BUILDING PARTNERSHIPS

Contact us:
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GOR 1, Lahore, Pakistan.
+92 42 99205201-6
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www.pbit.gop.pk

CONTENTS

Punjabs Agriculture Sector-Overview

Punjabs Differential Advantage
Punjabs Comparative Advantage
Sectors
Cotton
Wheat
Rice
Horticulture
Citrus
Mango
Pakistan Agricultural Commodity Index
Constraints
Productivity
Opportunities

01
03
05
06
06
07
08
09
10
11
12
13
13
15

01

PUNJAB SECTOR PROFILE

AGRICULTURE

PUNJABS AGRICULTURE
SECTOR-OVERVIEW
Punjab not only is the economic and cultural hub of the
country but also an increasingly important region from a
global standpoint. With a history dating back over 9,000
years it is a cradle of civilization and bestows on Punjab a
historically entrenched legacy in agriculture, far more
than any other agriculture power house the world over.
To this day Punjab enjoys unique status among the
agriculturally driven economies of the world.
Pakistan is progressively becoming a more significant
player on Asias economic map. It has a GDP in PPP
terms of over USD 445 billion and a population of over
181 million inhabitants. It is located at the nexus of
Central and Southern Asia and the Middle East. Punjab is
the most populous province of Pakistan with a population
of over 93 million people. The etymology of the word
itself is derived from the Sanskrit land of Five Rivers.
Not only is Punjab the largest province of Pakistan in
terms of population but also contributes over 62.02% to
the national economy.

Being a largely self-sustaining, agrarian province with an

abundant produce of food crops and livestock, it is also
referred to as the granary of Pakistan. Punjab offers a
large market size with a skilled and cost competitive
labor force; deregulated economy; a Gross Provincial
Product (GPP) of USD 276 billion in PPP terms,
strategically advantageous location in Asia; a liberal
investment
infrastructure; rich
fertile
land
complemented by four seasons; and, the highest literacy
ratios in the country with major cities having literacy
ratios of over 70% .
Punjab is ideally placed to supply non agrarian economies
within Pakistans vicinity at competitive rates. Growth in
the sector is expected to be driven by the requirements of
exporters due to increased demand from neighboring
developing countries as their incomes rise and economic
conditions improve. Total food consumption in Pakistan
was estimated to be around USD 22 billion in 2009
which translates into per capita consumption of food at
around USD 130 and constitutes around 4.94% of GDP.

The agriculture sector is a dominant source of growth and

development of Pakistans economy. It contributes nearly a
quarter of the gross domestic product and over half of export
earnings, employs nearly 45% of the labor force, and
provides income to nearly two thirds of the rural population.
In addition to the main food commodities, agriculture
provides raw material to agro-based industries and generates
foreign exchange through export of raw and finished goods.
In the last 20 years, the average annual growth rate of
agricultural output is estimated at about 4%, with a lower
rate (3%) in the last 5 years.
The importance of agriculture to the Pakistani economy is
made further clear during times of declining trends in
agricultural production. The rain and flooding that occurred
in the summer of 1992 destroyed about 10% of the sugarcane
crops, 15% of the cotton and rice crops, and an even greater
portion of some smaller scale food crops. As a result
agricultural exports plummeted and were largely responsible
for the 3.2 percent drop in gross domestic product (GDP)
that year.
Punjab serves as the granary and food basket of Pakistan. It
served the same roll in British India. Punjabs Agricultural
GDP is 66% of the national agricultural GDP . Punjab
produces 80% of the wheat, 58% of the rice, 64% of
sugarcane and 75% of the cotton crop produced in Pakistan.
Besides its share in the primary sector, Punjab is also the stage

for the majority of the agri processing and downstream

industries. For example, over 50% of all sugar mills in the
country are located in Punjab. Even more impressive statistics
lay abound in the textile, confectionary and other ancillary
industries. Punjab also has a large number of industrial units.
The small and cottage industries are in abundance that utilize
and rely on many products of the agricultural sector. There
are 39,033 small and cottage industrial units. The number of
textile units is 11,820. The ginning industries are 6,778.
There are 6,355 units for processing of agricultural raw
materials including food and feed industries. 70% of the
textile industry is located in Punjab.
In the last decade, the agriculture sector has experienced a
fall in the growth rate and high level of instability due to a
number of factors, including inclement weather, pest attacks,
water shortage, structural imbalances, and institutional
constraints. There is also evidence that the growth process in
agriculture has had little effect on rural poverty and may have
increased income inequality between rural households and
regions. Nonfarm activities have become a substantial source
of income for agricultural households, especially those with
little land of quality or no land.

02

03

PUNJAB SECTOR PROFILE

AGRICULTURE

04

PUNJABS DIFFERENTIAL ADVANTAGE

Large Tract of Alluvial Land
The agricultural land is the source of Punjabs biggest
differential advantage compared to other parts of the world.
The Indus River System drains one of the largest river basins
in Asia. The main tributary, the Indus River, originates in
Tibet in the northern Himalayas. From there it snakes its way
through the Himalayan mountain ranges before appearing on
the plains of Punjab. From there it irrigates one of the largest
single tract of agricultural land in the world (over 17 million
hectares) before it exits into Sindh near Rahim Yar Khan.
Indus along with its tributaries Jhelum, Chenab, Sutlej and
Ravi feed the Indus River Basin which with an approximate
area of 1 million square kilometers, extends over four
countries in South Asia including China in the North-east,
India in the east, Afghanistan in the North-west and the vast
majority of the plains of the Punjab, Sindh and Khyber
Pakhtunkhwa in Pakistan.
Fig 1: Indus Basin (Courtesy:World Resources Institute)

major rivers flowing through it in that close proximity of each

other. In that sense Punjab is unique. But what makes it
further unique is its river link canal system first devised by
the British in early twentieth century and then expanded by
Pakistan under its Indus River Basin Water Management
System. The complex Punjab Rivers and Link Canals System
could very well be classified as one of the twentieth century
engineering wonders. The combination of the large alluvial
plain and the extensive irrigation network is something
unique to Punjab and is the source of Punjabs great
agricultural success.
Four Distinct Seasons
Another great advantage that Punjab enjoys is division of the
year with four distinct seasons. Due to the presence of four
seasons, crop rotation is practiced with subsequent
plantations making Punjab not only ideal for the growing a
wide variety of crops but this practice also restricts the
build-up of pathogens and pest. Besides these, it also seeks to
balance the fertility demands of various crops to avoid
excessive depletion of soil nutrients. Also through alternating
between deep-rooted and shallow-rooted plants, this practice
has been seen to not only preserve but also improve soil
structure and fertility . Not only does Punjab offer the ideal
four season set up but also offers a wide variety of climatic
zones, inclusing tropical, sub tropical and temperate climates
that make Punjab ideal for a wide array of agricultural and
horticultural commodities.
Large Pool of Semi Skilled labor Force

Worlds Largest Irrigation Network

There are a number of barrages and several major dams
constructed on this river system, which provides the
backbone to one of the largest irrigation systems of the
world. No other area in the world could claim that many

Punjab is home to over 93 million people of which almost 64

million live in the vast rural areas of Punjab and over 41
million people are directly involved in agriculture and animal
husbandry while another 28.7 million involved indirectly
either further down the value chain or in ancillary industries.
This extensive labor force participation rate in the
agricultural sector not only ensures an ample supply of labor
in plantation and harvesting seasons but also represents
generations of inherited knowledge of the soil and plantation
techniques. This abundance of semi-skilled labor ensures that
agricultural sector is economically prudent.

Main Canal Network

WORLDS LARGEST
IRRIGATION NETWORK
Well Established Infrastructure Network
Punjab due to its agricultural heritage also enjoys the benefits
of a well set up infrastructure network with over 40,000
kilometers of farm to market access roads. Additionally, with
almost 14 million hectares, the Indus Basin Irrigation System
(IBIS) is the largest contiguous irrigation system in the world.
It consists of an extensive network of barrages, canals, and
watercourses. The total length of the canals is about 61,000
km with communal watercourses, farm channels, and field
ditches covering another 1.6 million km .

The Agriculture sector continues to play a central role in

Punjabs economy. While on the one hand, the sector is a
primary supplier of raw materials to downstream industry,
contributing substantially to Pakistans exports, on the other
hand, it is a large market for industrial products such as
fertilizer, pesticides, tractors and agricultural implements.

PUNJAB SECTOR PROFILE

AGRICULTURE

Cotton Production in Pakistan

09-10(P)

08-09

07-08

06-07

15000
14000
13000
12000
11000
10000
9000
8000
05-06

% Share of Punjab
89.6
90.1
76.5
48.8
75.6
73.2
76.6
83.4
64.5
62.4
52.4
60.6
35.7
8.0
5.1
0.9

04-05

Punjab
2060
658
1325
239
9156
2627
18420
247
32295
103
3643
114
30
45
8
4

Cotton production supports Pakistans largest

industrial sector, comprising some 521 textile
units (50 composite units and 471 spinning
units) with 10.1 Million spindles and 114
thousand rotors in operation with capacity
utilization of 89 percent and 60 percent
respectively, during July March, 200809.
There are about 12,000 Knitting Machines
spread all over the country. The Capacity
utilization is approx 70%. There is greater
reliance on the development of this industry
as there is substantial value addition in the
form of knitwear. Besides locally
manufactured machinery, liberal import of
machinery under different modes is also being
made and the capacity based on exports is being
developed.

03-04

Pakistan
2299
730
1732
490
12104
3589
24033
296
50045
165
6952
188
84
566
158
442

Cotton is the largest revenue earning non-food crop produced in the world. Its production and processing provide some or all
of the cash income of over 250 million people worldwide, including almost 7 per cent of the available labor force in developing
countries. The Textile and Clothing Industry has been the main driver of the economy for the last 50 years in terms of foreign
currency earnings and jobs creation. Pakistan is the fourth largest producer of cotton and the third largest consumer of cotton,
and the largest exporter of cotton yarn. The total value of the Pakistans Textile Industry was USD 11.1 billion in 2008. 1.3
million Farmers (out of a total of 5 million) cultivate cotton over 3 million hectares, covering 15 per cent of the cultivable area
in the country. Cotton and cotton products contribute about 10 per cent to GDP and 55 per cent to the foreign exchange
earnings of the country. Taken as a whole, between 30 and 40% of the cotton ends
up in domestic consumption. The remaining is exported. Pakistan
exported over USD 80 million worth of raw cotton, USD 1.1
billion worth of cotton yarn and USD 1.8 billion worth of
Cotton Fabrics.

02-03

Commodity
Citrus
Gram
Mango
Guava
Cotton (000 Bales)
Maize
Wheat
Bajra
Sugarcane
Jowar
Rice
Rape & Mustard
Barley
Dates
Banana
Apple

COTTON

01-02

Due to the differential advantages as highlighted above, the

production capacity of Pakistan is immense. It produces over
108 million MT worth of agricultural commodity worth over
USD 15.8 billion annually. The following is a list of major
agricultural commodities that are produced in Pakistan. Also
indexed is a amount produced in Punjab and the share that
Punjab holds in the production of that commodity. For a more
detailed index, refer to Annexure 1, giving a list of total
agricultural commodities produced in Pakistan. The
production quantum is also ranked in terms of who it
compares to the largest producers of that commodity all over
the world. Currently Pakistan is among the top 20 producers
in over 48 different commodities.

With this enormous agricultural wealth, the opportunities

for exports are immense. Pakistans and conversely Punjabs
largest comparative advantage is its geo strategic location.
Not only is Pakistan located on the foot hills of the immense
central Asian Economic Corridor but it is also I close
proximity to two regional super powers; India and China.
Close proximity to these countries provides Pakistan the
benefit of a high unsaturated demand that can be fulfilled.
Also in Pakistans vicinity are the agricultural deficient Gulf
States. Not even India or China can boast the low throughput
time that Pakistan can offer these countries. These countries
have historically remained Pakistans largest import
destinations with the United Arab Emirates alone accounting
for USD 1.54 billion worth of imports from Pakistan in 2009.
These countries also have large stakes in the country in all
sectors of the economy.

00-01

Production Capacity

Export Capacity

99-00

Punjab comparative to other parts of the world or other

agricultural power houses has its own distinct set of
advantages. These set of advantages makes Pakistan enjoy the
position that it does in the world.

SECTORS

98-99

PUNJABS COMPARATIVE ADVANTAGE

97-98

05

06

PUNJAB SECTOR PROFILE

AGRICULTURE

WHEAT

RICE

The world trade for wheat has seen a massive surge totaling
over USD 50 billion in 2008. The figure has subsequently
gone down and is at USD 33.4 billion in 2009. Wheat is also
a very important internationally traded commodity. A little
over one fifth of the world wheat production is traded
worldwide. Export of Wheat from Pakistan was negligible
and imports were USD 1.08 billion during 2008-09.

There are a number of different varieties of rice produced in

Pakistan, major varieties include the basmati and IRRI of
which the world renowned Super Basmati only produced in
Pakistan. Rice Production in Pakistan has increased
immensely in the past 3-4 years from 5.5 million Metric Tons
to over 6.9 million metric tons last year. Further investment
in incorporating newer rice growing technologies still need
to be made for the further development and modernization
of the sector.

Since the Green Revolution, Pakistan has achieved

remarkable progress in the wheat subsector. Through the
efforts of the Pakistan Agricultural Research Council
(PARC), and with assistance from the International Center
for Research on Maize and Wheat, Pakistan became the first
developing country in Asia to achieve self-sufficiency in
wheat production. Despite the fact that the wheat crop
contributes significantly toward the economy of Pakistan,
there has been little analytical research carried out on its
supply and demand determinants, with the exception of
some research on the cost of production, supply response,
and demand elasticities.
Wheat production increased by 528 percent from 1948 to
2000, while the increase in area planted was 114 percent.
Wheat production remained steady over the last 3-4 years.
Pakistans wheat production has been over 24.033 million
tonnes during 2008-09.

The Pakistani Rice sector is well suited to meet the growing

demand of rice from around the world due to it being the
third largest cultivated crop in Pakistan after wheat and
cotton. Also increasing demand of rice in the EU based on per
capita consumption of rice.
Pakistan however has a very distinct differential advantage in
the rice sector. It produces the worlds best rice. The name
Basmati comes from Bas translates to aroma and Mati
meaning Soil. This breed of rice has widely been acclaimed as
the finest quality of rice found anywhere in the world. There
have been many efforts to replicate this unique variety but
each has been unsuccessful. The rice is renowned world over
for its taste, aroma and nutritious value. The reasons for the
repute have been traced back to a certain set of condition that
makes this rice possible only in this area. They include quality
of the soil, extremely still and humid ripening climate, slit
Production of Rice in Pakistan
4,000.0
3.500.0
3,000.0
2,500.0
2,000.0
1,500.0
1,000.0
500.0
0.0

99
20 00
00
20 01
01
20 02
02
20 03
03
20 04
04
20 05
05
20 06
06
20 07
07
20 08
08
20 09
09
-1
0

The wheat crop occupies a vital position in Pakistans agrarian

economy. Its share in terms of percentage area under major
crops has remained around 36% for the last three decades
(Agricultural Statistics of Pakistan). The production of the
wheat crop in Pakistan is handled by private producers, but
its marketing and trade have mainly been regulated by the
government through support price policies announced by
the Government of Pakistan at the beginning of each
cropping season. According to economic theory, the
announcement of support or procurement prices at the
time of wheat sowing, the practice of wheat procurement,
and the size of wheat stocks procured positively affect the
area under wheat production and level of wheat production.

19

07

Total

Basmati

IRRI

Other

forming Deltas carrying high level of nutrients giving the

Basmati rice its trademark aroma and texture and an ideal
Day/Night Temperature Variation. The differential advantage
of Punjab holds true in this regard. The rice Bowl depicted
below highlights the ideal conditions for the growing of the
basmati rice variety
The other major variety found in Pakistan is the IRRI rice,
named so after the collaboration between the International
Rice Research Institute (IRRI) Philippines and Pakistan
Agriculture Research Council (PARC) for heat and salt
tolerant rice varieties which resulted in the creation of the
variety. This rice variety offers yields as high as 13,000
kg/hectare achieved through hybridization, compared to
only 4-5 Tons per hectare of traditional rice varieties.
According to the chairman of the Rice growers Association of
Pakistan, there is immense potential to produce more and can
easily double produce. Currently the local demand is easily
met and the export Potential is immense.
Europe consumes a much greater quantum of rice and thus
relies on imports to meet its consumption requirements. The
quantity imported into Europe jumped over 700% within 7
years. Further Investments are required in Rice Technologies
to facilitate the growth of the sector.

08

09

PUNJAB SECTOR PROFILE

AGRICULTURE

HORTICULTURE

CITRUS

The horticulture sector contributes about 12% to national agricultural GDP of Pakistan. The sector also experience higher
yields per acre and higher price per acres produce than cereals as illustrated below. Of these higher returns per hectare, Pakistan
has a local comparative advantage in the production of horticultural commodities compared to regional competitors.

Citrus is the leading fruit crop of Pakistan in terms of area, production and export. Pakistan is the 5th largest producer in the
world. Of this enormous wealth, Punjab produces 95% of the total Pakistans production. The annual Mandarin (Kinnow)
production was 2.29 Million Tons in 2009. Certain characteristics of the Pakistani Mandarin (Kinnow) award it a high regard.
This includes its high juice content, special flavor, high Vitamin C value and high levels of calcium, iron & phosphorus.

The horticulture sector is a major economic opportunity with an estimated global export market worth USD 150 billion. The
global sector is growing at over 12% per annum on average with countries like Jordan and Egypt leading the way in tradition
forms with up to 23% of growth per annum. There also exists the potential to increase exportable production by 50% through
additional investment. The following figure also illustrates four distinct growth models depicting the trajectories that Pakistans
horticultural exports may take depending on the amount of interest that is taken in the sector.

Again the differential advantage of Punjab is highlighted for these added advantages of the Pakistani Mandarin are attributed to
certain condition in Punjabs soil like its Potassium, Phosphorous and Nitrogen rich soil. Also attributed to the advantage is the
extensive network of irrigation and the immense human expertise in Citrus Sector.

World citrus fruit production (1961-2003)

120000000

Pakistan Horticulture Export Performance

100000000
80000000
60000000
40000000
20000000
-

2003

2004

2005

2006

2007

Vegetables

2008

1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003

160,000.0
140,000.0
120,000.0
100,000.0
80,000.0
60,000.0
40,000.0
20,000.0
0.0

2009

Citrus fruits

Fruit

Oranges

Grapefruits & Pomelos

Alternate Growth Models

Horticulture exports

$ million
1,400

$1 billion additional exports with

private-led integrated approach
(growth rate of 30%)

1,200
1,000
800
600

600
$1 billion additional exports with
private-led integrated approach
(growth rate of 30%)

500

$ 633 million additional exports

at Egypt, Jordans 2000-2007
growth rate of 23%

300

400
$ 100 million additional exports
at Pakistans 2000-2007 growth
rate of 6%`

200
0
2000

2002

2004

2006

2008

2010

2012

2014

Higher Net Returns on Horticulture

400

100
0

World exports of Citrus are at 2.29 Billion USD but Pakistans share is only 150 Million USD. We can increase our citrus exports
by value addition and processing of existing quantum of citrus production. Citrus yield varies from 10-25 ton/ha and averages
10 ton/ha, which ranks Pakistan 19th in the world. Monoculture and non-availability of disease free plants, insect pests and
diseases remain major issues. The main goal of the citrus sub-sector is to become internationally competitive, for which these
objectives must be achieved:

200

Pakistan

Vietnam
Horticulture

Bangladesh
Cereals

Cambodia

Lemons & Limes

Others

Increased crop yield

Improved fruit quality and safety
Extended fruit availability season to lengthen marketing window
Diversify industry

10

11

PUNJAB SECTOR PROFILE

AGRICULTURE

PAKISTAN AGRICULTURAL
COMMODITY INDEX

MANGO
Mango is the second most important tree fruit of Pakistan,
which is mostly grown in Punjab and Sindh province.
Pakistan is worlds 4th largest mango producer. Mango
orchards are cultivated on 0.16 million hectares and its total
production is 1.72 million ton. There are over 150 distinct
varieties of the Pakistani mango. Pakistan exported USD 29
million of mangoes to the Middle East, Far East and EU
markets during 2009. A very small proportion of mango
(3%) is used for processing mostly into mango pulp which is
used in canned form, drinks and ice cream.
The mango export sector began in the early 1980, after the
establishment of Export Promotion Bureau of Pakistan in late
1970s. During that period small quality of fresh mango was
exported to EU and Middle East markets. In the structural
adjustment process in 1990s and response to ongoing WTO
negotiation on international trade in horticulture sector,
little change has occurred in production technology,
harvesting practices, packaging and post harvest care.
Resultantly mango industry has been unable to significantly
improve the volume of output.
Punjab holds 67% of the total area and produces 80% of
Pakistans mango yield, which averages 10.7 ton/ha and
varies from 10-20 ton/ha, places Pakistan 13th in the world.
Diseased nurseries, sudden death syndrome of trees, short
shelf life of fruit and lack of cold chain infrastructure are the
main limitations to this industry. The mango sub-sector aims
to become a highly profitable and quality-conscious industry,
with objectives of:
Increased production with improved fruit quality and
safety
Reduced post-harvest losses and extended shelf life of
fruit
Diversified and value added products
Increased exports

ANNEXURE 1
Area

Production
(metric tons)

(tons/ha)

Punjab

105,000

1,392,000

13.3

Sindh

50,000

352,000

7.0

1,400

6,500

4.6

300

3,200

10.7

157,000

1,754,000

11.2

Province

Baluchistan
NWFP
Total

(hectares)

Yield

Rank
6
4
12
6
3
6
4
5
18
11
2
16
8
5
11
14
13
2
19
13
9
2
5
5
9
14
6
17
18
18

Product
Wheat
Cotton Lint
Rice
Sugarcane
Cotton Seed
Mangoes
Onions
Dry Chilies and Peppers
Maize
Oranges
Chick Peas
Fresh Vegetables
Tobacco
Dates
Tangerines, Mandarins
Rapeseed
Sunflower Seeds
Oil Seed
Dry beans
Wool
Tropical Fruit
Roots and Tubers
Spices
Apricots
Cauliflower and Broccoli
Melons
Okra
Pumpkins
Garlic
Fresh Fruit

USD (000)
3361010
2942239
1709320
1023285
477624
418603
387009
386122
324662
302448
225208
197032
187791
156735
144915
103717
95266
85257
80039
68387
64097
58677
58306
58222
47328
46987
46236
44936
44765
38849

Product
Rank
MT
Spinach
9
23294700
Pulses
3
1982000
Green Peas
12
8345100
Sesame Seeds
14
54741600
Limes and Lemons
18
3694900
Almonds
15
1719180
Millet
16
1816400
Walnuts
18
130000
Eggplants
18
3605000
Dry Peas
12
1721000
Nuts
18
838000
Lentils
11
1026564
Castor Oil
8
103240
16
Berries
557524
Pistachios
10
640000
Safflower Seeds
16
368000
Bastfibers
15
407224
Jute
18
300000
195000
40600
560000
467825
47113
240192
212228
241234
103659
252446
62333
243557
Food and Agriculture Organization of the United Nations, www.FAOSTAT.org

USD (000)
34726
32746
29683
28855
25737
25069
25061
18397
14314
9882
8815
4571
3170
2553
1983
0
306
7

MT
82693
120600
92134
32788
98500
23382
305000
15195
86528
71200
6200
21000
2219
3717
536
49
1000
20

12

13

PUNJAB SECTOR PROFILE

AGRICULTURE

CONSTRAINTS
Pakistan needs structural reforms in agriculture to raise the per hectre yields. High quality seeds, fertilizer and farm
mechanization could totally revolutionize agriculture and become an export powerhouse. A lot of agricultural products are lost
in the supply chain from the field to the supermarket creating food shortages and increase in prices. According to some estimates
more than 20% of Pakistani agricultural goods are lost in the archaic Indus Valley era supply chain. Refrigerated cargo trucks
could ship vegetables and fruits to refrigerated ships to their destinations in Europe and America. Pakistan could ship roses, and
flowers kept at almost zero degree temperature and get Billions of Dollars during Valentines Day.

PRODUCTIVITY
Two of the main cash crops of Punjab are rice and wheat. In Pakistan, rice crop has an accumulated growth rate of 25% in
three years.
Country

Wheat

Difference
from Best

Sugarcane

World
China
India
Pakistan
USA
Brazil
Egypt
Best = 100

3086
4762
2802
2451
3018
-

65
100
59
52
63
-

71510
73114
68877
51494
73765
79709
121136

Difference Rice (Paddy) Difference

from Best
from Best

The Indian state is following a policy of trying to produce

more from less land while in Pakistan, more land is brought
under cultivation every year to enhance the total yield and
meet domestic consumption needs. At the same time, it is
well known that Pakistan can ill afford to increase area of
cultivated land because of scarcity as also deteriorating
quality of water.
The difference between the productivity of the two sides
reflects sadly on the state of affairs in Pakistan's Punjab.

59
60
57
43
61
66
100

4309
6556
3370
3520
7672
4229
9731

44
67
35
36
79
44
100

Cotton Seed

Difference
from Best

2099
3906
1206
2046
2250
3757
2333

54
100
31
52
58
96
60

According to a study by three Pakistani and Indian experts, "if

India were to produce the same amount of rice with
Pakistan's productivity level, it would have to devote an
additional area of more than one million hectares under rice".
The picture of wheat is worse. Pakistan would have to bring
an area of about 'four million ha' to reach Indian Punjab's
produce. The experts ask the question why yields vary so
much under fairly similar 'agro-climatic, socio economic and
managerial conditions'. Their analyses identify some of the
factors contributing to this discrepancy in productivity. They

cite productivity performance as partly caused by differences

in input use and cropping intensity but link it with the use of
technology and resource quality too.
Low productivity is not restricted to Punjab; farmers of
Sindh are equally afflicted with this problem though all the
reasons for low yields in the province do not follow Punjab's
pattern. Extensive irrigation has caused the water level to rise
in Sindh from a 'depth of 20-3 meter to 1-2 meter within the
last twenty years' and that has had a negative impact on
productivity. In Pakistan, produce varies from farm to farm,
indicating inequity in the availability of resources to farmers.
That should read as big landowners usurping the share of
small farmers and their resources enabling them to apply the
required quantity of inputs to crops.
Land is suffering a process of degradation in Pakistan. India
has countered the problem with 'widespread use of gypsum
to combat secondary salinity from tube well irrigation' by
providing gypsum at subsidized rates to states facing salinity.
An organization has been established for this purpose.
Gypsum has been provided on subsidised rates in Punjab in
the past. A project namely Biosaline-II with main focus on
provision of Gypsum on subsidised rates is being
implemented in saline district of Punjab (Sargodha,
Hafizabad and Jhang). Federal Govt. is also implementing
similar projects in all provinces including Punjab. However
more efforts are needed with respect to reclamation of salt
affected lands. One of the reasons for low produce of rice is
Pakistan's emphasis on low yielding high value Basmati rice
while India cultivates early maturing coarse rice. This causes
delays in sowing of wheat in areas of rice-wheat regime.
Basmati rice is a foreign exchange earning commodity but it
has become a case of earning from one source and
squandering assets as a consequence.
Basmati rice is harvested late and that automatically delays
wheat cultivation in Basmati-rice areas. This is reflected in
quantity of wheat yield. Delayed cultivation of wheat means a
1 to 1.5 per cent daily decline in the yield if the crop is sown

after the cut-off date for sowing. The experts have not taken
the impact of sugar-cane on wheat because that too is an
important factor in the delay of wheat cultivation. Problems
of sugar millers are costing a lot in wheat output. It is time
the government started seriously investigating and
identifying factors causing low productivity of the agriculture
sector of Pakistan. The measures announced in the Budget for
2004-05 suggest that the authorities are concerned but they
are hardly backed by appropriate policies. High allocations
are welcome but the money has to be invested in the right
fields, not scattered all over to demonstrate the importance
attached to the agriculture sector.

14

15

PUNJAB SECTOR PROFILE

OPPORTUNITIES
CORPORATE FARMING
Few regions have seen such enormous changes in their
farming industry as the province of Punjab. Recent decades
have been a turbulent time for agriculture with the increasing
climatic uncertainty, droughts and floods. Besides these,
there are newer more powerful pressures on their livelihoods
that their grandfathers, even 50 years ago, could never have
imagined.
These pressures have been generated by the contemporary
worlds economic, environmental and consumer forces and
have changed the face of the entire agriculture sector and the
food-production industry in Pakistan.
Today in Punjab, farmers tend an impressive 70% of the
provinces 20 million hectares of land and yet the direct
economic value of farming in the food they produce is less
than 21% of Punjabs gross provincial product. This
decreasing proportion however, hides the real and
immeasurable economic value of farming in terms of the raw
materials that feed Punjabs and conversely Pakistans major
food processing industries and the enormous benefit for the
local population in the shape of much needed export earnings
that provide a fertile field for growth in the industry.
Increasingly, these developments are being encouraged not
only by government policies but also by the farming
community. One of the inherent problems in the sector is the
fragmented non-economic and land holdings and the archaic
inheritance policies that exist to perpetuate the status quo
situation and hinder the development of new processes and
technologies.

World production levels have fallen, especially in the United

States, Canada and Australia, while new markets are opening
up in north Africa and Asia. Pakistan was supposed to be a
leader among those nations with announcements of the
forthcoming wheat crop being the highest yielding one in
Pakistans history were propagated by agricultural and
farmers associations. The 2010 Monsoon flooding has
severely their spirits and the possibilities of the bumper crop.
However opportunities lay abound in corporate farming, i.e.
to incorporate large scale economic farming practices and
trade and price policies into the structure of the sector. The
capacity for increase is strongest however in the downstream
and processing sector of the agricultural economy.
Investments in cold chains, farms to market roads, pack
houses, grading and certification mechanisms, and value
added opportunities like pulp extraction, fruit juice, retail
brands are immense and should be initiated.
Contact us:
Department of Agriculture
Mr. Arif Nadeem
Secretary
Government of Punjab
Ph: +9242.99210578, +9242.99210130
For Investment Related Queries:
Dr. Arshad H. Hashmi
Sectoral Head (Agriculture/Dairy & Livestock)
Punjab Board of Investment & Trade (PBIT)
Tel: +9242.99205201-6