The week in focus

There is a need to cultivate necessary crops on a large scale in order to ward off costly imports and inflation.

A warning by the Food and Agriculture Organisation (FAO) that prices of agricultural commodities will remain volatile and move further up has reminded the developing food-deficient countries of the need to cultivate necessary crops on a large scale in order to ward off costly imports and resultant consumer price inflation.

The Agricultural Outlook 2011-20, released by FAO and the Organisation for Economic Cooperation and Development last week, says that a good harvest in coming months should push commodity prices down from the extreme levels seen earlier this year. However, over the coming decade real prices for cereals could average as much as 20 per cent higher and those for meat 30 per cent higher, compared to 2001-10.

Higher prices for commodities are being passed through the food chain, leading to rising consumer price inflation in most countries. This raises concerns for economic stability and food security in some developing countries, with poor consumers most at risk of malnutrition, the report says.

In Pakistan too, the government has been talking time and again about the importance of food security, which will not only make available wheat, vegetables and pulses at affordable prices to ordinary citizens, but will also save money spent on the import of necessary commodities. However, the country has to devise a mechanism which could ensure that farmers cultivate the necessary crops on a large scale to meet the needs of the swelling population as well as create surplus for exports.

Though Pakistan’s irrigation and canal system is the lifeline for the agricultural industry and has been recognised the world over, but no significant efforts have been made to repair and rehabilitate the system. A few years ago, the government did initiate a drive to improve watercourses, but its concrete results are yet to be seen.

Besides, no big dam has been constructed to store water over the last 10 to 20 years, despite the fact that the country receives substantial rainfall every year and this water can be stored for crop sowing. “We have vast agricultural land and a large number of farmers, but water shortage affects their ability to cultivate crops over a big area. The government must provide infrastructure for the farmers including building of dams and improvement of watercourses,” said Hamad Aslam, Group Head of Equities BMA Capital.

He said wheat crop, which was a staple food item but faced problems from time to time, should be sufficient for meeting the demand of around 22 to 23 million tons per annum and the country should also be self-sufficient in production of pulses and vegetables, dubbed a poor man’s food items, and avoid their imports.

Prices of food products are also an issue that has dogged the country for the last two to three years. Reports say that prices of vegetables in the retail market are double the prices in the wholesale market and that requires immediate attention of price control authorities.

Sindh Abadgar Board Information Secretary Nadeem Shah, commenting on food security, said there was no government policy for purchase of cereals to encourage farmers to increase production of these crops. Besides procurement, the government must announce support prices for minor crops – cereals and vegetables – which he said was the practice the world over.

Around three years ago, lentil (masoor) was sold for Rs5,000 per maund but a year later prices dropped to Rs1,400. Last year, the price was Rs2,500 per maund.

Shah called for setting up a chain of cold storages for preserving perishable commodities like fruits and vegetables. Only Punjab has satisfactory cold storages for potato, which helps make available the commodity the whole year.

the writer is incharge Business desk for the Express tribune and can be contacted at [e-mail]

Published in The Express Tribune, June 20^th, 2011.