Revival of Agriculture Chapter 20: Revival of Agriculture 20.1. Role of Agriculture Agriculture has historically served as the backbone of Pakistan’s economy. At the time of Partition, the share of agriculture in the GDP was 53 percent. Today, it directly contributes almost 24 percent to the GDP, still higher than the contribution of industry of 19 percent to the GDP. However, what is generally not realized is that the agricultural sector has strong forward and backward linkages. First, it provides inputs to agro-based industries like textiles, sugar, tobacco, beverages, etc. These industries account for 59 percent of the output in manufacturing. Second, it has backward linkages with industries like fertilizer, chemicals, and tractors. Third, almost 53 percent of the income generated in the wholesale and retail trade is through the sale of agricultural items. Fourth, 42 percent of the value added in the transport sector is through the movement of agricultural goods. Overall, it is estimated that 39 percent of the GDP is generated directly or indirectly by the agricultural sector. It is truly the‘primary` sector of Pakistan’s economy. Other key macroeconomic variables are also linked to the performance of the agricultural sector. 39 percent of the national employment is in this sector. Agricultural exports have a 20 percent share directly in exports and almost 34 percent indirectly. The largest share of 30 percent of private investment is in agriculture. The above facts clearly demonstrate the central role still of agriculture in the economy of Pakistan. An increase of 1 percentage point in the growth rate of the sector can raise the GDP growth rate by almost 0.4 percentage points. On top of this, the sector makes the biggest contribution to food security and poverty alleviation. Table 20.1 demonstrates that there has been a substantial decline in food security, as measured by the food availability per capita. The food security index has fallen by over 11 percent between 2005-06 and 2020-21. However, there was some improvement in 2020­21 due to bumper crops of wheat, rice and sugarcane. 193