Saturday, March 24, 2018

Bumper Crops And Soaring Credit Drive Pakistan's Tractor Sales Boom

First seven months of the current fiscal year have seen tractor sales soar 45% to 38,173 units, according to data of the Pakistan Automotive Manufacturers Association. It is driven by a combination of soaring credit availability and bumper harvests of Pakistan's top three crops by area: wheat, cotton and rice.

Tractor Sales:

First seven months of the current fiscal year have seen tractor sales soar 45% to 38,173 units, according to data of the Pakistan Automotive Manufacturers Association. This is good news for Pakistan's tractor industry that has been in slump for several years as the agriculture output was stagnant.

Pakistani farmers use tractors for a variety of usual tasks ranging from tilling and planting to harvest and transport. Tractor owners recover their costs from more efficiently working their farms and renting out equipment when they are not in their own use.

Agriculture Credit Growth:

Pakistani banks provided Rs 500 billion (nearly $5 billion) worth of agricultural credit during the first seven months, July-January period, of current fiscal year.  It represents a 45% jump from the same period last year, according to media reports.

According to State Bank of Pakistan (SBP), commercial banks, specialized banks, Islamic banks, domestic private banks, microfinance banks and other microfinance institutions have together disbursed Rs 499.645 billion during the period under review, up Rs. 351.358 billion in the same period of last fiscal year.

Top Three Crops:

Wheat output is expected to be near all time high of 26 million tons. Cotton production is forecast to exceed 11.5 million bales, up from 10.6 million bales last year.

Source: FAO via Kleffmann Group

Pakistan rice exports have reached 2.59 million tons worth US$ 1.224 billion in the first 7 months, up from 2.27 million tons worth US$.961 Million last year,  recording growth of 27% in value and 14% quantity.

Pakistan ranks among the world's biggest producers of a variety of crops including wheat, cotton, rice, corn, sugarcane, onions, chickpeas and fruits, according to Food and Agriculture Organization Stats (FAOSTAT).

Crops vs Livestock:

Livestock farming contributes 53% while crops make up about 42% of Pakistan's agriculture output. The rest comes from fishing and forestry.



Pakistani livestock sector has growing much faster than the crop sector and more recent estimates show its contribution has increased to 56.3% of the value of agriculture and nearly 11% to the agricultural gross domestic product (AGDP). It's driven by growing domestic demand for meat and dairy products.

Crop Yields:

Pakistan's crop yields are comparable to India, among the lowest in the world, according to FAO (Food and Agriculture Organization) data.

Source: FAO via Kleffmann Group

World's highest crop yields are seen in Europe while the lowest are in Africa.

Maize, Potato, Rice and Wheat Yields in Hectograms/Hectare. Source: FAOSTAT

Value Added Agriculture: 

Livestock revolution enabled Pakistan to significantly raise agriculture productivity and rural incomes in 1980s. Economic activity in dairy, meat and poultry sectors now accounts for just over 50% of the nation's total agricultural output. The result is that per capita value added to agriculture in Pakistan is almost twice as much as that in Bangladesh and India.

Although Pakistan's value added to agriculture is high for its region, it has been essentially flat since mid-1990s. It also lags significantly behind developing countries in other parts of the world. For example, per capita worker productivity in North Africa and the Middle East is more than twice that of Pakistan while in Latin America it is more than three times higher.

CPEC Long Term Plan:

Beyond the current phase of China Pakistan Economic Corridor (CPEC) focus on energy and infrastructure projects, there is a long term plan that deals with modernizing Pakistan's agriculture. CPEC LTP outlines a more comprehensive effort involving the entire supply chain from agriculture inputs like  seeds, fertilizer, credit and pesticides to logistics such as storage and transportation systems.

Summary:

Pakistan ranks among the world's top producers of a number of major crops including wheat, cotton and rice. Soaring tractor sales are being driven by a combination of  rising credit availability and bumper harvests of major crops in the country this year. But the farm productivity and yields are still among the lowest in the world. CPEC LTP (long term plan) offers hope of significant improvements in agriculture sector to reach its full potential.

Related Links:

Haq's Musings

Value Added Agriculture in Pakistan

Agribusiness Drawing Investors to Pakistan

China Pakistan Economic Corridor

An Indian Farmer Commits Suicide Every 30 Minutes

Pakistan's Rural Economy

Pakistan World's 5th Largest Motorcycle Market

The Other 99% of the Pakistan Story

16 comments:

Hasaan said...

The productivity gap is demonstrated by a wide difference between average yields in Pakistani and Indian Punjab. These two provinces have same topography, climatic conditions, soil characteristics and plant diseases, yet the Pakistani side remains far behind the Indian side. Punjab’s average yield for wheat, sugarcane, rice and maize remains 25-45% behind average yields in Indian Punjab and about 45% behind progressive farmers in Punjab province (Pakistan). This deficit is costing Punjab about $6 billion in nominal GDP every year and is attributed to several reasons.

https://tribune.com.pk/story/1664227/6-reforming-punjabs-agriculture-sector/

Riaz Haq said...

Hasaan: "Pakistani side remains far behind the Indian side. Punjab’s average yield for wheat, sugarcane, rice and maize remains 25-45% behind average yields in Indian Punjab and about 45% behind progressive farmers in Punjab province (Pakistan)"


FAO data shows yields of major crops in Pakistan are about the same or higher than in India.

https://www.kleffmann.com/en/information-center/information-center/a-snapshot-of-the-pakistan-and-indian-agriculture

As to the difference in the two Punjabs, the Pakistani Punjab is 4 times larger (about 80,000 square miles) and has a much more varied terrain than the Indian Punjab (20,000 square miles).

Pakistani Punjab has the plains, the Potwar plateau and the Cholistan desert.

Yield in the plains are most likely the same as those in Indian Punjab.

Z Basha Jr said...

Good to be pulling ahead of neighborhood..Agriculture is one our strengths.. the food quality in shanghai and beijing is abysmal.. we can trade agri-products with our xin jiang brothers and buy leverage in China..

Noor, FCERT said...

Of the major South Asian countries Pakistan has the lowest yields(Tonnes/Hectare) in wheat and rice (2014).

RICE
Pakistan 2.42
India 3.58
Bangladesh 4.62

WHEAT
Pakistan 2.82
India 3.15
Bangladesh 3.03

POTATOES
Pakistan 18.15
India 22.92
Bangladesh 19.38

SOYABEANS
Pakistan 0.75
India 0.97
Bangladesh 1.84

Data from previous years show that in Pakistan the yields have flatlined (decreased for rice) whereas India and Pakistan once behind Pakistan have eclipsed Pakistan and are trending upwards for the last decade.

Riaz Haq said...

Noor: "Data from previous years show that in Pakistan the yields have flatlined (decreased for rice) whereas India and Pakistan once behind Pakistan have eclipsed Pakistan and are trending upwards for the last decade."

I am not sure what is your source of data. FAO data shows there's been little change in crop yields in Bangladesh, India and Pakistan since 2014.

Here are the yields in hectogram/hectare I found on FAOSTAT for 2016:

Rice:

Bangladesh 46,188 hg/ha
India 36,950 hg/ha
Pakistan 37,649

Wheat:

Bangladesh 30,269 hg/ha
India 30,930
Pakistan 28,442

Potatoes:

Bangladesh 199,162 hg/ha
India 205,493
Pakistan 224,459

Maize:

Bangladesh 73,008 hg/ha
India 25,745
Pakistan 45,952

Soyabean:

Bangladesh 18,319
India 12,181
Pakistan 4,283

Except for rice, maize and soyabean for which Bangladesh is way ahead, the rest of the yields are quite comparable for all three.


Here's the link to FAOSTAT yield data: http://www.fao.org/faostat/en/#data/QC

Anonymous said...

Bangladesh land is EXTREMELY fertile and has MASSIVE amounts of silt deposited by Brahmaputra and Ganga rivers every year.Think Nile floods X 50.

It is not fair to compare Bangladesh yield to water stressed countries like India and Pakistan.It is actually grossly under performing given the quality of land(Prime Alluvial) with unlimited fresh water resources.



Riaz Haq said...

Anon: "It is not fair to compare Bangladesh yield to water stressed countries like India and Pakistan.It is actually grossly under performing given the quality of land(Prime Alluvial) with unlimited fresh water resources."

I agree.

Pakistan is among the most water-stressed countries while India is a little bit better. But Bangladesh is among the least water-stressed, according to Water Resources Institute (WRI).

Among 176 countries ranked by Water Resources Institute (WRI) for water stress from most to least, Pakistan ranks 31, India 40 and Bangladesh 125.

http://www.wri.org/sites/default/files/aqueduct_coutnry_rankings_010914.pdf

The ratio of water withdrawal to supply in Pakistan is over 80%, India 40-80% and Bangladesh less than 10%.

https://www.huffingtonpost.com/2013/12/13/water-stressed-countries_n_4434115.html

In spite of water stress, Pakistan does much better than Bangladesh and India in agriculture value addition.

Livestock revolution enabled Pakistan to significantly raise agriculture productivity and rural incomes in 1980s. Economic activity in dairy, meat and poultry sectors now accounts for just over 50% of the nation's total agricultural output. The result is that per capita value added to agriculture in Pakistan is almost twice as much as that in Bangladesh and India.


http://www.riazhaq.com/2013/11/pakistan-leads-south-asia-in.html

Singh said...

Massey Ferguson 360 tractors are small low hp tractors. They need bigger tractors like Mahindra in India and those used in America.

Riaz Haq said...

Singh: "Massey Ferguson 360 tractors are small low hp tractors. They need bigger tractors like Mahindra in India and those used in America."

Both Massey Ferguson in Pakistan and Mahindra in India are about 50-60 hp. They are good enough for small farm sizes in India and Pakistan.

The farm sizes in Pakistan are very small as in most of the other Asian countries. Approximately 89% of the farms in Pakistan are below 5 hectares and cover 55% of the cultivated area.

Similarly, farm sizes in India are very small and tend to decline. The recent Agricultural Census (2010-11) reported that the average farm size in India is around 1.16 hectares. In the last Census (2005-06), it was around 1.23 hectares. 85% of the farms in India are below 2 hectares and cover 44% of the operated area.

By contrast, average farm size in America is over 400 hectares that require bigger more powerful tractors.

Riaz Haq said...

Pakistan’s economy set to surpass last year’s growth rate

https://dailytimes.com.pk/224735/pakistans-economy-set-to-surpass-last-years-growth-rate/


Pakistan’s economy is set to surpass last year’s growth rate, with continued strong performances by agriculture and services, and a four-year record high large-scale manufacturing growth during the first half of FY18. Inflation and the fiscal deficit were both contained, whereas revenue growth has outpaced last year’s level.

The report pointed out that increased consumer spending has led to a strong growth in durables such as automobile and electronics, while the ongoing infrastructure and construction activities have stimulated the allied sectors of cement and steel.

Encouragingly, various industrial players across different sectors are investing in capacity expansions and product diversification. The private sector also continued its borrowing from scheduled banks for long-term projects.

On the agriculture front, while all major kharif crops performed well, wheat production came under pressure due to lower area under cultivation.

With adequate inventory of key food items, such as wheat, sugar and pulses, prices of these commodities remained low, keeping food inflation in check.

Favorable adjustment in the duty structure of cigarettes led to a sharp fall in its price. Meanwhile, core inflation remained higher on average in H1-FY18 due to continuously rising education and healthcare costs. However, its pace has stabilized in recent months.

The report highlighted that the growth in revenue collection outpaced the increase in expenditures in H1-FY18, which led to a broad-based improvement in fiscal indicators.

The overall fiscal deficit was contained at 2.2 percent of GDP, down from last year’s 2.5 percent. Revenue growth gained impetus from greater real economic activity, rising imports (both quantum and prices), and higher sales volumes of POL products.

Non-tax revenues also rose over last year, led by higher SBP profit and a surge in receipts from property and enterprise, civil administration and other miscellaneous receipts.

On a cautionary note, the report added that while the real sector of the economy was performing well, the external account presented challenges.

The 8-month-long consecutive export growth and a rebound in workers’ remittances were welcome developments, but they were overshadowed by rising imports.

Resultantly, the current account deficit increased to $ 7.4 billion in H1-FY18, from $ 4.7 billion last year. Even though financial inflows were higher this year, they were insufficient to offset the rise in the current account deficit.

Consequently, SBP’s liquid reserves came under pressure, and the PKR/USD parity depreciated by 5.0 percent in H1-FY18.

While concluding, the report referred to the Pakistan economy having reached a familiar juncture, where Balance of Payments challenges warrant concerted and timely measures to preserve the macroeconomic stability and growth momentum.

If the external challenges are addressed, other fundamentals are strong enough to put it on a sustainably high growth path.

Riaz Haq said...

#Pakistan's #manufacturing growth increases 6.24% for 8 months of FY 2017-18. #LSM Quantum Index Numbers (QIM) rose to 145.28 points July 2017 to Feb 2018 compared with 136.75 points in same period in prior fiscal year. #economy #industry - Xinhua | http://www.xinhuanet.com/english/2018-04/11/c_137101207.htm#0-twi-1-9015-7250227817ecdff034dc9540e6c76667 …

Pakistan's large scale manufacturing (LSM) industries grew by 6.24 percent during the first eight months of the fiscal year of 2017-18 on a yearly comparison, the Pakistan Bureau of Statistics (PBS) said on Tuesday.

According to the official data, the South Asian country's LSM Quantum Index Numbers (QIM) were clocked at 145.28 points during the period for July 2017 to February 2018 when compared with 136.75 points recorded during the same duration of the previous fiscal year.

The Pakistan Bureau of Statistics, which is Pakistan's premier government institution to release official economic data, said Pakistan recorded the highest growth of 4.08 percent in the indices monitored by the Ministry of Industries, followed by 1.54 percent growth in the products monitored by the Provincial Bureau of Statistics, and 0.62 percent growth in the indices of the Oil Company Advisory Committee (OCAC).

In the month of February 2018, the South Asian country's industrial growth surged by 5.52 percent when compared with the same month of last year. On the other hand, the industrial growth shrank by 1.51 percent in February 2018 when compared with the growth posted in January 2018.

According to the official figures, the major sectors which posted growth during the reporting period were textiles with 0.47 percent, food, beverages and tobacco with 2.33 percent and 10.26 percent in coke and petroleum products sector.

On the flip side, the LSM industries which remained in the red ink included chemicals production, fertilizers production, leather products, and wood products.

The Pakistan Bureau of Statistics computes the provincial QIM on the basis of the latest production data of 112 items, which is sourced from the OCAC, the Ministry of Industries and Production, and the Provincial Bureaus of Statistics.

Riaz Haq said...

Pakistan economy accomplished a decent growth rate of 5.79% April 16 2018 09:07 PM

http://www.gulf-times.com/story/589222/Pakistan-economy-accomplished-a-decent-growth-rate

Maintaining a steady path and supported by an overall performance by key sectors, Pakistan’s economy has accomplished a decent growth rate of 5.79%, highest in 13 years since 2004-05 when it grew by 7.52%.
With the rate of inflation still below 4% in the first nine months of the current fiscal year, this high-growth-low-inflation scene can be compared to a text book description of an economy at the take-off stage unless rising external vulnerabilities revert back to a crash landing and need for stabilisation during the upcoming political transition.
Some critics may still like to highlight slippages on some targets including the GDP growth target itself 5.79% growth instead of the 6% target – and a particularly lower than anticipated output by the industrial sector.
Yet it is heartening that the agriculture and services sectors performed better than targeted. This in fact partly compensated for the industrial sector’s growth.
Most of the numbers approved by the National Accounts Committee for GDP performance are subject to the usual revision based on availability of actual numbers for the entire fiscal year.

--------------

The rise in production of three important crops namely rice, sugarcane and cotton was estimated at 8.7%, 7.4%, and 11.8% respectively. On the contrary, decline in production, although provisional, was estimated at 4.4% for wheat crop and 7.1% for maize.
Together, important crops posted a healthy growth rate of 3.57% against 2% target while other crops increased by 3.33% against 3.2% target. Cotton ginning also contributed significantly with a 8.72% growth rate compared to 6.5% target and last year’s growth of 5.6%. With 3.76% growth, livestock was close to 3.8% while forestry sub-sector stayed far behind the 10% target at 7.17% – almost half the 14.5% growth delivered last year.
On the whole, the industry is estimated to have grown 5.8% against a target of 7.3% and revised growth of 5% last year. Here the manufacturing showed a 6.24% growth instead of the targeted 6.4% and 5.3% growth last year.
Large scale manufacturing posted a 6.13% growth, slightly below its 6.3% target but much better than last year’s 5% increase. Major contributors to this growth were cement (12%), tractors (44.7%), trucks (24.41%) and petroleum products (10.26%).
Construction, another priority sector of the current government, also increased by 9.13%, against 9% increase last year, and missed by a wide margin the target of 12.1%.
The major contribution to 5.79% GDP growth rate came from 3.85% share from the services sector. The remaining 1.94% share to GDP came from industrial sector (1.21%) and agriculture (0.73%). The services sector has achieved 6.43% growth during current fiscal year second year in a row to have achieved above 6% growth but was primarily driven by general government services aka salary increases, inflation and other public sector expenditures.

Riaz Haq said...

Current account deficit increases and so do Pakistan’s worries

https://tribune.com.pk/story/1690144/2-current-account-deficit-increases-pakistans-worries/

Pakistan’s current account deficit continued to expand, adding to the worries of economic managers as the gap widened 50.6% year-on-year to $12.03 billion in the nine months of the current fiscal year.

The State Bank of Pakistan (SBP) reported that the deficit now stands at over $12 billion during July-March, just shy of last-year’s 12-month figure of $12.62 billion. The nine-month deficit for 2016-17 amounted to $7.99 billion.

The growth in the current account deficit suggests that measures taken by the government have yet to take effect, which includes devaluation of the currency in two phases, and imposing regulatory duty to curtail imports.

A widening deficit eats up a country’s foreign exchange reserves, putting it at risk of a balance of payments crisis.

Economists have estimated the full fiscal year’s deficit to stand at around $16 billion.

Analysts say the deficit may continue to increase by an additional $100 million per month on a year-on-year basis due to uptrend in international oil prices, as Pakistan remains a net oil and gas importing country.

Experts anticipated the government would further devalue the rupee against the dollar and other world major currencies during the ongoing fiscal year to bring the currency at par with its peers in order to create some sort of balance in external trade and the overall economy.

In a statement issued on Thursday, the central bank said exports of goods increased 11.97% to $18.26 billion in the nine-month period, compared with $16.31 billion in the same period last year.

However, the import of goods surged 16.60% to $40.56 billion from $34.79 billion in the corresponding period last year.

The influx of foreign shipments remains on the higher side due to heavy imports of machinery and other construction material for multi-billion dollar projects under the China-Pakistan Economic Corridor (CPEC).

The trade deficit (of goods and services) increased 22.48% in the period under review to $26.15 billion from $21.35 billion.

Workers’ remittances, which play a significant role in financing the current account deficit, has started showing positive trends in recent months due to deprecation of the rupee.

Current account deficit widens 50% in July-February

Total remittances for the first nine months of the current fiscal year amounted to $14.60 billion, 3.55% higher than $14.10 billion in the corresponding period last year, the central bank reported.

Foreign direct investment in the nine months improved 4.4% to $2.09 billion from $2 billion in the same period last year. However, a significant portion of the foreign investment in local businesses is coming from China.

Riaz Haq said...

THE EXPRESS TRIBUNE > BUSINESS
ADB says ‘no need to panic’ over Pakistan’s economy
By Maidah Haris Published: May 4, 2018

https://tribune.com.pk/story/1701893/2-adb-says-no-need-panic-pakistans-economy/

MANILA: Asian Development Bank’s (ADB) former country director Werner Liepach said Pakistan will not need a bailout package as its economy was doing well, adding that there was no need to panic even as the current account deficit widens and foreign exchange reserves continue to fall.

Addressing a media briefing at the 51st Annual Meeting of the ADB Board of Governors in Manila, Liepach said remittances continue to remain strong and would help meet external sector challenges.

“Things are pretty much okay,” said Liepach. Overseas workers’ remittances touched a seven-month high at $1.77 billion in March 2018, which came on back of the second round of rupee devaluation, he added.

In its latest quarterly report, the State Bank of Pakistan also anticipated that the country would attract a maximum of $20.5 billion in remittances in fiscal year 2018.

Liepach, who is the director general ADB for Central and West Asia Regional Department, also maintained a positive outlook of Pakistan’s growth. He acknowledged that the budget deficit has gone up a little but it is “quite normal in election year”.

Currently, the country’s budget deficit is projected to stand at 5.5% of GDP at the end of fiscal year 2018, while SBP-held foreign exchange reserves currently amount to $11.51 billion.

Additionally, Pakistan’s current account deficit has continued to expand and the nine-month gap has increased to $12.03 billion. However, the ADB official remained optimistic.

“What’s happened is that imports have gone up quite a lot due to increased economic activity related to the China-Pakistan Economic Corridor (CPEC), which is not a bad thing.

“What is missing is that export growth hasn’t really gone as expected.”

He highlighted various factors that impact the growth of exports, including the overvalued exchange rate, which has been taken care of. “The latest information that I received is that exports are starting to pick up again,” he informed.

Now, due to the early rise in imports followed by late pick-up of exports, there has to be a reaction in the foreign exchange reserves, which is of concern, but Pakistan has a way of financing its reserves and “there is no need to panic”.

He added that ADB and the World Bank are not the only ones in town as Pakistan has managed to secure a loan from China. “The country is also contemplating tapping the capital markets, because the market has been responsive lately.”

Stressing on ADB’s role, Liepach said the agency always gave policy-based loans to finance structural reforms, which in no way is a bailout.

Riaz Haq said...


In recent years, however, basmati revenues have slumped in Pakistan amid low-yield harvests and uneven quality. At the Sino-Pakistan Hybrid Rice Research Center in Karachi, Chinese and Pakistani scientists are working to reverse this trend. Using state-of-the-art genetic technologies, they are developing high-yield, high-quality, and pest-resistant rice varieties, for both domestic sale and export.

https://thediplomat.com/2018/05/is-pakistani-agriculture-ready-for-cpec/

The $1.3 million research facility is a harbinger of many changes soon to come to Pakistan’s agriculture sector under the ambitious development scheme known as the China-Pakistan Economic Corridor, or CPEC. A crown jewel in China’s continent-bridging Belt and Road Initiative, CPEC encompasses some $62 billion in investments and infrastructure projects in Pakistan, including ports, power plants, roads, and railways. For agriculture, CPEC promises technology transfers, infrastructure upgrades, and extensive cooperation between Chinese and Pakistani farming enterprises.

Pakistani officials have struck a cheerful note, pledging all good things for the country’s landowners and farmers. But economists say similar rhetoric preceded ongoing CPEC projects in other sectors, which in fact became plagued by exploding budgets and bureaucratic delays when the time came for implementation.

Farmers in Pakistan, for their part, complain that a lack of detailed publicly available information has left them in the dark as to what to expect from CPEC-related agriculture projects, as well as unable to verify what measures the government has taken to protect their interests vis-à-vis China. At a time when Pakistan has wagered future decades of prosperity on CPEC’s success, this lack of transparency — and possibly an overall lack of government preparedness — threatens to place the country on the losing end of an otherwise promising economic partnership.

“CPEC could work for Pakistani agriculture or it could be a disaster,” said Nazish Afraz, a professor of economics and public policy researcher at the Lahore University of Management Sciences. “None of the potential gains under CPEC are automatic, though, and there is a sense that China has done much more to prepare than Pakistan.”

A June 2017 report in the Pakistani news outlet Dawn outlined the potential breadth of China’s plans for CPEC. According to the author’s review of a lengthy but confidential government planning document, it is possible Chinese enterprises will be allowed access to large tracts of Pakistani farmland, either by lease or purchase. On that land, they will allegedly be permitted to operate their own farms and processing facilities, backed by robust capital grants and loans from Beijing and the Chinese Development Bank.

Thanks to low tariffs and increased transportation links between the countries, Chinese produce is already prevalent in Pakistani markets and competing with locally grown produce. But in the future, Chinese produce grown in Pakistan could potentially be exported to Chinese markets, with little benefit whatsoever to Pakistan’s economy.

Riaz Haq said...

Long-term Agricultural Growth in India, Pakistan,
and Bangladesh from1901/02 to 2001/02
Takashi Kurosaki

http://www.ier.hit-u.ac.jp/primced/documents/No46_dp_up_Pdf_2013.pdf

When we look at the
results for each decade, we find that the total value-added grew very little up to the Partition in all
three countries. Only in Pakistan during the 1900s and 1930s, the growth rate was positive and
statistically significant. When the whole pre-1947 period is taken, Y grew at 1.24% per annum in
Pakistan and at 0.37% in India, and it declined at 0.30% in Bangladesh, all of which were statistically
significant. After the Partition, Y increased in every decade in all three countries. The growth rates
were generally higher in Pakistan than in India and Bangladesh. When the whole post-1947 period is
taken, Y grew at 3.46% per annum in Pakistan, at 2.28% in India, and at 1.73% in Bangladesh. The
column “C.V.” in Table 1 shows how variable was the production around the fitted values in terms of
the coefficient of variation. The value-added was the most variable during the 1900s and 1910s but
was stabilized since then, possibly due to the development of irrigation. The stabilization of
agricultural production after the Partition is observed in all three countries.
Although these growth rates, except for the negative growth in the pre-1947 period in Bangladesh,
seem impressive, the growth performance became more moderate if we look at labor productivity,
which is a better measure for evaluating the welfare of population engaged in agriculture than the total
production measure. The long-term trends of Y/L (agricultural value-added per labor) are shown in
Figure 2,7 and parametrically-estimated growth rates are reported in the middle columns of Table 1.
Using growth rates of Y/L, the pre-Partition contrast across three countries become more clear-cut:
statistically-significant positive growth in Pakistan (+0.76%), insignificant growth in India, and
statistically-significant negative growth in Bangladesh (−0.62%). Since 1947, labor productivity grew
at statistically-significant growth rates in all three countries.
4.2 Contribution of land productivity improvement to agricultural growth