How do we pay for our food?

Published December 27, 2022
The writer is a hands-on farmer.
The writer is a hands-on farmer.

PAKISTAN is one of the most agriculturally endowed countries, yet we cannot feed ourselves, let alone aspire to be counted among the world’s major food exporters.

Our governance system and successive economic policies, including agricultural ones, have led us to a dead end, with total exports of only $30 billion to offset the about $80bn in goods we imported in the financial year 2021-22. Those imports included over $9.0bn in foodstuffs, even as we struggled to contain our balance-of-payments crisis.

The question is, where do we go from here, as we have to pay back tens of billions of dollars over the next three years?

The war in Ukraine and, prior to it, Covid-19 have changed the dynamics of global food markets, affecting all nations, rich and poor alike. Pakistan this year also suffered the added misfortune of exceptionally heavy monsoon rains, which brought large swathes of plains and farmlands under water, rendering them incapable of producing food. According to reliable data, over 15 million acres of land — which accounts for about 40 per cent of arable soil — had suffered from waterlogging and salinity prior to the recent rains. The monsoon deluge only worsened the waterlogging and salinity problem.

As a result of the rains, the water table in Sindh is now dangerously high — in some areas, people cannot even find dry spaces in graveyards to bury their dead. The problem is particularly severe in irrigated areas, where farmers are now unable to plant wheat or other winter crops. This warrants an urgent and radically new approach towards the drainage infrastructure if the country hopes to simply sustain its food production capacity.

Pakistan has already borrowed billions of dollars over the years from international lenders for irrigation and drainage. All the borrowing in the irrigation and drainage sector was through official sources, and so was the utilisation by the public sector. Yet the 2022 rains were a reminder of how woefully inadequate the drainage infrastructure remains.

What can we do differently in irrigation and drainage and the wider water sector over the coming years and decades to be more food secure?

Pakistani agri-businesses should be asked to manage the irrigation and drainage sector.

Pakistan’s capacity to produce for its teeming millions depends on its irrigation and drainage infrastructure, and it is clear we need a paradigm shift away from the existing ideas about how to improve it. As we have seen from our experience of the SCARP’s (salinity control projects) projects of the 1960s and the LBOD (Left Bank Outfall Drain) and RBOD (Right Bank Outfall Drain) projects of the 1980s and 1990s, these plans have not worked.

I propose that the government now seek assistance from the major Pakistani agri-businesses, particularly fertiliser and other agri-input companies, and invite them to gradually take over the management of the irrigation and drainage sector. Their initial responses will, expectedly, be inadequate due to a lack of expertise and orientation, but these will develop gradually over time.

The idea may sound radical, but then who would have thought 40 years ago that private investors would one day be undertaking road infrastructure development projects?

Even international donors and lending institutions may be more inclined to work with entities in the private sector if the government allows such an arrangement. However, the lead has to come from government policymakers, and the Provincial Irrigation & Drainage Authority (PIDA) Act of 1997 provides an excellent legal framework for such an approach.

Finance is another area that warrants a major rethink to serve Pakistani farmers better.

Recently, Prime Minister Shehbaz Sharif was informed that farmers in the country would be provided Rs1.8 trillion in farm loans. I believe this agri credit target involves a fair degree of creative accounting on the part of the banks, but even if one takes the figure at its face value, the vast amount of agri credit will likely not be disbursed to farmers but to the arthis (middlemen) and even to multinationals supposedly serving the farmers. The least the government and the central bank can do is to give a regulatory target to disbursing banks that require them to disburse at least half of the agri credit target directly to the farmers.

Yet another area that requires major changes is the unwritten policy of suppressing food prices to force producers — who are invariably rural people — to provide cheap food for urban consumers. This policy affects almost all food crops and livestock produce (as agriculturalists, many are well aware of what treatment dairy producers get at the hands of district administrations almost all over Pakistan) and hardly leaves any reinvestment capacity with the farmers. This is not to say that the poor — either rural or urban — should be left solely at the mercy of the market; however, the government can and should think up better ways to support vulnerable people. There are good enough macroeconomic models available where targeted support can be provided to the poor while the interests of the farmers are protected.

The impact of the 2022 rains will be felt next year with the increased need for food imports. The people of Pakistan will be forced to buy their staple wheat by paying in dollars. Will they be able to afford it? For the longer term, can the Pakistani government or its people afford to continue buying food from the international markets and paying for it in foreign currencies? Are the people of Pakistan not justified in asking how a major food-producing country cannot even produce enough food for itself? These questions need to be answered by the state, and it would be well-advised to act quickly.

The writer is a hands-on farmer.

Published in Dawn, December 27th, 2022

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