Food autarky has been the primary goal of policy makers since the mid- 1950’s but unfortunately has been missed with the result that the country spends over $1.6 billion annually on the import of wheat, edible oil, milk, tea, etc. The situation has been compounded by phenomenal population growth and smuggling across the border Food self-sufficiency is an important element of overall security environment as its deficiency leads to outside pressure. In addition, the food industry, circumscribed by unfavourable factors, has failed to make quantum leap, notwithstanding the emphasis on value addition.
Food autarky has been the primary goal of policy makers since the mid- 1950’s but unfortunately has been missed with the result that the country spends over $1.6 billion annually on the import of wheat, edible oil, milk, tea, etc. The situation has been compounded by phenomenal population growth and smuggling across the border Food self-sufficiency is an important element of overall security environment as its deficiency leads to outside pressure. In addition, the food industry, circumscribed by unfavourable factors, has failed to make quantum leap, notwithstanding the emphasis on value addition.
Wheat production increased by 2.7 per cent per annum during 1990’s, at the same rate as the population growth. The result was that the deficit continued to persist and wheat continued to be imported to the extent of 2 million to 4 million tonnes in different years. The area under wheat increased by 0.8 per cent per annum, devoting increase in the yield at 1.9 per cent. The yield of wheat at 2.2 tonnes per hectare is one of the lowests in the world. In the adjoining Indian Punjab, the yield is over 3 tonnes per hectare whereas in advanced countries like France it is as high as 7 tonnes. Similar is the case with other crops.
A substantial quantity of wheat (around one million tonnes) is smuggled to Afghanistan which reduces its availability in Pakistan leading to heavy import. In fact, our precious foreign exchange is used to finance smuggling of wheat to the extent of $136 million. Although efforts are underway to check smuggling both ways but these are likely to be fruitless as in the past. According to government sources, the distribution system has been identified as one of the major causes of wheat shortage in the country. Government manages 6 million tonnes while 13 million tonnes goes into the system through the private sector.
The support price of wheat has recently been raised from Rs.240 to Rs.300 per 40 kg in order to boost its production this year. Now the support price at Rs.7500 per tonne is slightly higher than the import price, a long standing demand of our farmers. Lower support price than the import price has been cited as one of the disincentives to produce more. There is a rumour that subsidy on wheat is being removed, which will push up its price.
Edible oil import has assumed garganturan proportion over the years because of the negligence and wept policy compounded by smuggling and accelerated consumption. Over the recent period it has ranged between 1 million and 1.4 million tonnes a year, causing serious strain on the balance of payments. The situation has been aptly summed up by the Report of the National Commission on Agriculture 1988. “Oilseeds represent the most notable agricultural policy failure of the past. From self-sufficiency, the country turned into a major importer of edible oils. Imports currently represent 65 per cent of domestic consumption. The area under traditional oilseeds (rapeseed and mustard) has been declining and the yield has remained static. The main reason for this decline has been the price policy which, due to excessive concern with consumer interest, kept the prices of edible oils low, thus encouraging smuggling to neighbouring countries where Prices were relatively high. Efforts to expand the production of non-traditional oliseeds also failed as domestic price policies and liberal imports of cheap oils have effectively curbed the farmers incentive to produce oliseeds. The situation has not changed much since then, except the establishment of Oilseed Development Corporation to promote production of nontraditional oilseeds such as sunflower, canola, soyabean and safflower which formed 27 per cent of local production, traditional oilseeds such as cotton and rapeseed accounting for the hefty 73 per cent. For the year 1998-99 edible oil requirement is estimated at 1.7 million tonnes whereas local production is 550,000 tonnes or 32 per cent. The annual growth in consumption of edible oil is 9 per cent.
Tea is yet another imported item whose annual import runs around 100 to 125 tonnes a year and accounts for 14 per cent of total food import bill. Local plantation of tea is being developed in Mansehra district of NWFP but production on commercial lines is yet far off.
It is unfortunate that being an agricultural country, Pakistan is deficient in milk, imported in powder form. The stagnant production of pulses has led to their import. In addition, dry fruits and spices are also being imported.
On the export front, the major items are rice and fish followed by fruits and vegetables. Sugar is an item which is imported or exported, depending upon its production in a particular year. During the last two years, $300 million of sugar was exported because of surplus production. Fall in export of fish in 1998-99 was due to stringent standard set by EU countries. Fruits and vegetables could be exported in greater quantities if refrigerated transport facilities are provided, proper export facilities are provided to farmers and quick air transport is available at the point of production.
The details of import and export of food items over the last five years are given in tables:
It will be seen that barring pulses, availability of all items has increased, edible oil topping the list. The increase in per capita consumption of edible oil, meat, milk, sugar and cereals has been precipitated by increase in per capita income, change in eating pattern and commercialisation over the years. The increase in edible oil, milk and cereals has been possible through imports. There are three areas which according to one report, have badly affected agricultural growth namely irrigation system, soil depletion and seed depletions.
The value of production of food industry according to latest census of manufacturing industries (1990-91), so constitutes 17 per cent of total manufacturing sector. Food industry encompasses sugar, ghee, dairy, bakery, grain milling, processed fruits and vegetables and fishery sectors. There are a number of units both in the organised and unorganised sector, catering to the local market barring fishery units. There are 80 food units listed on the stock exchange. Sugar industry has the capacity to produce 5 million tonnes against the present production of 3.5 million tonnes because of inferior quality of sugarcane, leading to low recovery unefficient sugarcane and above all inability to export. National Foods Ltd., operating at more than the capacity and making profits, has complained of increase in GST and rising utility prices which have tended to push up the prices of the products. Resultantly many consumers have scared away and switched over to the open loose products, away from branded/packed products. The names of multinational/joint ventures like Lever Brothers, Nestle and Rafhan are buzz words as their products command high demand and therefore make huge profits. Their shares are available on high premium. As food is a delicate product, the industry has to take extraordinary care in its preparation. As a result, foreign collaboration is needed to ensure necessary hygienic and quality standard. The recent induction of Artal Group in bakery is a case in point.
Our poultry and meat processing industry is not upto the standard. The slaughter houses are unhygienic and unscientific. The meat is transported in the van and sold by the vendors in the open where flies and dust are abundant. Similarly, chicken is sold by the retailer in the open where it is slaughtered. The concept of cut, washed and packed beef or poultry is still alien to our country.
The distinction between major and minor crops is artificial and should, therefore, be done away with. Oilseeds, pulses, fruits and vegetables fall under minor crops. This division has been, to a great extent, responsible for the neglect of oilseeds and pulses. Minor crops have vast business and investment potential. As there is a lack of infrastructural facilities such as cold storage, refrigerated transport and agro-processing units, thousands of tonnes of fruits and vegetables go waste. Nature has bestowed upon Pakistan a land and climate conducive to the growth of a wide spectrum of fruits and vegetables. A total of 6.3 million tonnes of fruits are produced annually but mainly Kinnoo and mango are exported while other fruits are exported in limited quantities. Significant amount of foreign exchange could be earned by exporting both fresh and processed fruits as well as vegetables.
General Parvez Musharraf in the economic package unveiled in last December has emphasized the need for self-sufficiency in food by augmenting production of wheat and oilseeds. Import substitution strategy is envisaged in the package, yet it must not remain a policy statement as in the past. Instead unwavering commitment to achieve that end must be made in future in the form of action.
One must mull on such questions. Have our farmers been given adequate incentives to grow more? Have high-yielding new varieties of seeds been introduced? Is land tenure system in tune with modern demand? Why the present government has shied away from land reforms? Are small farmers contented with the supply of inputs including credit? Why research conducted at universities and research institutes remain confined and their results and experiments not known to farmers? Are not post-harvest losses higher in Pakistan than elsewhere (e.g. 30-35% broken rice here compared to 10% elsewhere)? Is it not necessary that Oilseed Developmen t Board be reactivated with the collaboration of the private sector? In sum, prospect of extensive cultivation is limited in wheat as large areas beyond 8.3 million hectares cannot be brought under cultivation. So intensive cultivation (that is, raising the yield to 3 tonnes per hectare or beyond) is the only alternative to boost wheat production with greater dose of fertilizer, better seeds, timely water and proper land management.
Import and Export of Food Items (Million $) 1994-95 1995-96 1996-97 1997-98 1998-99IMPORT:Wheat 413 444 477 709 407Edible Oil 997 856 612 767 824Tea 188 170 134 226 223Pulses 77 101 42 50 64Milk 27 49 28 32 36Sugar 2 2 254 41 3Others (Fruits, Spices) 59 45 49 48 78Total Food Imports 1,763 1,667 1,596 1,873 1,635Total Imports 10,395 11,805 11,895 10,116 9,432Food as % of Total Import 17 14 13 19 17EXPORT:Rice 454 504 468 563 534Fish 154 141 149 172 123Fruits 41 44 71 64 55Vegetables 10 10 10 19 48Sugar 122 11 -- 65 231TOTAL: 781 710 698 883 991Deficlt on Food A/c 982 957 698 990 644Source: State Bank of Pakistan Annual Report, 1998-99 The food availability (Consumption) is given below: (Kg/annual/Per Capita) % increase in 98-99 1949-50 1979-80 1989-90 1998-99 over 49-50Cereals 139.3 147.1 164.7 160.3 15Pulses 13.9 6.3 5.4 6.4 - 54Sugar 17.1 28.7 27.0 30.8 80Milk 107.0 94.8 107.6 129.7 21Meat 9.8 13.7 17.3 21.9 123Edible Oil 2.3 6.3 10.3 10.7 365Source: Economic Survey 1998-99
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