SOARING FOOD PRICES: A MATTER OF GRAVE CONCERN

KANWAL SALEEM
(feedback@pgeconomist.com)
Mar 28 - Apr 3, 20
11

The recent statement of the Director for the World Food Programme (WFP) in Pakistan, Mr. Wolfgang Herbinger that the government in Pakistan has pushed food prices too high for an impoverished population has caused alarm for the countrymen.

In the face of rise in malnutrition levels, soaring prices of food items is a matter of concern for the country's population.

According to Wolfgang Herbinger, food crops especially wheat in the southern flood-hit plains were recovering fast with the prospect of decent crops over the coming weeks. The crop outlook is not bad but the food security situation remains difficult because prices remain so high. The government is the biggest buyer of wheat in Pakistan, setting the farm gate price, and dominating the market. That's why the wheat price in Pakistan didn't adjust when, for example, in 2009 and early 2010 the wheat price had gone back a lot, it stayed high to the detriment of local consumers.

Now ordinary consumers pay double the price for wheat compared to three years ago and the food security situation has "changed dramatically", the WFP official added. Malnutrition levels in Sindh have reached 21 to 23 percent, according to the agency. "That is well above African standards. The emergency standard is 15 percent," the WFP official said.

A recent survey found that in some flood-hit areas 70 percent of people were taking out loans and even using them to pay for food.

Herbinger admitted that the WFP was "struggling a bit" to bring the message across to authorities. "You may have the country full with food but people are too poor to buy it," the WFP official explained. "We are working a lot with the Ministry of Agriculture to explain to the minister that it is not enough to have enough production in the country if people can't afford it." "Maybe for political reasons he doesn't always understand it, that it's one thing to be nice to the farmers but if your consumers can't afford it then... there's something wrong with agricultural policy," Herbinger added.

Reacting to the UN report on food price hike in the country, official sources told PAGE that wheat prices in the country are at the lowest level as compared to the international markets, as the commodity was being sold at US$329 per tons in the internationally whereas it was available at US$280 per ton in the domestic market. According to them, Pakistan has sufficient strategic food reserves, including wheat, rice, maize, and pulses to fulfill its domestic requirements. The commodity markets were witnessing the upward trend in food prices due to increase in petroleum prices.

The sources said: "It was a natural phenomena that hike in PoL prices in international market led the cause of price rising of food commodities in domestic price due to increase in cost of production and transportation."

The sources also claimed that the prices of food commodities including vegetables and pulses were still at the lowest level as compared to the regional countries like, India, Afghanistan and Bangladesh. Nevertheless, Pakistan was producing the exportable surplus including wheat, rice, maize and other minor crops like pluses vegetable and fruits.

The present government has also initiated safety nets like Benazir Income Support Programme to protect the poor from inflation and over Rs74 billion have been disbursed to the poor beneficiaries under social safety net, they said, adding: "A scheme of soft loans, of up to 300,000 rupees for setting up of small businesses, has been launched." The Benazir Income Support Programme has provided relief to over 4 million poor families, including IDPs, flood victims and the victims of bomb blasts.