The Pakistan Economy Watch (PEW) on Sunday said the country is spending billions of dollars on the import of agricultural products which indicate the want of enabling policies.
Pakistan can save billions of dollars annually by encouraging domestic agricultural sector which is in a shamble, it said.
We are spending over two billion dollars on the import of edible oil only which can be saved if domestic production is promoted, said Dr. Murtaza Mughal, President PEW.
Over two million tonnes of annual edible oil imports costs around $ 2.4 billion making it second largest import after petroleum products, he added.
Dr. Murtaza Mughal said that that proper farming, production, processing and marketing will not only reduce dependence on imports but also help earn foreign exchange.
He said that despite being an agrarian economy we are unable to produce sufficient edible oil which leads us to spend a substantial amount of foreign exchange at a time when country badly needs it.
Reasons behind the gap between production and consumption include lack of R&D initiatives, want of incentives, failure to attract investment, low price and the high cost of production making these crops less profitable, he informed.
He said that per capita consumption of edible oil in Pakistan is declining due to increasing poverty, presently it is at 4-15 kg while promoting cultivation of oilseeds will also be a remedial measure to help masses.
Dr. Mughal said that agriculture is the single largest sector of the economy which accounts for 22 percent of GDP and employs over half of the labour force but it faces problems like low productivity and limited investment.
He informed that India, the largest importer acquires nearly 50 percent of its demand from abroad while Islamabad buys around 75 percent of oil from the International market.
Over the past decade the primary driver for edible oil price direction has been the strong demand while the faulty policy of extracting fuel from food is also to be blamed, he said.