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Published 28 Nov, 2016 06:48am

Low yields, subsidies ail agro economy

The ‘Food Security and Nutrition Strategic Review’ is an independent, analytical and consultative exercise that identifies the key challenges faced by Pakistan in achieving food security and improved nutrition.

It provides prioritised areas for action for the government, the UN and all humanitarian and development partners.

Preliminary findings of the strategic review revealed a large number of challenges in raising food availability. These are slow growth in yields, a lack of international competitiveness, unproductive subsidies, rising land fragmentation, problems with quality and timeliness and productivity of input supply; and extensive water scarcity and climate change issues.

In order to create long term improvements in diet diversity, agricultural diversification and productivity must expand, even after they have a less direct impact on poverty. If prices decline from increased productivity in products, the buying power of consumers rise and they can afford a more diverse diet.

Domestic farming is facing a growing demand for output per unit of land to supply the expanding population, yet food availability from domestic sources has been lagging growth. Various causes appear to be low growth in yields, poor input availability and quality, and large post-harvest losses.

Key crops and milk are currently uncompetitive with international markets, although some of this is policy induced from developed countries. Most traditional inputs cannot be engines of growth, as land, tube wells, overall water, and even fertiliser and tractors, have nearly reached their maximum possible contribution.

Few of these inputs can be significant enough to add the kind of growth in production needed. Improved seed, research and development, better mechanisation and management of agricultural practices are what need to be expanded.

Currently, internal commodity prices are high compared to world prices for many key products. Thus, aside from farm level food security and avoidance of risk from international markets, these high domestic prices benefit the largest 6 to 7pc of farms who supply less than 50pc of wheat and milk.

Among the most challenging areas for Pakistan are food security and nutrition. The average caloric intake in Pakistan of about 2,260 kcal is above the internationally accepted recommended daily value of 2,100 kcal per person per day. This obscures the points that the poor in urban areas only consume 1,786 kcal, slightly above the undernourishment level, and in rural areas it is only slightly better, at 1,848 kcal.

Malnutrition in Pakistan is estimated to cost the economy around 2 to 3pc of GDP per year, which is higher than the costs of the energy crisis.

Published in Dawn, Business & Finance weekly, November 28th, 2016

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