Pakistan’s exports are putting the nation’s food security at risk
Food and other essentials for the local consumer first.
While the country is going through its biggest financial crises led by cost push inflation our business indices reflect that the country is doing better than last years in all its sectors.
Production is up in all major industries, bumper crops and we have excess piles of carry-forward stocks of sugar, rice and wheat. In fact, Pakistan being a net importer of wheat is now exporting wheat.
How can this be when one after the other the country faces multiple crises and acute shortages of sugar, wheat, electricity, gas, petroleum and so on with interest rates touching 17%, and to top it all the number of people forced to live below the poverty line increasing from 25% to 40%?
Our government tells us this is due to the price hike in most essential commodities in the world.
While I tend to agree that prices for imported items will increase due to this factor and its related consequences- but what is happening to our surplus production? The local demand for all the basic food items has dropped due to exorbitant prices in the market along with the reduction in the purchasing power of the common man.
The only reason is that while our countrymen are facing near starvation all excess production is being exported to other countries which may have oil but no food. Prime cases here being Afghanistan and the Middle East who are our biggest consumers.
In order to bring down prices in the country, Pakistan should, with immediate effect, put a ban on export of all basic food items including wheat, rice, sugar, poultry, meat, fish and all vegetable and fruits with a clear warning to all belonging to the production and manufacturing sectors that the ban will remain until the food prices of all these items are brought at a level where the average Pakistani can afford to feed a minimum family of five. As soon as the ban comes into place we will see an immediate reduction in the prices of all consumer based products.
While this may result in a temporary loss of exports of about US1 billion a year it will immediately benefit 160 million people. At the end of the day, the choices we make and the decisions we take are up to us. What is more important — $1 billion or 160 million Pakistanis?
Imposing a ban will immediately release the pressure on the average Pakistani who will be able to feed his family. Meanwhile, the government can concentrate on creating a long term price mechanism apparatus and devise ways of enforcing this apparatus to ensure that the prices do not go out of control in the future.
In Europe, while the basis costs of raw material and petroleum etc is dependent on the international market rate and subject to fluctuations, manufacturers are allowed a maximum of three per cent price increase per year in their costs to cater to inflation and currency fluctuations. However, this is not the case in Pakistan. The government should warn its local producers of fertilisers, pesticides and seed banks that they cannot increase the prices of their material by more than 5-7 per cent per year.
All that is happening now is the big local and multinational companies dictate their prices and at times have imposed increases of up to 100-300 per cent per year without any authority to monitor them. This is bringing in huge profits to their shareholders at the cost of our nation. When has one ever heard of multinationals lose money?
Published in The Express Tribune, April 18th, 2011.