Macro Economics

Macro Economics

Agriculture and Industry Sector In Pakistan

Presented To : Prof. M. Azmat

Presented By : Bilawal Shabbir ( 1210 ) Waqas Sattar ( 1205 )

Ch. Awais Zahid ( 1211 ) Arham Javed ( 1215 )

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AGRICULTURE
Economy of every state depends on three sectors i.e. agriculture, industry and commerce. These three are interrelated with each other as the progress or retrogress of one sector effects the other two.

Pakistan is an agricultural state thus agriculture gains are of much importance than any other sector.

Importance of this sector is manifold as it feeds people, provides raw material for industry and is a base for foreign trade. Foreign exchange earned from merchandise exports is 45% of total exports of Pakistan. It contributes 26% of GDP and 52% of the total populace is getting its livelihood from it. 67.5% people are living in the rural areas of Pakistan and are directly involved in it. The Backbone off Pakistan's Economy Agriculture is the mainstay of Pakistan's economy. Nearly 26% of total output (GDP). 52% of total employment is generated in agriculture.

It also contributes substantially to Pakistans exports.

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There are two crops in Pakistan i.e. Rabi & Kharif.

Crop Kharif Rabi

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Sowing season April June Oct Dec

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Harvesting season Oct Dec April May

Some Major Crops In Pakistan

Cotton Wheat Rice Sugarcane

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Area Under Major Crops (000 Hectares)

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Major Causes of Agricultural Problems in Pakistan

i.

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. 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. 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.

ii.

iii.

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Iv . 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 feudal 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. V . Water logging and salinity is increasing day by day. No effective measures have been taken to curb it. As the storage capacity of the dams is decreasing so the water availability per acre is also decreasing. Therefore, the farmers are installing more and more tube wells to irrigate their crops. This is why salinity is becoming the major issue in most parts of Punjab and Sindh. Vi . 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.

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Vii . 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.

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Solutions for Agricultural Problems in Pakistan:

i. Feudalism should be abolished and lands should be allotted to poor farmers. This will enhance the productivity and per acre yield of all the crops in Pakistan. Taxes should be levied on Agricultural income but not without devising limit of land holding. Otherwise it would directly effect poor farmers. Federal Seed Certification and Federal Seed Registration is approved but it should taken responsible steps in approving seeds as it has already approved 36 new kinds of seeds. Specially, those seeds should be banned which can create pest problem in near future. These seeds are of cotton mainly. International seed makers are providing those seeds which are not successful in our country as these seeds are not tested on our soil. A new Agricultural policy must be framed in which following steps should be focused on. - Small farmer must be focused. The major problems of small farmers should be solved first. - Consumer friendly policy must be projected. - Productivity enhancement programmes must be constituted to adjust and support prices.

ii.

iii.

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iv.

Surplus vegetables and fruits must be exported. A Rs 39 million scheme has been approved for the current fiscal year for establishment of agro export processing zone for fruits, vegetables and flowers. This will also help in commercializing agriculture. Latest machinery should be provided to the farmers to increase the per acre yield. This provision should be on easy installments so that the farmers can avoid the burden of loans. If possible subsidy should be given by the government of modern machinery. Modern techniques of irrigation can solve the problems of irrigation in Pakistan. this includes drip irrigation and sprinkle irrigation methods. By using this technique the farmers can save a huge some of money which he pays for irrigation through tube wells and tractors. More dams should be constructed on Indus, Jhelum and Chenab rivers. This will enhance the storage capacity of water and reduce the per acre cost of all the crops. This step will also reduce the salinity chances of the lands as less tube well water will be flooded to the lands which cause salinity.

v.

vi.

vii.

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Industry
The government seeks to diversify the country's industrial base and bolster export industries. Net foreign investment in Pakistani industries is only 0.5% of GDP. Pakistan's search for additional foreign direct investment has been hampered by concerns about the security situation, domestic and regional political uncertainties, and questions about judicial transparency.

Some Major Industries in Pakistan

i. ii. iii. iv. v. vi. vii. viii. Textile Cement Fertilizer Information Technology Sugar CNG ( Compressed Natural Gas ) Tobacco Automobile

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Major Causes of Industrial Problems in Pakistan

i.

Power shortage It is one of the most common issues in Pakistan. The shortage of power is increasing day by day.

ii.

Lack of trained manpower There are only few people, who are trained as they working, There is also low level of literacy rate.

iii.

Lack of proper infrastructure It is common issue that there is no good infrastructure in Pakistan like telephone, Electricity, Etc.

iv.

Inefficiency It is also big problem in industrial sector.

v.

Lack of products innovation resulting in concentration of industries in some specific sectors. There is no innovation in industry that any one start producing new goods, All of them are try to make those product which are also made by other ones.

vi.

Changing political and economic policies. It is big issue in Pakistan that after every few years government change their economic policies.

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vii. Bad law and order situation resulting in lower investment in industries In Pakistan the situation of law and order is so bad so thats why people done take risk to invest in industries. viii. Corruption in related government agencies and so many govt. agencies intervention. There are lots of corruptions in government agencies which are related with industries. ix. Higher interest rate. Banks charge high rate of interest rate on loans. x. Smuggling It is also a big issue. xi. Shortage of Capital There is a big problem in Pakistan is shortage of capital.

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Solutions for Industrial Problems in Pakistan:

i. ii. iii. iv. v. vi. Increase Power resources Trained manpower Make A good infrastructure Do not Change political and economic policies. Make Good law and order situation Which resulting in Higher investment in industries Reduce Corruption in related government agencies and so many govt. agencies intervention and make take some strict action against corruption. Interest rate on loans should be reduced. Take some serious action against smuggling to stop it.

vii. viii.