Increasing agricultural productivity

Agriculture remains a socioeconomically and politically important sector in Pakistan, even as its share in the overall economy continues to fall. Sluggish growth in productivity has constrained farm income growth, limiting its potential for reducing poverty. There remains, however, substantial scope for accelerating broad-based agricultural growth to boost returns, which requires stimulating productivity growth through technology and innovation, better water use management, and the right trade policies. More specifically, the national agricultural research system requires fundamental institutional reforms to make it more efficient and effective. For water, the most important intervention is institutional reform of the entire management system, including completing the devolution of authority to the appropriate scale with provision of sufficient resources and capacity building to the devolved authorities. Finally, improving agricultural trade will require removing discretionary instruments like the statutory regulatory orders and simplifying the trade regime. Distortions in domestic commodity markets also need to be removed. Food price stability is important, but it can be achieved through mechanisms more cost-effective than those in use today. Further, food security for the most vulnerable can be supported more efficiently through well-targeted social safety net programs.