LOSSES WITH FAR-REACHING CONSEQUENCES

SHAMSUL GHANI
(feedback@pgeconomist.com)
Aug 30 - Sep 05, 20
10

The estimates of losses to agriculture inflicted during the onslaught of floods widely differ as do the statements of our political leaders on the dimensions of disaster. However, the words immense, colossal, overwhelming etc. can easily be used to describe the damages if one is not sure about the real extent of it. Till such time that reliable and valid statistics are developed, anecdotal evidences will remain in abundant supply. One thing is for sure that the floods have targeted the most important sector of Pakistan's economy - a sector that ensures food security, feeds and employs majority of country's population, keeps the industrial wheel moving, and gives exports a semblance of respectability.

What we would be shortly able to measure to a certain degree of accuracy is the crop and arable land damages. What we would not be able to measure - and perhaps would not like to measure is the human misery, both present and future.

To describe such destructions of huge dimensions, terms like disaster, catastrophe, calamity etc. have been coined but none of them can encompass the hundreds of thousands of stories of suffering, deprivation and degradation. Only few of them are recorded and publicly shown as daily chores of media reporters and cameramen. An Arabic international daily Asharq Alaswat quotes in its report the following words for a flood victim of Thul:

"It seems we are doomed to walking through a dark tunnel. We are on an unending path of misery. We had goats and buffalo and a wooden hut. We had grain to eat. The river ate everything, leaving the whole family hungry and empty-handed. I don't think we can start again for many years. Everything is under water and even if the river recedes, the water will be there for a long time." The same report quotes Ibrahim Mughal, the Agri Forum head, as saying: "We have lost around 20 percent of our cotton crops. The destruction of corn, rice, sugarcane, vegetable crops and fish farms is enormous as well."

According to Ashfaq Hasan Khan, the former economic advisor to the government, the floods have destroyed three million tons of cotton accounting for more than 20 percent of the targeted 14 million tons. This will have a negative impact of 25 percent on large scale manufacturing industry rendering Pakistan's export targets unachievable.

Food And Agricultural Organisation of the United Nations (FAO), in its early August report, when Sindh was not in focus, gives an overview of agro destruction in the following words:

"According to initial official estimates standing crops on over 10,000 hectares have been washed away and 8,000 livestock has perished in Khyber Pukhtunkhwa alone. The worst affected districts are Swat, Nowshera, Charsadda, Shangla and Kohistan. Amongst these Nowshera and Charsadda are among the most fertile lands in the country producing a variety of cereal crops, vegetables and fruits. According to preliminary reports, standing crops of sugarcane, maize, rice, sorghum and millet as well as orchards and vegetable plots in Peshawar, Nowshera and Charsadda Districts have been badly damaged. Stocks of stored grains, seeds, fodder and straw have been washed away. Large numbers of livestock kept for milk and meat have died in the floods and those that survive lack feed and fodder."

The above quoted brief FAO report describing the extent and nature of damages inflicted by the floods on a single province can fit fine for the entire country with some variations. Sindh was hit late by the floods but with greater vengeance. According to some estimates, Sindh sustained comparatively higher losses. The concerned ministries have submitted an account of their hurriedly-made estimates. According to the ministry of food, agriculture and livestock, the agro sector losses stand around 250 to 350 billion rupees or $3 to 4 billion. Wheat loss estimates stand at 0.6 million tons with a rupee cost of 15 billion. Sugarcane losses in Punjab, KP and Sindh accumulate to Rs22 billion. The paddy losses are also in the figures of Rs20 billion. But again, these estimates present only immediate rupee costs, ignoring the far-reaching consequences of economic and social dimensions.

Inflation is an immediate threat. This will be followed by reduction and disruption in production activities due mainly to the damaged infrastructure. The cost of doing business will further go up. Unfortunately, the State bank policies have been a big disappointment, particularly during the last two years. This is high time for SBP authorities to realise that a policy rate of 13 percent will paralyse the already-stressed economy. The business and industry needs at least a 300 basis points cut in the policy rate.

Natural calamities strike with lightning speed and leave behind a mess that takes years to get cleared. The corollary is that donor/rehabilitator fatigue starts raising its ugly head. We have seen this during 2005 earthquake rehabilitation work. The scope and sphere of disaster being much larger this time, both those affected and those undertaking the rehabilitation work will have to be patient with each other for a much longer period of time. Unless the floods and monsoons make a dramatic comeback, one feels that the rehabilitation process should start in earnest. The government will do well to shift the responsibility of immediate succor in the shape of food and shelter to the country's social organisations, NGOs and philanthropists by properly equipping them with aid material.

The government itself should take urgent economic measures to infuse life in the entire agriculture system. The immediate requirement of farmers is good quality seeds and farming equipment.

ZTBL and other banks should spearhead this mission. Financial assistance in line with the Grameen Bank's time-tested policies should be made available to the affected farmers at their doorstep.

The government has recently announced certain incentives for flood-hit farmers. The incentives focus on making use of the fertility of flood-affected land before the start of Rabi season. The farmers have been advised to sow canola early next month for which government support in the shape of seeds and other inputs has been promised. The viability and efficacy of this proposal can only be judged by the agriculture experts. Most important thing is that all rehabilitation programs have to be backed by good intentions. If we are prepared to spend even the last aid-dollar sincerely and honestly, the job of rehabilitation will become much easier.