Farmer and consumer friendly policies
Agriculture is the mainstay of the economies of majority of the countries including Pakistan. It provides employment opportunities for their workforce, produces raw materials for their industrial machines and above all grows food crops to ensure food security for their populations. In Pakistan, it accounts for about 21.2percent of GDP and employs about 43 percent of the labour force.
Self-sufficiency in the production of food crops is the major concern of all the planners around the world not only to protect the consumers from the ill-effects of fluctuations in prices and supply of food items at the international level but also to make sure that the producers of these crops, the farmers, maintain their interest in the production of their crops through steps that guarantee reasonable prices for their produce. It has been observed that the third world and poor countries are more vulnerable to the changing international prices of food and their collateral fallout, particularly those countries which are food-deficient and have to import sufficient quantities of food for themselves.
A study carried out by the FAO concludes that the only and the best way of protecting the consumers and farmers of the poor countries is to encourage and harness the production potential of staple crops in these countries. That essentially means that along with the measures aimed at increasing yield per acre and bringing more areas under cultivation of food crops, the prices of the staple crops must be maintained at such a level that the rise in the prices of the commercial crops does not prompt the farmers of the staple crops to switch over to those crops resulting in food shortages in the country and consequently importing food to meet the requirements, with all the accompanying disadvantages.
In Pakistan, wheat is a staple diet and constitutes 60 percent of the daily diet of the common man. It contains calories, proteins, certain vitamins and minerals which have a great nutritional value and therefore is the most important food crop in the world. Pakistan being an agricultural country is supposed to be self-sufficient in the production of wheat and not only that but also be in a position to have substantial surplus for export to other food-deficient countries. But a close look at the pattern of wheat production in the country reveals that barring a few years, the production of wheat has been much below the consumption level and Pakistan has been importing wheat to fulfill its needs. Apart from crop failures, droughts and weather related debilitating factors, unimaginative and faulty policies of the successive governments have also played a major role in our drift towards a food-deficient country occasionally.
In 2008, when the present government assumed power, the country was importing 2.5 million tones of wheat. There was also a severe shortage of sugar in the country. With the snowballing of international food prices, the imported wheat was much expensive than the homegrown wheat and the consumers had to pay more for buying their food. That not only affected the consumers but also added an extra burden on the national exchequer. The agriculture sector as a whole was in a pretty bad shape and needed to be revived and supported in bringing about a turnaround in the production of food crops and improvement in the economic situation of the farmers.
The government did exhibit commitment and concern over this precarious state of affairs. The former Prime Minister Syed Yousaf Raza Gilani, in his first address to the Parliament after being unanimously elected, announced a raise in the wheat procurement price for the farmers. This policy has been vigorously pursued since then and even last week the ECC raised this price from Rs 1050/- per 40 Kg to Rs 1200/- per 40 Kg. This was the fourth time since the inception of the present government that support price for wheat has been increased. These price increases have been made well before the sowing season.
The latest raise in the procurement price of wheat was necessitated by a number of factors. The prices of the inputs for the crops had witnessed tremendous increase during the last year eroding the net income accruing to the farmers. So it was imperative to offset this impact and also to provide incentives to the farmers to boost the production of wheat. A collateral advantage of this move will be that it would discourage the smuggling of wheat to the neighbouring countries where the prices of wheat are much higher than Pakistan. The continuation of this illegal practice by the unscrupulous elements could have created shortage of wheat in the country.
Some might argue that the raising of the support price for the farmers would also raise the prices of food for the consumers who will have to bear the brunt of the support provided to the farmers. That impression is not correct and those entertaining this thought are not looking at the other variables and factors which are very relevant to the obtaining situation. The international prices of wheat are still much higher than the price of wheat after raising the support price. The consumers would have had to pay more for their food if it had to be imported. The policy of raising the support price of wheat for the farmers, besides the economic considerations is also relevant and indispensable from the political perspective.
There is no denying the fact that the country indeed has witnessed a turnaround in the production of wheat as well as sugar during the last four years. The wheat production has increased from 22 million tones in 2008-2009 to 25 million tones in 2011-12 and is likely to touch the figure of 26 million tones in 2012-13. The ECC also approved export of 400,000 metric tones of sugar to other countries. So from a net importer it has become a net exporter of these commodities.
Food security is the most preferred policy option for any country as it also helps in nudging the economic progress in a multiple ways. Food shortages can have serious repercussions like famines and riots with all the negative political ramifications. Politics aside, the conclusion one can safely draw is that the consumer and farmer-friendly policies of the present government over the last four years have not only protected the interests of the consumers and raised the level of food security but have also provided adequate incentives for the farmers to help the country to achieve those targets.
