ISLAMABAD, Feb 17: The price of wheat increased in Pakistan by 16 per cent between June and December, leading to an increase of 1.9 percentage points in poverty, according to the Food Price Index released by the World Bank on Wednesday.

The bank said the higher wheat prices carried an impact on consumers far outweighing the beneficial impact on medium and large farmers. Like the food price hike of 2008, the last six months of 2010 witnessed sharp increases in the global prices of wheat, maize, sugar and edible oils, with relatively smaller increase in rice prices, it added.

According to the index, the rise in poverty indicates that the government's pro-poor policies have become less effective because it was pursuing policies of gradually curtailing expenditure on indirect subsidies.

The bank said the inflationary pressures, which eased during the first half of 2009-10, started to resurge in January last year onwards. Rising expenditure trends in law and order, justice administration and natural calamities and disasters during the current fiscal year aligned with the rigid security-related circumstances compelling higher outlays.

While several countries were sharing the adjustment to higher wheat prices, Pakistan is chosen the path to eliminate subsidies completely whether it is food or energy. All is happening to meet the conditions set by international financial institutions like the IMF which were providing loans to Pakistan for economic stabilisation.

It said the Punjab government's 'Sasti Roti Scheme' was started on a positive note in September 2008, but could not sustain because of financial crisis and allegations of mismanagement.

Likewise, the federal government's Benazir Income Support Programme which was aimed at to partially offset the impact of inflation on the purchasing power of the poorer sections of the society did not seem to be successful against the indication of rising poverty, the bank said.

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