Agro-Industry: An Accelerator for Agricultural Development in Pakistan

By Khan, Rao Abdul Rauf | Economic Review, July 1996 | Go to article overview

Agro-Industry: An Accelerator for Agricultural Development in Pakistan


Khan, Rao Abdul Rauf, Economic Review


Introduction

Despite the peculiarities of our rural areas, the separate identity of rural industries has not yet been institutionalized. It is abundantly clear that this sector offers opportunities not only to absorb our jobless millions but also provides time-bound action plan for poverty eradication, if it is given its due share. It will pave the way for village industrialization in remote/backward areas by making full and judicious use of available resources through induction of appropriate technologies and support services. The khadi and village industries activities, if developed properly, can arrest the exodus of population from rural areas to urban areas to an extent and thus reduce social costs of urbanization.

The process of industrialization of developing countries is hampered due to various constraints, such as availability of investible funds, infrastructural facilities consisting of transportation, communication, credit, market, backward and forward linkage. Whatever industries are established in developing countries of which Pakistan is no exception, these tend to get located in cities and around semi urban areas where comparatively better socio-economic infrastructural facilities are available.

As a result of this tendency, rural population which cannot be absorbed by agricultural sector, tends to migrate to cities and abroad to find work in industries. This has created manifold socio-economic problems. Thus establishment of agro-industries should evenly be spread over specially in backward areas so as to remove regional disparities and concentration of economic power in few limited hands. The presence of inequality infact is the main cause of poverty. With a view to rectify the lopsided development of the economy, the present government policy of rural industrialization under the process of deregulation and privatization have been endeavouring to boost giving relaxation and incentives in both fiscal and non fiscal measures, has gained ground in the recent past. However, in order to give real boost further positive changes by developing entrepreneurship within rural sector is need of the hour without which no investment will come-forth as expected.

Agriculture - Its Status

Agriculture with its branches of animal and crop husbandry, forestry, fisheries and horticulture is the largest sector of the economy. Today bulk of 68 per cent population living in rural areas is dependent on it for livelihood. It contributes 25 per cent to gross national product (GNP) accounts 15 per cent of foreign exchange earnings and engages 18 per cent of employed labour. The main features of Pakistan agriculture are the fertile soil of the country, a generally favourable climate with a net work of canal irrigation. The unhappy aspects of agriculture are low yield per acre, uncertainty of weather condition, recurring floods, sub-division and fragmentation of holding and incidence of large scale water logging and salinity. The unorganized market, the unsatisfactory infrastructural facilities like farm to market road, weak means of transport and communication are another factors proving hurdles in the way of modernizing agriculture bringing improved practices in operations aided with diversification making economically viable unit specially small and marginal farms comprising 93 percent. Finally the pace in mechanization still needs acceleration. Present Government has given to agriculture its due place by devising development specially by setting up task force making provision all essential input in each segments of agriculture to develop by itself. The growth rate in agriculture has gone to 6.7 per cent against growth rate of 7 per cent envisaged in VIIIth Plan and 5.9 per cent during 1994-95. The value added crops as per economic survey has improved from 8.7 per cent in 1994-95 to 9 per cent in 1995-96 with cotton growing and 14.9 percent realizing 10.6 million bales against 8.7 million bales in 1994-95. …

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