Agriculture plays a crucial role in the economies of least developing countries (LDC) like Pakistan. Pakistan’s economy is fundamentally based on agriculture. The agriculture sector in Pakistan contributes 21 per cent of the GDP, with yearly growth of 2.7 per cent. Whereas 44 per cent of the labour force can find employment in the agricultural sector and this industry provides a living for 62 per cent of the rural population. A significant area where our ways of living and commercial innovation intersect is agriculture. It plays a variety of roles in the economy of any country, including those related to food security, the fight against poverty, the industrial revolution and economic expansion, particularly in developing nations.
With a total area of 796,095 km2, Pakistan has around 22 million km2 of cultivated land and 8.3 million km2 of uncultivated land. Pakistan is endowed with natural resources and spans a variety of climatic and ecological zones. Water and fertile land make up the majority of Pakistan’s natural resources. Federal Bureau of Statistics estimates that this industry supports 75 per cent of the nation’s population, employs 42.3 per cent of the labour force (36.2% men, 74.5% women), and generates a sizable portion of foreign exchange revenues.
The food and agriculture crops, horticulture and orchards, livestock and dairy, fisheries, and forestry are the four primary subsectors of Pakistan’s agriculture industry. Because of the high yielding and fertilizer-responsive crops, as well as the development of the land base and irrigation water supply, the sector’s output has increased from the 1960s to the late 1980s, but little not more has been done to add value and prevent post-harvest losses.
Since 1990, farmers have planted more land in horticulture, orchards, oilseeds, and food crops. The region’s increasing food crop yields, however, which can be attributed to the use of pesticides and fertilizer, are still far lower than yields in developed nations.
Value addition system
For a variety of reasons, including low investment in Research and Development (R&D), the creation or dissemination of higher production packages, the maintenance of an efficient agricultural education and extension system, and the upkeep of physical infrastructure, technical change and value addition have been slow to come about. Resource deterioration, governmental sector domination in agricultural commerce, and price controls all contribute to problems.
About 23.4 million of Pakistan’s 34.5 million hectares of fertile land are under cultivation. A few very large holdings and a lot of small, owner-operated farms make up the majority of the farm size distribution. There isn’t much investment made in land development, farm buildings, or machinery because the majority of farms have less land than the economic landholding size of 5 hectares. Inefficient land markets and investment are discouraged by the outdated land titling system.
Effects of food price inflation
Pakistan, a developing nation, likewise struggles with rising food prices. The task of regulating food item pricing is more difficult. Because it reduces the welfare of the impoverished households, the rise in food prices requires a lot of attention. Various points of view exist regarding the reasons behind food inflation. Economists contend that the additional funding provided by the government through the creation of new currency is what causes food inflation (Monetarist), but the government contends that structural changes and international effects are what are really to blame. Pakistan frequently experiences food inflation because the government keeps raising the cost of basic goods. High inflation in emerging nations is a major issue that has made life difficult for the average person. One of main problem of developing countries are high inflation which has made the lives of common man miserable.
In Pakistan, food inflation ranged from less than 10 per cent from 1997 to 2003 and 9.9 per cent from 1972 to 2008. It began to rise after 2003 and increased all the way to 12.5 per cent in 2004-05. In 2007 and 2008, it was 17.5 per cent and 26.6 per cent, respectively. Wheat was in low supply, which led to a sharp rise in food inflation. Prices have continued to rise as a result. Food inflation in Pakistan was also significantly influenced by a rise in food costs globally along with an increase in oil prices.
Asian Development Bank (ADB) research indicates that a 10 per cent increase in food costs results in a 2 per cent increase in the poverty rate. Although numerous monetary and fiscal steps were tried to lower food inflation, it remained double digits.
Policymakers find it difficult to regulate the reasons when food prices rise substantially since a combination of structural, demand, and supply side factors are at play. These determinants include, among others, the availability of money, the currency rate, foreign aid, input prices and transportation costs.
Food inflation hinders economic growth and lowers household purchasing power. Since food prices are a dangerous enemy of the economy, it is necessary to look into the underlying causes of the issue and identify the driving forces behind the increase in food prices. If this happens, malnutrition, which contributes to low economic productivity, will result from poor access to a basic necessity like staple food.
Effects of rising food and fuel costs
Concerns has been expressed by policymakers, lawmakers, and international organizations over the consequences of these costs on their people, in particular the poor, given the recent high levels of food and gasoline prices and their quick growth. The transmission of high global prices to local markets in developing countries may be slowed down or reduced by government policies aimed at price stabilization (such as export and price controls and subsidies), international factors (such as a weak US dollar), and domestic conditions (such as a lack of infrastructure).
In fact, Pakistan made an attempt to outlaw wheat exports. However, poorer nations are particularly affected by the rise in global food and fuel prices.
The poorest groups in society are disproportionately affected by the increases in food prices. The World Bank estimates that rising food costs might push up to 100 million people into deeper poverty. According to the World Food Programme, 20 million underprivileged children are in danger. The United Nations worries that progress in reducing poverty is being jeopardized by rising food prices. While costs have made food unaffordable for many people, US food aid has decreased.
In Pakistan, long lines develop at government outlets, and wheat ration cards have also been reinstated. Additionally, the nation has had violent protests. While increased food costs damage low-income consumers, they are anticipated to benefit struggling farmers; nevertheless, whether or not farmers can get access to needed fertilizer, irrigation, and markets.
The costs of essentials have been rising quickly as a result of a combination of supply and demand-side variables. Rising food demand in China and India, particularly for meat, which necessitates a significant amount of grain for animal feed, are among the demand-side causes. The World Bank predicts that by 2030, food demand would have doubled. Recent biofuel attempts in industrialised nations like the US and EU, which deplete supplies of wheat, soy, maize, and palm oil, are further sources of food demand. Two billion bushels of wheat were utilized to make ethanol in the United States alone. Speculation on the commodities markets has increased prices as a result of shortage expectations.
Food safety challenges
Food-borne illness is a hazard worldwide, not just in developing nations where sanitary and hygienic conditions are subpar and outbreaks are more likely. To reduce the financial burden, comprehensive food safety procedures must be chosen. Pakistan’s public health burden is growing and placing social and economic limits.
In the fiscal year 2017-18, Pakistan’s total health care spending climbed to Rs384.57 billion from Rs24.28 billion in 2000-01. An additional financial load is being placed on Pakistan by its drastically rising healthcare spending. The 169 targets and 17 goals that UN member nations must use to guide their socioeconomic policies.
The health and economic development of developing civilisations are horrifyingly threatened by the biological, chemical and physical pollution of food. The research on foodborne infections, notably diarrhea in children, is widely available and only describes the increased disease burden brought on by foodborne sickness in undeveloped economies.
In Pakistan, the presence of several pathogens in a variety of foods is typical.
Because there is no monitoring, surveillance, or infection control in Pakistan, precise estimates of foodborne infections are difficult to come by. Aflatoxin contamination and mold growth are primarily caused by inadequate milk processing and storage, as well as improper handling of cereal grains and nuts. Many studies show that a wide variety of foods are polluted with heavy metals. As a result of merchants and manufacturers’ propensity to purposefully degrade food commodities provided for sale in order to increase profits at the expense of their quality and safety, escalating population expansion restricts both the economic potential of the individual and the state.
Therefore, the government faces a serious dilemma as a result of the recent trend of increasing food adulteration, especially with regard to milk. This analysis represents a concerted effort to clarify the current food safety situation in Pakistan. To paint a comprehensive picture of food safety in Pakistan, data from local and related foreign studies will be given. It is suggested that a comprehensive infrastructure for food safety that results in a safer supply of foods needs to be developed, built, and put into place.
Price volatility, natural hazards
There has been a noticeable increase in the number of nations experiencing a food crisis recently. Higher global food commodity prices and increased volatility, more frequent severe natural disasters, and political unrest are a few of the underlying factors. In many developing nations, procedures for fast evaluations at the national and international levels fall short of supporting timely responses to food crises. Man-made disasters provide even greater hurdles to conducting increasingly complicated and in-depth studies, despite the fact that many sudden-onset natural disasters leave little time for evaluation and response.
Consequently, there has been a pressing need to create a reliable Early Warning System that alerts to impending shocks and allows for swift crisis action.
Around 70 per cent of the population depends on agriculture for their living either directly or indirectly. However, because of natural and man-made calamities, it has recently faced numerous risks and threats. Due to its great susceptibility to natural disasters, Pakistan is not immune to calamities like earthquakes, floods, droughts, heavy snowfall, etc. These disasters had a significant impact on agriculture production, not just in terms of crop loss but also in terms of crop damage caused by the lack of irrigation systems, which provide water for substance farming, which ultimately leads to poverty and starvation. One of the main causes of Pakistan’s GDP decline is due to these disasters.
It is currently necessary to create plans and strategies aimed at reducing the dangers and effects of disasters on the agricultural sector. In Pakistan, improving food security, poverty reduction, and rural community livelihoods are all important in addition to ensuring the sustainability of agricultural production. There is much work to be done in the agriculture sector to make it sustainable, plan for disaster risk reduction strategies, boost resilience, and increase the ability of people, institutions, and agricultural systems to adapt.
Elements to address food inflation
Due to domestic and global economic changes, Pakistan’s economy, and its agricultural sector in particular, is facing significant difficulties. These difficulties include rising food and oil prices, unpredictability in the country’s politics, and a deteriorating law and order situation. Growth has slowed, the trade deficit has widened, and inflation has increased. Because of stagnant wheat production and unprecedented levels of informal wheat trade with nearby countries, the food supply is unstable. Pakistan’s traditional subsistence farming is gradually giving way to commercial agriculture.
Low and erratic agricultural productivity, inefficient use of water and other crucial natural resources, a lack of innovation, and weather-related shocks are all contributing factors to rising prices. The Covid-19 pandemic and associated restrictions, as well as a significant locust attack the previous year, caused additional problems. The poor performance has worsened as a result of ineffective government policies. Four areas for priority action have been identified in discussions with various stakeholders in order to increase access to food, particularly for the poorest people, including at a recent Webinar on “Food Inflation and Market Interventions” hosted by the World Bank and Consortium for Development Policy Research (CDPR).
Therefore, a few necessary steps are important to take in order to control the food inflation ion Pakistan. They include;
- Staggered and erratic agricultural productivity, inefficient use of important natural resources, particularly water, lack of innovation, and weather-related shocks are the root causes of price increases.
- In order to reduce the government’s influence on the market and give the private sector the responsibility of purchasing, selling, storing, and importing wheat, urgent reforms in the system of wheat procurement should be made.
- The liberalization of imports and the removal of restrictions on the opening of new mills are essential for increasing competition in the sugar industry.
- Improving agricultural research would aid in resuming productivity growth by introducing new crops and crop varieties, more effective production and climate-smart techniques, and better control of pests and diseases.
The experience of many nations has demonstrated that easing upward pressure on prices is not the only approach to protecting the livelihoods of those who suffer from food inflation the most. In order to prevent hunger and malnutrition, social safety nets may be more cost-effective than nation- and economy-wide market interventions. Effective social protection is a complement to agricultural sector policies for controlling food inflation.