Literature Review on Pakistans Food Security

Literature Review on Pakistans Food Security ANALYTICAL FRAMEWORK Food security is elucidated by the IFAD/FAO as the year-round access to the amount and variety of safe foods required by all household members in order to lead active and healthy lives, without undue risk of losing such access. No country anywhere in the world is food secure on this definition. It represents therefore an ideal. To make the definition operational, four dimensions are considered namely Food Availability, Food Access, Food Utilisation and Stability of Access. These are briefly explained as follows: 1. Food Availability: The availability of sufficient quantities of food of appropriate qualities, supplied through domestic production or imports (including food aid). This is often confused with food security but should properly be seen as only a part, albeit an important part of food security. The question is not only whether food is available in a country but whether it is available in the right place at the right time and there must be a mechanism for ensuring that food of the right quality is made available. 2. Food Access: Access by individuals to adequate resources (entitlements) to acquire appropriate foods for a nutritious diet. These resources need not be exclusively monetary but may also include traditional rights e.g. to a share of common resources. Entitlements are defined as the set of all those commodity bundles over which a person can establish command given the legal, political, economic and social arrangements of the community in which he or she lives. 3. Food Utilization: Utilization of food through adequate diet, clean water, sanitation, and health care. This brings out the importance of non-food inputs in food security. It is not enough that someone is getting what appears to be an adequate quantity of food if that person is unable to make use of the food because he or she is always falling sick. 4. Stability of Access: Are individuals at high risk of losing their access to food? An example of this situation would be a landless agricultural laborer who was almost wholly dependent on agricultural wages in a region of erratic rainfall. Such a person is at high risk of not being able to find work in a situation of general crop failure and thus going hungry, i.e. is vulnerable. The objective of the thesis would be to analyze the institutional, production, market and policy aspects of the aforementioned four specific factors underlying food insecurity in Pakistan. This shall be gauged by analyzing secure access, production and utilization of three key staples; wheat, rice and sugar. There is considerable evidence that indicates the need to route policy focus to take the shape of revisionary responses to institutional framework, production, market dynamics and existing policy framework; all geared towards actualizing yield potentials and enhancing food security in the context of factors outlined above. What makes it even more pertinent is the impending food crisis keeping in view the increasing population and various institutional constraints underlying the retarded growth in production e.g water shortages, soil degradation, absence of proper agriculture research, improper agricultural practices etc. The four key aspects defined above i.e. Food availability, Food Access, Food Utilisation and Stability of Access shall be analyzed in terms of their current standing as well as the potential areas of improvement to realize the stipulated objectives. The stated framework is illustrated in the table as under: FOOD AVAILABILITY Review of Land holdings Cropping Patterns and relative prices for each crop. Profits and Losses per acre for each crop for each size class of farm Total area of cultivable land including land currently being utilized and cultivable waste. Water Utilisation Seeds, Fertilisers and GM food technology as a yield enhancement technique Productivity Enhancement of major crops Availability of credit for farmers for investments geared towards productivity enhancement FOOD ACCESS Identification and Targeting of the Food Insecure People Enhancing Productivity of small farmers for poverty alleviation and foster agricultural growth Diversification of On-farm and Off-farm income generation activities Stabilization of input and output process Encouragement of small scale enterprises STABILITY Inter-regional Inequality Urban Rural Disparity Distribution of land and Access to inputs and resources Skill Development for broad based development UTILISATION Improving nutritional aspects of food Balanced dietary consumption Promotion of household food production e.g. vegetables and pulses production, poultry and rearing of small ruminants POLICIES AND INSTITUTIONAL IMPERATIVES Removing Policy Distortions Provision and enhancement of rural infrastructure Institutional Structure for accelerated agricultural growth with equity. Credit and Rural Finance Human Resource Development Research and Extension Support Services In addition, the modus operandi for addressing the questions specified above would be through: †¢ A review and research the production, availability and consumption of essential food commodities †¢ A review of existing food procurement and storage facilities and identify areas of potential improvement †¢ Identification of the constraints in production, yield as well as the prices of essential food commodities e.g. wheat, sugar and rice. †¢ Identifying areas and scope of improved physical inputs geared towards improving the state of agriculture. †¢ Appraising the effectiveness of the Social Safety nets like BISP, Punjab Food Support Scheme in improving food security and how modifications in these programs towards targeting can be brought about to reduce fiscal and economic costs and losses for non target beneficiaries. †¢ Institutional and policy imperatives for enhanced and sustainable agricultural growth through a normative analysis of the following: o Agriculture and Crop Research Facilities o Social Mobilization o Vertical Integrations and Marketing systems o Enforcement Mechanisms in place to keep track of the regulatory endeavors. LITERATURE REVIEW Agriculture is considered the mainstay of Pakistans economy. According to the Economic Survey of Pakistan 2008-09, there are major hindrances in the GDP growth rate in case of Pakistan, which the report asserts could not hold at 2007-2008 level. Agriculture, the major source of employment and income in the rural areas is expected to grow at 4.7 percent as against Services sector growing at the rate of 3.6 percent during 2008-2009. About 70% per cent of the countrys rural population is directly or indirectly linked with agriculture for their livelihood. Whatever happens to agriculture is bound to affect the livelihood and consequently food security of the poor rural people. Decline of agriculture and shrinking livelihood opportunities have resulted in rising poverty in rural areas while also compounding the food insecurity in both rural and urban areas. Agriculture, thus assumes a critical role in the national economy, providing food to the fast growing population of the country. Pakistan is a country where food security situation in recent years has not been very encouraging. The demand for food in recent years, especially key staples like wheat and sugar have started to exceed the supply. This gap can be attributed to many possible causes. According to Ahmed and Siddiqui (1994), even when the supply situation is better, there are problems with the distribution amongst different segments of the society thus adversely affecting the nutrition. On the demand side, the food security problem has been complicated by an unprecedented increase in population. Since the existing rate of population growth of over 3 percent per annum is expected to continue for a reasonable period of time, the total fertility rate also remaining well above the so-called â€Å"replacement level†, improvement in health-care facilities, which have already resulted in a remarkable decline in infant and child mortality rates has also contributed towards the high population rate in Pak istan. Transitory and chronic food insecurity is caused mainly by poverty. (Tweeten, 1999) People with adequate buying power overcome the frictions of time (e.g., unpredictable, unstable harvests from year to year) and space (e.g., local food short- ages) to be food-secure. The conclusions of the aforementioned study further suggested a food security policy synthesis for poor, developing countries like Pakistan which are outlined as follows; Poverty is best alleviated through broad-based, sustainable economic development. The most effective and efficient means to economic development is to follow the standard model, illustrated by the figure as under, which assures an economic pie to divide among people and among functions, such as human resource development, infrastructure, family planning, a food safety net, and environmental protection. The standard model is not merely an ideal; it is applicable to any culture and provides a workable prescription for economic progress, ensuring buying power for self-reliance and food security. Eventually, in conjunction with family planning, it brings decreased population growth. Although no country has adopted every component, many countries have adopted enough components of the standard model to demonstrate its capacity for economic success. The central puzzle of why food-insecure countries like Pakistan, eschew the standard model when it can bring food security is explained by political failure. Terminating even the worst policies creates losers. If the losers are in positions of power and authority, they resist reform. Economic distortions provide economic rents for those in authority who bestow licenses and enforce regulations. Parastatals provide employment for friends and relatives of power brokers; hence, unfortunate public policy carries powerful momentum. Political failur e is inseparable from broader institutional failure. Food insecurity and economic stagnation are not the result of limited natural resources, environmental degradation, or ignorant people. Rather, they are the result of misguided public policies, which in turn are the product of weak institutions and corrupt governments serving special interests. Institutional change is required to adopt the standard model. Poorly structured, inadequate institutions often trace to cultural factors such as tolerance of the public for unrepresentative, corrupt, incompetent government. Government leaders often view their position as an opportunity for personal aggrandizement rather than to be a servant of the public interest. Socio-institutional changes, and hence standard model adoption, are blocked by cultural characteristics such as caste and ethnic animosities, which provide a fertile climate for governments not representing the public interest to play one group against another. Thus, the challenge of food security for our time, as argued by Tweeten (1999), is socio-institutional change. A study was conducted by the IFPRI in 1977 that emphasized on the intensity of the problem facing the Developing Market Economies (DMEs) in countering food deficits in the wake of increasing populations. The options to grapple this challenge were outlined as increasing domestic production, commercial imports, reducing the food consumption levels through pricing adjustments or rationing, and food aid. For a country like Pakistan, easily branded as a low income country, policy choices are limited. Much of the population is already below the minimum dietary and nutritional requirements. Commercial imports to cover up the food deficit may not be a plausible option because it deems imperative a huge foreign exchange outlay coupled with various alternative development expenditures seeking priority. The study concluded that in order to narrow the food gap, development efforts in such low income countries must emphasize on policies to increase and enhance production performance. Large increa ses in agricultural investments coupled with appropriate policies and effective programs will be central. The third critical dimension of food security, utilization, refers to actual metabolization of food by the body. Food that is available and accessible does not alleviate food insecurity if people do not utilize food properly because of inadequate nutrition education and food preparation, bad habits, eating disorders, or poor health, such as intestinal parasites from unsanitary water. Thus, food security is appropriately defined not just as access but as utilization by all people at all times of sufficient nutrients for a productive and healthy life. It follows that sanitation, education, and health care are important instruments for food security. Despite per capita world food supplies being more than adequate to provide food security to all, food or income transfers among nations cannot be the principal instrument to end food insecurity. One reason is because altruism is too limited and fickle to provide sufficient, reliable transfers. Heavy dependence on transfers could discourage local production and create an unhealthy dependency of poor nations and individuals on rich nations, agencies, and individuals. Massive food transfers would destroy incentives for local food producers. A nation must have a pie of purchasing power to divide and share among its food-insecure people. Because it is the poor who lack access to food, alleviating food insecurity means alleviating poverty. Most of the worlds poor, the 1.3 billion people with incomes of less than $1 per day (updated from World Bank 1990, p. 29), will have to escape poverty and food insecurity through economic growth. Economic growth largely was responsible for the 158 million reduction in numbers of undernourished people in East, South, and Southeast Asia from 1979-1981 to 1990-1992. In the mixed and underdeveloped economies of the Third World, the maintenance of minimum consumption levels for large segments of the population is a critical problem. Even in developing countries with a reasonably well-developed industrial base, such as India, glaring nutrition gaps exist (Knudsen and Scandizzo 1979) and critical shortages can and do arise in basic consumption areas such as food, fuel, and clothing (Sharma and Roy 1979). Such shortfalls have serious economic, social, and political consequences (Burki and Haq 1981). Therefore, governments in developing countries usually attempt a macro management of selected consumption items. A fairly complex set of direct and indirect policies are used to influence the production, distribution, and prices of such items (Ahmed 1979, Dholakia and Khorana 1979, Kaynak 1980, Sorensen 1978). The formulation and implementation of such policies can be viewed as a macro-marketing management process [Zif 1980]. For essential consumption ite ms, this process entails: i. Identification of key consumption items (products) and target groups (markets), ii. Development and evaluation of intervention methods (macro marketing strategies), iii. Creation of delivery or communication systems (channels) to reach the target groups or other intervention points, and iv. Monitoring and control of the consumption- oriented programs (macromarketing control system). In discussing the rationale for Macromanagement System for Essential Consumption Items (referred herein as MSECI), two interrelated questions arise i.e. why do these systems come into existence and what are the goals of these systems. In analyzing why the government intervenes in the distributive trade for essential consumption items, Sorenson (1978) cites four reasons, which are presented below in an elaborated version: i. Under conditions of scarcity (a typical feature in underdeveloped countries), the unfettered operation of the market mechanism is politically unacceptable. Price increases and shortages resulting from unfettered private trade would be politically too risky for the government in power. ii. Distributive trade typically has a poor reach in the rural areas. In periods of shortages, rural distribution deteriorates even further, making government intervention a necessity. iii. The market mechanism is imperfect in terms of prices, information, and market clearing. During periods of shortages, these imperfections become magnified, inviting government regulation. iv. Profits and surpluses from private trade in developing countries usually do not flow into productive investments. Instead, they flow into private consumption and investment such as clothing, jewelry, gold, houses, dowries, and so on. Hence, profits from shortages do not help alleviate the major cause of shortages, i.e. low le vels of production. In fact, some of the surpluses may even accentuate shortages by becoming working capital for increased hoarding of goods. Government often intervenes to reduce the profits going into such unproductive uses. The experience of India as put forth by Dholakia and Khurana (1979) and other Third World countries points out a few other reasons for the emergence and growth of macro management systems in the distributive trade sector. Some of these are: i. Distributive trades absorb a lot of people and provide a low-cost employment outlet in developing countries. Governments often intervene to further some employment goals in addition to the distributional goals. In India, for example, the government often preferentially awards licenses to operate Fair Price Shops to those groups considered to be politically important unemployed college graduates, retired army personnel, widows of servicemen, etc. ii. Government intervention in distributive trades is often a consequence of agricultural price support programs. Once the government becomes a procurer and storer of large quantities of farm products, it needs a distribution method for these products. An MSECI is created as a result. Once an MSECI is created, the reverse logic often takes over. For example, to support an extensive public distribution system in a southern state of India, the state government resorts to mandatory procurement of some percentage of farms output [George 1979]. iii. In a manner similar to agricultural policy, the industrial policy of developing countries also leads to governmental intervention in distributive trade. To support small-scale, infant, or weak industries, the government sometimes assists in the marketing of the products of such industries by procuring their products and distributing them through state-controlled or subsidized channels [Bhandari 1979]. In Morocco, for example, the government subsidized the introductory advertising efforts of a baby food considered to be important in meeting that countrys nutritional goals [Vitale and Cavusgil 1981]. These last three points illustrate how consumption- and distribution- oriented policies get intertwined with policies related to employment, agriculture, industry, and other sectors. The rationale and rationality of MSECIs must therefore be studied in the context of other related sectoral policies [Gustafsson and Richardson 1979]. While the above discussion throws some light on why MSECIs come into existence, it does not fully illustrate the range of goals that MSECIs may serve. According to Gustafsson and Richardson (1979), where there is a complex polity, not only are there multiple actors in the policymaking process but each actor sometimes has multiple goals. Politicians, for example, are interested in: a) Solving problems, where it is feasible to do so and ideologically acceptable to the politician b) Agenda management, that is, getting problematic and intractable items off the political agenda, often by formulating do-nothing placebo policies, and c) Creating consensus, especially when the issue is frankly fractious. In the context of an MSECI, purely placebo or consensus-making policies are unlikely to exist. This is because breadbasket issues are involved and simply managing the agenda or creating a consensus (without solving the problem) is politically too risky. As a part of the problem-solving strategy, however, policymakers may make some efforts to manage agendas or create consensus. Policies geared towards essential consumption items are therefore likely to have some symbolic, rhetorical, or bargaining content (Lapps, Collins, and Kinley 1980). With reference to the rationale and goals of MSECIs, the following conclusions can be made: a) MSECIs usually emerge in developing countries to serve short-term, volatile political problems caused by scarcity. Later, these systems may be further developed to embrace other economic goals. In fact, appropriately used, MSECIs could play an important role in balanced development (United Nations 1977). b) As the complexity of an MSECI increases, consumption and distribution-related policies become entwined with several other sectoral policies in developing countries. c) Analysis of MSECIs should be conducted with sensitivity to the goals stated and implicit of the different actors in the consumptive and distributive policy process. According to Hussain et al, the production instability and food insecurity in are interrelated. Most of the rain-fed agriculture of the country is experiencing erratic production. The production instability index (coefficient of variation) is 29% in the Pakistan (Anonymous). Most variation is attributed to crop yields. The productivity per unit of resource especially water, is low. The declining resource productivity is due to increased water logging and salinity, nutrient depletion, deforestation and devegetation and increased pest complex. Looming water scarcity and competition for the same water from non agricultural sectors necessitates improving crop productivity to ensure adequate food for the nation with the equivalent or less water than is presently available for agriculture. This can be obtained because available information shows that there is a wide gap between actual and attainable crop water productivity, especially in the arid and semi-arid environments. Quantifying cro p water output reveals gaps in information regarding pre-eminent ways to increase crop water productivity. Cropping systems need to be inherently flexible to take advantage of economic opportunities and/or adapt to environmental realities. A dynamic cropping systems concept characterized by a management approach whereby crop sequencing decisions are made on an annual basis has been proposed to improve the adaptability of cropping practices to externalities. STATE OF AGRICULTURE IN PAKISTAN Despite a structural shift towards industrialization, agriculture continues to be the biggest sector of the economy. It contributes 21.8% of the GDP, employs 44.7 % of the workforce and is a major source of foreign exchange earnings . About 68% of the population lives in rural Pakistan and depends upon agriculture for their sustenance. Given its wide-spanning forward and backward linkages, in particular with the Industrial sector, agriculture has assumed an added significance especially in the context of the prevalent global food crunch and food security. According to the Economic Survey of Pakistan 2008-09, no economic reforms will be successful in the absence of a sustained and broad based agricultural development which is critical for raising living standards, alleviating poverty assuring food security, generating a buoyant market for industrial expansion an making a substantial contribution to the national economic growth. The utilization of agricultural land in Pakistan is illustrated by the table as under. The total area reported in the table includes the total physical area of the villages. Forest area refers to the area of any land administered as forest under any legal enactment dealing with forests. Any cultivated area which may exist within such a forest is shown under the heading of cultivated area. Culturable waste is that uncultivated farm area which, although fit for cultivation, has been left uncropped during the year under consideration as well as the one preceding. Cultivated area is the area which was sown at least during the year under reference or during the preceding year. This includes the net sown area as well as the current fallow. The current fallow is the area that is ploughed but not cropped. With these definitions in context, a review of the agricultural land holdings of Pakistan is presented as under: (Million hectares) Table: (Source: MINFAL) An analysis of the land utilization statistics indicate that the total area under cultivation has registered a gradual increase during the period specified i.e. 1990-2008. The uncultivable land is being brought under cultivation and the total cropped area has also been increasing, though not very significantly. Given the importance of agriculture in the national economy, the policy focus has essentially been on agriculture even though the need for a structural shift towards industries and manufacturing gained importance post 1990s. If we look at the historical statistics of the Pakistan economy, we can see how the performance of agriculture coincided with the GDP growth. Table below illustrates the performance and average annual growth rates of the Agriculture and the GDP for the period 1960-2009. AVERAGE ANNUAL GROWTH RATES 1960s 1970s 1980s 1990s 2000-2009 GDP 6.8 4.8 6.5 4.6 5 Agriculture 5.1 2.4 5.4 4.4 3.0 Table Broadly speaking the growth rate of agriculture across the periods specified in Table 1 was fairly good but the yearly growth rates during the same periods were erratic. The growth of agriculture was particularly low in the periods of 1998-99 at 1.9%, 2000-01 at -2.2%, 2001-02 at 0.1% and 2007-08 at 1.1%. Considering the current decade, agriculture has grown at an average rate of 3.32% per annum. Of this, the growth performance over the last seven years has been of a volatile nature ranging from 1.1% to 6.5% at the highest. See table below, AGRICULTURE GROWTH (%) Year Agriculture Major Crops Minor Crops 2002-3 4.1 6.8 1.9 2003-4 2.4 1.7 3.9 2004-5 6.5 17.7 1.5 2005-6 6.3 -3.9 0.4 2006-7 4.1 7.7 -1.3 2007-8 1.1 -6.4 10.9 2008-9 4.7 7.7 3.6 Table 2 Federal Board of Statistics, Government of Pakistan(2009) This volatility can be primarily attributed to the crop sector which has been a subject of various pest attacks, irregular raining patterns, adulterated pesticides etc. There are two principal crop seasons in Pakistan, Kharif and Rabi. The sowing season of the former begins in April-June and the harvesting occurs in October/ December while the latters begins in October/December and ends in April/ May. Major crops of the Kharif season include Sugarcane, rice, cotton and maize and those of the Rabi season include wheat, gram and lentils. As per the statistics of the MINFAL , the major crops such as wheat, rice, cotton and sugarcane amount to about 89.1% of the value added in the major crops, and this amounts to about 33.4% of value added in the overall agriculture. The production statistics of the major crops of both the seasons are given in the table as under: PRODUCTION OF MAJOR CROPS (000 TONS) YEAR COTTON (000 BALES) SUGARCANE RICE MAIZE WHEAT 2003-4 10048 53419 4848 1897 19500 2004-5 14265 47244 5025 2797 21612 2005-6 13019 44666 5547 3110 21277 2006-7 12856 54742 5438 3088 23295 2007-8 11655 63920 5563 3605 20959 2008-9 11819 50045 6852 4036 23421 MINFAL Pakistans agricultural production is closely linked with the supply of irrigation water. The supply of irrigation water has been strained as indicated by Table 3 as under: Actual Surface Water Availability (Million Acre Feet) Period Kharif Rabi Total % Change over Average Average System Usage 67.1 36.4 103.5 2002-3 62.8 25 87.8 -15.2 2003-4 65.9 31.5 97.4 -5.9 2004-5 59.1 23.1 82.2 -20.6 2005-6 70.8 30.1 100.9 -2.5 2006-7 63.1 31.2 94.3 -8.9 2007-8 70.8 27.9 98.7 -46 2008-9 66.9 24.9 91.8 -11.3 Table 3: (IRSA) As shown in the table, against the normal surface water availability at canal heads of 103.5 MAF, the overall water availability for both the crop seasons has been less in the range of -2.5% to 20.6%. If the water availability for the respective seasons is analyzed one can conclude that the Rabi season faced a greater dearth of the water supply as compared to the Kharif season.