ASIAN AGRICULTURE SECTOR
INTRODUCTION
Agriculture is the mainstay of the most developing countries, which supplies food and employment to the majority of the population. Because of the dominance of the agricultural sector, a sufficient supply of domestic food is indispensable to support stable socioeconomic and political systems in these countries. To attain a sustained growth of agricultural productivity, sufficient investment in the agricultural sector is crucial, particularly in the initial stages of economic development. This increases agricultural production and as a result, there is a shift in (human) resources from the agricultural sector to the industrial and services sectors. According to Duranton (1998), in order to transform from agricultural sector to industrial sector a significant increase in the agricultural sector productivity is necessary. On the demand-side, the growth in agricultural production increases agricultural income which leads to increase in the demand for industrial products; whereas on the supply side, the increase in the agricultural productivity shifts human resources from the agricultural to the industrial sector [Johnson (1967)]. Economists have further explained these interdependence and linkages between agricultural and industrial sectors. According to Kaldor’s (1978) two-sector model, agricultural and industrial sectors supply inputs to each other and provide market for their outputs but differ in a number of ways. The agricultural sector has disguised unemployment and produces consumer goods for competitive markets, while industrial sector produces investment goods which are sold in imperfectly competitive markets at mark-up prices. The agricultural sector has diminishing returns to labor and capital, while the industrial sector relies on labor and capital and has increasing returns to scale. So, the surplus agricultural labor force can be redirected to the industrial sector without increasing wages. Like many developing countries, South Asian Countries (SACs) have protected their agricultural sectors to stabilize domestic food supplies. This is also necessary as agriculture accounts for nearly 30 percent of the GDP, engages bulk of the population and for most people, agricultural products make up a large part of consumption, and have a weight of 57 percent in the consumer price index. Any policy change that affects agriculture thus eventually affects everyone in the society. The provisions of Uruguay Round of the GATT agreement on agriculture reduce the ability of developing countries to continue their protectionist policies for domestically produced agricultural goods. The GATT agreement provisions on agriculture focus on aspects related to input subsidies, trade barriers including tariffs and non-tariff barriers, market access, and export subsidies. The application of the agreement will make agriculture in the developing countries less competitive as compared to developed countries mainly because of limited capital investment to improve agricultural productivity. Under the structural reform policies in the developing countries, the agricultural sector is getting less attention as compared to the industrial and services sectors.
Major Asian Countries:
Major countries of Asia are:
- Pakistan
- India
- Bangladesh
Agricultural Sector in Pakistan:
Pakistan has a rich and vast natural resource base, covering various ecological and climatic zones; hence the country has great potential for producing all types of food commodities. Agriculture has an important direct and indirect role in generating economic growth. The importance of agriculture to the economy is seen in three ways: first, it provides food to consumers and fibers for domestic industry; second, it is a source of scarce foreign exchange earnings; and third, it provides a market for industrial goods.
Land use,farming system and institutions:
The total geographical area of Pakistan is 79.6 million hectares. About 27 percent of the area is currently under cultivation. Of this area, 80 percent is irrigated. In this regard, Pakistan has one of the highest proportions of irrigated cropped area in the world. The cultivable waste lands offering good possibilities of crop production amount to 8.9 million hectares. Growth in cropped area is very impressive: from 11.6 million hectares in 1947 to 22.6 million hectares in 1997.
Most of Pakistan is classified as arid to semi-arid because rainfall is not sufficient to grow agricultural crops, forest and fruit plants and pastures. About 68 percent of the geographical area has annual rainfall of 250 mm, whereas about 24 percent has annual rainfall of 251 to 500 mm. Only 8 percent of the geographical area has annual rainfall exceeding 500 mm. Thus supplemental water is required for profitable agricultural production, either from irrigation or through water harvesting.
Agriculture is largely dependent on artificial means of irrigation. Of the total cultivated area, about 82 percent or around 17.58 million hectares is irrigated, while crop production in the remaining 3.96 million hectares depends mainly upon rainfall. The Irrigation Canal Command Area (CCA) has been grouped into classes on the basis of the nature and severity of its limitations water logging, salinity, periodicity and texture. At present about one-fifth of the cultivated land in CCA is affected by water logging and salinity to varying degrees. An additional area of 2.8 million hectares suffers from periodicity. Notwithstanding huge investments, the water table was 0 to 1.5 m under 2.2 million hectares of irrigated land, 1.5 to 3 m under 6 million hectares and 0 to 3 m under 8 million hectares. Thus Pakistan needs to overhaul its entire drainage and reclamation strategy reduce its cost and make it efficient.
Significance of the agricultural sector in economy:
Agriculture is an important sector, providing food to the fast-growing population of the country. According the 1998 census, the total population of Pakistan is 130 million. With a population growth rate of 2.6 percent there is a net addition of 3.4 million people each year. In 1947 the population of Pakistan was 32.5 million; in 50 years it has increased fourfold. During this period the production of wheat, the major food crop, has increased only 2.9 fold. During 1970/71 the amount of wheat imported was 0.3 million tonnes; it has
increased to 4.1 million tonnes in 1997. Tremendous efforts have been carried out to narrow the gap between population growth and food production.
Agriculture contributes about 24 percent of the gross domestic product (GDP) and employs 47 percent of the national employed labor force. The contribution of the agricultural sector to the GDP has declined gradually since Pakistan came into existence, from over 50 percent in 1949-50 to about 24 percent in 1996-97. Agriculture still remains the major sector of the GDP composition. A major part of the economy depends on farming through production, processing and distribution of major agricultural commodities.
In foreign trade agriculture again dominates, through exports of raw products such as rice and cotton and semi-processed and processed products such as cotton yarn, cloth, carpets and leather production .Agriculture is essential for sustainable improvements in internal and external balances. Of the total export earnings, the share of primary commodities and processed and semi-processed products constituted
almost 60 percent of the total exports. There have been some structural changes over time, but the contribution of aggro-based products has more or less sustained its position.
The average annual growth rates in the agricultural sector during the 1960s, 1970s and 1980s were 5.07, 2.37 and 5.4 percent, respectively. With the announcement of a new agriculture package by the government in April 1997, the growth rate during 1997/98 has improved to 5.9 percent.
More specifically; the agricultural sector plays an important part in Pakistan's economy by:
• providing the main source of livelihood for the rural population of Pakistan;
• providing raw materials for many industries and a market for many locally produced industrial products.
Overview of agricultural sector:
Significant progress has been made in development of the agricultural sector in Pakistan since the time of independence in 1947. At that time, the Indus Basin was irrigated with an extensive system of canal irrigation, sown with low-yielding traditional seed varieties, fertilized mainly with animal manure and cultivated by means of animal drought power and by hand.
In the early 1960s, conditions that favored more rapid growth were put in place: the Indus Water
Agreement was signed under the chairing of the World Bank; the Indus Basin Development Fund
established with multi-donor support; government improved the terms of agricultural trade; and tube well
were installed as a viable investment. That decade witnessed a green revolution in Pakistan, and
production accelerated during the first part of the decade, primarily because of the increased use of inputs.
Pakistan's agriculture has made a long and difficult journey. Its performance is marked by a mixed trend. There have been some years of dismal growth and some years of cruising growth. Since 1980, agricultural GDP at constant factor cost has more than doubled, increasing from Rs 76 billion in 1980 to more than Rs 141 billion in 1996/97, with a steady growth rate of 3.91 percent annually. Agriculture's share of total GDP however, declined from about 31 percent to just 24 percent over the same period. Crop production contributed the largest share of agricultural GDP (62 percent in 1996). with livestock contributing 34 percent and fisheries and forestry the remaining 4 percent.
During the past 50 years a significant increase in production of the major crops has been achieved. Wheat production rose from 3.3 million tonnes in 1950/51 to 18.6 million tonnes in 1997/98. Similarly during this period rice production rose from 0.86 million tonnes to 4.32 million tonnes. There was also a records increase in cereal production. The production of cotton reached 9.4 million bales during 1996/97.Sugarcane production reached 5.3 million tonnes during 1997/98.
Policy measures in the last four years, i.e. from 1993/94 to 1996/97, were positive for the agricultural sector. Undue benefits provided to the industrial sector over the years were reviewed and modified. The agricultural sector as a result responded with new buoyancy. Export taxes on agricultural commodities were reduced or eliminated, which benefited the agricultural sector. In the policy reforms package, better support prices, better tillage and soil preparation practices and adequate and timely availability of fertilizer and certified seed have added to the positive response from the farming community. In 1996/97, production of wheat reached a level of 16.7 million tonnes, and there was also a 13.7 percent increase in the production of Basmati rice. The overall production of rice registered an increase of 8.5 percent - the total production of rice during the year was 4.3 million tonnes, compared with 3.97 million tonnes in the previous year.
There was, however, a decrease in the production of pulses, particularly of gram, during 1996/97 to 832 000 tonnes from 918 000 tonnes during the previous year (1995/96). Production of potatoes and onions in 1997/98 is estimated at 1 205 000 and 1 160 000 tonnes respectively, as compared with 963 000 and 1131 000 tonnes in 1996/97.
Over the past 20 years some important structural changes have taken place in the sector. In particular, livestock has emerged as an important sub-sector, today contributing more than one-third of agricultural GDP, compared with about 28 percent 20 years ago. Similarly, fisheries and forestry, while still minor contributors to agricultural GDP, have grown rapidly. Structural changes have also taken place within the crop sector. Cotton is now as important as wheat in terms of value added with a one-fifth share of total earnings. Rice and sugar have, however, fallen from a 20 percent share in the early 1970s to 15 percent today.
Agricultural Sector in INDIA:
History of Indian Agriculture:
The history of agriculture and civilization go hand in hand as the food production made it possible for primitive man to settle down in selected spots leading to formation of society and initiation of civilization.
Western Asia is considered to be the birth place of agricultural revolution where wild ancestors of wheat and barley and domesticated animals like goat, sheep, pig and cattle are found. The period from 7500-6500 B.C. was the period of discovery of agriculture.
The period from 3000-1700 B.C. marked the spread of agricultural revolution to Egypt and subsequently to Indus valley. Moenjodaro to Harappa territory was the center of agricultural revolution in Indus valley.
Agriculture was very important profession during Verdict age 1500-1000 B.C. Use of iron implements, particularly iron ploughs became prevalent. .Buddhist period 600 BC marks the importance of trees. It can be called as a period of Arboriculture and Horticulture.
During the first century of Christian era the most important development in agriculture was irrigated cultivation in agriculture. Irrigated cultivation of rice in South India Carvery River was the most important source of irrigation water. Cultivation of rice, finger millet, Sugarcane, Pepper and turmeric was quite common.
During British period the most important development in agriculture was cultivation of commercial crops like cotton, sugarcane and Indigo. The reason for introducing commercial crops in India by Britishers, they felt need of raw materials for their industrial growth and they got huge amount from European market by selling our commercial crops there.
After Independence during 1950’s there was food crisis in India. India imported wheat from USA and rice from Myanmar. During mid 1960’s green revolution was started in India. After green revolution India became a food surplus country.
Indian Agriculture:
In India, more than 70% of the population is depending on agriculture in one form or the other. The present population is about 1000 million which is expected to stabilize at about 1500 million by the middle of present century. This trend of population growth created alarming situation as the scope of increasing area under cultivation is limited.
Importance of Agriculture in Indian Economy:
Importance of agriculture can be measured by the share of agriculture in national income and employment pattern etc. Knowing the importance of agriculture, agriculture sector can be related with the industrial sector.
- Share of Agriculture in National Income:
Agricultural share in India’s GDP was 14.02 per cent on 2010-11. India’s GDP shown robust growth (never less than5 per cent since 1990-91) which shows that non-agricultural sectors (particularly to service sector) have grown at the expense of agriculture. This is a trend that takes place the fundamentals of the Indian economy closer to the developed economies.
- Indian Agriculture sector and Pattern Of Employment
- Importance of Agriculture for Industrial Development:
Indian Agriculture has been source of supply of raw materials to our leading industry. Cotton, Jute, textile industry, Sugar, Carpathians and plantation depend upon agriculture directly.
There are many other industries which depend on agriculture in indirect manner. Many of our small and cottage industries, hand loom, oil industry, rice mills and sugar mills depend upon agriculture for their raw materials. They account for 50 per cent of income generated in manufacturing sector in India.
However in recent years the importance of food processing industry is being recognized both for generation of income and employment opportunities.
- Role of Agriculture in the field of International Trade:
Agriculture products like tea, oil seeds, tobacco and spices constitute the main items of exports of India. The proportion of agricultural goods which are exported may account for 50 per cent of our export and another 20 per cent of exports from manufactures with agricultural content.
In total 70 per cent of India’s exports comes from agricultural sector. The increased exports pay for the imported oil, machinery, etc.
Even though export surpluses are available for these commodities along with competitive prices, the export is quiet often hampered by non price competition, viz Technical barriers to trade (TBT) and Sanitary and phyto sanitary measures (SPS) under WTO regulations.
These are not uniform in all countries. They vary from country to country. Developed countries use these to minimize import from developing countries.
To meet these challenges, Indian agricultural and agricultural processing sector have to adopt measures like Hazard analysis and critical control points (HACCP) and Total quality management (TQM).
- Role of Agriculture in Economic Planning:
Agriculture is main support for India’s transport system. Transport systems like railway and roadways secure bulk of business from movement of agriculture goods and international trade is mostly in agriculture products. Many other economic activities like food grain business, dairying and fruit marketing seed and agricultural machinery etc. also depends upon agriculture. Economic condition of govt, to large extent depend upon prosperity of agriculture.
It is therefore clear that agriculture is the back bone of Indian economy and prosperity of agriculture largely influence the Indian Economy.
Agricultural Sector in BANGLADESH:
INTRODUCTION:
Most Bangladeshis earn their living from
agriculture. Although rice and jute are the primary crops, maize and vegetables
are assuming greater importance. Due to the expansion of irrigation networks,
some wheat producers have switched to cultivation of maize which is used mostly
as poultry feed. Tea is grown in the northeast. Because of Bangladesh’s fertile
soil and normally ample water supply, rice can be grown and harvested three
times a year in many areas. Due to a number of factors, Bangladesh’s labor-intensive
agriculture has achieved steady increases in food grain production despite the
often unfavorable weather conditions. These include better flood control and
irrigation, a generally more efficient use of fertilizers, and the
establishment of better distribution and rural credit networks. With 28.8
million metric tons produced in 2005-2006 (July-June), rice is Bangladesh’s
principal crop. By comparison, wheat output in 2005-2006 was 9 million metric
tons Population pressure continues to place a severe burden on productive
capacity, creating a food deficit, especially of wheat. Foreign assistance and
commercial imports fill the gap, but seasonal hunger (“monga”) remains a
problem. Underemployment remains a serious problem, and a growing concern for
Bangladesh’s agricultural sector will be its ability to absorb additional
manpower. Finding alternative sources of employment will continue to be a
daunting problem for future governments, particularly with the increasing
numbers of landless peasants who already account for about half the rural labor
force. Due to farmers’ vulnerability to various risks, Bangladesh’s poorest
face numerous potential limitations on their ability to enhance agriculture
production and their livelihoods. These include an actual and perceived risk to
investing in new agricultural technologies and activities (despite their
potential to increase income), a vulnerability to shocks and stresses and a
limited ability to mitigate or cope with these and limited access to market
information.
Economic history:
East Bengal - the eastern segment of
Bengal - was a historically prosperous region. The Ganges Delta provided advantages of a mild,
almost tropical climate, fertile soil, ample water, and an abundance of fish,
wildlife, and fruit. The standard of living is believed to
have been higher compared with other parts of South Asia. As early as the thirteenth century,
the region was developing as an agrarian economy. Bengal was the junction of trade
routes on the Southeastern Silk Road. Under Mughal rule, it was a center of the worldwide muslin, silk
and pearl trade. The British East India company,
however, on their arrival in the late eighteenth century, chose to develop Calcutta, now the capital city of West Bengal, as their commercial and
administrative center for the company held territories in South Asia. The development of East Bengal was
thereafter limited to agriculture. The administrative infrastructure of
the late eighteenth and nineteenth centuries reinforced East Bengal's function
as the primary agricultural producer—chiefly of rice,
tea,
teak, cotton, sugar cane and jute
— for processors and traders from around Asia and beyond.
After its independence from
Pakistan, Bangladesh followed a socialist economy by nationalizing all
industries, proving to be a critical blunder undertaken by the Awami League government. Some of the same factors
that had made East Bengal a prosperous region became disadvantages during the
nineteenth and twentieth centuries. As life expectancy increased, the
limitations of land and the annual floods increasingly became constraints on
economic growth. Traditional agricultural methods
became obstacles to the modernization of agriculture. Geography severely limited the
development and maintenance of a modern transportation and communications
system
The partition of British India and
the emergence of India and Pakistan in 1947 severely disrupted the economic
system. The united government of Pakistan expanded the cultivated area and some
irrigation facilities, but the rural population generally became poorer between
1947 and 1971 because improvements did not keep pace with rural population
increase.Pakistan's five-year plans opted for a
development strategy based on industrialization, but the major share of the
development budget went to West Pakistan, that is, contemporary Pakistan. The lack of natural resources meant
that East Pakistan was heavily dependent on imports, creating a balance of payments
problem. Without a substantial industrialization program or adequate agrarian expansion, the economy of East
Pakistan steadily declined. Blame was placed by various observers,
but especially those in East Pakistan, on the West Pakistani leaders who not
only dominated the government but also most of the fledgling industries in East
Pakistan.
Since Bangladesh followed a
socialist economy by nationalizing all industries after its independence, it
underwent a slow growth of producing experienced entrepreneurs, managers,
administrators, engineers, and technicians. There were critical shortages of
essential food grains and other staples because of wartime disruptions. External markets for jute had been
lost because of the instability of supply and the increasing popularity of
synthetic substitutes. Foreign exchange resources were
minuscule, and the banking and monetary systems were unreliable. Although Bangladesh had a large work
force, the vast reserves of under trained and underpaid workers were largely
illiterate, unskilled, and underemployed. Commercially exploitable industrial
resources, except for natural gas, were lacking. Inflation, especially for essential
consumer goods, ran between 300 and 400 percent. The war of independence had crippled
the transportation system. Hundreds of road and railroad bridges
had been destroyed or damaged, and rolling stock was inadequate and in poor
repair.The new country was still recovering
from a severe cyclone that hit the area in 1970 and cause 250,000 deaths. India came forward immediately with
critically measured economic assistance in the first months after Bangladesh
achieved independence from Pakistan. Between December 1971 and January
1972, India committed US$232 million in aid to Bangladesh from the politico-economic aid India received from the USA
and USSR. Official amount of disbursement yet
undisclosed.
After 1975, Bangladeshi leaders
began to turn their attention to developing new industrial capacity and
rehabilitating its economy. The static economic model adopted by
these early leaders, however—including the nationalization of much of the
industrial sector—resulted in inefficiency and economic stagnation. Beginning in late 1975, the government
gradually gave greater scope to private sector participation in the economy, a
pattern that has continued. Many state-owned enterprises have been privatized, like banking, telecommunication, aviation, media, and jute. Inefficiency in the public sector has
been rising however at a gradual pace; external resistance to developing the
country's richest natural resources is mounting; and power sectors including
infrastructure have all contributed to slowing economic growth.
Significance of the agricultural sector in economy:
 |
Meeting the nation's food requirements remain the key-objective of the government and in recent years there has been substantial increase in grain production. However, due to calamities like flood, loss of food and cash crops is a recurring phenomenon which disrupts the continuing progress of the entire economy.
Agricultural holdings in Bangladesh are generally small. Through Cooperatives the use of modern machinery is gradually gaining popularity. Rice, Jute, Sugarcane, Potato, Pulses, Wheat, Tea and Tobacco are the principal crops. The crop sub-sector dominates the agriculture sector contributing about 72% of total production. Fisheries, livestock and forestry sub-sectors are 10.33%, 10.11% and 7.33% respectively.
Bangladesh is the largest producer of World's best Jute, which also known as natural jute or raw jute. Rice being the staple food, its production is of major importance. Rice production stood at 20.3 million tons in 1996-97 fiscal year. Crop diversification program, credit, extension and research, and input distribution policies pursued by the government are yielding positive results. The country is now on the threshold of attaining self-sufficiency in food grain production
Related Links:
|
overall blog is nice and is done with clarity
ReplyDeletegood job huda i will assign u 5/5 marks
ReplyDeleteThanks for suggestion and appreciation...
DeleteThis comment has been removed by the author.
DeleteVery informative blog good work huda I assign you 5/5 marks
ReplyDelete