The looming crisis

Published Jan 26, 2013 09:11pm

Sachal Abbassi writes about the multifaceted role of the world trade bodies and institutions in aggravating the crisis.

With the collapse of the Soviet Union, capitalism diffused throughout the far corners of the world. Endorsed by the scholarly intellect of Milton Friedman, and enforced by financing and conditionalities of international financial institutions (IFI), neo-liberal economics soon surfaced in the mainstream policymaking discourse. These institutions such as the World Bank, the International Monetary Fund (IMF) and World Trade Organisation (WTO) have since been a catalyst for promoting capitalism and providing accessibility to corporations once warranted only in the age of colonialism and slavery.

Many of their conditionalities have proved to be detrimental to social, economic and environmental landscapes of countries where they have been applied. In countries where success has been made, it is usually within a few indicators while wider prosperity and social benefits have been very limited. Among the many spillover effects of such policies, food insecurity is of grave importance.

A worsening trend of food insecurity is noticeable in Pakistan, and much can be blamed on IFI impositions, trade liberalisation policies and increasing corporate agricultural farming.

These have dramatically changed the international trade of Pakistan, while significantly augmenting levels of food insecurity and malnourishment, in a once self-sufficient country. The Structural Adjustment Programme was introduced in the post-Zia period for the purpose of attaining financial loans for developmental projects. Yet, it wasn’t until late 2001, during the Doha rounds of the WTO, that trade liberalisation was applied to our agriculture sector.

Shafqat Munir, a well-known public policy analyst based in Islamabad explains, “Since Pakistan is one of the founding members of the WTO and has been subscribing to the regime through various actions through departments, institutions and ministries, it is committed to diminishing trade barriers within its capacity.”

He further adds that Pakistan has introduced a mechanism which permits large landholding by corporate enterprises, though he warns that as it is “researched and evident, trade liberalisation and corporate farming is not advisable for developing countries”.

Indeed, liberal polices in international trade have previously received much criticism for reinforcing a climate of inequality among nations. The developed world excessively subsidises its agriculture sector and floods international markets with its produce at cheaper prices, which also tends to lower value of agricultural produce from the developing world, whose population depends on the agricultural sector as a source of sustenance.

International markets still offer a marginally higher return on agricultural produce, in comparison to Pakistan’s domestic markets, but it isn’t enough to generate significant export earnings. Consequently, much of our primary sector output is exported at a slightly lucrative price, but profits are not rewarding enough for wealth to trickle down from rich landlords. This is lowering the purchasing power of our broader population who lack the financial resources to purchase enough food to meet even the minimum World Health Organisation (WHO) caloric and nutritional standards.

Due to increasing exports, poorer segments of society suffer a double setback where food prices are rising led by export-driven shortage of domestic supply. With a bourgeoning population and exports, food insecurity in Pakistan is likely to progressively aggravate in the future.

Recently, a surging unemployment rate in rural areas is evident due to mechanical capital intensive farming methods of corporate farms, which tend to have few social advantages.

Traditional farmers are unable to compete with the productivity and efficiency of corporate farms, and often find their incomes declining drastically, while  their more organic produce is being wasted.

As Tahir Hasnain, manager of environment and livelihood, Shirkat Gah, explains, “Corporate farms do not have any obligation to sell their produce in domestic markets, and as such, they tend to produce goods with a higher turnover, instead of staple crop”. Munir adds, “It is likely, more agricultural resources would be used to cultivate raw material for bio fuels”.

Trade liberalisation and corporatisation of the agriculture sector is having far-reaching consequences rather than merely changing the current microeconomic indicators. Corporate farming is also changing the farming methods, which took millenniums to develop and agriculture is being practised along the lines of efficiency and productivity by making extensive use of pesticides and Genertically Modified Organisms (GMOs) which can be lethal and carcinogenic to human health.

Without any social or environmental audits, it is difficult to account for the damage to our irrigable land. Integrity of Pakistan’s agriculture sector is far too important to be displaced by capitalisation and its existence is not only intrinsic to its self sufficiency but also its cultural sphere in rural areas, which is so profoundly organised around the labour-intensive agriculture sector. This sector is not only the source of food production, but also of income and economic power which are all integral to food security.


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Comments (1) Closed




danial tariq
Jan 27, 2013 11:20am
you are alleging that food insecurity is linked with international financial institution, so why dont our govt realise it or is it that they have little idea of all this, though conspiracy theories about imf still exist in the public.