Agriculture: A sad story of agricultural input pricing.

The rupee lost 16 per cent value against the dollar last fiscal year. It has lost another 16.4pc so far in 2018-19.

In the last fiscal year, domestic prices of petrol and high-speed diesel increased 26pc and 29pc, respectively. Their prices have surged 18pc and 17pc, respectively, since the beginning of 2018-19.

The rupee depreciation and the increase in oil prices resulted in a sharp rise in the rates of agricultural inputs in both 2017-18 and 2018-19. Since the rupee's value began falling and oil prices started rising in the second half of 2017-18, the agriculture sector's growth remained subdued and grew only 3.8pc last year, according to provisional estimates.

Governments love to incentivise the crop output, but seldom introduce and implement plans for promoting local industries engaged in the production of seeds, insecticides and pesticides

Now 2018-19 is the first fiscal year in which we are witnessing a fuller impact of the rupee depreciation as well as the increase in oil prices. Their lagged impact will be felt by the agricultural sector in the next fiscal year too even if the rupee's value and oil prices remain intact until June.

Initial estimates put agricultural growth during this fiscal year at about 1pc, according to a Dawn report. Doubling or tripling this growth rate in 2019-20 will require extraordinary measures regardless of the low-base effect.

It is true that the PML-N government kept the rupee overvalued throughout its term. This necessitated heavy doses of correction in the final days of its government, under the interim government and during the first year of the PTI government. It is also true that the uptrend in international oil prices is a recent phenomenon and this is one reason for escalated local prices.

But the problem in revenue generation that the government is facing is unprecedented. This is one reason for higher fuel prices. It is forcing the government to levy higher taxes on fuel. May 5 onwards, the government increased sales tax on different kinds of fuel by 4-10pc.

Keeping this backdrop in mind, let's see how the prices of agricultural inputs have behaved in the past one and a half years, making the lives of millions of poor farmers miserable.

According to the Pakistan Bureau of Statistics (PBS), average monthly prices of two widely used fertilisers nitro phosphate and diammonium phosphate (DAP) shot up to Rs2,832 and Rs3,547 per 50kg in April, which shows an annual increase of 11.8pc and 10.2pc...

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