should be improved, and resources should be budgeted for gender equality work and women empowerment.

Two pronged approach is needed to address the ongoing food crisis in the country. In the short term, net food purchasers may need income support to pay for the higher cost of food until their wages adjust. The Punjab government is providing targeted subsidy in this regard. However, net producers may need credit to respond to fertilizers’ high prices, though they can recoup their costs through the higher price of their outputs. This is particularly true for subsistence farmers who are hard pressed to maintain subsistence as they cannot afford to purchase fertilizers. There is also a risk that fertilizers subsidy programmes, focused on achieving market surpluses, will exclude subsistence farmers. The subsidy on the DAP has not benefited farmers and the fertilizer is currently available at Rs 5,500 per bag against Rs 2,500 few months bag.

One promising approach involves increasing women’s access to soil fertility inputs and technologies. Given the attention paid to increasing fertilizers’ use in order to increase food supplies, coupled with the rapidly rising costs of fertilizers, fertilizer and seed vouchers may be an important short-term intervention. The vouchers could be issued on the same pattern as used in the Food Support Programme. Fertilizer and seed vouchers should be targeted to small stakeholders with explicit efforts to reach women farmers in poor households. Where women do not have enough cash to pay for fertilizers, fertilizer-for-work programs can be launched or fertilizers can be sold to women in small bags at lower cost.

http://www.thenews.com.pk/daily_detail.asp?id=140061