Consensus on wasteful irrigation practices that has long prevailed in academia is finally trickling into the mainstream due to the specter of water shortage. Questioning inequitable distribution and access to water for different sectors of the economy is a worthy cause. But unless we are prepared to question the entire paradigm, we risk demonizing few sectors to the benefit of others.
Let’s recap: Pakistan is set to become water scarce by 2025; agriculture is the most water-intensive sector, constituting about 90 percent of country’s annual water consumption. Moreover, sector’s output consists pre-dominantly of three cash crops that consume more than half of sector’s water requirement. Thus, rice, sugarcane and cotton have been labelled as extremely water thirsty, leading some experts to consider these as unsuitable for water scarce regions. And let’s not even start on the water footprint of livestock farming, which by some estimates is worse than that of sugarcane in dollar output.
Moreover, of Pakistan’s annual water supply of 94.5 million-acre feet, 60 percent comes from groundwater abstraction that is being pumped out mercilessly at subsidized electricity tariffs. Unabated extraction has led to dangerous depletion of subterranean aquifers as erratic precipitation patterns have led to lower recharge. Due to poor zoning laws, groundwater is also becoming increasingly contaminated, leading to higher cancer incidence.
So, we know the problem. But before we get prescriptive, let’s take stock. Though much maligned, agriculture contributes one-fifth of the GDP. Together with textile and fertilizer, that is about one-third of country’s economy. By some accounts, the three sectors combined directly and indirectly employ 70 percent of the labor force. Export of food, textile and other agriculture dependent products contribute about 75-80 percent of our forex earnings.
Yes, there is a water shortage, but not because we have less water to go around than we did 20 years ago, but because its per capita availability has fallen to dangerous levels due to population explosion. Yes, it is also true that sugarcane contributes lower in terms of dollar output compared to cotton, worsening trade imbalance by increasing demand for imported cotton.
While it is true that rent seeking attitudes of different sectors have worsened the crisis, the solution does not lie in targeting sectors in isolation. For example, it may be convenient to place the blame for low textile exports on higher sugarcane cultivation; it is worthwhile to remember that top apparel exporting nations such as China, Bangladesh, Vietnam and India are also net importers of raw cotton.
Farmer’s preference for one crop over other is a response to market incentives. Withdrawing support price and subsidies is of course on way to go, but a saner response would be to seek a holistic debate to chart a new course for economy with water shortage in mind.
At a time when policymakers are fully geared towards favouring the textile sector to boost exports, there is a high chance that we will once again miss an opportunity to price water as an input in its production.
From livestock to textile to bottled water, it is true that some sectors contribute more than other in terms of their per capita consumption of water. However, if policymakers are serious to resolve the crisis, Pakistan needs to avoid the mistake of creating an “exemption-based model” if we are to truly price a scarce resource.
(This news/article originally appeared in Business Recorder on October 12th, 2018)