Point to Ponder December 2023
Corporate Agriculture – the Crux of the matter
With the formation of Special Investment Facilitation Council (SIFC), there has been heavy emphasis on promoting agro-chemical agriculture, with Green Revolution technologies considered markers for progress. The role of the Pakistan Army in SIFC remains dominant. In context to the project ‘Green Initiatives,’ the Pakistan Army Chief of Staff (COAS) has identified plans for ‘agriculture malls,’ that would supply various facilities to farmers. He has been quoted, to have said that “provision of easy agricultural credit, cold storage chain, climate change resistant seeds and genetically engineered livestock will be ensured”. These development in the agriculture sector are alarming, as the economic and political positions of ‘famers’ in the country is divided into those who are on one hand big feudal lords, and rich farmers, while the bulk of those who till the land, are small farmers and agriculture workers.
This is in essence the crux of the matter. Agriculture sector, though it remains the major employer in the country has declining productivity. Climate change is often held responsible for the poor performance. However, political factors are not given the weightage that they deserve. On one hand there is vast inequity in land distribution, and on the other modern technologies and private sector are considered a panacea to all ailments. The long-term harm caused by Green Revolution policies are totally ignored. Agriculture university academics are lamenting soil infertility, with more than 6.3 million hectares of land having been destroyed by salinity. While soil nutrients are decreasing, we have the defense forces claiming they want to bring back the glory of development through Green Revolution technologies, which are globally accepted to have been the key catalyst to environmental degradation, loss of biodiversity, and a severe impact on human health. Even under acute national debt of $128 billion, instead of planning policies that would decrease the debt and increase local reliance in agriculture production, a new Green Revolution package worth PKR 2 billion has been introduced.
Apart from the crippling harm to biodiversity, especially loss of local and indigenous seeds, and pesticide poisoning, there is also now overwhelming dependency on profit-seeking agro-chemical corporations. Apart from these issues are also, bureaucratic procedures, poor policy planning and implementation, black marketing of agricultural inputs, soaring unbridled cost of production are all factors that do not take into account ground realities of small farmers. An example is that while ‘experts’ emphasize insurance and small loans for small farmers, according to a report from the Securities and Exchange Commission of Pakistan (SECP) has provided data that of the total population of farmers of 8.2 million, only 9.5 percent of the farmers were insured against the disaster risk insurance and small loans. At the same time, at peak sowing seasons, there has been continued shortage of chemical fertilizers, a situation that has been prevailing for many years. This year, government officials had assured urea imports of 200,000 tonnes; however, all provinces have reported once again, acute shortage of the chemical fertilizer. Farmers have been protesting against the black-marketing of urea fertiliser by dealers. The ultimate result is that a majority of the peasantry is pushed deeper into debt and poverty. Apart from the scenario at home, the use of agro-chemicals for agricultural production is being questioned, globally. At the COP28 UN climate summit in Dubai, there were calls for complete phasing out of chemical fertilizers based on their heavy reliance on fossil fuels.
For the policy makers in the country, the way out from the high national debt ultimately relies on increasing exports. In the past month, two export advisory committees were established, one for exports of the textile sector, and the other for the non-textile sector. They are expected to formulate policy guidelines that are to be shared with SIFC. Based on these developments, the Export Advisory Council (EAC) held its inaugural meeting under the chairmanship of Caretaker Minister for Commerce, Dr. Gohar Ejaz, charting the course for Pakistan’s $100 Billion Export Vision, where a $50 billion elevation of exports in the next five years was considered. While there are discussions of increasing textile exports underway, Punjab, the biggest cotton producing province was not able to reach even 50% of its cotton production. It’s worth pointing out that the textile industry has been reeling from the impact of highest ever energy cost, a direct result of the conditionalities of the IMF. It is also important to point out that adverse weather conditions have not been kind to cotton production, globally.
Trade – the merry go round
Exports are tied to trade relations with other countries, and Iran and China are key trade partners. There has been further developments in Pakistan-China trade relations. China has agreed to revise the Free Trade Agreement. Private sector parties of Pakistan and China have signed several memoranda of understandings (MoUs) with a $10 billion investment in four major export-oriented sectors. Joint ventures (JVs) planned include establishing industries in key sectors including textiles, agriculture, food, and car spare parts manufacturing.
Additionally, a protocol has been signed to export halal meat to China. In the coming weeks, Pakistan will commence shipments of boiled meat to China. Mr Gohar revealed that a protocol has been signed with a Chinese investor to cultivate peanuts across 10,000 acres of the Cholistan desert. The peanuts will be exclusively grown for export purpose. In addition, China is willing to put forth new investments in automobile, mineral, and agricultural sectors, with joint venture in the textile sector, with Chinese technology to be used in special economic zones. The Chinese government has also agreed to consider the option of providing trade finance in Yuan. Trade with Iran has also shown further developments with respect to barter trade.
Among exports are also fodder exports to Kuwait, based on cultivation of high protein fodder ‘alfalfa.’ The caretaker CM Punjab, is emphasizing the scientific drying and preservation of this nutrient-rich feed. There are also plans to provide alfalfa seeds to farmers for cultivating the fodder. Other key players, such as FPCCI members have highlighted the importance of increasing rice exports, while hoping to meet an annual rice export target of $3 billion by the end of the fiscal year (FY) 2024.
Further, according to the Pakistan Bureau of Statistics, food exports have increased year-on-year by 37.12 percent during the first five months of the current fiscal year, recorded at $2.64 billion during July-November 2023-24 as compared to $1.92 billion in the same period last year. The rice exports surged by 49.37 percent to $1.11 billion from $749.4 million, last year. Likewise, the exports of fruits rose year-on-year 15.27 percent to $128.13 million, leguminous vegetables 79.01 percent to $0.084 million and spices 19.21 percent to $45.179 million.
While there is an increase in food exports, the situation of food security in the country is not so rosy. UNICEF is looking for $135.6 million from the donor community for 2024 to meet the critical humanitarian needs of more than 5.5 million Pakistanis, including 3.4 million children. These fund requests for 2024 are for the protracted and ongoing nutrition emergency following the 2022 floods, and for Afghan refugees residing in Pakistan. According to UNICEF, funds requested will be used to help 1.3 million people gain access to safe water and sanitation, provide essential health and nutrition services for 5 million people, among other uses. The state of hunger and malnutrition cannot be separated from high food inflation in the country. In November 2023, it stood at 29.8 percent in urban and 29.2 percent in rural areas, whereas non-food inflation was 30.9 percent in urban and 25.9 percent in rural areas. The rise in food prices, particularly wheat have been met with popular protest. In Gilgit-Baltistan, a shutter-down strike was observed as the increase in the rate of subsidised wheat, has significantly increased over the past six months — first from PKR 7.5 to PKR 20 per kg in June, and then recently to PKR 52 per kilogram
The Lynch Pin – Foreign Direct Investment
Another area of concern for policy makers is the decrease in remittances, which has been a key sector for earning foreign exchange. The World Bank has projected a drop in remittance flows to Pakistan to $24 billion in 2023 and further drop below $22 billion with 10 percent decline in 2024.
While Pakistan is one of the most vulnerable countries to climate crisis, more than 50 percent of foreign direct investment (FDI) has been in the power sector of Pakistan, mostly for coal power projects. Most of the coal power projects are being funded by China. According to the government of Pakistan, the Thar coal reserves are worth $25 trillion, much needed to pay back foreign loans.
Policy making seems to have an internal conflict. Increasing exports is the highest priority, and given the billions in dollars in debt, it is understandable. However, the very policies that are enacted for increasing exports, end up increasing the debt burden instead of reducing it, as it is heavily reliant on further loans, and opening the country to foreign investments; investments which keep the investors profits at heart, and is not concerned with other social, political and/or economic consequences that may arise for Pakistan. Projects like the Green Initiative, are being critiqued as ‘poison for the country,’ where millions of acres of land are being offered for corporate farming.
The debilitating climate disasters in the country are based on the global character of climate crisis. This is further exacerbated when agrochemical technologies are introduced, and at the same time increasing food and agriculture exports to foreign markets. The impact of climate disasters are suffered by the population, mostly those segments who are the most marginalized. It needs to be pointed out that the impact of these disasters are long term. After the 2022 floods, to date, 1.3 million people remain temporarily displaced in Sindh, Balochistan, and KP, with 900,000 concentrated in five hardest-hit districts of Sindh, posing risks due to preexisting vulnerabilities. According to the World Malaria Report 2023, as a result of the 2022 floods, Pakistan is facing a five-fold surge in Malaria, with reported cases escalating from 500,000 in 2021 to 2.6 million in 2022; this was based on stagnant water providing an optimal breeding environment for mosquitoes. In addition, over 150,000 cases of watery diarrhea are being reported every week across Pakistan as children are facing micronutrient deficiencies. According to the World Health Organization (WHO), other reasons for the spread of the disease were displacement, healthcare system breakdown due to the crisis, increased levels of food insecurity and malnutrition. Further, according to the World Bank, Pakistan’s GDP is expected to decrease by a minimum of 18 to 20 percent by 2050 due to severe climate-related occurrences, environmental deterioration, and air contamination; all of these factors are directly related to capitalist, modern technologies dependent on fossil fuel production. The situation globally is also alarming, as there is further increase in global warming. According to scientists, based on available data, ‘ice cores, tree rings and the like suggests this year could be the warmest in more than 100,000 years.’
And then, as part of the panacea, further loans are provided for mitigating the impacts. For instance, the Asian Development Bank has already approved a $80 million concessional loan as part of its $1.5 billion pledge of support for Pakistan’s recovery from the 2022 floods.
One also needs to examine the ethical character of lending institutions. It is in this vein, an organization, the Fair Finance Pakistan carried out a policy ranking of leading commercial banks, based on which it was reported that these banks had low policy commitments in the following areas: climate change, human rights, gender equality and labour rights. On a scale of zero to 10, with zero being the least desirable policies, the five banks scored an average of 0.5 for addressing climate change. These banks have not publicly disclosed any climate policies aligned with the Paris Agreement. All five banks scored an average of 0.72/10 in human rights policy ratings. None of the banks disclosed human rights policies related to their investment or financing, which is “not aligned” with the UN Guiding Principles on Business and Human Rights. In a similar vein, in Amsterdam, Netherlands, Extinction Rebellion, a climate activist group blocked a major highway demanding an immediate end to the financing of fossil fuel projects by the country’s largest bank, ING. According to Extinction Rebellion, ING was the main financer of fossil fuel projects in the Netherlands.
The hypocritical face of corporations can be clearly seen by the fact that in Pakistan, a program, “Recharge Pakistan’, a seven-year, $77.8 million activity to use nature to help adapt to climate change, has as one of its funders The Coca Cola foundation, which is providing $5 million. It is no hidden secret that Coca Cola company is one of the worst corporations in the world that is not only creating plastic pollution, but offers a high sugar-based soft drink that has no nutritional value, rather just the opposite. In addition, it is part of corporations that are known for funding the apartheid Israel, carrying out genocide in the occupied Palestine. The brutal aggression carried out by Zionist forces in Gaza have led to wide scale protests by hundreds of healthcare professionals, paramedics and students. In face of such brutality, it is quite atrocious that corporations like Coca Cola are being allowed to provide funds for climate crisis or any other issue, when they themselves are active players in the ongoing ecocide, globally.
Grotesque Imperialism
The Israeli assault in Gaza has many consequences for economic development as well as social and political freedom across the world. There are millions of people protesting against the genocide and intense destruction of Gaza. With Yemen blocking the Red Sea, it has already impacted global trade with world’s largest shipping corporations having re-routed their ships and imposed extra charges. Similarly, the attack on democracy and human rights in occupied Palestine, has been beyond what has been seen in recent years. Since October 7, in Gaza more than 20,000 people, mostly women and children have been killed, while the health system has been destroyed through Zionist aerial bombardment. According to the UN World Food Programme, half of the 2.3 million Gazan population is starving. The Palestinian foreign minister has stated that Israel is using food as a weapon of war, as the occupation forces have cut off food, medicine and fuel forcing starvation on the people. The year 2023 can only be remembered as the starting of the demise of the legitimacy of the western countries that have been holding the world accountable for human rights, women’s rights, freedom of expression and peaceful demonstration, among other pillars for democracy. The economic crisis, the environmental and climate crisis are all set for becoming worse. It is the time for uniting for raising our voices for genuine democracy and just and lasting peace.
