Wolfgang Herbinger, Director World Food Programme, stated on the sidelines of the humanitarian meetings in Geneva that the Pakistani crop outlook is good, however "the food security situation remains difficult because prices remain too high."
His name may compel those much enamoured of alliteration to point out that Herbinger's statement must be a harbinger of serious concern for the PPP-led government, which has kept the same election slogan as was first adopted fifty years ago by the party's creator and first Chairman, Z A Bhutto, "roti, kapra aur makaan".
There is little doubt that in its own defence the government would argue that the reason the slogan disturbingly remains the same, even after the passage of half a century is due to the adventurism of the military strongmen, who either initiated or supported the flawed economic policies. There is some truth to this assertion.
However, the PPP government must acknowledge some of the prevalent conditions in this country that have militated against the successive governments' attempts to control the inflationary pressures, as well as some policy actions taken during the past three years for which it is directly responsible.
There is enough evidence to suggest that in this country inflation is partly due to the failure of successive governments to check the profiteering activities of the cartels that do not allow the price of essential commodities to be determined by supply and demand conditions.
Thus the price of sugar, the price of cement and indeed of some other items are held hostage by powerful and influential cartels. Additionally the government's corrective policy, to import the commodity and provide subsidy for the consumers, has been derailed time and again because of the failure to check cross-border smuggling (on our eastern and western borders).
In some instances, imports, coupled with subsidies, have effectively implied a subsidy paid for by the Pakistani taxpayers money to consumers in neighbouring Afghanistan and India. And the rising international price of oil, due to the ongoing operation in Libya, has also contributed to domestic inflationary pressures.
However, the present government must be held responsible for its flawed macroeconomic policies that have led to a steadily increasing budget deficit, with serious inflationary implications, as well as heavy reliance on domestic borrowing as international donor pledges remain undisbursed due to failure to implement the agreed reforms with the International Monetary Fund under the Stand-By Arrangement.
However, the reforms that were undertaken were partial. Thus the government began earnestly to end subsidies to the energy sector that led to a dramatic rise in electricity tariffs over the three years - a rise that is ongoing with obvious implications on the budget of the common man.
At the same time, the government failed to reduce inefficiencies and did not focus on huge transmission losses as well as on pressurising the government ministries/departments to pay their electricity bills, leading to the untenable position of the higher bills with heavy load shedding. This has raised costs of production across a broad spectrum of products, with obvious implications on prices.
And in the case of wheat, our staple food, Herbinger explains why the wheat price for the consumer has doubled from three years ago: "the government is the biggest buyer of wheat in Pakistan, they are setting the farm gate price and they dominate the market...that's why the wheat price in Pakistan didn't adjust, when for example in 2009 and early 2010, the wheat price had gone back a lot, it stayed high to the detriment of the local consumers". Not only that, it was further increased thereafter.
The effect according to Herbinger is that malnutrition in Sindh, the PPP home base, has reached 21 to 23 percent, well above the African level and admitted that the WFP was struggling to bring the message across to the authorities.
In sharp contrast, the PPP government has claimed success in its farm policy. The President in his address to the joint session of the parliament claimed that "despite the floods, agriculture has registered progress. From wheat importing, Pakistan has become a wheat exporting country...rural economy has greatly benefited." There is a need to correct the President with respect to these claims.
First farm output, according to experts, is expected to rise this year due to the floods, and not despite the floods. Second, wheat exports contain the element of significant destruction due to the floods, given that there was inadequate storage and, finally, the rural economy may have benefited, particularly the big farmers that dominate the parliament but it has compromised the ability of the poor to buy!
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