EMERGING FOOD INSECURITY

SHABBIR H. KAZMI
(feedback@pgeconomist.com)
Oct 11 - 17, 20
10

According to a report released in advance of the September 20-22 Summit being held in New York, Pakistan is among the seven countries around the globe where two-thirds of world's undernourished live. The report called for speeding progress towards achievement of the United Nations Millennium Development Goals (MDGs), the first of which is to end poverty and hunger.

Bangladesh, China, Congo, Ethiopia, Indonesia, and India are the six other countries. Asia and the Pacific has become the region with the most undernourished people estimated around 578 million whereas new estimate of the number of people who will suffer chronic hunger this year is 925 million, down from 1,023 million for 2009.

The UN Food and Agriculture Organisation (FAO) and World Food Program (WFP) report reveals the hunger figure contained in the 'State of Food Insecurity in the World'.

The number of hungry people in the world remains high despite expected recent gains that have pushed the figure below one billion. The lower global hunger number are based on the expectations that the economic growth would be better this year particularly in developing countries.

However, the recent increase in food prices can mar further reduction of hunger. The International Monetary Fund estimates that world economic output will increase by 4.2 per cent in 2010, faster than forecasted, following a contraction of 0.6 per cent in 2009. In general, income is growing faster in emerging economies and developing countries than it is in developed countries

Out of the eight millennium development goals devised by the UN in 2000, the top item pledged to halve the proportion of hungry people from 20 to 10 per cent by 2015. With a lapse of five years, the percentage was reported at 16 per cent, however. Globally, the hunger figure marked a decline mostly concentrated in Asia, where 80 million fewer people were estimated to be going hungry this year. In sub-Saharan Africa the drop was much smaller about 12 million and one out of three people there would continue to be undernourished.

While international cereal prices have declined from their 2008 peaks, reflecting two consecutive years of record yields, production in 2010 is forecast to be lower. The overall supply situation is considered adequate. However, food prices in most low-income food-deficit countries remain above the pre-crisis level, negatively affecting access to food by vulnerable populations. The joint report has noted that the global cereal production has been strong for the past several years, even as the number of undernourished people was rising. The overall improvement in food security in 2010 has been primarily a result of better access to food due to the improvement in economic conditions, particularly in developing countries, combined with lower food prices.

OUTLOOK FOR PAKISTAN

Initial increase in prices was attributed to price hike due to Ramadan but in the aftermath of devastating floods prices of almost all the food items have doubled and even tripled. It is true that supply constraints are there but hike is mainly due to profiteering and inability of the government to control price.

Prior to flood Pakistan was planning to export surplus wheat but post floods price of wheat flour went up mainly due to interruption supplies. While it has been observed that some of the stored wheat has been damaged, people having vested interest are supplying staled cereal to the flour mills.

Experts are of the opinion that Pakistan can attain bumper wheat production if appropriate measures are taken in time. If farmers are provided seed and other inputs at subsidised rates a big boost in wheat production can be achieved.

To achieve this rehabilitation of people affected from floods is a must. The process has been hampered by second spell of downpour and standing water in the fields. Damaged bridges and inundated roads are not allowing return of people to their homes. Unless they settle down farming activities can't be normalised. Hike in prices of fruits and vegetables can also be contained once new crop is made available, but it will take some time. One of the options is to import potato, onion, tomato, and even chili from India to ensure uninterrupted supply.

Pakistan despite being among the top five milk-producing countries has witnessed persistent and substantial increase in milk price. Availability of milk in tetra packs has brought changes in the consumption pattern, particularly in the urban areas. However, interruption in supplies provide a chance to traders to indulge in hording and black marketing. Vendors in Karachi blame that if they do not get enough supply how can they guarantee supply to the consumers. They also blame that manufacturers have been increasing prices regularly and they were told that post Ramadan supply would be at higher prices.

Interruption in supply is temporary but concerted efforts have to be made to bring the situation back to normal at the earliest. It is on record that the country suffers mainly because of poor yield, nearly half of the yield achieved in the neighboring countries. This arises from non-availability of certified seeds, limited supply of irrigation water and above all lack of credit to the small farmers.

Despite the best efforts of the central bank, lending to farmers has remained low. It was expected that crop insurance would help in increasing credit disbursement but the fact of the matter is that the existing scheme is credit insurance not the crop insurance.