National food security: but how?

Courtesy:-  Jamil Nasir

Food price escalation in South Asia is a matter of grave concern. Measured against the yardstick of $1.25-a-day, the increase in food prices can push millions of people below the poverty line. According to estimates in the recently released report of the Asian Development Bank (ADB), titled “Food Price Escalation in South Asia-a Serious And Growing Concern,” 30 of the increase in food prices is estimated to push 10.4 million more people into poverty in Pakistan.

The reasons of the rising food prices are manifold. Both demand- and supply-side factors are responsible for the price hike. From the Malthusian perspective, growing population is one of the major factors as population growth simply means that we have more mouths to feed compared to scarce resources. If the population keeps on escalating at the current rate, pressure on the food supplies will further grow.

The ADB report mentions the rising incomes as another demand-side factor for price escalation of food items. But here the point is: have the real incomes of all sections of society increased in proportion to the rise in food prices? Prima facie, this is not the case. The escalation of food prices has certainly generated both winners and losers. The profits of big producers have increased, whereas the incomes of rural labourers and small farmers have declined in real terms. So the policy implication from the demand side is: the population-control policy needs to be critically examined and made effective; and distributional mechanisms in the society should be strengthened to compensate the losers.

On the supply side, the major factor responsible for the food security problem is the low productivity of crops like wheat and rice, which constitute the main staple of our people. Arable land for wheat and rice is not increasing due to multiple factors but mainly owing to the prevalent land-ownership structure. The land is concentrated in the hands of a small minority. The big farmers, driven by the desire for profit maximisation are switching over to cash crops like potato and maize.

What has also contributed to the changes in cropping patterns is the agricultural pricing policy of keeping prices depressed compared with global prices, especially the price of wheat, through the instruments of fixation of ceiling price and export restrictions.

Another supply-side factor is low yield of wheat and rice. According to recent statistics of the Food and Agriculture Organisation (FAO), per-hectare production of wheat in case of Pakistan is 2.6 tons, compared to the yields of China and India, which respectively produce 4.7 and 2.8 tons per hectare. In rice our per- hectare yield is 3.1 tons, while China, Bangladesh, Sri Lanka and India respectively producing on average 6.5, 4.2,4.1 and 3.3 tons per hectare.

Pakistan’s lower productivity in the region points to poor performance of agricultural research institutions, the low quality of rural infrastructure and agricultural extension services, weak regulatory environment to control artificial shortages and quality of agricultural inputs, and corruption which increases the cost of agricultural credit and other agricultural services, especially to the small farmers.

The poor performance of research institutions owes to multiple factors. Low public spending for research, low and irrelevant skills of the researchers, a poorly designed incentive structure, appointment of non-professional people as managers of research institutions, lack of coordination of research with other institutions within the country and outside the country are some of the probable causes for their low performance. The policy implication is: the causes of poor performance should be determined dispassionately through an independent study and immediate steps taken to gear these institutions towards high performance.

On the supply side, weak regulatory frameworks and poor governance are also responsible for the low productivity. The agricultural inputs are either provided at the higher costs compared to the price fixed by the government or such inputs are of poor quality. The provision of fertilisers is a case in point. Due to inadequate supply, there is always a big gap between the demand and supply of fertilisers, particularly in the sowing season. Hoarding by middlemen and dealers of fertiliser is a known phenomenon. Resultantly, the farmers purchase fertilisers at inflated prices. If hoarding is controlled, the artificial shortage created by the middlemen can be avoided.

As regards pesticide medicines, complaints about adulteration and poor quality are common. You only need to visit the rural area and meet the farmers there to find about their rampancy. You will be inundated with complaints about adulteration and hoarding of agricultural inputs. The answer lies in improving the regulatory framework and governance for timely and quality supply of inputs to the farmers.

Succinctly speaking, a multi-pronged strategy is needed to enhance the agricultural productivity. Such a strategy should not only focus on the visible areas warranting improvement like overhauling of research institutions and provision of quality inputs but other areas like education and rural infrastructure development should also be the main focus of such a strategy. Indian Punjab is a case in point. According to R S Sidhu and A S Bhullar, agricultural economists at the Agricultural University of Ludhiana, say that spending on education and rural infrastructure development played a vital role in increasing the productivity of the Indian state of Punjab, though agricultural policies on both the sides of the border were almost similar. While delineating the points of difference between the two Punjabs, these researchers say that by the mid-1980s all the villages were electrified in the Indian state. The conditions of the roads in the rural areas was better and about 90 percent of the cropped area was irrigated.

These factors thus contributed towards the agricultural productivity, besides the massive subsidisation of fertiliser, credit, power and irrigation inputs. The governments in Pakistan also provided subsidies to agriculture especially during the era of the Green Revolution. But in our case, subsidies had stronger bias towards the big farmers. On the other hand, in the Indian state of Punjab small and medium farmers were the main beneficiaries, and that made the difference.

It also needs to be mentioned here that production of food in sufficient quantity is not the only condition guaranteeing food security. Rather it is the economic and physical access of the people to food which is equally important. Amartya Sen, the distinguished economist of our age, in his study on the famine in Bengal that killed two to three million people and brought starvation to millions of people says that it was not shortage of food that caused the famine. The main reason, according to Sen, was that people did not have enough command over food. “The years 1942 and 1943 were of unprecedented inflation, mainly resulting from war expenditures, and the absolute level of prices moved rapidly upwards,” Sen wrote.

He considers failure of exchange entitlement as being responsible for famines. If change in exchange entitlement is such that a large number of people are excluded from the ability to acquire food, then famine and poverty are the most likely outcome. Policy implication is: strengthen social security safety net and generate employment opportunities.

In a nutshell, food insecurity is a multi-dimensional problem and deserves to be tackled through a multi-pronged approach. Demand, supply as well as distribution factors need to be taken into account in the formulation of a strategic response to food insecurity. Both the unavailability and structural inaccessibility to food need to be addressed simultaneously.