UNTIL the late 1960s, Pakistan was surplus in production of food items and as such had enjoyed a favourable balance of trade for being net exporters of food products as well as cash crops and thereafter this position was attained intermittently for short span of time.

Since early eighties due to water shortage and frequent natural calamities like floods, import of food items has become indispensable. The impact assessment study conducted at IMF on liberalization of trade in 10 agriculture commodities including beef and veal, cotton, maize, milk products, rice, lamb and mutton, soybeans, sugar wheat and wool had focus on import bill of 79 countries, categorized as net food importers of the world. Pakistan’s overall net position regarding exports of cotton, rice, fruits and vegetables, and other agriculture products continue to offset net import bill of food items including edible oils, wheat, tea and sugar etc.

This holds good for similar other 21 countries with which Pakistan was bracketed and categorized as net food importers, but also as net exporters of agriculture products other than food items, as trade liberation pertaining to aforementioned 10 commodities was not considered as threat to their agriculture sectors.

The report also reveals that countries importing milk and other dairy products would encounter sharp rise in their food import bill due to increased cost of these products following trade liberalization.

It was one of the assumptions of the report that developed industrial economies will remove supports/subsidies to their agriculture sector, particularly to cotton cultivators. This would raise the world cotton prices, and developing countries producing cotton would have enhanced export earnings, which would offset similar increase in food import cost. It has been experienced lately in case of Pakistan that rising prices of cotton in international market brought earnings to the farmers in the range of Rs1000 to Rs1800 per bale, whereas government support price of seed cotton was Rs900 per bail of 40 kg.

Similarly, impact of rising prices of milk and milk products in international market can be advantageous particularly to countries having agrarian economies in the sense that they would be prompted to develop their livestock industry and dairy farming so as to become self-sufficient.

In view of the steep rise in price of imported milk in the face of increasing demand, the government is embarking upon a programme of speedy growth of livestock industry. For that, liberal bank financing is being made available.

The ministry of food, agriculture and livestock is ready with draft policy on livestock with a focus on increasing indigenous meat production by five per cent every year over and above present annual base figure of two million tons. Further, there is need to regulate dairy farming and livestock sector. Live stock is the largest contributor to agriculture sector (46.8 per cent)and Pakistan has significant ranking among milk producing countries, yet due to poor distribution, urban population heavily depends on imported milk.

Buffalo milk production is estimated at 24 million tons but due to poor means of transport and sub-standard road link between rural and urban areas is not up to the standard, and milk being a perishable commodity cannot reach big cities and other urban areas on time. Hence, there is immediate need to develop necessary infrastructure and provide liberal institutional credit for purchase of vehicles to facilitate transportation of milk.

Seafood production also needs equal attention. Fish export to adjoining Middle Eastern countries can enhance export volume considerably. Fish-pond cultivation should be encouraged to produce exquisite variety of fish in great demand at home and abroad.

Pakistan in recent years has been facing acute shortage of food grain especially wheat, despite extension of cultivation area both in Sindh and Punjab. Shortage is being experienced in other food items like sugar and lentils, which no doubt, to some extent is due to failure of crops resultant of water shortage, untimely rains or flood conditions, but is mostly due to unethical practice of hoarding and speculative trading.

To combat hoarding, government has allowed tariff free imports of wheat and sugar. Apart from this adhoc arrangement to tackle this issue, there is need to increase national food crop production in order to achieve permanent food security.

Incentives in the form of easy institutional credit, supply of quality seeds and fertilizers, total waiver of import duty on tractors and other equipment have, no doubt, been made available, but chronic problem of irregular water supply to farms continue. Resultantly, all development initiatives are marred. Apart from plans for construction of small/big dams, conserving technologies need to be brought at the door step of even small farmers and they be adequately trained to make use of those technologies. Alarming rise in the prices of pesticides and fertilizers need to be checked and at the same time quality of pesticides supplied to market to be checked.

Developing countries must lower barriers to cross border regional trade in food products. Countries entering regional multilateral trade arrangements must totally eliminate tariffs and other barriers on agriculture inputs such as seeds, fertilizers, pesticides and agriculture equipment etc. Until recently emphasis of agrarian economies has been on self-sufficiency in food. Food shortage was considered as outcome of poor macro economic policies. Since these countries are normally under foreign exchange reserve constraints, food imports are not liberally undertaken, hence a major chunk of their population remains under nourished.

In order to ensure food security in low-income developing countries, especially when world prices are exceptionally low, these countries should be allowed to take temporary measures to protect the production of at least food crops despite their commitment to lower tariff on imports under compulsion of WTO rules. This strategy is imperative for developing countries in the face of common practice on the part of economically developed countries to protect their farmers from high volatility in agriculture markets through various safety nets.

According to IMF report on OECD (Organization for Economic Cooperation and Development) countries, farmers in the member countries receive lot of support, which in year 2001 alone was equivalent $311/ - billion or 1.3 percent of their total GDP taken together in that year. Domestic subsidies for farmers, import tariffs and export subsidies allowed were found equal to one-third of total farm receipts.

The prices received by farmers in OECD countries, for their agriculture products were found 31 per cent higher than rest of the world prices. Accordingly to enable low income developing agrarian economies to derive full benefit of agriculture trade liberalization and at the same time for ensuring food security for their impoverished population, developing economies must abstain from providing safety nets and subsidies to their farmers.