Agriculture: FPCCI chief raises food security concerns

Writes to commerce minister, underlines need of subsidies.

KARACHI:

Federation of Pakistan Chamber of Commerce and Industry President Zakaria Usman has expressed concern over the present deplorable conditions of food security, stressing that the crisis demanded urgent attention.

Since the WTO has failed to act, Usman says any food subsidy would play a vital role, pointing out the subsidies given in India.

Despite the imperative nature of this problem, Usman believed the response from the ninth ministerial conference of the World Trade Organization that was held in Bali in December was underwhelming.

In a letter addressed to the Federal Minister for Commerce Khurram Dastagir, Usman said that Pakistan is an agro-based country. If India is granted subsidy on agricultural products – under the agreement on agriculture (AoA) – this would create an imbalance in regional trade against Pakistani products. “The government should strongly object and oppose the demand of subsidy by India.”

Usman further informed the minister that the situation means that the Indian farmers would be in a position to supply their products at cheaper prices with the help of government financial support in the form of subsidies. Consequently, export of rice from India will be available at cheaper prices in international markets, he said, adding that Pakistani exporters will not be in a position to compete with Indian exporters. This is mainly due to Pakistani authorities not being able to give subsidies due to the IMF’s condition of disallowing any subsidy to its farmers or exporters.

FPCCI chief suggested that the government can provide subsidy on those agriculture products that are linked with the global food security issue. Food processing industry, dairy products, agriculture equipments and machinery may be included in those products, he said. The supply of energy and other utilities may be subsidised for food processing and the agriculture industry.

Usman further proposed that inland freight subsidy can also be covered in this clause; however, the major factor leading to the competitive prices of Pakistani products in the international markets is the cost of shipping.

The reason behind high cost of shipping is the lack of Pakistan’s own shipping line. “The National Shipping Corporation has become inactive and freight outward from Pakistan is monopolised by few international shipping lines.”

Published in The Express Tribune, August 23^rd, 2014.

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