Name three factors that greatly support agriculture in Pakistan.

Agriculture plays an important role in the Pakistani economy, contributing about 25 percent of GDP and employing almost half of the country's workforce. Over the past two decades, agricultural production has increased at an average annual rate of more than 4 percent, and has contributed significantly to the overall growth of the economy, food supplies, nutrition, and exports. Crop production accounts for the bulk of agricultural GDP (63 percent in 1995), followed by livestock (32 percent), and fisheries and forestry (5 percent).

Despite the upward trend in agricultural production, the country faces several problems in the sector. The first is to reduce food imports, which have increased in recent years. According to FAO projections, the demand for food will increase considerably by 2010, and it is likely that the percentage of imports in domestic consumption will continue to grow. In view of the limited possibilities of expanding arable land, the increase in agricultural production must primarily come from improved yields, which will require, among other things, investments in the areas of agricultural research and irrigation. However, investments in agriculture have been declining.

The continued high incidence of poverty is another important problem. According to FAO estimates, in 1995-97, 20 percent of the population suffered from malnutrition. One of the measures taken by the Government regarding food security has been to keep consumer prices of basic food products low, through a public food distribution program (the ration system) and, in more recent years, through free market operations; but the program has proved uneconomic: in 1995/96 its cost represented almost 1.5 percent of agricultural GDP. Broad-based agricultural growth offers the best possibilities of reducing poverty in general, and in particular rural poverty.

Agricultural exports have contributed significantly to the growth of exports in general. Pakistan has considerable comparative advantages in the production of various agricultural products for export, including cotton and rice. In recent years, horticultural exports have increased rapidly, with very few subsidies. The climate and location of the country offers advantages to access several market niches and in general it is considered that, in an enabling environment, exports could increase substantially.