Issues in food inflation
By Latha Jishnu

Pakistan is going through an economic impasse.

The macro figures are not tallying with the requirements of the nation.

Policy elites sitting in various forums are unable to diagnose what is going on. Much of the food inflation is due to ossified infrastructure.

It's the dead that are running this country through policies devised in the early 20th century.

The institutions that were then devised were based on the colonial knowledge that was brought forth by the British. This is not going to work. 

The other day a PhD in soil sciences from a local university came to discuss issues with me. I was appalled at his ability(s) not to answer basic questions. An understanding of soils is basic to productivity in the sector.

Productivity it may be mentioned can only be worked into the system for the control of inflation if its growth is roughly twice the size of the growth of population. The added variable is the urbanisation that is going on at the moment.

This urbanisation is dead capital for it is being used not for any positive economic activity but is used for converting black assets into white. If these new urban sites are visited the mismanagement is colossal.

Sites that were providing subsistence living for the poor have been purchased by these investors.

Some of us feel that this is good growth but in the long term it is some thing that will distort the economy to such an extent that there will be no come backs.

In other words the loss of this land to agriculture is absolute. Roughly by the last satellite-based study about 3 million acres have been lost to urbanisation.

These days to cover the criticism that is heaped on them they have started talking of 'Greening' the areas. There is no such thing that would replace the existing food requirements.

With the population growing at something like 3% there will be pressure on resources and there is nothing that the policymakers can do about it.

With limited knowledge productivity cannot be enhanced. When such a situation develops then the need is to go for a radically different approach.

One solution does not fit all the issues in agriculture. Since it is site-specific the policies for Punjab will not be suitable for Balochistan and other areas of Pakistan.

Yet the food security of this country will be dependent on the policies that are devised for Balochistan for that is where the land resources are available for inefficient agriculture to continue.

In Pakistan's vocabulary there is no such thing as efficient use of resources. Our agriculture is inefficient in as much as we are not using our resources optimally.

Our water usage is only 10% efficient at the farm level and in conveying the water to the farmer we have a logistic line that is thousands of miles long through the canal system.

We lose about 50% of the water through this conveyancing system. Efforts were made to change this in the nineties but that ended up in a fiasco.

The use of inputs is equally inefficient. The more one uses this artificial input system the more one has to use the next year.

 Some put it at more than 10% increase. The fact is that for the last six decades we have used chemical fertilizer and in the process the lands have become toxic.

Now there is a need to rethink and re-engineer our thought process. That means that we will be thinking in terms of liberal economics.

There are a lot of misapprehensions about neo-liberal economics as coming from the West. All that it requires is that the country decides on the alternate to existing policies that have not delivered.

No where do the liberal policies suggest that the country should follow any policies of the West. That would be suicidal. Pakistan does not have to ape the desires of the West.

Neither does it have to go in for Monsanto's policies on GMOs. The problem with Pakistan's policymakers or takers is that they do not apply their minds to the issues at hand.

They are virgins so far as knowledge is concerned. Knowledge generation is another matter. So why dig very deep for we are surface people and if you scratch us we will have blue blood in us.

Our blue blood never realised that books were important. Go through Muslim history of the subcontinent to verify this statement.

So what is it that we require to feed our own people? Wheat is considered the food security item in the subcontinent and that is where the story ends regarding wheat for food security.

In the 1960s Ayub Khan's government became hostage to the Americans and we were provided by PL 480 regime with free wheat.

We got hooked on to it and that is what they wanted because they wanted a market for their mid-USA wheat to be sold somewhere in the world and what better place than the subcontinent. We continue to be so.

So what are the variables involved in productivity enhancement. Without which we will never be able to manage the inflation in food items. Already the inflationary burden is obviously very regressive.

All these armchair economists that have read massively books on Western systems are unable to fathom what is going on. Just as a reminder there are at least 53 variables that impact on the sector.

So the possibility of error is large. That means that the policymakers and their cohorts are to take decisions in a sector in which they are both blind and deaf. To talk to these idiots is to be in touch with egos bursting with egoistic thought.

So where is the solution? There are no hard and fast solutions and the need is to make mistakes and to improve on their abilities by making fewer ones and to have the ability to strike a balance that is based on science as well as insight, intuition and probability skills.

I am afraid that will not come easy to Pakistani policymakers because they are by functional reasons weak and unable to take responsibility.

The premise generally is that there are no shortcuts. That everything is possible. When seeds were sent to the salt range there was speculation that sugarcane would not grow.

One took a risk. Sugarcane is now growing under saline conditions and the water is more saline than seawater. So where is the explanation? In the holy world that we have inherited there are no holy cows and everything is to be tested.

But if you chose to stay in the Islamabad area and do not understand the requirements of the rural sector than that is how it is going to be.

The impact of this is already visible in the turbulence that we are seeing in the social systems of Pakistan; every aspect of social up for grabs. That does not make for good governance.

It does; however, seem to make for a crisis-ridden nation. Policymakers do not understand the current dharnas and the inqilabi march. These are manifestations of hate for the government in power and for the political system that delivers only for themselves.

Try something different so that neo-liberalism comes into play. Sindh is going to come in to play on the same basis soon. Other provinces will demand that they be treated fairly by the federal government.

Federation by itself teaches you the ability to listen more than to keep blabbering on about things that are not relevant and in any case not true. Living in truth matters. Agriculture productivity is helpful.

November 2014

Courtesy: Business Recorder