Agricultural Crops of Pakistan

Introduction
Agricultural activities in plain areas of Pakistan are performed in two seasons.Those crops which are cultivated before the beginning of winter season and harvested in early summer are known as "Rabi Crops".They include wheat ,barley ,grams,oil seeds,pulses e.t.c.But those crops which are grown in the beginning in summer and their picking or harvesting takes place in early winter are called "Kharif Crops".These may include Rice,Sugarcane,Millets,Maize etc. These major crops contributed 7.7% last year against the set target of 4.5%. Minor crops are canola, onions, mangoes and pulses which contributed 3.6% as there was no virus attack last year. Fishery and Forestry contributes 16.6% and 8.8% respectively.

Agriculture problems and their causes:

Though the agricultural sector is facing problems in Pakistan yet the major chunk of money comes from this sector. Following are the major causes of agricultural problems in Pakistan which disturb the agricultural growth or development in Pakistan. Firstly: No mechanism has been adopted to eradicate the soil erosion and even after harvesting nothing is done to improve or restore the soil energy. Therefore, the fertility of soil is decreasing day by day. The thickness of fertile layer of soil in Pakistan is more than 6 inches but the average yield is lower than other countries where layer of fertile soil is only 4 inches. Secondly: water wastage is very high in our country. The archaic method of flood irrigation is still in practice in whole of the country which wastes almost 50 to 60 percent of water. A new irrigation system called drip irrigation system has been introduced in many parts of the world. This not only saves water but also gives proper quantity of water according to the needs of plants. Thirdly: owing old methods of cultivation and harvesting, Pakistan has low yield per acre that means the average crop in Pakistan is just 1/4th of that of advance states. Where as Nepal, India and Bangladesh are using modern scientific methods to increase their yield per acre. For this purpose, these states are using modern machines to improve their yield.

Fourthly: the small farmers are increasing in our country as the lands are dividing generation by generation. So, there are large number of farmers who own only 4 acres of land. These small farmers do not get credit facilities to purchase seeds, pesticides, fertilizers etc. Additionally, a large area of land is owned by feudals and the farmers who work on their lands, are just tenants. This uncertain situation of occupancy neither creates incentive of work nor does attract capital investment. Fifthly: focusing more on land, crops and yield problems the man behind the plough is always ignored. While formulating the 5 or 10 years plan, no emphasize has been laid on the importance of solving the problems of farmers. Most of the farmers are illiterate, poor and ignorant. In this wake the loans issued by ADBP or other banks are used by them in other fields like repayment of debts, marriage of daughters etc, in spite of its befitting use in agricultural sector. Lastly, The only mean of communication in rural areas is T.V or radio so it is urgently needed on the part of these mass communication resources to air the programmes related to the new agricultural techniques and allied sciences. But these programmes should be telecast in regional or local languages. Because lack of guidance is the main reason of farmers backwardness. The communication gap between well qualified experts and simple farmers have not been bridged. Availability of these experts is not ensured in rural areas as they are reluctant to go there. Monopoly Of Foreign Companies: The pesticides companies are sorting partnership with World Bank. These companies are selling adulterated but expensive pesticides to a poor farmer thus leaving him helpless. These pesticides are not only hazardous for health but also a filling the pockets of companies. By moving according to world bank these companies are gaining their own aims. Moreover there is a conflict of interests. It is not ensured that either the company conducting agreement is basically trying to get access to international market or just working according to their aims. Non-comprehensice Policies Of Pakistan:18 billion in budget was allocated for agricultural sector of Pakistan but the withdrawal of subsidy on pesticides and electricity on the conditions of IMF has done serious damage to this sector. Whereas America and European Union are giving a huge amount of subsidy to their farmers and that is a greatest hurdle in the implementation of W.T.O rules. Additionally, price policy is very weak. In Punjab sugar cane is sold 150 Rs. per 40 kilograms. It was purchased and later on stocked by Industrialist in their stores. When Brazil bought sugarcane from International Market and prices become high, the Pakistan sugar mills owners projected demand of selling sugar at high prices, thus Pakistan faced sugar crisis. Then Pakistan had to import Sugar at high prices therefore, the prices of sugar went high in local markets.

SOURCES OF RURAL CREDIT

Credit in the farm sector is available from sector is available from two sources--Non institution and institutional. These two sources of credit are now discussed in brief.

(1) Non-institutional sources of credit.

The major non-institutional sources of farm credit are money-lenders, friends, relatives, landlords, shopkeepers and commission agents. Before 1947, the money lenders mostly nonMuslims were the main suppliers of loans to the farmers. After Partition however their importance has decreased to a great extent and the short term credit needs of the farmers are met from commission agents, friends and relatives which supply roughly 50% of total rural borrowings. The lenders of the informal sources (friends, relatives etc) have certain advantages over the formal credit sources. The informal lenders usually know the borrowers personally. They require little security for advancing loans. The loan are given for consumption as well as production purposes. The lenders are approachable at all times. They are also lenient in rescheduling loans. However, the informal lenders are also accused of charging higher rates of interest. They extract monopoly profits from the borrowers. As such a need was felt to organize and develop the institutional sources of credit.

(2) Institutional sources of credit.

The major institutional sources of farm credit are ZTBL, Commercial Banks, Cooperative Credit and Taccavi Loans. I. The Zarai Taraqiate Bank Limited (ZTBL) formerly known as Agricultural Development Bank of Pakistan (ADBP). The ZTBL was established in 1961 through the merger of Development Finance for the supply of credit to agricultural credit. The Pakistan. It contributes over 32.9% of the national institutional agricultural credit. The ZTBL provides short, medium and long term loans for farm and off farm activities. The Bank has five windows of investment (1) Development loans (2) Production loans (3) Agri-business loans (4) Cottage industry loans and (5) Off farm income generating activities loans. II. Commercial Banks. Commercial banks were inducted into the field of agricultural credit under the Banking Reforms Act of 1972. The banks, since them, are providing loans to the farmers for meeting their short and medium term requirements. The loans are advanced to the farmers against the security of land, crops, fixed assets and even on personal security. Commercial banks disburse agricultural credit for the purchase of inputs, cattle, tractors, dairy farming, installation of tube wells, etc. Banks provide loans under the Supervised Credit Scheme and outside the Supervised Credit Scheme.

III. Cooperatives. The cooperatives are oldest institutional sources of farm credit in

Pakistan. The performance of the cooperatives in the spread and utilization of credit to the small farmers is not satisfactory. The loans are mostly utilized by big farmers who have got their pocket societies registered with the Cooperative Department. IV. Taccavi Loans. Taccavi loans are handled by the Provincial Revenue Department. Necessary founds are allocated for different areas each year in the provincial budgets. The Taccavi loans are primarily given to the farmers for meeting emergencies such as flood, earthquake, famine, etc. The farmers take these advances in the spirit of gift or relief given in calamity and are not serious in repaying them. The major problems which are being met by the farmers in the receipts of rural credit from the institutional sources are summarized below: 1. Less Flow of credit to small farmers. There are millions of small farmers throughout the country. In spite of expansion of institutional rural credit, the gain has reached more to the big landlords. It is therefore, an urgent need that the credit should reach the small farmers who are the backbone of agricultural industry. 2. Complicated procedure for advancing loans. At present, the procedure for advancing loans by institutional sources is quite complicated. The loans are advanced to the farmers on the basis of pass books which contain the details of land owned by the farmers. The procedure is quite complicated. 3. Delay in the disbursement of credit. The procedure involved for advancing loans to the farmers is cumbersome. Who-so-ever succeeds in completing the documents is entitled to receive loans. 4. High interest rate. The interest charged by the various institutions on farm credit is high. The low income farmers cannot bear it. As regards the interest-free loans, they are not reaching the small deserving farmers. These loans are being misused on large scale through proxy loaning, family loaning and paper loaning. 5. Amount of bad debts is increasing. The loans advanced particularly to the big landlords are not being repaid to the institutions. Since the big landlords have political influence, they therefore manage to get them written off. 6. Reaching the small farmers is expensive. The financial institutions which provide rural credit avoid to advance loans to the small farmers. It is because of the fact that the procedure involved in advancing loans is cumbersome, complicated and expensive. 7. Provision of loans for marketing storage, processing of agricultural produce. The various financial institutions are trying to provide loans to the farmers mostly for the purchase of seeds, fertilizers, pesticides, tractors, etc. There is a considerable need to provide loans for marketing, storage and processing of agricultural produce.

Agriculture Loan requirements by Farmer (Agriculture Pass Book as a security)

Four attested copies of computerized National identity card of applicant.

Four attested passport size photographs of applicant Complete Agriculture pass book of applicant which is not older than last two years and be free of all types of inherited problems & mortgage (Visible signatures of Patwari, Tehsildar & Gardawar with official seals and date of issue with detailed demarcation of land i.e Khasra no, khewat, Khatooni & schedule in the end) Fresh Fard (Ownership Document) with remarks & particulars on the documents regarding any bank charge or loan or any court orders. Fard would be issued for bank loan with all required signatures & stamps from concerned officials as mentioned in point # 3 above. Average land price calculated on the basis of last three years prices. Khasra Gardawar having (signature of Patwari and date on each page of the said document). Preferably with signature & official seals of Gardawar & Tehsildar. Two Attested copies of computerized National identity card of two guarantors. Attested photocopy of fresh Fard (ownership documents) of guarantors or urban property (photocopy of ownership documents for a shop or home) of each guarantor as proof of ownership. N.D.C (Non Default Confidential Report) from all the banks of the area on the application form. Aks Shajra ( History of land ownership)

Major risk faced by farmers:

Written by Dr Monday, 11 August 2008 22:13
Price Risks: The most significant rice risks occurs when agricultural trade is subject to

free - competition. Liberalization is seemed as one of the most significant risks by the farmers. Too much production will also reduce prices and diminish the profit margins. Production Risks: Production risk is defined as any risk with origins such as adverse meteorological affects. Diseases on animals can also drastically reduce the productivity in this sector. Human or Personal Risk: This risk is about health problem or death of the farm operator. Since farming is a labor-intensive sector, the health of the farmer is essential. Asset Risk: This risk is about theft, fire and other damages or losses to property. A loss of an essential equipment, such as tractor may have additional costs. Production or Yield Risk: This risk includes weather-related risks as well as plant and animal diseases. When livestock sector is considered, the production and yield risk due to weather-related events is less substantial because weather affects this sector on a small scale. However, diseases can significantly reduce the livestock production. Price Risk: This risk includes the price reductions and fluctuations that might pull the prices below the profitable level. Institutional Risk: This risk is pertinent to policy changes which affect the agricultural issues. Since subsidies constitute a significant portion of the farmer's income, policy changes that lead to reductions in subsidies can have adverse affects on farmer's income. Financial Risk: Financial risks are associated with the possible increase in interest of a mortgage, insufficient liquidity and loss of equity. The financial risks inhibit the use of credit by the farmer to increase productivity. Farmer's tend to decline credit offers although the efficient use of credit resources can boost their productivity. Climatic Risks: include adverse meteorological events such as Hail, frost, drought, flood, wind, fire, snow, ice.

References:

J.B. Hardaker, R.B.M. Huirne, J.R. Anderson and G. Lien, Coping with Risk in Agriculture (second ed.), CAB International, Wallingford, UK (2004) ISBN 0-85199-831-3 pp. 352.