Khyber Pakhtunkhwa industry’s blues

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Industry: Stalled at the start

Industrial sector in Khyber Pakhtunkhwa looks for relief in the budget 2011-2012

By Tahir Ali

Industrialists and traders in the Khyber Pakhtunkhwa, terming the federal budget as jugglery of words, have rejected it for having no package for the revival of the militancy-hit industrial sector in the province.

Industrialists had hoped the federal government would come to the rescue of sick industrial units in Khyber Pakhtunkhwa by announcing province-specific incentives and package, expanding the duration of the relief package and suggesting several mega hydel-power generation projects. They were disappointed.

The only thing they welcomed in the budget was the lowering of sales tax rate from 17 to 16 percent which, according to them, would decrease inflation a bit. The budget, according to them, had no long-term plan and, therefore, lacked the potential to ensure a robust economic and industrial growth.

The industrial sector in Khyber Pakhtunkhwa, mainly comprising the marble, furniture, pharmaceutical, match and cigarette and hospitality industries, has been badly affected by high power/gas tariffs, load-shedding, low voltage, insecurity and insufficient infrastructure besides long distance from seaport which increases cost of production and makes them less competitive.

Factories working in the iron, marble and furniture need latest training for capacity-building of their workers and machinery, marketing, and technical support from the government. The budget failed to provide any workable plan and programme for these problems.

Industries should have been given incentives such as discount in power and gas tariff, rescheduling of loans for two years, or suspension of mark-up thereon, rebate in other taxes and duties, and halting of audit of businesses and industries for two years. New investors should have been given tax exemption for a few years and relief in duties on import of machinery. All these issues have been neglected in the budget.

Soft loans, preferably interest-free ones, and separate industrial estates with modern machinery pool and common facility centres for different clusters and value addition, especially the mineral and furniture, are some steps that should have been taken.

Sharafat Ali Mubarak, president Markazi Tanzeem-e-Tajiran Khyber Pakhtunkhwa and former president of KPCCI, says prolonged power/gas load-shedding and terrorism have not only scared new investors away but also forced existing industrialists not to expand their businesses and many have shifted to other provinces.

“The extent of the damage to industrial sector in the province could be judged from the fact that off the 2200-plus total units working here, only 572 are functional these days and the number of industrial labour has decreased from around 200,000 in 1996 to a dismal 20000-plus these days,” he says.

“A couple of years ago Prime Minister Yousaf Raza Gilani had declared the province a war-hit zone and announced a relief package for industries but it, unfortunately, was not implemented in a letter and spirit. Bureaucracy continues to create hurdles in its implementation. For example, we had been exempted form general sales tax on electricity but it is being collected in the bills in clear violation of relief package. Industrialists and traders waited for another package or extension of the earlier one for a few more years but there is no roadmap for the revival of sick industrial sector in the province,” he complains.

“The problem of power-shortage, that has been afflicting the sector for quite some time, has been ignored once again and no emergency plan and mega projects have been suggested for the purpose. The target could be easily achieved by public-private partnership schemes in the sector,” Mubarak adds.

According to him, “We have over 40000MW of hydel-power potential which can be utilised by constructing power plants here. The government has unfortunately allocated around Rs50 billions for the Benazir income support programme. If funds form this and other wasteful initiatives are diverted to build power infrastructure, this would boost the economy and generate job opportunities, a requisite for permanent prosperity. Some mega projects for hydel power generation, gas exploration and exploitation, development of human capital and technology transfer must have been included in the budget for long-term sustainable economic growth.”

“Khyber Pakhtunkhwa produces about 4200 mega watt of electricity from Tarbela dam alone and its peak consumption is around 2300MW but it is subjected to 12 hours of loadshedding. Similarly, 341 million cubic feet (MCF) gas is produced here while its total requirement is 227 MCF. If Punjab is not ready to supply its wheat to other provinces unless its own wheat needs are met first, we have also right to demand non-stop and cheaper supply of gas and power before others,” he argues.

Usman Bashir Bilour, president of Khyber Pakhtunkhwa Chamber of Commerce and Industry (KPCCI), says that being adversely affected, the industrial sector in the province deserves a comprehensive package or at least, the package announced by the prime minister should be extended for another two years.

“The State Bank reports that industrial growth rate has been as dismal as 0.01 percent this year. The government should ascertain why most of the industries are closing one after the other. We have sent to the government a detailed strategy paper for the revival of industries but no one has bothered to contact us so far. We need to sit together to chalk out a 10-15 years’ plan for revival of industries in the province,” he says.

According to him, their businesses are ruined and the government is contemplating the imposition of reform general sales tax. “We would never tolerate it as it would increase inflation and overburden the people. The government had announced it will expand direct taxation base but it has once again reneged on this commitment. Special relief orders are regularly announced that exempt certain industries from taxes while other industries are subjected to additional tax burdens intermittently. This should be avoided and all those who earn money be brought into the tax net — there should be minimum tax but maximum taxpayers,” Bilour says.

“Credit is the basic requirement of industrialists but it has been made difficult for us as all leading banks have shifted their head offices to Islamabad. One will have to travel hundreds of kilometres to get a loan of even Rs10 million. How can we modernise our industries in this backdrop,” he asks.

Khyber Pakhtunkhwa is rich in oil and gas reserves. Official estimates suggest it has one billion barrel oil and four trillion cubic feet gas reserves, which, if utilised, will meet energy requirements of industries for a long time and give fillip to provincial and national economy.

Marble reservoirs in the province are estimated to be at four billion tons found in 30 varieties in the province. But most of the 2000 marble factories in the province and tribal belt, besides the factors cited above, suffer from use of outdated techniques, inconsistent supplies of raw material, lack of proper infrastructure, absence of value addition and of public-private cooperation.

Khyber Pakhtunkhwa is an ideal place for summer and winter tourism, adventure tourism, eco-tourism, culture/heritage tourism, spiritual tourism and sports and commercial tourism. This sector also needs hefty funds and public-private coordination to build tourism infrastructure and strong media campaign to attract tourists but no such thing has been announced despite promises in the 2009 tourism policy draft.

KP’s agriculture budget: Business as usual


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KP budget glued to traditional approach

By Tahir Ali Khan

Dawn 20-06-11

Officials had claimed that next year`s agriculture budget of the Khyber Pakhtunkhwa would be innovative, allocate sufficient funds and offer out-of-box solutions. But an analysis of the annual development programme shows it to be `business as usual`.

The overall meagre size of the ADP for the sector coupled with small apportionment of funds for various schemes shows it is a new budget with the old approach. It is characterised by meagre funding and staggered allocation of funds that delays completion of the projects for years. It is an overstretched plan of action that has negligible results at the end of the day.

The sector needs strong commitment of the authorities because the livelihood of around 70 per cent population of the province depends on it directly or indirectly.

The annual strategy aims at doing much with the little amount made available. With en bloc allocation to projects becoming impossible, delays in completion of projects become inevitable.

For example, for the project for distribution of cultivable land amongst landless farmers and agriculture graduates, which has a total outlay of Rs200 million, only Rs10 million has been earmarked for the next year. It will take years for the project to complete.

Again, only Rs1 million have been set aside for the Rs10 million rehabilitation of germ-plasma unit in Hazara division. And for development of olive orchards in wasteland, another good intervention, only Rs10m out of the total outlay of Rs60m have been approved for the year. For new schemes worth Rs716m in the agriculture research, only Rs109m have been provided.

Achai conservation and development programme estimated to cost Rs222m gets a meagre Rs42m. While Rs141 had been spent on it in the last fiscal, why the remaining amount is not allocated to complete the vital project?

The ADP addresses only marginally most of the serious problems like outdated farming techniques, inefficient extension and research outfits, low per hectare yield, lack of value addition, wastage of produce, shortage of irrigation water and the like.

The annual roadmap for agriculture for 2011-12 has been prepared in the light of provincial agriculture policy 2005, horticulture policy 2009 and the floods reconstruction priorities, a senior official said.

The agriculture budget has 71 projects including Rs849m for 47 ongoing and Rs505m for 24 new schemes.

The allocation to agriculture and its allied sectors has been increased from Rs1.175bn in the outgoing year to Rs1.355bn for new fiscal but its share has fallen from 1.70 per cent to 1.59 per cent of the overall ADP.

The livestock sector, for the first time, has been allocated Rs0.60bn or 44 per cent of the agriculture budget.

According to the province`s white paper 2011-12, this year`s budgetary allocations reflect higher priority to income generating sectors of the economy, including agriculture.

Agriculture can easily attain the status of big industry in the province if proper care and patronage is given to it, says the white paper.

To ensure efficient implementation and timely completion of the schemes the present strategy of spreading out resources too thin delays projects with cost over-runs.

In the agriculture sector, only six of the 84 projects were completed in 2010-11. And the problem of low utilisation of funds is another pressing problem that hinders timely completion of projects.

According to the white paper, in the preceding year, out of the total budget ADP estimates of Rs69 billion, Rs45bn were released but actual expenditure stood at only Rs26bn. For the agriculture sector, over Rs1.22bn were released against the budget estimates of Rs1.175bn but only Rs0.67bn could be spent till May 2011.

Viewed in this backdrop, the amount to be spent on agriculture may be much less than allocated in the ADP.

The size of foreign assistance in the new ADP is over Rs16bn for 39 projects but there is no project for the agriculture sector in it like the previous year. Only six per cent farmers in the province have access to agriculture credit.

Last year, the government had announced revival of cooperative bank which was to provide Rs1 billion seed money for easy farm and non-farm loans to small farmers and rural women but actually only Rs200m was released.

Notwithstanding these drawbacks, the annual roadmap of Khyber Pakhtunkhwa has something for each agriculture sub-sector: agriculture extension schemes (Rs0.11bn), agriculture mechanisation (Rs0.16bn), on farm water management (Rs0.15bn) agriculture research (Rs0.24bn), livestock extension (Rs0.24bn), agriculture planning (Rs0.02bn), livestock research (Rs0.27bn) and soil conservation schemes Rs0.05bn.

Besides these, projects for backyard farming and livestock rearing, value addition of fruits and vegetables, rehabilitation of flood disaster lands with plantation of new fruit orchards, olive cultivation initiative, poverty alleviation through improved rural poultry production and conservation of the Achai cattle breeds have been proposed.

Furthermore, a project on micro-propagation/tissue culture has also been proposed to produce millions of plants sooner than routinely possible.

Low priority to farm modernization

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KP’s low priority to farm modernisation

By Tahir Ali Khan

THE majority of farmers in Khyber Paktunkhwa is using the age-old technique — a pair of bullocks — for ploughing its fields, instead of tractors.

Only about 20 per cent farmers use modern agriculture technology in the province. This is because either most of them have no resources to buy the services or have no knowledge or inclination to use the modern farming techniques.

Agriculture worldwide has undergone tremendous transformation and latest technologies are used for ploughing fields and sowing, harvesting and crop packing but KP farmers, especially the majority poor/small ones, still continue with outdated ways, resulting in low crop yields, and wastage of agriculture assets like water and low incomes.

Farmers usually don’t benefit from provincial government’s research endeavours and innovative technology for lack of coordination between the line departments, and the growers and the line departments.

A senior official in the Agriculture Department agrees that problems such as lack of mechanised farming, low per acre yield, inputs availability constraints etc., are also suffering from weak agriculture extension for lack of coordination between farmers and the government.

“Our researchers need to develop seeds varieties for the different climatic zones in the province that could increase both under-cultivation land and production. But there are two challenges in this connection. One is for the research scientists to develop new varieties and techniques and the second is how that is to be made available to farmers so that they could use them,” he said.

“Even if researchers fulfil their responsibilities but their products are not available to farmers or they are not inclined to use them, the problem will remain unresolved. Extension department needs to make latest research and development products and farming techniques available to farmers as soon as possible,” he added.

“It is strange the farmers still prefer outdating farming techniques that result in poor per acre yield and therefore the incidence of poverty is increasing amongst small farmers,” he said.

Mechanised farming is urgently needed to increase per acre yield but the small landholding is the hurdle. The research directorate in collaboration with local industry could solve this problem by evolving miniature engineering machinery and technology. To facilitate the directorates of agricultural research and agricultural extension in their endeavours to benefit the farmers and to bridge the gap between farmers and research, the government should revive the erstwhile outreach directorate in the ministry of agriculture.

The outreach directorate will surely reach out to the farmers with new technologies. It had done pretty good job till 1995 when it was wrapped up. Its revival is necessary to address the critical problem of coordination between farmers and agriculture researchers.

The next provincial Annual Development Programme has a new project for strengthening of outreach activities, but meagre allocation is a cause of concern.

The project was allocated Rs50 million but only Rs15 would be spent under the ADP. It means there cannot be any meaningful practical changes at least for some years to come.

Agriculture cannot be developed in the province by taking half-hearted routine measures. It, instead, requires some innovative, out of box, targeted and emergency plans to develop the sector on which around 70 per cent of provincial population depends.

An official informed that the provincial government intended to revive the outreach directorate. “The terms of reference of the directorate have been prepared and necessary allocations have been made in the next budget for this purpose,” he informed.

“This would surely expedite services, improve coordination between the stakeholders and bridge the gap between farmers and research thereby facilitating and benefiting the farmers enormously. It will regularly update the policy makers on the requirements of the farmers and will also inform the latter on any invented/imported technology or technique sooner rather than later,” he hoped.

Besides the above shortcomings, some other problems are also hampering agriculture development in the province.

In the recent past the agriculture extension directorate was being run without a full-time head.

Also, there is an acute shortage of research personnel in the directorate. The shortage of senior research officers is particularly serious.

“Many researchers are performing their duties under compulsion but waste no time when they get an offer from private companies which pay them hefty amounts. The lack of service structure and chances for promotion is discouraging new talent to join the directorate and the existing ones are also leaving their services.”

“Most of the officers are performing their duties in the same scales for 30 years despite being qualified. In a situation when the officers and officials retire in the same scale they were inducted in and they are paid comparatively far less than their research counterparts in the private sector, it is not strange if most of the existing officials too are opting for retirement, ex-Pakistan leave or leaving their service in search of better future,” conceded the official.

The government should offer incentives to attract competent people to the sector and should also announce a service structure and comprehensive relief package for the existing ones to arrest the trend of flight of human capital from the directorate.

Innovative farm schemes needed

Investing in innovative farm schemes

By Tahir Ali Khan

Dawn, 06-06-2011

THE Khyber Pakhtunkhwa government will present its first budget this week after the devolution of the federal agricultural departments to the provinces. The question arises: what difference will it make?

Though officials of the provincial agriculture department are confident that their development strategy reflects out of the box thinking, farmers have very little hope that it would be any different from the past. Thy say the traditional approach will prevail.

Minister for Agriculture Khyber Pakhtunkhwa Arbab Ayub Jan declined to share any details about the allocations and targets for the next year’s ADP for agriculture but said the budget would be non-conventional in its priorities and plans.

“Several new interventions have been proposed. Allocations have been approved for all of the schemes we had suggested. This has been done for the first time and we hope it would help develop farming in the province,” he said.

Ahmad Said, Chief Planning Officer of the agriculture department, said “We have suggested various innovative schemes, the details of which, I cannot share as yet. I am hopeful this year’s comprehensive ADP with several innovative steps would ensure expansion and development of agriculture. The special focus is on revival of farming in the 12 flood-hit districts,” he said.

Farmers have their own concerns. “The problems are so huge that only a revolutionary ADP, with innovative steps and enormous investments can tackle them. But there is little likelihood that any such plan will be included in the annual agriculture roadmap,” opines Naimat Shah Roghani, a farmers’ leader from Mardan.

High prices of various farm inputs have increased cost of production manifold.

“The government should extend direct subsidies on the farm inputs like seeds, fertiliser, tractors, power, diesel and tube-wells,” he said.

The agriculture sector has received meagre funds in successive ADPs despite its huge significance as the primary source of livelihood for around 70 per cent provincial population.

While the allocation for agriculture sector was increased by about 45 per cent this fiscal year over the preceding year, it came down from 2.4 per cent of last year’s core ADP to 1.9 per cent of this year’s total core ADP of Rs58bn.

Irrigation budget was 4.3 per cent of the core provincial ADP last year. Though its allocation went up by about 70 per cent, it decreased to about 4.1 per cent of the ADP this fiscal year.

Roghani said at least five per cent of the ADP should be allocated for agricultural development, which should be gradually increased to 10 per cent in the coming years.

Only about 20 per cent farmers use quality seeds and modern agriculture technology, for which agricultural research, engineering and extension directorates should be strengthened.

“For better coordination between the farmers and government and to facilitate the directorates of agricultural research and agricultural extension and to bridge the gap between farmers and research, the government should revive the erstwhile outreach directorate in the department of agriculture,” said Muhammad Khalid, an agronomist from Mardan.

“The outreach directorate reached out to the farmers at their doorstep with new farming technologies and improved seed varieties, but became dormant in 1995. Its revival is necessary to address the critical problem of coordination between farmers and agriculture researchers,” he said.

“Soil testing laboratories should be opened in all the districts and tehsils. If modern farming technology and techniques are provided to farmers, it will change their farming from subsistence to commercial/modernised one,” he added.

KP needs to bring under cultivation about 1.6 million acres of cultivable wasteland. If possible, it should distribute the state-lands at nominal rates amongst landless farmers.

This requires water for irrigation which can be met by building small dams for conserving floods/rain water for future use. Wastage of water can be minimised by lining the water-courses and canals and its efficiency increased by adopting the sprinkle and drip irrigation.

And fruit orchards could be set up in areas not suitable for food or cash crops.

Backyard or household farming can also increase people’s incomes. The government, however, will have to provide seeds of vegetable, fruit plants and animal progeny to the poor households.

Tunnel farming technique needs to be extended. For this, the government should provide the technology along with guidance and financial support to the poor farmers.

As prices of chemical fertiliser are gradually becoming unaffordable, the government can support the use of green-manure or other organic fertiliser.

According to Roghani, access to market and improved marketing is vital for increasing the incomes of farmers. At present these markets function only in two districts. More markets should be set up across the province.

Livestock sector continues to be provided with meagre budget. There should be some special programme for the livestock farmers, especially women, who should be given free animal offsprings and poultry initially.

Around 60 per cent area of Khyber Pakhtunkhwa is suitable for olive cultivation. If an olive plantation project is launched and farmers get plants and technical support from the government, oil import bill could be reduced.

Modern laser technology could be used for land levelling. Mechanised farming is vital to increase per acre yield; for small landholdings, common facilities need to be provided.

Khyber Pakhtunkhwa needs more farm credit facilities. It accounted for only 3.4 per cent of the country’s agriculture credit of Rs233bn in 2009. Only six per cent farmers here have access to farm credit against 21 per cent in rest of the country.

“Interest on agriculture loans needs to be decreased and its process simplified,” Roghani said.

The government and private sector should establish agricultural machinery pools and input centres at villages where farmers could get these things on subsidy and deferred payment, apart from guidance.

Growing Hybrid vegetables

bitter gourd

Image via WikipediaGrowing hybrid vegetables

By Tahir Ali Khan

Dawn May 30, 2011

FARMERS and the private sector have joined hands to cultivate hybrid vegetables and adopt innovative growing techniques to raise crop yield in Khyber Pakhtunkhwa.

In Takht Bhai, Mardan, farmers opting for technique of growing hybrid vegetables, see it as a route to their prosperity.

On a visit to the area, this scribe witnessed lots of u-shaped stands and scattered open sheds scattered that had been prepared with sticks and plastic wire, cobbled together, to support the structure for hanging vegetables.

Taufeeq Ahmad Khan, a local farmer, said the sowing of imported hybrid of bitter gourd called Karail , and not the local variety Karaila , was started three years ago.

“Farmers are usually too conservative, often ignorant and also poor to adopt new technologies and strategies but once their utility is established, they adopt them quickly. Seeing financial advantages, more and more farmers are following suit. The private sector guided us to adopt high-yielding variety of bitter gourd,” he said.

“It is highly rewarding for farmers as they continue growing vegetables for around nine months. An acre of imported hybrid bitter gourd sown this way earns a farmer around Rs400,000. Besides, vegetable like tomato or fruit like watermelon can also be sown alongside it on the ridges in the field. This can fetch them another Rs200,000,” he added.

Gul says local seed of bitter gourd when sown on ridges in the field usually gets destroyed quickly by excess of water, heat, drought and diseases. “Besides it can resist adverse climatic conditions and diseases, being a short duration crop. The local bitter gourd also has negligible income for farmers as compared to hybrid bitter gourd.

“ It is also more resistant to diseases and climatic conditions and the vegetable is comparatively healthier,” he said.

According to Khan, the method is simple and can be easily adopted by any one. “As Karail had to be kept above the ground to save it from degeneration, one has only to bear a one-time expenditure of around Rs40,000 for building the structure using sticks and plastic wire. The vegetable hangs from it which can be collected easily. This structure can be used for next three to four years if protected. Considering the advantage of this technology, it is a negligible amount which farmers can happily spend to increases their incomes a lot,” he said.

“The second vegetable or fruit grown alongside bitter gourd is of short duration. It continues its output till winter when frost decomposes its roots. But if necessary measures are taken to protect it against chill and moisture, it will continue yielding even in winter,” he added.

Adoption of these techniques together with guidance on establishment of market linkages with packaging and processing industries can benefit the farmers. Growers in other areas can take advantage of the experiences of their counterparts.

Farmers say the government and private seed dealers can help the farmers by providing them with seeds on deferred payment.

Imported hybrid seeds of vegetables are available in the market but the farmers said if hybrid seeds are developed locally and provided to them, it would be better. These will surely be cheaper and easily adaptable to local ecosystem.

If local labour and fields can be used by the multinationals to prepare new seed varieties, why can`t we do the same ourselves. The numerous public seed research farms could be used for developing hybrid seeds for vegetables.

The government and private sectors can reduce dependence on import of seeds by developing hybrid varieties for vegetables and fruits themselves. But it will also have to be disseminated to farmers as soon as possible. For this purpose` a pro-active strategy will be needed by the agriculture department to contact farmers at their doorsteps.

The province is gifted with diverse climatic and ecological zones which is well suited to all types of vegetables and fruits. About 47,000 hectares produce approximately 0.52 million tons of fruit and 38,000 hectares produce around 0.356 million tons of vegetables.

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