Agriculture, Caste, Religion and Happiness in South Asia

Pakistan's agriculture sector GDP grew at a rate of 5.2% in the October-December 2023 quarter, according to the government figures. This is a rare bright spot in the overall national economy that showed just 1% growth during the quarter. Strong performance of the farm sector gives the much needed boost for about 37% of Pakistan's workforce engaged in agriculture. It helps the country's rural economy improve their living standards. In the same period, India's agriculture sector that employs 43% of the workforce slowed to 1.2% growth. This could be one possible contributing factor for Pakistan (rank108) significantly outperforming India (rank 126) on the World Happiness Index once again. 

World Happiness Map 2023. Source: Gallup

Pakistan has seen bumper crops of rice, corn, wheat, sugar and cotton this fiscal year after the devastation caused by massive floods in the prior year. During the first six months of the current fiscal year 2023-24, exports of agro and food products from Pakistan have soared by 64% as compared to the same period during 2022-2023. In the month of December alone, there was a growth of 118%, as $882 million of food was exported as compared  to $404 million in the same month in 2022-23. Pakistan's gains in the food export market have come at a time when India has had to limit or ban exports of rice, corn, sugar and other commodities due to crop failures.  

The World Happiness Report attributes India's poor ranking in the Index to widespread caste discrimination in the country. Older Indians belonging to upper castes, and “never experience[d] discrimination or ill-treatment” were “more satisfied with their lives”, according to the report.

Caste discrimination contributed “significantly to the caste-based discrepancies in life satisfaction”, the research showed. Caste backgrounds determined access to education, social services, health care or financial security in India.  Individuals with secondary or higher education, and those of higher social castes reported higher life satisfaction than those without access to formal education and those from Scheduled Castes (SC) and Scheduled Tribes (ST).

Another factor contributing to India's unhappiness is the ruling party's targeting of its minorities, including Christians, Muslims and Sikhs. Here's an excerpts from Rohit Khanna's piece in The Quint describing this issue:

"In recent years, 20 percent of India, our minorities, have been targeted – economically, socially, and physically. We have all seen multiple viral videos calling for the economic boycott of Muslims, of them being mob-lynched on the roads, of their homes being bulldozed, of inter-faith marriages being targeted as ‘love-jihad’ and more. We have seen videos of Christian pastors and congregations being roughed up, and of church buildings being vandalised. We have seen protesting Sikh farmers being vilified on communal lines as ‘Khalistanis’". 

Average MPCE (Monthly Per Capita Consumption Expenditure) for Indian Muslims is only Rs. 2,170.  Average MPCE for upper caste Hindus is Rs. 3,321, the highest of all groups. Lower caste Hindus fare much worse than upper caste Hindus, according to Indian government data

Average Monthly Per Capita Consumption Expenditure by Caste in Indi...

India is almost totally dominated by the upper caste Hindus. It is not just the 220 million Dalits (untouchables), or the 190 million Muslims, or the 110 million from “scheduled tribes” (Adivasis)  who are under-represented in positions of power and privilege, but also the 40-50% of Hindus who come from the widest tier of the pyramid, the shudras or laboring castes, known as Other Backwards Classes (OBCs), according to a report in The Economist Magazine.
Some Indians claim without evidence that the Indian Muslims are richer than Pakistani Muslims. The fact is that the average monthly per capita expenditure (MPCE) in Pakistan was PKR 5,959 in 2019-20, the year closest to the 2021-22 for which the Indian MPCE data is available. Using the 2019 average exchange rate of 2.136 PKR to INR, this works out to MPCE of INR 2,789 in Pakistan, higher than for Indian Hindus (INR 2,470) and Muslims (INR 2,170).  As to the cost of living in the two countries, Pakistan is 15.8% cheaper than India without rent and 20.1% cheaper with rent, according to Numbeo
While it is true the Pakistani currency has suffered significant devaluation in the last couple of years, there have been large increases in wages. Pakistan's minimum wage has increased 14 times since 2001, from 14% to 67%. The minimum wage for unskilled workers in 2023 is 32,000 Pakistani rupees per month, up from 25,000 rupees in 2022. The cost of living has been a key factor in determining the new rate. 
Income Poverty in Bangladesh, India and Pakistan. Source: Our World...

Over 75% of the world's poor deprived of basic living standards (nutrition, cooking fuel, sanitation and housing) live in India compared to 4.6% in Bangladesh and 4.1% in Pakistan, according to a recently released OPHI/UNDP report on multidimensional poverty.  Here's what the report says: "More than 45.5 million poor people are deprived in only these four indicators (nutrition, cooking fuel, sanitation and housing). Of those people, 34.4 million live in India, 2.1 million in Bangladesh and 1.9 million in Pakistan—making this a predominantly South Asian profile". 
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Comment by Riaz Haq on May 21, 2024 at 3:54pm

Pakistan's GDP grows 2.09% in Q3 supported by higher growth in agriculture | World News - Business Standard

Pakistan's economy grew 2.09 per cent in the third quarter of the financial year 2023-2024, supported by higher growth in agriculture, the Pakistan Bureau of Statistics said in a press release on Tuesday.
The estimated provisional growth rate of gross domestic product (GDP) for the financial year ending June 2024 is 2.38 per cent, the bureau said in a statement. That compares with a revised 0.21 per cent economic contraction in the 2023 year when political unrest, a combination of tax and gas tariff hikes, controlled imports, and a steep fall in the rupee currency rapidly pushed up inflation.

Last week in its half yearly report, Pakistan's central bank projected real GDP growth of 2-3 per cent for the fiscal year 2024.

There was no comparable year-ago third quarter GDP data as Pakistan only began releasing quarterly growth numbers from November. That was done in compliance with the structural benchmarks of the current $3 billion bailout programme agreed with the International Monetary Fund and completed last month.

The bureau revised the first and second quarter GDP estimates for financial year 2023-2024 to 2.71 per cent and 1.79 per cent respectively, compared to earlier estimates of 2.5 per cent and 1 per cent.

The provisional 2024 financial year growth in agriculture was estimated at 6.25 per cent, and 1.21 per cent for both industry as well as services, it added.

"The healthy growth of agriculture is mainly due to double-digit growth in important crops", the bureau said, adding that bumper crop of wheat, cotton, and rice contributed to the positive result.

Comment by Riaz Haq on May 21, 2024 at 3:57pm

In contrast to 12.4% growth in government spending in the July to September period, growth in farm output, which contributes about 15% of GDP and employs more than 40% of the workforce, slowed to 1.2% in the second quarter of this fiscal year, the weakest since fiscal 2018/19.

Asia's third-largest economy grew 7.8% and 7.6% on an annual basis in the first two quarters of the current fiscal year that ends in March.
But momentum likely slowed last quarter, as none of the 63 economists surveyed from Feb. 16-26 expected similar growth rates in the October to December quarter. Forecasts ranged from 5.6% to 7.4%.
Official GDP growth releases for the preceding three quarters have broadly surpassed economists' predictions.

"The slowing is predicated both on softer agricultural production and government spending," said Sajjid Chinoy, chief India economist at JPMorgan.
"Government spending was heavily front-loaded this year and is slowing to meet budgeted targets... It remains to be seen how agricultural GDP is impacted by the patchy and uneven monsoon."
The monsoon accounts for about 75% of India's annual rainfall and is the lifeblood of its agriculture-dependent economy.
In contrast to 12.4% growth in government spending in the July to September period, growth in farm output, which contributes about 15% of GDP and employs more than 40% of the workforce, slowed to 1.2% in the second quarter of this fiscal year, the weakest since fiscal 2018/19.
Although the latest government survey estimated rural consumer spending to have more than doubled since 2011-12, large parts of the population living in rural areas face stagnant incomes and high inflation.

Comment by Riaz Haq on May 31, 2024 at 1:19pm

To Understand India’s Economy, Look Beyond the Spectacular Growth Numbers - The Wall Street Journal.

But the way India calculates its gross domestic product can at times overstate the strength of growth, in part by underestimating the weakness in its massive informal economy. There are also other indicators, such as private consumption and investment, that are pointing to soft spots. Despite cuts to corporate taxes, companies don’t appear to be spending on expansions.


BENGALURU, India—India is set to be the world’s fastest-growing major economy this year, but economists say the country’s headline growth numbers don’t tell the whole story.

The South Asian nation’s gross domestic product grew at more than 8% in its fiscal year ended in March compared with the previous year, driven by public spending on infrastructure, services growth, and an uptick in manufacturing. That would put India well ahead of China, which is growing at about 5%, and on track to hit Prime Minister Narendra Modi’s goal of becoming a developed nation by 2047.

But the way India calculates its gross domestic product can at times overstate the strength of growth, in part by underestimating the weakness in its massive informal economy. There are also other indicators, such as private consumption and investment, that are pointing to soft spots. Despite cuts to corporate taxes, companies don’t appear to be spending on expansions.

“If people were optimistic about the economy, they would invest more and consume more, neither of which is really happening,” said Arvind Subramanian, a senior fellow at the Peterson Institute for International Economics and former chief economic adviser to the Modi government.

Private consumption, the biggest contributor to GDP, grew at 4% for the year, still slower than pre-pandemic levels. What’s more, economists say, it could have been even weaker if the government hadn’t continued its extensive food-subsidy program that began during the pandemic.

The problem is driven in part by how India emerged from the pandemic. Big businesses and people who are employed in India’s formal economy are generally doing well, but most Indians are in the informal sector or agriculture, and many of them lost work.

While India’s official data last year put unemployment at around 3%, economists also closely track data from the Centre for Monitoring Indian Economy, a private economic research firm. It put unemployment at 8% for the year ended March.

At a small tea-and-cigarette stall in the southern city of Bengaluru, 55-year-old Ratnamma said many of her customers in the neighborhood, which once bustled with tech professionals and blue-collar workers, have moved out of the city and returned to rural villages. Some have come back, but she has fewer customers than she once did.

“Where did everyone go?” she said.

She makes about $12 a day in sales, she said, compared with as much as $100 on a good day in the past. It isn’t enough to cover her living expenses or repay a business loan she took out six months ago.

Economists say that the informal sector has been through three shocks in a decade—a 2016 policy aimed at tax evasion called “demonetization” that wiped out 90% of the value of India’s paper currency, a tax overhaul the following year that created more paperwork and expenses for small businesses, and the pandemic.

Comment by Riaz Haq on June 5, 2024 at 9:10am

Pakistan inflation slows to 11.8% in May, lowest in 30 months

ISLAMABAD (Reuters) - Pakistan's consumer price index (CPI) in May rose 11.8% from a year earlier, data from the Pakistan Bureau of Statistics showed on Monday, the lowest reading in 30 months and below the finance ministry's projections.

The lowest reading comes a week before the central bank meets to review the key rate which has remained at a historic high of 22% for seven straight policy meetings.

Pakistan has been beset by inflation above 20% since May 2022. Last year in May, inflation jumped as high as 38% as the country navigated reforms as part of an International Monetary Fund bailout programme. However, inflation has since slowed down.

Month-on-month consumer prices fell 3.2%, the biggest such drop in more than two years.
In its monthly economic report released last week, Pakistan's finance ministry said it expected inflation to hover between 13.5% and 14.5% in May and ease to 12.5% to 13.5% by June 2024.

"The inflation outlook for May 2024 continues on a downward trajectory, attributed to elevated inflation levels (in the) previous year and improvements in (the) domestic supply chain of perishable items, staple food like wheat and (a) reduction in transportation costs," the report said.

The actual readings have come in even lower due to a sharper dip in food prices, said Amreen Soorani, head of research at JS Global Capital.

Comment by Riaz Haq on Tuesday

Pakistan onion exports amounted to $210 million In first 10 months of FY2023-24

In the first 10 months of FY2023-24, Pakistan achieved onion exports amounting to $210 million, as reported by local media. The All Pakistan Fruit and Vegetable Exporters Association anticipates this figure to escalate to $250 million by the closure of FY24. Despite the flourishing export figures, the local populace has been subjected to elevated prices for onions, a fundamental kitchen staple. An association representative attributed the price hike to market dynamics rather than the export activity itself, noting a discrepancy between wholesale and retail prices.

Overall vegetable exports during this period reached 1.044 million tons, generating $371 million in revenue, marking an increase in the average price per ton from $233 to $354, attributed to stable currency rates. Onions constituted a significant portion of these exports, alongside potatoes and other vegetables.

The export landscape was also influenced by the import of onions from Iran and Afghanistan and the exploitation of an Indian export ban by Pakistani exporters. Despite efforts to regulate the market, including setting a minimum export price for onions at $1,200 per ton in January 2024, domestic prices have remained high, benefiting exporters significantly. Pakistani onions have found their way to various international markets, notably in the Far East, with potential growth hinging on resolving trade issues with countries such as Indonesia, the Philippines, and Thailand.

Comment by Riaz Haq yesterday
Economic Survey 2023-24: Agriculture’s ‘best performance’ in two decades helps drive economic growth - Business - DAWN.COM

Cotton, rice and wheat grow by 108.2 pc, 34.8pc and 11.6pc, respectively

LAHORE: Notwithstanding the challenges of lack of finance, quality inputs, efficient market systems, research and development, and extension services, the agriculture sector grew 6.3 per cent in 2023-24 compared to 2.3pc last year, driven by healthy growth in important crops, reveals the Pakistan Economic Survey 2023-24 released on Tuesday.

Rallied by a significant growth of 16.8pc in the production of wheat, cotton, and rice crops, the sector improved its share in gross domestic production from 23.2pc in FY23 to 24pc in FY24.

The agricultural sector growth of 6.3pc was the highest in 19 years, according to the research firm Arif Habib Ltd.

Wheat output witnessed a record growth of 11.6pc from 28.2 million tonnes last year to 31.4m tonnes this year, the survey said. Cotton, severely damaged by floods and rains last year, recorded 10.2m bales compared to 4.9m bales last year, growing by 108.2pc. Rice output also saw a significant increase — up by 34.8pc — reaching 9.9m tonnes compared to 7.3m tonnes.

Cotton ginning, with 0.3pc share in the GDP, grew by 47.2pc due to the significant increase in cotton production.

Sugarcane and maize, however, declined by 0.4pc and 10.4pc, respectively, mainly due to a drop in acreage. Sugarcane production came down from last year’s 88m tonnes to 87.6m tonnes, and maize came down from 11m tonnes to 9.8m tonnes. Though the sugarcane production area decreased, its yield increase (kg per hectare) is encouraging, highlighting the optimal agriculture policy mix.

Other crops have also shown a 0.9pc growth compared to a decline of -0.92pc last year. There was 8.4pc growth in fruits, 5.8pc in vegetables, and 1.5pc in pulses.

The survey reveals that water availability during Kharif 2023 increased to 61.9 million acre-feet (MAF) from 43.3 MAF in Kharif 2022 (flood year), meeting crop requirements. For Rabi 2023-24, water availability was recorded at 30.6 MAF, showing an increase of 4.1pc over Rabi 2022-23.

Overall domestic production of fertilisers during FY24 (July-March) increased by 17.3pc to 3.25m tonnes compared to 2.77m tonnes in the same period of FY23. Fertiliser imports also increased by 23.7pc, reaching 524,000 ton­nes. Consequently, the availability of fertilisers increased by 18.1pc to 3.77m tonnes.

The total offtake of fertiliser nutrients also saw an 18.7pc increase, reaching 3.95m tonnes. This was attributed to the extraordinarily low offtake during the previous year due to floods. Although gas prices for urea plants increased, the rise in average prices of urea and other nitrogen-containing fertilisers was disproportionately high compared to the increase in gas prices.

Agricultural lending during July-March FY24 went up by 33.3pc from Rs1.22 trillion disbursed during the same period last year to Rs1.63tr. It achie­ved 72.7pc of the annual target.

The outstanding portfolio of agricultural loans increased by Rs105.8 billion to reach Rs818.7bn by March 2024, compared to Rs712.9bn at the end of March 2023, reflecting a 14.8pc growth.

Livestock, which accounts for 60.8pc of the agricultural sector and 14.6pc of GDP, grew by 3.9pc in FY24, up from 3.7pc last year.

The forestry sector, contributing 2.3pc to agricultural value addition and 0.56pc to GDP, flourished by only 3.05pc compared to a significant 16.63pc growth last year.

The fishing sector, which claims 1.30pc of agricultural value addition and 0.31pc of GDP, grew by 0.81pc, up from 0.35pc the previous year.

During July-April of FY24, total fish production reached 720.9m tonnes, comprised of 410.9m tonnes from marine fisheries and the remainder from inland waters fisheries. The major fish buyers included China, Thailand, Malaysia, the Middle East, Sri Lanka, and Japan with 207,000 tonnes of fish and fish preparations exported, earning approximately $534.22m.
Comment by Riaz Haq yesterday
Empirical results of the study reveal that agricultural growth and other important variables of the study such as cash crops, livestock, fisheries and forestry are significantly affecting poverty head count rate in Pakistan.

Agriculture is considered a key tool for reducing poverty in developing countries like Pakistan. It employs almost half of the rural workforce, contributes around 20% to the country's GDP, and provides raw materials for agro-based industries. However, some studies suggest that agriculture may only help mitigate rural poverty in the long term, while other sources say that sustainable agriculture practices can significantly improve agricultural production and reduce poverty.

Here are some ways that agriculture can help the rural poor in Pakistan:
Agriculture provides jobs for millions of people in rural areas, including both skilled and unskilled workers. This can help reduce unemployment and poverty.
Sustainable practices
Studies have shown that sustainable agriculture practices can significantly improve agricultural production, which can help reduce poverty. For example, one project in Pakistan advised farmers on applying gypsum to water channels, which allowed them to grow rice and wheat in alternating seasons.
Crop-related advice
Some organizations have provided small-scale farmers with crop-related advice tailored to each stage of the cropping cycle. This advice can help farmers prepare their land, select seeds, apply fertilizer, irrigate their fields, and control disease.
However, the agriculture sector in Pakistan faces several challenges, including unequal land ownership, which is a major cause of poverty. About 75% of households in Pakistan own no land, and poverty levels are highest among landless households.



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