Points to Ponder November 2023!
Agriculture production is the center of Pakistan’s economy is a fact and needs no reiteration. However, the sector is besieged by many ills of which the main is the consistent dependency on resources external to the country. There are many examples of such tendencies.
According to the Federal Minister for National Food Security and Research Dr Kauser Malik, Sino-Pak agricultural ties and joint efforts will help address the issue of food security and to learn from each other’s experiences. Similarly, the Alternative Livelihoods Options project, a five-year project worth $1.3 million finished recently; it was meant to teach women improved agricultural practices and increasing their access to new, alternative crops. According to the US Ambassador Donald A Blome, who participated in a closing event of the project, “the achievements (of the project) are far-reaching,” and has “helped establish fruit orchards, vegetable gardens, greenhouses, and irrigation systems benefitting more than 25,000 people.” In addition, USAID’s Economic Recovery and Development Activity (ERDA) is collaborating with the Khyber Pakhtunkhwa (KP) Agriculture Research and local farmers, in pioneering an innovative approach to certified wheat seed production in District Mardan.
Through the many decades that Pakistan has received back-breaking loans and other grants to help us ‘develop,’ the outcome has been disappointing. In the 21st Century, when we are confronting climate crisis, global warming is a vicious reality destroying millions of acres of land and livelihood: can countries like the US and China, who have a history of chemical intensive, ecologically suicidal agricultural systems teach Pakistani farmers how to practice agriculture production?
The Food Ministry has announced that no seeds, including genetically modified organisms (GMOs), would be permitted into the country without complying with the prescribed Plant Quarantine Regulations and Seed Regulations. But such a compelling directive is actually misleading. The government is requesting a technical and commercial research report for potential import of GMO seeds for oil extraction and meal production. There is no dialogue nationally on a controversial issue as GMOs, especially with farming communities, while the emphasis is to study global standard operating procedures and sanitary and phytosanitary protocols for GMO soybean seed importation. Apart from the corporate driven Sanitary and Phytosanitary Mechanisms and Technical Barriers to Trade agreements of the World Trade Organization (WTO), on the question of seeds, one must always remember that Trade-related Aspects of Intellectual Property Rights (TRIPs) agreement of the WTO. TRIPs and other WTO agreements have strangled agriculture economy of third world countries because, based on these agreements, mega-corporations of rich industrial countries have been able to capture local production and markets in food and agriculture. Global standards are for mega corporations of the rich industrial countries, and is the absolute opposite of the concept of food sovereignty.
One good news, at least on the surface, is that the Sindh livestock department and the Sindh Agriculture University (SAU) Tando Jam have signed a memorandum of understanding (MoU) for preservation of indigenous cattle breeds such as Sindhi Kundhi buffalo, Sindhi red cow and other breeds.
In the end, our focus on development is based on having faith not in the peasant class, which is directly responsible for much of the wealth generated through agriculture production as can be seen from financial gain of PKR 400 billion with the increase of 4 million tons of wheat production in 2022-23. Additionally, $3 billion has been earned from the export of basmati and coarse rice this year. The Pakistan Business Forum (PBF) has stated that said Pakistan’s exports in rice, and sesame seed increased by 13.5 percent, while the trade deficit decreased by 4.5 percent during the same period.
But the contribution of the small and landless farmers to the economy is ignored, while, there is no end to recommendations on collaboration with government research institutions, the private sector among others. For instance, the Sindh Agricultural University Vice Chancellor, Dr Fateh Marri has pointed out that over 3.5 million tons of valuable banana waste was burnt every year although it could be used to produce by-products, including fiber, composite fertilizers, confectionery and cosmetics. His suggestion is to form a banana research group comprising public, private and industrial sectors along with research institutes and growers, and hoped that this group could become part of World Banana Forum. The word ‘growers’ invariably means rich farmers, and not the peasantry itself.
At the same time, agriculturists, economists, progressive farmers and researchers have lamented the situation where agriculture sector in Sindh is hostage to commission agents, who, instead of farmers, fix prices of farm products. In Punjab, farmers have been raising complaints on the non-availability of fertilizers, and pointing to overcharging of the commodity by dealers. Urea was being sold at PKR 4,200-4,500 per bag against the government-prescribed price of PKR 3,600 per bag, while DAP prices were around PKR 13,500 per bag, with many police reports being filed against dealers for black marketing.
The Punjab government had fixed wheat sowing target for 2023-24 at 16 million acres to achieve a target of 25.6 million tons, but given shortfall and black marketing of inputs will this be possible? Even if it is possible, given shortage of oil and gas fuel as a critical input for their production, where does it leave us in the long run? The government is reportedly engaged with Russia, China and Azerbaijan for purchase of 0.2 million tons of urea fertilizer for the Rabi season. Is it feasible, given our huge debt, that we continue to rely on chemical fertilizers that are on one hand are expensive and detrimental to climate and soil fertility, and on the other, based on dependency of external sources?
It also needs to be emphasized that infrastructure development is often not finished in time; the caretaker government has indicated that work on the construction of Daducha Dam with an escalated cost of Rs10 billion has been resumed, while three key water sector projects face funding shortfall.
In general, there has been an increase in exports in the country. According to the Pakistan Statistical Bureau (PSB), higher shipments to China, and exports to nine regional countries resulted in a year-on-year growth of 14.3 percent in the first four months of the current fiscal year. Pakistan’s merchandise exports increased for the second month in a row after a year-long downward trend, data released by PBS. In absolute terms, the exports were recorded at $2.70 billion in October against $2.38 billion over the corresponding month of last year (20222), amounting to a growth of 13.55 percent. The textile and clothing exports recovered, with a recorded growth of 5.92 percent, with exports rising to $1.44 billion, up from $1.35billion in the same month last year.
Similarly, raw food products saw an export surge of almost 60 percent in October. Apart from basmati rice, meat exports were worth $152.58 million in the 4MFY24 in comparison to $128.46 million over last year, achieving a growth of 18.77 percent. Increase in meat exports is based on reaching new markets that include Jordan, Egypt, and Uzbekistan.
From February to August, sugar export figures reached 248,854 tons against no exports recorded over the comparable period of last year. Fruit exports, in the first four months of the FY24 increased 13.53 percent to $108.99 million against $96.003 million over last year. All other food exports increased by13.88 percent to $404.52 million in the first four months of the FY24 from $355.22 million in comparison to the corresponding months of last year. In the same period, only fish and fish product exports worth $123.86 million saw a decline of 7.96 percent from a year ago of $134.57 million.
Fish and fish exports have declined. However, Pakistan has successfully secured a two-year extension (December 2025) to continue the commercial export of fish and fish products to the United States. This decision by the US administration exempts Pakistan from adhering to the standards outlined in the Marine Mammal Protection Act (MMPA) of 2016, to offer additional time for aligning fishing practices with US environmental standards.
The result of increased food exports resulted in higher prices for consumers at home. It has been reported that ‘unchecked exports’ resulted in a high food inflation of 29 percent in October, 2023, making access to essential food items such as wheat flour, rice, sugar, meat and vegetables difficult.
Contesting news reports point to, at the least, lack of coherency in food and agricultural directives. There have been unprecedented high sugar prices at PRK 200/kg that resulted in the ECC imposing an export ban from August 10, 2023.A relevant point regarding sugar production is though profits accumulated by the sugar industry, there is big gap in fair prices for sugarcane. The caretaker Chief Minister of Sindh, fixed the minimum price of sugar cane at PKR 425 per 40 kg, whereas Punjab has fixed it at PKR 400 for the same quantity. However, in Punjab, farmers have rejected the sugarcane support price demanding that it should be raised to PKR 500 per 40 kg, at least. Various farmers’ platforms have been contesting the price, as well as highlighting the bias in favor of the industry and not farmers.
Similar tussle is apparent with respect to government policy and industry. The Pakistan Flour Mills Association has rejected the wheat issue price of PKR 4,700 per 40kg announced by the food authorities. The Association pointed out that adding PKR 800 per 40kg as incidental charges to the cost of grain procured by the government at PKR 3,900 per 40kg from the farmers was not fair.
The question of food security is also quite muddled. The National Food Security Ministry has announced that the country has well-stocked wheat reserves, as federal and provincial food departments have total stock of 6.934 million tons of wheat. At the same time, according to European traders, the Trading Corporation of Pakistan (TCP), has issued an international tender to purchase and import 110,000 metric tons of wheat.
The presence of ‘trawler mafia’ in Gwadar robbing the local fishermen in Makran of their livelihood is being raised, as well. Chairman Hidayatur Rehman Baloch, Haq Do Tehreek (HDT) has pointed out human rights abuses faced by the Tehreek in advocating for their rights; in spite of promises by the previous government, workers and leaders holding protests have been tortured and arrested.
Apart from the fisher folk facing scarce livelihood there is also ongoing marine ecological crisis which also fails to get government attention.
According to a World Bank study in Pakistan, there was a link between malnutrition and poor quality of water which inhibited the absorption of healthy minerals in the body. According to Dr Alvi, the President of Pakistan, climate and water emergency had exposed the underlying dysfunctions in global, national, and local economies, that failed to produce economic, environmental, and social justice for people. He proposed developing platforms with the involvement of the communities to encourage them to follow preparedness, and resilience initiatives on water conservation
Climate change and rising global temperatures have affected marine ecosystems, as well as fresh water upstream of the Indus River delta. A result has been a decline in fish catch, impacting fisherfolk’s income. The Ministry of Food Security, Government of Pakistan through its Fisheries Development Board will develop a digital link through a website to bring together various stakeholders (farmers, auctioneers, whole-sellers, processors and retailers); the website will be providing fish farmers information on market price as well as demand for fish in in national local markets. Public and private sectors will be supported to further fish production, especially in in Gilgit Baltistan, Azad Jammu and Kashmir and Khyber Pakhtunkha, shortly. One does wonder though, can the vast bulk of fisherfolk engage in such a digital platform?
Pakistan and China are emphasizing controlling livestock diseases, so as to enhance the growth potential in order to increase per animal production and solve livestock health issues. The federal government has provided PKR 36.6 million, Export Development Fund to build a ‘center of excellence’ at an estimated cost of Rs200 million to protect the Kinnow crop against different diseases.
One has to ask, are these measures for the majority who comprise of small and landless farmers, fisherfolk, or is for the rich industrial sector, and the traders?
Pakistan remains a highly indebted country. The past months have shown Pakistan to be near bankruptcy and default. Almost four months down the road things remain on shaky footings. Based on AidData, US international development research institution, Pakistan is the third biggest recipient of Chinese development finance worldwide; only two per cent of China’s portfolio in Pakistan between 2000 and 2021 consisted of grants while the rest was in the form of loans. 2017 onwards, Chinese finance has been mostly for rescue loans rather than developmental projects.
Saudi Arabia has rolled over the $3 billion deposit facility for another year to support State Bank of Pakistan’s foreign exchange reserves which may fall to below $4 billion in case the amount is withdrawn.
Pakistan’s development policy has included attracting international investment. The Special Investment Facilitation Council (SIFC) has been playing a key role in Pakistan and Kuwait venturing into seven Memorandum of Understandings for investments amounting to $10 billion, in various fields such as mining, food security and environment. Similarly, under the SIFC, leaders of UAE and Pakistan, witnessed by the Chief of Army Staff, have also signed MoUs worth billions of dollars to boost economic and strategic cooperation between the two countries.
It is expected that there will be no roadblocks to the IMF’s release of about $710 million second tranche of $3 billion Standby Arrangement (SBA), most probably to be released in December. However, the Fund, and the World Bank have raised concerns over SIFC, advising against creation of a group of preferred investors.
At the same time, industry leaders in the country want the government to seek other sources of cheaper external financing; the current business environment is difficult due to the high electricity, gas and petroleum prices.
The thrust of neoliberalism continues to be trade and investment, along with privatization. Privatization of PIA, and outsourcing of airport operations are still on the books. Climate crisis continues to be a major disruptive force in economic development especially agriculture. Global warming is ever present, to play havoc with agriculture production as well as communities. For instance, Himalayan glaciers are supposed to lose up to 75 percent of their ice by the century’s end, according to the International Centre for Integrated Mountain. Avalanches, and lake bursts are a feature of Northern areas of Pakistan.
An Islamabad-based climate change expert has pointed to the use of fossil fuels in energy, transport, industries and agriculture for the emission of greenhouse gases (mainly carbon dioxide and methane), which are the main reason for escalating global temperatures. As has been iterated numerous times, Pakistan’s global carbon emissions are less than one percent.
According to the caretaker Finance Minister Dr. Shamshad Akhtar, Pakistan is facing a trade-off between raising climate finance and development finance, as seeking money for climate finance negatively impacts development finance. The country needs an estimated investment of $340 billion to address climate and development challenges between 2023 and 2030.
Given the continued price escalation in essential goods and services, especially food, energy and transport, and lack of decent livelihood, there have been many protests happening across the country. While Metrobus security staff have been protesting as they had not been paid their salaries for three months, Karachi University, and Karakoram University students have been agitating against tuition fee hike. In Punjab University, students were marching for revival of student unions in educational institutions across the country.
The brutal war by the Zionist State of Israel continues and people across Pakistan, as well as Azad Jammu and Kashmir, have been standing in solidarity with Palestinians across the country. In particular, the presence of schoolchildren in street marches is noteworthy given the US-led Zionist aggression in Palestine has been especially targeting children.
