FOOD PRICES AND AGRICULTURE

DR S.M ALAM, DR M.A KHAN
(feedback@pgeconomist.com)
Oct 11 - 17, 20
10

Prices of many food products are on the rise increasing at a faster speed. Consumers are paying more for inflated food prices. In other words, if our monthly grocery budget was Rs4000 a year ago, we are now likely paying closer to Rs8000-plus for buying exactly the same products from the groceries.

While the federal government continues to assert that inflation is under control, the measures to control inflation simply do not take into account higher food prices. Thus, it is much more important to focus on the individual food prices to give benefits of inflation control. If we look at the price trends of the past couple of years, we notice that the prices for many food-related commodities have risen substantially. What it does not show, however, is the higher energy and fertilisers' costs that also add fuel to the price of food. These costs also ultimately translate into the inflated prices that consumers are now seeing at their local grocery store.

Unfortunately, higher food prices will likely continue for the next decade or so. The main reason prices have headed higher globally is soaring demand from newly industrialising economies of some countries of the world. This trend will continue as the people are accumulating wealth and their dietary patterns are being changed.

A REMEDY

You can fend off food inflation by several ways. Inflation is also related with the price of gold. Gold has historically been a hedge against inflation. It has maintained wealth for thousands of years and it will continue to do so for many years to come. As commodity prices have soared over the last several years, the price of gold has also moved up. Profits due to the rise of gold prices can offset high price of commodities.

Pakistan spreads over an area of 796,096 Sq. Km which is more than collective area of Germany and Britain. Presently, its population is more than 170 million, which is more than the collective population of Germany and France. Agriculture provides about 22 per cent of GDP. Pakistan has coastal area of 1050 kilometers. It has 10th largest labor force. Coal reserves are about 184 billion tonnes and ranks 7th in the world. The country possesses 25.1 trillion cubic feet of gas reserves. It is the 4th largest agricultural state after China, USA and India. Pakistan has the largest irrigation system in the world. More than 70 per cent of earning comes from agriculture. Major exports from the country include cotton, rice, fruits while major imports are edible oil, petroleum products, tea etc.

The cultivated area is about 22.5 million hectares. Agriculture plays a simulative role in the overall economic growth of Pakistan. The country has pivotal position in the production of citrus, mango, milk, dates, cotton, rice, and wheat in the world. Research shows that that the growth of agriculture sector has been very effective in reducing poverty both in urban and rural areas of the country.

Food availability is normally defined as a situation in which all households have both physical and economical access to adequate food and where households are not at risk of losing such access throughout the year. In a broader sense, it requires, i) adequacy in food production, ii) complete stability and resource in food supplies in the markets, and iii) physical and economic access to food on the part of those who need it most, at the time of requirement. It is a well documented fact that the major improvement in food availability has been gained through the growth and enough production of agricultural commodities at the rate higher than the increase in population.

The access to food generally depends on the availability and stability in the markets. Sufficient food availability means that sufficient food supplies should be available to meet consumption needs of the citizens and the stability refers to minimising the possibility that in shortage periods, the food requirement might fall below the consumption requirements. Principally, the food sufficiency concerns the individual or family unit and its major determinant is purchasing power-income adjusted for the costs of cereals.

Sustainable increase in production and agricultural productivity in all food sectors, coupled with a sufficient yield variation through better water control measure are considered to be key elements to improve food situation in the short-term and to improve poverty and malnutrition in the long-term. Every effort has been made by the government to maximise the food production in the country and to meet the domestic needs of food and fibers.

Major and minor food crops of Pakistan are wheat, rice, cotton, maize, jowar, bajra, barley, rapeseed/mustard etc. Cash crops are sugarcane, cotton, sugar-beet and guar-seed. Pulses are gram, mung, masoor, mutter, and mash. Edible oilseeds are linseed, groundnut, soybean, sunflower, canola, safflower, and cottonseed. The production of sugar is over 4.2 million tons from nearly 77 mills.

The annual production of fruits, vegetables and spices is more than 12 million tons. The important fruits include (000 tons): Citrus (2,348), mango (1,074), dates (622), apples (380), banana (158), apricot (206), almonds (23), grapes (49), guava (571), peach (70), pears (31), plums (61), and pomegranate (50).

Some of fruits grown have great potential for exports, which are available in volumes, varieties and are of rich flavor. These are mangoes, citrus, grapes, dates, apples, peaches, and cherries. Other prominent fruits with enormous export potential are plums, pears, guava, etc. Among vegetables, potatoes, garlic, ginger and onions are vastly grown in Pakistan.