The year 2011 has been marked as black year for agriculture sector as imposition of General Sales Tax on agriculture inputs and withdrawal of subsidies have multiplied the cost of farming in the country. Major role in this critical situation has been by the government as on one hand, the withdrawal of subsidies and levy of GST has increased the input cost by over 35 per cent, while on the other hand agriculture produce prices , except wheat, dropped by nearly 25 per cent that caused huge losses to farmers. The imposition of GST on fertilizers has shown 30 per cent decline in diammonium phosphate (DAP) usage, besides drop in urea and pesticides usage. Similarly, the loans to agriculture sector also witnessed a decline mainly due to the provincial and federal governments over borrowing from banking channels. Even the loan spread had been squeezed for rice seller, flour mills and agriculture produce distributors. The issue of wheat support price had not been effective the last year as it was fixed at Rs. 1,050 for 40 kilograms of wheat, however, it could be ensured only when markets have sufficient funds and competition, otherwise farmers could not benefit from the support price. The absence of food processing industries, storage and other value-addition industries was another issue, however, it could not be tackled by any government despite tall claims during the outgoing year. Similarly, no new scheme or investment was brought in this sector which could not only overcome the waste of perishable and non-perishable agricultural commodities but could also help both producer and consumer in shape of sustained prices. Regarding meeting the crops targets, the country also displayed a dismal performance as it missed almost all major targets. The government had fixed cotton crop target of 14.5 million bales, while it is being expected that the country would miss it by 1.8 to 2 million bales. Similarly, the government fixed wheat sowing target of 22 million acre, whereas it would be missed by over 2.1 million acres due to high input cost and shortage of much needed inputs. Major increase in agriculture and food products imports has further disturbed the trade balance, which was a matter of great concern for an agricultural economy. Fertilizer prices witnessed an unprecedented raise of over Rs. 800 in 2011, mainly because of suspension of natural gas supply to fertilizer plants. The country was already short of urea fertilizer and absence of price control further aggravated the situation by offering an opportunity to profiteers and hoarders. In real terms, the agriculture sector witnessed zero growth due to anti-agriculture policies and the country does not foresee any positive change during the current year as neither policymakers have wish to bring change, nor have they vision. But despite all this slackness, they have to take some effective measures to revive the agriculture sector otherwise the country would stand nowhere especially when the government is giving the MFN status to India.
interesting reading: Govt is working hard in applying genetic engineering, crop diversification and biotechnology in agriculture sector: Imam