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Sophisticated technology, sustainable means key to prevent Pakistan’s agri growth

Agriculture and food security in Pakistan highly vulnerable to climate change impact
Edible imported oil and fuel oil are threat to food security

Pakistan needs sustainable means to grow food and adopt technological innovations and must create awareness and understanding of agriculture technologies. Sophisticated technology has a strategic role in the future of agriculture sector in Pakistan. Growing population, climate change, scarcity of water and changing lifestyles continue to pose challenges to food security.

Climate change

The climate change with natural calamities in the country such as unpredictable rainfall patterns, floods and drought, the growth in population and poverty is a menace to the country’s future food security. The climate change had emerged as one of the greatest global challenges. Increasing global temperatures, reduced and inconsistent rainfall patterns and hydro-meteorological disasters such as floods and droughts had increased the vulnerability of Pakistan. Climate influences stress, increasing poverty and population present troubling times in the future.

Water for sustainable food security

Water must be ensured for sustainable food security under climate change and increasing food demand. People living downstream are relying on mountain services such as water for food security and livelihoods. Overall, 1.9 billion people in the

Hindu Kush Himalayan Region (HKH) countries are dependent on mountain ecosystem services.

Agriculture and food security in Pakistan are highly vulnerable to climate change impact due to higher dependence on vulnerable natural resources such as water. The Indus River is highly dependent on glacial sources for water. The Indus River has the highest reliance on glacial water in the entire HKH region with many areas getting over 60 percent of their irrigation water supply from glacial melt.

In pre-monsoon period, the melt water contribution is most critical for the agriculture sector. Some regions of Indus Basin that depend on melt-water also have depleting groundwater reservoirs which makes them highly sensitive to future climate shocks.

The climate change-induced changes in glacier melting have serious implications for food production in the plain areas of Pakistan. The higher temperatures could effectively melt Pakistan’s water stores.

The rate of melting, the timing of melting is important for key crops such as wheat, rice and cotton. Pakistan is a water-stressed country. It is difficult to achieve food security.

The Mangla Dam and other associated water infrastructure were constructed, and a massive land-clearing and reclamation effort was undertaken.

The area under cultivation saw an increase. There was increase in the yields through large-scale utilization of modern inputs like urea fertilizer.

Dwindling water resources, further expansion is not possible. Soil fertility is worsening; increasing yields is also becoming a growing challenge.

The pressure to grow more nutritious food per unit of land is growing at an accelerating rate, putting unprecedented stress on future food security.

Pakistan dependent on edible oil imports’

Lack of policy support and research as well as low acreage keep Pakistan dependent on edible oil import. The State Bank of Pakistan (SBP), in a latest report, said the country’s dependence on imported edible oil continues nonstop due to lack of any advances in domestic oilseed crop cultivation.

Oilseed crops, such as sunflower, have failed to take hold on a large-scale due to farming issues such as overlapping of the sowing period with that of major crops such as wheat and cotton. The technological handicap, lack of research orientation and absence of any policy support are other major impediments to import substitution.

Import of soybean surged 76.2 percent to $102.16 million in the first half of the current fiscal year of 2017-18. Palm oil import increased 23 percent to $1.04 billion during the same period. In quantity terms too, soybean import rose almost two-fold to 114,234 tons, while import of palm oil surged 17 percent to 1.42 million tons in the July-December 2017-18.

Edible oil imports accounted for 35 percent of food import bill of $3.24 billion in the first six months of the current fiscal year. Pakistan produced 533,525 tons of vegetable ghee and 157,276 tons of cooking oil in the July-November period of fiscal year 2018.

The country’s annual edible oil/fats consumption is around 3.9 million tons. Local edible oil manufacturers said around 30 percent of edible oil import bill comprises of duties, which the SBP said is not promoting availability of import substitution.

Reliance on import duties, while failing to reform the real sector, only adds to the burden on the consumers, who face an inelastic demand.

 

Pakistan heavily dependent on fuel oil

Pakistan’s economy will most likely be faced with tougher challenges in the second half of the current fiscal year as it remains heavily dependent on imported fuel oil whose prices are steadily on the rise. Import bill will be significantly higher than the first half (of current fiscal year 2017-18).

The continuous surge in oil prices in world markets due to pick-up in demand and weakening of the US dollar against major world currencies under the global currency war has forced authorities in Pakistan to pass on the burden to the consumers.

This is expected to have an effect on the entire economy by inducing cost-push inflation. This will have the impact on the food security of our country also.

It would also make transportation of commodities and their prices expensive, fuel inflationary pressure and prompt the SBP to further increase the benchmark interest rate.

Consequently the upturn in international oil prices and the country’s surging import bill would also widen the current account deficit. It will press authorities to take additional measures to bolster exports and inward remittances and cut imports.

Pakistan’s foreign exchange reserves will continue to reduce quickly in the short run. According to the Pakistan Bureau of Statistics, the petroleum import bill surged 33.42 percent to $6.67 billion in the first half (July-December 2017) compared to $5 billion in the same half of previous year.

Similarly, the current account deficit increased 59 percent to $7.41 billion in the first half against $4.66 billion in the corresponding period of previous year, according to the central bank.

Rebalancing of oil demand and supply in world markets may push the current account deficit up by around $100 million per month.

The oil import bill would have been higher had the country not started importing cheaper liquefied natural gas (LNG), which has led to increased production of electricity at cheaper prices.

This would somewhat offset the inflationary pressure in the economy. Higher oil prices will make imports expensive and will definitely be a significant challenge. The government needs to reintroduce corrective measures like an incentive package to boost exports, impose regulatory duty on imports and let the rupee depreciate against the US dollar and other major currencies. Both the monetary authorities and fiscal authorities have to move in tandem to manage the associated risks.

Tea imports grew 11 percent year- on -year, touching $333.9 million and import of other food items increased 17 percent year-on-year, touching $1.5 billion. Milk product imports also grew 9.9 percent year-year- year, touching $152.3 million.

Soyabean oil import went up 82 percent, touching $105.7 million. Spices imports grew 22.5 percent year-on-year to $93 million. Sugar imports registered 4.9 percent increase year-on year, touching $0.34 million.

Pulses imports declined 35.7 percent, year-on-year to $315.4 million because of improved yield locally. Dry fruit imports declined 8.5 percent year on year, touching $91.3 million due to imposition of regulatory duties on several types of dry fruits.

The Pakistan Customs banned the import of food and fruit items from Afghanistan and stopped the loaded trucks on Torkham border. The customs officials have put forward seven conditions for importing fresh and dry fruits, cooking oil and ghee from Afghanistan.

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