EDITORIAL: Finance Minister Shaukat Tarin has very rightly instructed the ministry of food security and research to work out modalities for establishing commodity warehouses, storage facilities and agri-malls, on the basis of public-private partnerships, and present their findings to the national price monitoring committee. Finally, there is some realisation in government that one of our many failings as an agri-economy was our inability to build proper storage facilities for our produce; something that is so basic that it should have been taken care of a very long time ago. The fact that it’s also left us very vulnerable to international price fluctuations, as is happening right now, and still nothing was done about it so far really says it all.
It must border on the criminal, considering our shaky finances, that a fair part of our harvest always goes waste because of lack of proper facilities. That is true especially for commodities that the government must procure and store for reasons of food security, like wheat, which is poured into sacks and dumped into warehouses and the bags at the bottom are often reduced to plain dust with time. Therefore silos and proper, extensive facilities are very much a need of the hour. Already, Pakistan has been downgraded to a net agri-importer precisely due to policies that have squandered away our natural, comparative advantage. Now our own production of things like wheat, sugar and pulses is not nearly enough to satisfy local demand and we are forced to go shopping in the international commodity market, often at top dollar prices.
This also puts upward pressure on inflation, particularly in food items with very inelastic demand, as well as the current account. At a time when, as per the government’s own admission, there are already mafias at work to distort prices of essential commodities to the upside, a further jump in the price of staple food because the government never worked out its storage policies is simply unfair. That this is happening when workers still have to recover from the pandemic and lockdown shock, in terms of employment and wages at least, only makes everyday life much harder for the average Pakistani.
The finance minister must, therefore, be supported in this move. Hopefully, all relevant organs of the state will treat this as a top priority and the private sector will also not take forever to step forward and take part in this initiative. These are very testing times for the government, not the least because it has staked its reputation, and of course the whole country’s survival, on a budget that is just as expansionary as it is ambitious and if we have to scurry to import food regardless of the cost at the time then the trade balance will suffer and all bets are off. And it was for good reason that the finance minister made specific and repeated mention of the agriculture sector at the time of the budget. Clearly, he has realised that one of the biggest problems with the sector, and one that has been impacting our eventual import bill quite unnecessarily, is something as basic as storage facilities.
Now that this problem has been identified and the necessary work is being done to address it, it can only be hoped that the government will move with great speed to put things in their right place. This is but one of the many unjustified leakages that force us to go begging for fresh loans every time a repayment or even an interest payment is due. And once this hole is plugged, Finance Minister Tarin and his team must simply move to identify and fix the next one in line. A penny saved is a penny earned, after all, and we could do with both saving and earning more.
Copyright Business Recorder, 2021
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