Our wheat problem

Wheat is the main staple food in Pakistan. Consumption is around 125 kilograms per head per year — one of the highest in the world. Wheat and wheat-based products account for 60-70% of total calories consumed. As incomes and urbanisation increase, consumers are gradually shifting towards more of a diversified diet with increased consumption of higher-value foods such as fruits, vegetables, meats and dairy products. However, for the foreseeable future wheat will remain of primary importance — and the main source of calories, especially for the poor.

One of the country’s principal policy goals is to produce enough wheat to meet national needs, and if possible, a small surplus for export or to put into stock. To meet this objective, the government conducts a rigorous wheat planting campaign every year — targets for planting and yields are set and procurement targets are agreed upon. Thousands of extension agents and agriculture students are instructed to fan out across the country to encourage and advise wheat farmers — whether they do this, and whether this has any impact is another matter. The government also spends billions on subsidising inputs and buying wheat at a fixed price which is then sold to flour millers at concessional rates to provide cheap atta to consumers.

Over the past decades, this process, despite its myriad inefficiencies, along with better seeds and production systems, has succeeded in increasing wheat production. In 1990 production was 14.4 million tons and crossed 25 million tons in 2011 — an increase of 75% in about 20 years. Since then progress has been much slower — it took 10 years before production hit a new record of 27.5 million tons in 2021 (a 10% increase in 10 years) before falling back to 26.4 million tons in 2022. Prospects for 2023 are highly uncertain as it is still not clear if lower planting, due to areas still being underwater or waterlogged, will be offset by higher yields due to enhanced soil fertility caused by silt deposits.

Slower growth in wheat production has made Pakistan increasingly dependent on foreign supplies. Two to three million tons — around 10% of needs — are being imported in the last years. However, high dependence on imported wheat is of some concern. International markets have been volatile and turbulent in recent times, and this may well be a continuing feature for the coming years if not coming decades.

Trade-related decisions in the face of volatility and turbulence is difficult. The situation in the case of wheat is made even more difficult by the lack of reliable real-time data on domestic production and supplies; on regional trade flows — for example to Afghanistan; and on actual public sector stocks whose quality is doubtful and quantities are reportedly inaccurate due to thefts, pilferage and pest attacks.

The difficulties of handling the wheat market became clear in 2019 when government estimates suggested a wheat surplus and some 500,000 tons were exported.

But then, as domestic market conditions tightened, the government was forced to change gears and import some 3.4 MMT to meet consumer needs and help rebuild the country’s wheat stocks, at a much higher cost. These events created a public uproar and triggered an investigation by the Federal Investigation Agency which was highly critical of the government’s handling of the wheat trade.

A good option for Pakistan would be to try to increase domestic wheat production. At present the average yield of wheat is around 3tons/ha, substantially lower than other comparable countries. There is a huge scope to increase this yield through relatively simple changes in the production system such as reduced tillage, increased use of certified seeds, use of seed drills, a better match between fertiliser applications and soils, and application of micro-nutrients. There is also a large potential scope to reduce on-farm and off-farm losses through improved harvesting, bulk handling and storage in modern silos.

Climate change poses problems for Pakistan as it does for many other countries. However, it also creates opportunities. Changing rainfall patterns have resulted in higher precipitation in some of the arid areas in Balochistan and Sindh. And this has expanded the potential area for wheat. With relatively minor investments, for example, in water storage (small dams) and water spreading technologies, these areas could, in a good year, get a reasonable wheat crop from post-monsoon residual moisture.

These changes and innovations require a much more efficient and dynamic production system than we have at present. There is a need for better inputs, better technology, better machinery and equipment, and better trained technical staff. And if Pakistan needs to make better use of rain-fed areas, production systems need to be agile. In low rainfall years, planting may not be viable. But in a year with good rainfall inputs, manpower and equipment need to be quickly moved into arid areas to plant wheat.

At present most farmers and associated governmental support systems will not be able to generate the efficiency, dynamism and agility needed. However, post-Covid many agritech entrepreneurs have seen potential in agriculture. So far, these entrepreneurs have largely focused on high-value products such as fruits, vegetables, fodder and livestock.

The future lies in harnessing the expertise of these entrepreneurs as well as others service providers in the private sector for enhancing wheat production. The government nevertheless has to play a facilitation role. Such help may include credit and seed money; study tours to countries with large commercial cereals sectors such as Australia, Canada, Romania, and Russia; and bringing in overseas commercial and operational expertise. There is also a need for a change in policies — for example, allowing more flexibility in both domestic and international trade in wheat, and related inputs, particularly seeds.

It is worth recalling that with good interventions and strong leadership, other countries have moved from being major importers of wheat to becoming major exporters. The most spectacular transformation in recent times is that of Russia. During the 1960s, 1970s and 1980s Russia was a major wheat deficit country with imports reaching about 47 million tons in 1985. Since then a major push in production has made Russia the world’s largest wheat exporter with overseas sales of about 40 million tons — well ahead of other exporters such as the EU, the US and Canada.

Published in The Express Tribune, December 5^th, 2022.

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