Agricultural exports, including livestock products, amounted to 3.2% of GDP in FY2008, and 1.9% in FY2007. Including carpets, all agriculture derived exports
amounted to 4.7% and 4.5% of GDP, respectively, for the 2 years.
20 years ago no data available.
Overall system efficiency in irrigation schemes remainslow although it is expected to improve with infrastructure and management improvements under a variety
of projects. Under the Western Basins project the target is to increase efficiency
by 15% from present levels of 25-30%. Under the proposed Water Resources
Development Investment Program, efficiency gains will build on gains already
achieved under EIRRP and overall efficiency could reach 50-55%.
Divestment of AFTC fertilizer and input distribution now with the private sector.
Exports of agricultural products are handled by the private sector.
Identified constraints to private sector participation were removed as conditions
for release of second tranche of the loan; although these were not major constraints to production and trade, their removal will facilitate further participation of private sector business in agricultural sector trade, marketing and service provision.
Farmers and businessmen, both with and without project support, are investing in
orchards, livestock, improved crop production, post-harvest handling and processing (including cold storage facilities, fruit and vegetable drying and other processing facilities), transport and marketing facilities.
The main natural resource management ministries continue to strengthen their
capacity. MAIL recently completed implementation of the new government pay &
grading system for all staff. MAIL's upcoming change management project seeks to
create a dynamic, well functioning, competent and effective institution through a
process of reform and structural adjustment. The project includes change
management, public sector service development and a program support network.
Ministries with enhanced capacity for sector policy and planning. Per above.
At present 23 SOEs and 3 banks are under liquidation committees or are being
prepared for restructuring or corporatization (3). Of these, 5 or 6 are almost ready to be auctioned. So far, assets valued at about $120 million have been corporatized, transferred to the public sector or auctioned.
The program supported improved food security through measures to improve
sector efficiency. Crop production is highly dependent on weather conditions and annual precipitation, but is gradually rising over time. However, a large proportion of the population remains food insecure, especially in years of poor harvest or high prices.
Food security worsened in 2008 because of the poor harvest, compounded by very
high international wheat prices and a ban on the export of wheat from
Pakistan. WFP, based on their surveys, estimated that, in 2008, 35% of households
were not meeting their daily calorific requirements, 5% more than in 2005. In 2008, a main cause of food insecurity was the high price of wheat and wheat flour. In 2007, 37% of households had been found not to be meeting their food
Production in FY2008 is reported to have been the highest in over 30 years (over
5 million tons), but this has been due to an excellent growing season. Between
2003 and 2008 rice (paddy) production has varied between 260,000 tons and
370,000 tons, but has been above 320,000 tons in every year except 2003-2004.
Agricultural output, especially of cereals, has increased significantly in recent years,
but growth is still highly variable from year to year. Overall growth in constant
prices for the agricultural (primary) sector since FY2003 has been: FY2003, 17.1%;
FY2004 -4.9%; FY2005- 2006, 6.7%; FY2006, 0.6%; FY2007, 24.6%. Growth for
the whole economy for these years was 18.6%, 9.4%, 11.5%, 11.2% and 16.2%
(est.), respectively. Between FY2002 and 2007 the economy grew at an average
of 15.7% per year fuelled by reconstruction as well as the agricultural sector.
While overall growth has been strong, there is so far no real evidence that the rate of growth of agriculture is accelerating. It still remains dependent on annual weather variations.
The three ministries have restructured and developed sector programs. The
progress with each ministry has varied as has their capacity to implement national
programs. MRRD has been the most successful, MAIL is in the midst of a change
management program to strengthen capacity, and MEW has adopted a more
cautious process of institutional reform.
Ongoing and planned irrigation rehabilitation projects, including ADB's Western Basins Water Resources Management Project and Water Resources Development Investment Project, are expected to have positive impacts on improving
irrigation system efficiency in their respective areas.
The Government is also making progress in improving the use, equity, and
management of forest land and rangeland. A new Forest Law has been prepared after an extensive drafting and consultation process, has been approved by Cabinet
and is due to go to parliament in the near future. A proposed Rangeland law is
still in the drafting stage.
The Water Sector Strategy in the Afghan National Development Strategy (ANDS), approved in April 2009, includes the following targets for 2013: (i) 2,534,000
ha under irrigation with 30% supplied from large schemes and the remainder from small and medium-sized schemes, and (ii) 47% of villages benefiting from improved small-scale irrigation. To meet these objectives MEW has a revised medium-term investment plan for $2,468 million.
Major new initiatives in the irrigation sector include the Panj-Amu River Basin
Programme (EC), the Dahla Dam and Irrigation System Phase 1 (Canadian
International Development Agency) and ADB's newWater Resources
Development Investment Program.
The United Nations Office on Drugs and Crime Afghanistan Opium Survey 2009 reports a drop of 22% in area cultivated in 2009 from 157,000 ha to 123,000 ha. This is associated with a rise in average yield to 56 kg/ha from 49 kg/ha and a fall in total production of 10% to 6,900 tons. Farm gate prices for fresh opium have fallen from $70/kg to $48/kg. Falling prices have probably been a major driver of the reduction in area, but pressure from Afghan and North Atlantic Treaty Organization forces is compounding the effect of market forces. Total worldwide annual consumption of illicit opium has never exceeded 5,000 tons but Afghan production has exceeded this level for many years. Twenty provinces (out of 34) are now opium free and a further 4 have only marginal production.
Private investment has increased: in agriculture by producers with significant
expansion in horticulture and other cash crop areas, and by traders and processors in basic market infrastructure to meet the increased demand, and by companies for a number of storage, juicing, dairying plants. A number of new large investments are planned.
The MISFA is an umbrella organization for 15 microfinance partners providing credit to individuals throughout Afghanistan. At 30 June 2009, these microfinance agencies had a total of 442,986 active clients, of whom 60% were women.
Since late 2004, 1.4 million loans with a cumulative value of $650 million have been
disbursed. The average loan outstanding per borrower was $330. The cumulative
repayment rate is 95%. MISFA is also now providing loans for small- and mediumsized enterprises (SMEs), and as at 30 June 2009 the cumulative total was 761 loans with a total value of $22 million. Work, supported by Department for International Development (DfID), is currently underway in MAIL to develop suitable modalities for the delivery of credit to midsize and larger farmers and other rural businesses with larger credit requirements than can be met by
microfinance agencies. The upcoming Change Management project in MAIL will improve MAIL's capacity and delivery services.
A review of the FAO Price Bulletins for August and September 2009 suggest that
allowing for transport costs to more inaccessible areas, the prices of important staples such as wheat, wheat flour, potatoes, beef, and mutton vary between areas within relatively narrow bands. Wheat prices vary by about 50% between the cheapest and most expensive locations, while for beef and mutton the differences are about 25%. For potatoes, the price difference between highest
and lowest reported is about two-thirds. These data suggest that commodity
markets in the country, at least for staples, are working with reasonable efficiency.
No data are available on internal market trade volumes.
The SOE restructuring process is still going on. At present, of 23 SOEs under
liquidation committees, only 3 are designated for restructuring or corporatization. The assets of the others will be transferred to the public sector or auctioned off to the private sector. It is too early to know whether or not the operations of restructured or corporatized SOEs will be more efficient than previously.
The Improved Seed Enterprise, which has been corporatized, still has structural and organizational issues to be resolved and does not yet appear to have greatly increased in effectiveness.