Thursday February 02, 2023

Smaller land holdings in Punjab yield lower harvest

April 27, 2016

LAHORE: Agriculture in Pakistan is in shambles, more so in Punjab despite having the largest agricultural land than the other three provinces. However, all regions in the country have much less per acre yield than the global best or even global average.

Small farm size has been identified as one the reasons for low yield. Sindh, for instance has larger average farm size compared to Punjab, and its per acre yield of wheat, cotton and sugarcane is higher than Punjab.

Official figures reveal that in 2013-14 Punjab cultivated wheat on 17.5235 million acres of land and its average yield was 29 maunds. The wheat cultivation area in Sindh was 2.7703 million acres and the per acre yield was 36 maunds. The farmers in Sindh thus earned Rs9,450 per acre more than the farmers in Punjab.

In rupee terms, cumulatively the farmers in Punjab would have earned Rs165.6 billion additional had their yield been at par with the average yield of farmers in Sindh. It may be noted that big landlords and the corporate farmers in Punjab got wheat yield of up to 60 maunds per acre.

This means that in ideal conditions, more land could be spared for canola cultivation, which would save over $2 billion of foreign exchange spent on importing edible oil, even leaving an exportable surplus. Even if Punjab achieves the same production level in wheat as that of Sindh, it would spare 3.6 million acres for canola cultivation. This would annually save Rs112.5 billion that the country spends on import of canola oil.

In the year 2013-14, Punjab cultivated sugarcane on 1.869 million acres of land and obtained an average yield of 584 maunds per acre. The average yield of sugarcane in Sindh was 700 maunds per acre. Big farms obtain up to 1,200 maunds of sugarcane per acre. Because of the difference in sugarcane yield, farmers in Punjab were deprived of crop income of Rs39 billion.

Similarly, Punjab cultivated cotton on 5.497 million acres and per acre yields were 19 maunds, whereas the average cotton yield in Sindh was 28 maunds. Punjab farmers suffered a net loss of Rs123.7 billion on account of lower cotton yield of 9 maunds per acre than that of Sindh.

The cumulative loss of Punjab farmers, due to lower yields in the above three major crops was Rs328.3 billion.

The basic reforms needed to develop agriculture in Pakistan include introduction of viable cooperative and corporate farming; zero GST on all agricultural inputs; crop zoning; availability of quality seeds; introduction of private commodity trading houses, and public private partnership in research and development.

Lastly, all subsidies to the farmers should be disbursed through the cooperative system. Cooperative system had failed earlier in Pakistan because even the big landlords were allowed to join the cooperative. No farmer above land holding of 12.5 acres should be allowed to join a cooperative this time.

Low productivity in Punjab can be explained from the farm size distribution compared with Sindh. The total agricultural land in Punjab is 11.8 million hectares and in Sindh it is 3.99 million hectares.

Of this, three percent of Punjab’s landholdings are less than half hectares, and in Sindh only one percent of farms are this small.

Three-five hectare farms are only 20 percent of the total agriculture land in Punjab, compared to 13 percent in Sindh. Farms of 10-20 acres are only 10 percent in Punjab and 21 percent in Sindh; and similarly, larger farms of 20-40 acres constitute only five percent in Punjab compared to 13 percent in Sindh.

The larger farm sizes in Sindh are lucrative for input suppliers of seeds, fertiliser, pesticides and other medicines as they can sell their products in bulk and provide guarantees for the performance. The salespersons of input suppliers usually do not visit small farms because the travelling hassle is not worth it.

Moreover, poor farmers with smaller land holdings rely on middlemen who provide them credit at four percent per month and also supply expensive inputs. The quality of the inputs supplied is also suspect.