ISLAMABAD: The World Bank, in a policy note on agriculture and food in Pakistan, has pointed out that inappropriate government policies and regulations that distort markets, inhibit competition, and discourage private investment, as well as limited and poorly implemented efforts for research, innovation and technology dissemination are the underlying causes of the price hikes in the country.

The ‘Just-in-Time Policy Note on Agriculture and Food in Pakistan’ released by the World Bank on Tuesday, says that food inflation and volatility in Pakistan have been high and exceed those in other neighbouring countries.

“The lack of adequate social protection policies means that price hikes have had a severe impact on the poor and aggravates nutritional problems, especially among children,” says the note, which is the first in the series while examining the features of food system that make it vulnerable to food price inflation and volatility.

The policy note made six recommendations to improve the situation, suggesting the reduction of wheat market distortion through the rationalisation of public procurement, encouragement of competition, investment in research and extension services, strengthening of global trade linkages, decapping milk and meat prices, and making information accessible for research and decision-making.

Suggesting that the government may consider gradually reducing its role in the public procurement of wheat, the policy note observes that while little evidence exists of public procurement benefiting farmers, there is a lot of evidence of public procurement being used as a signal to other actors to speculate and manipulate markets through uncompetitive behaviour.

Published in Dawn, February 15th, 2024