SBP terms state of food security in Pakistan as ‘unsatisfactory'

July 19, 2019 (MLN): The State Bank of Pakistan recently released a report titled “The state of Food Security in Pakistan”, which explicitly highlights that the state of food security in Pakistan is unsatisfactory, despite the fact that it produces vast quantities of major staple and non-staple food crops.

Pakistan is presently self-sufficient in major staples. But in spite of that, only 63.1 percent of the country’s households are “food secure”, according to the Ministry of Health and UNICEF’s National Nutritional Survey 2018. Alarmingly, of the 36.9 percent of the households in Pakistan labelled as “food insecure”, 18.3 percent face “severe” food insecurity.

Incorporating these factors, Pakistan was ranked 106 among 119 countries surveyed for the Global Hunger Index, and has been characterized as facing a “serious” level of hunger. In fact, Pakistan is among those seven countries that cumulatively account for two-thirds of the world’s under-nourished population.

According to this report prepared by the SUN Secretariat at the Ministry of Planning, Development and Reform in collaboration with the UN’s World Food Program, under-5 malnutrition in Pakistan costs around US$ 7.5 billion every year, which is equivalent to 3 percent of GDP.

In overall terms, the dismal state of food insecurity in Pakistan can be traced primarily to the limited economic access of the poorest and most vulnerable to disruptions in the food chain. According to a World Bank’s report, the incidence of under-5 malnutrition rates in Pakistan is “considerably higher among poorer quintiles” of the expenditure distribution.

Another factor that contributes to food insecurity in the country is the import-dependence for certain items, which is partly responsible for significant variations in their prices. In particular, limited (if any) attention has been paid to the local production of minor crops and livestock produce, such as pulses, fruits, vegetables, nuts and oilseeds.

Furthermore, prices of meat and dairy products have increased steadily. In contrast, a large physical and financial infrastructure of government-run commodity operations works in the country to implement the support/ indicative prices for major food crops to ensure their availability. Although these operations entail a large fiscal cost, these have proved helpful in maintaining commodity stocks and stabilizing the prices of these commodities over the years.

Furthermore, it is important to note that even if prices are relatively low and stable, poorest families still lack the purchasing power to buy food. Thus, like other developing countries, Pakistan also has to resort to in-kind and cash transfers to stabilize and increase the real incomes of the poor. Unfortunately, the effectiveness of these transfers has often been questioned due to governance issues and poor service delivery.

Pakistan provides support to its farm sector at various levels, in order to encourage sufficient production levels of major food crops. Although the country relies heavily on imports for certain food items such as edible oil, tea and pulses, it is able to provide for major staples on its own. However, if population increases at the existing pace over the next couple of decades, it will become extremely challenging for Pakistan to sustain even the food self-sufficiency. Therefore, a focus on population control and timely implementation of policies would be vital to ensure food security in the country.

The major concern is that the fiscal cost of ensuring food security –in the form of food subsidies, cash transfers through BISP, nutrition interventions program, school feeding/Tawana Pakistan–would escalate steadily if the population continues to grow at a rapid pace.

It is important to note that due to low and stable global and domestic food prices, the government spending of Rs 95.7 billion during the previous 5 years (FY14 –FY18) on food-related subsidies was quite modest compared to Rs 142.5 billion spending in the preceding 5 years. However, with food prices now rising and import-dependence growing, fiscal costs may increase substantially if the government adheres to its food security objectives.

Similarly, the demand-supply gap in the domestic market is likely to emerge in major food crops going forward, even if population growth subsides. This implies that the country will likely face a steady increase in its import bill of food and non-food farm products.

Taking stock of these concerns, the Ministry of National Food Security and Research of Pakistan announced and published a Draft National Food Security Policy in 2018. This has been considered as a major development in terms of solving an issue of significant importance. The draft also stressed on the poor state of public sector investment in Pakistan’s agricultural R&D compared to other countries and limitations of concerned authorities to achieve goal of modern agriculture.

Resultantly, the policy lays out twenty different qualitative and quantitative goals, stretching from 4 percent per annum growth in agriculture sector and eradication of poverty, to the achievement of the zero hunger SDG and implementation of provincial agricultural policies.

 As much as it is necessary to appreciate the announcement of the draft food security policy as a timely and ambitious silver lining, it is equally, if not more, important to urge that the agenda included therein is implemented in its full spirit.