role of agriculture in economic development

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ROLE OF

AGRICULTURE IN

ECONOMICDEVELOPMENT OF

PAKISTAN


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AGRICULTURE IS OF IMMENSEIMPORTANCE FOR PAKISTAN. AT THE TIME

OF INDEPENDENCE PAKISTAN WASPRIMARILY AGRICULTURE BASED COUNTRY.

BUT AS TIME PROGRESSED PAKISTANTURNED INTO MORE DIVERSIFIED COUNTRY

AS INDUSTRIALIZATION TOOK HOLD. BUTDEVELOPMENT OF INDUSTRIES HAD NOT

ELIMINATED THE EXISTENCE OFAGRICULTURE IN PAKISTAN ALTHOUGH THESHARE OF AGRICULTURE HAD DECREASED

SIGNIFICANTLY SINCE ITS BIRTH.

Introduction


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Cont.

The role of agriculture in the economic

development of Pakistan cannot be

denied and Pakistan is stillcharacterized as an agricultural country.

In the subsequent assignment I will be

discussing the contribution of

agriculture in the economic

development of Pakistan.


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Increasing the GDP of theeconomy Agriculture has a great contribution towards the

GDP of Pakistan. Economic development takesplace when the GDP of a country increases. At thetime of independence agriculture had the largest

contribution towards the GDP of Pakistan. But withthe passage of time service sector became thelargest contributor of GDP and now agriculture hasthe third largest share in the GDP of Pakistan.According to World Bank In the year 2007, 20% of

the GDP of Pakistan came from the agriculturesector of the economy.Livestock and fisheries arean important source of employment as well as theyalso consist of the exports of the country and helpin increasing the GDP of the country.


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livestock

Livestock accounts for 40 percent of theagricultural sector and 9 percent of thetotal GDP. Pakistan ranks fifth in the

Muslim World and twentieth worldwide infarm output. It is the world's fifth largestmilk producer.The country is the 5thlargest producer of milk in the world. Thisimplies that agriculture is the back bone ofPakistans economy and has integral rolein the economic development of thecountry.


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Source of Employment Agriculture industry is the major source of

employment in Pakistan. As more than half ofthe population of Pakistan lives in rural areas.

In 2007-08 Development Report of UNDP 65%of the total population of Pakistan lived in ruralareas in 2005. In rural areas agriculture is thesole means of their subsistence andemployment.According to the Economicsurvey of Pakistan agriculture remained to bethe dominant source of employment.43.61% ofthe total employment is provided by agriculturein the FY 2006-07


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cont.

As a developing country consistent employment isof huge importance for the country and directly andindirectly agriculture is the biggest source ofemployment in the country. Employment leads

towards increased GDP of Pakistan and higher percapita income of people. High per capita incomeresults in improved standard of living of the peoplewhich means more access to basic needs, betterhealth facilities, quality education etc, which are all

the signs of economic development. In this wayemployment as a result of agricultural activity isadding momentum to the economic developmentof Pakistan.


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Sustaining the Population The population of Pakistan is increasing at the rate

of almost 2% per year according to HumanDevelopment Report (2007-08) of UNDP. Pakistanis the sixth most populous country of the world

while second most populous country in the Muslimworld according to Food and AgricultureOrganization (FAO) of United States. In order tosustain such a massive population agriculture isplaying a key role. Agriculture is providing food to

this ever increasing population. Wheat is the mostconsumed food item of Pakistan and fortunately itis the most cultivated crop of Pakistan. Imaginewhat if Pakistan is not an agricultural country.


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Cont.

Then to sustain a population of almost158.1 millionthe country would have toimport all the food items creating a further

deficit in its balance of payments andincreasing the countrys debts causing theeconomic growth of this developingcountry to slow down. Thus agriculture isplaying a dual role in the development ofPakistan by providing food to its massivepopulation and supporting economicgrowth by reducing imports of food items.


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Contribution towardsExports Major exports of Pakistan consist of

agriculture items like wheat, rice, cotton.According to FAO Pakistan exports rice,

cotton, fish, fruits, and vegetables. In 2005-06the major share of Pakistan exports went to 9countries, account for 55.9% of total exports.62.6% of Pakistans total exports are

Agriculture Commodities and Textiles Products,33% of which are Raw or Low value addedproducts.Agriculture is helping the country toearn foreign exchange through exports.


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Cont.

Foreign exchange, in turn, helps Pakistan toimport those items which either it cannot

produce in the domestic market or produces

them expensively than other countries. Throughforeign exchange Pakistan imports high-tech

equipments and capital intensive machineries

and raw material for its industries like industrial

machinery, computer and computer parts etc.

Foreign exchange through export of agriculture

items helps the central bank to stabilize itscurrency and reducing debt burden of Pakistan


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Raw material for IndustrialSector Industries are of major importance in the economic

development of any country. Agriculture is helping manyindustries in Pakistan by providing raw material to theseindustries. Cotton is a major crop of Pakistan which isalso an important export of Pakistan and raw material oftextile industry. Textile industry is significant and worldfamous industry of Pakistan. Likewise sugar industry usessugar cane as raw material and sugar cane is also amongone of the important crops of Pakistan. Sports goods ofPakistan are famous world wide. They are major exportsof Pakistan. Raw material for these sports goods isobtained from the skins of live stock which is also a partof agricultural activity.


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Cont.

Livestock is also used in the manufacturing ofleather, which is again one of the important exportsof Pakistan. These industries have innumerablebenefits to the economy of Pakistan. They provide

employment to the pool of the labor, they add up tothe exports of Pakistan, they bring in newtechnology with in the country which not onlyincreases the quantity but also the quality of outputand many more benefits. All these benefits of

industrialization are largely derived fromagriculture sector of Pakistan which acceleratesthe economic development of the country.


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Development of Rural Sectorand Improving the Standardof Living A prerequisite for development with in the country is

the development of rural sector. Almost 65% of Pakistanspopulation lives in the rural sector. The progress of ruralareas is indispensable for the development of Pakistanseconomy. Agriculture had been a milestone towards theadvancement of the rural sector of Pakistan. It is not onlythe means of subsistence for the villagers but is also the

biggest source of employment for them. As agricultureexpanded in rural areas their development took roots-roads started to develop and rail tracks were laid down inrural areas to make transportation agricultural productsefficient to the domestic and foreign market and to theindustries.


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Cont.

It further says that in the emergingcountries, the agricultural agenda should

focus on reducing the disparity between rural

and urban incomes and raising the incomesof the rural poor. Thus agriculture helps in

reducing the income inequality between rural

and urban areas of Pakistan. All this lead

towards higher standard of living of the

villagers, signifying the growth of the rural aswell as that of the whole country.


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Role of agriculture in

development: * source of foreign exchange earnings

* capital formation

*increase in national income

* contribution to GDP

*increase in the industrial demand


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Why agricultural production

is low in pakistan ? Following are the factors which hindersPakistan from maximum or good production.

* Technological factors ,

* General factors etc.


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Cont.

* Technological factors ;lacking of awarenessimproper irrigation systempoor infrastructureimproper utilization of landineffective research


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Cont.

* General factors ;Natural calamitiespolitical instabilityplant deseasesDebt burdenlow literacy rate


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Suggestions to improve

productivity :* Credit availability

*improve Irrigation system

*quality seeds

*availability of fertilizers

*land reforms


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Cont.

*increase in cultivation land

* control over plant deseases

*promote education

*oil seed and live stock

*agricultural markets


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Agricultural market ;

obstacles* no market knowledge

* Expensive transport

* Chain of middle man

* Lacking storage and warehouses

* unfair burden of charges


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Measures taken by Govt. to

build up agricultural market*proper grading system

* market awareness

* ware house and storage facility

* regulated markets

* elimination of middleman


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Cont.

* co-operative marketing

* regulations regarding weights andmeasures

*agricultural market and storage limited


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Conclusion

In these manifold ways agriculture had contributed in theeconomic development of Pakistan. In order to furtherincrease the development of the economy thegovernment should introduce policies which increase theefficiency of agriculture. E.g. government should

introduce modern means of production through theinitiation of technology in the agriculture sector. Thegovernment should also revise land reforms as smalllands are not as productive as the large ones and shouldalso increase the ownership of land to farmers and musttake steps to eliminate feudalism. Effective measures for

agriculture will definitely add up to the development of theweak economy of Pakistan.


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role of agriculture in economic development

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