HIGH FOOD INFLATION AGGRAVATING POVERTY

MOHAMMED ARIFEEN
(feedback@pgeconomist.com)

May 21 - 27, 20
12

The skyrocketing increase in petrol, diesel and CNG rates has adversely affected the food prices. High food inflation in the past four years has forced millions of people to live in an abrupt state of hunger, poverty, and disease.

According to an estimate, more than 60 per cent people in Pakistan are still going through food insecurity. These people cannot afford even meager food due to high food inflation. It is surprising that in Pakistan with superfluous wheat production of millions of tons, 60 percent Pakistanis are reported to be going through food insecurity because of inflated prices of food staples.

ICCI President was of the opinion that prices of essential items like wheat, rice, sugar, vegetables, pulses, milk, egg and meat have exorbitantly increased by 220 percent in last four years. It has really become very difficult for a common person to support a family in a decent way as the government has failed to provide any relief to the common masses. The energy crisis has choked the industrial production and due to which the rate of unemployment has vastly increased.

According to a biannual report on Change in Cost of Food Basket (July-December 2011), "the food basket has shown a persistent rise since 2007 from Rs1000 to Rs1790 (79 per cent) based on retail prices of December 2011."

The price of wheat, the major staple crop, registered an increase of 200 per cent during the 11-year period from 2001 adding by 20 per cent to the cost of monthly food basket. The price of sugar during the period (2001-12) registered an increase of 200 per cent. In the same period, prices of pulses climbed 134 per cent.

During the past four years of the present government, the cost of minimum food basket comprising basic items increased 79 per cent.

The cost of 2,150 calories, needed to keep the human body, increased from Rs960 to Rs1,790, more than 86 percent between 2007-08 and 2011-12.

According to a report jointly commissioned by UNICEF, the World Bank, and USAID, 50 per cent of children born in Bangladesh, India, and Pakistan in 1999 weighed less than 2.5 kilogram.

Research has disclosed that underweight children at birth rarely catch up in weight and height later. In Afghanistan, 40 to 50 per cent children are estimated to have suppressed growth.

According to an international survey by Gallup International, which interviewed 58,000 people in 56 countries between June and September 2008, 53 per cent Pakistanis reported lacking food in the past 12 months. The same survey revealed that 48 per cent of Nigerians, 42 per cent of Peruvians, and 40 per cent in Philippines also reported lack of adequate access to food.

In a recent report, the Asian Development Bank (ADB) said that a 20 per cent rise in food prices increased the number of the poor by 4.5 per cent through pushing an additional seven million people below the $1.25-a-day poverty line in Pakistan.

"Malnutrition rate in some parts of Pakistan are as high as in Africa," the Country Representative, World Food Programme (WFP), Jean-Luc Siblot, warned while addressing a seminar at the Sustainable Development Policy Institute (SDPI).

Dr Abid Qaiyum Suleri, Executive Director SDPI, said that it is high time the government took notice of this issue. Food inflation would be a great challenge in coming years, he warned. "More than half of Pakistan's population is food insecure, anemic, and malnourished," he said, quoting a study by the Department for International Development (DFID) which revealed that the economic cost of iodine and vitamin deficiency in Pakistan equals to 2.5 per cent of GDP.

The frighteningly high level of malnutrition observed in Pakistan in the past few years is far worse than what has been observed in the sub-Saharan Africa.

Millions of Pakistani children have been determined as scrubby and underweight because of hunger, disease, and poverty. A survey jointly conducted by Unicef and the government of Sindh revealed that one in every four children in Sindh was suffering from acute malnutrition.

In a straight way, the government must concentrate on increasing the production of staple food in Pakistan by removing market deficiency to increase incentives for the small farmers.

Agriculture production has been adversely affected by the small farmers' lack of ability to access credit for securing inputs. Small famers, in the absence of options like crop insurance, become risk aversive and grow less as they cannot deal with the high risk of producing additional crops. Government must see that poor farmers are provided with crop insurance benefits.

Government must ensure that farmers have access to quality inputs like seeds, fertilizers, machineries, training as well as credit. Top most priority must also be enforced on improving rural infrastructure such as roads, irrigation systems, and storage facilities. To get rid of food inflation rationing of the most basic commodities like flour, sugar, ghee, milk powder, and tea is one such alternative that may be introduced.

Moreover, in order to check the uninterrupted inflation, the government must cut down the finances of its various ministries. It must reduce unnecessary expenditures-public sector enterprises (PSEs) like Pakistan Steel Mills, Pakistan International Airlines, Railways, WAPDA etc. More people must be brought into the income tax net. Tax evasion must be stopped forthwith.

Prompt steps are essential for boosting industrial and agricultural production that would finally decrease the level of unemployment and increase purchasing power of working class and poor people, so that they could bear the force of high food inflation.

Stable prices not only give a flourishing environment for economic growth, but also raise the life standard of poor, downtrodden people, and fixed income citizens who are the weakest people in society.

The government must take appropriate food security policies and develop a channel to control essential food prices to provide relief to millions of poor people who are suffering from harsh food inflation.