The myth of self sufficiency

Earlier this week, a widely circulated news report, including in this newspaper, indicated that the federal government of Pakistan has “decided to add a sunset clause to Pakistan Biosafety Rules, 2005 and guidelines to contain the import of genetically modified soybean and canola seeds”. This news report follows an earlier in-principle decision by the caretaker government last month to amend the biosafety rules to allow the import of GMO oilseeds for the explicit purpose of food, feed, and processing (FFP) only.

Policymaking in Pakistan continues to beggars’ belief. In October 2022, the coalition PDM government banned the import of genetically engineered oilseeds, after the food security minister declared that GMOs were poisonous for human consumption. The decision brought the poultry and solvent extraction industries to a standstill, as key raw materials such as soybean and canola were removed from the supply chain overnight.

Despite fierce advocacy campaigns by the poultry and edible oil industries, the issue remained unresolved as babus at various ministries – including climate change, food security, health, and science & technology – took months to ‘deliberate’ upon already concluded and unanimous findings of a Technical Advisory Committee, made up of subject experts. Those deliberations yielded precious little, until certain elements leaned in on the issue, forcing the interim set to short-circuit the process and notifying amendments on a policy matter. One which would otherwise strictly have been the purview of an elected government. Now, it seems that the decision is not without conditions.

What prompted the interim government to add the sunset clause? The news report indicates that policymakers in Islamabad view the growing food import bill as a threat to domestic food security. After all, Pakistan’s rising food import bill has become a battle cry for many advocates of import substitution, who often lament that the trade deficit in food is a travesty for an agro-based economy.

In recent years, the demand for import substitution in agri-imports has picked up steam, especially for plant-based fats and oilseeds. Critics point out that major producers of these commodities such as China, USA, India, Brazil, and Indonesia provide generous crop support programs to enable domestic cultivation. Meanwhile, despite rising local demand, Pakistan has failed to make domestic production a policy priority.

Such criticism completely ignores the lack of suitability of Pakistan’s climate to grow these non-native crops. Moreover, any meaningful attempt at import substitution would require not only several million hectares of land, but also billions of gallons of water for irrigation. And while ‘million-acre-wastelands’ have become the new buzzwords in this ‘decade of corporate farming’, no amount of interest-free loans can enable the successful plantation of an equatorial crop like a palm in Cholistan or a temperate climate crop like soybean in Thal.

Here’s in fact another view. Rather than worrying about the import bill, let rich countries such as USA subsidize their farmers and export cheap grain to deficit nations such as Pakistan. Let Indonesia and Brazil worry about deforestation caused by intensive farming of palm and soybeans. Eat their subsidies, rather than increase your own fiscal spending in a race to bottom.

Rich countries that subsidize their farmers and then advocate free trade to export surplus are an advantage, not a threat to the food security of countries such as Pakistan. For every dollar the US government spends on supporting soybean production, 50 cents flow to importing nations indirectly in the form of lower prices.

Any sincere attempt at achieving national food security would make fulfilling the nutritional needs of all citizens – the 250 million consumers of Pakistan – a policy priority, not a segment of farmers or producers. Take a leaf out of the Chinese playbook, which spends over $100 billion on annual food imports, and runs a $50 billion trade deficit in agriculture. Or learn from Bangladesh’s trade strategy, which imports cheap cotton from India and USA – produced using generous subsidies for their local farmers – and exports it back to Western destinations in the form of garments sold at steep markups.

The specter of rising food import bills is a red herring. Instead, the real challenge is the continued failure to discover where the natural comparative advantage in exports lies. Solve that challenge, and the problem of import affordability would go away on its own. To succeed, Pakistan need not remain an agro-based economy forever, nor produce every single domestic consumed commodity locally. Don’t let the snake charmers fool you.