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CPEC and Agriculture

CPEC and Agriculture

Opportunities we need to capitalize on

China-Pakistan Economic Corridor (CPEC), the flagship project of multi-billion dollar Belt & Road Initiative (BRI), has emerged as a vivid manifestation of the strong strategic Sino-Pak cooperation. It has rekindled a hope about the revival of the dwindling economy of Pakistan through investment in infrastructure growth, power generation, industrial development and upgrade of Gwadar Port so as to make it a vital trans-shipment point for South and Central Asia, as well as for China’s western territories. CPEC was envisioned to be implemented in three phases: short-term, medium-term and long-term plans with their expected completion in 2020, 2025 and 2030, respectively. Early-harvest projects like development of transport and energy infrastructure were added in STP in order to provide for better logistics and energy security for the establishment of Special Economic Zones and resource and technology transfer in other sectors. Now that Pakistan is producing enough power to meet domestic demand and the road connectivity provided by western and eastern legs of CPEC has begun to provide logistics for across-the-country transport, it seems imperative now to discuss the impact of CPEC on agriculture, which remained a hugely under-invested and neglected sector during the previous political regimes.

Agriculture is a vital sector for developing, agri-based economies like Pakistan. It is the lifeline of Pakistan’s economy as it contributes 18.9 percent to GDP and absorbs 42.3 percent of the country’s 65-million-strong labour force, as per the Economic Survey of Pakistan 2017-18. The importance of agriculture is self-evident as a principal source of national income, a vehicle for poverty alleviation and an instrument for improving on rankings of Human Development Index (HDI). Features like being a direct as well as indirect source of employment in rural areas, huge potential for revenue-enhancement, vital contribution to exports, a major source of raw material for the industrial sector, provision of livelihood for rural communities, critical role in enlarging banking sector and massive market for agri industries like tractor and other farm-machine manufacturing units do indicate that this sector is a key to putting the economy on sustained and robust trajectory, thereby helping resolve the chronic problems of rapidly-declining foreign exchange reserves, widening trade deficit and ballooning fiscal deficit. In addition, agriculture plays a vital role in mitigation of climate change. Water and food security, pollution control, wastewater management and development of effective methods for optimal utilization of marginal land and water resources are some other areas inextricably linked with agriculture for improvement and development.

Before we analyze the impact of CPEC on agriculture, a brief overview of the issues plaguing this crucial sector is inevitable so as to better understand the relevance of CPEC-led investment in overcoming these hitherto insurmountable challenges. Less spending on agri-related research and development (R&D), lack of value addition, low and stagnant yield, price fluctuations, highly-deregulated agriculture produce Supply Chain Management, lack of certified seeds, scarcity of skilled labour, fast-deteriorating irrigation system, high energy tariffs on different farm operations, low farm mechanization, insufficient storage facilities, limited availability of capital, high cost of production, defective marketing strategy, post-harvest losses, insufficient access to agri-information for informed decision-making and poor nursery management are some of the issues that are hampering the role of agriculture in boosting the country’s economy.

Agriculture has huge untapped potential and CPEC has all the tools that can help us exploit this potential to the fullest. The resource and technological transfer, government-to-government, institution-to-institution and people-to-people contacts, availability of huge capital, improved infrastructure and energy security, etc. would benefit massively all sectors of agriculture: crop husbandry, livestock, fisheries and forestry.

The crop sub-sector, which accounted for 23.60 percent in the value addition of agriculture sector and 4.45 percent in GDP in 2017-18, consists of major crops (wheat, rice, sugarcane, maize and cotton) and minor crops (vegetables, fruit and oilseed crops). The sub-sector stands to benefit from CPEC in the areas of yield production, food and non-food exports, value addition, post-harvest management and cultivation of crops in marginal lands.

Read More: The Other Side of the CPEC

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