The Ministry of Food, Agriculture and Livestock (Minfal) is restructuring of provincial food departments and directorates to make them more efficient state-owned enterprises, said official sources. According to official sources, Passco's role is also being reviewed to encourage private sector involvement in wheat marketing and storage.
The challenge for the future is to devise a market friendly approach to address the issue of food insecurity in Pakistan, said sources. Official sources stated that the government is committed to ensuring availability of sensitive food items, particularly wheat and wheat flour and sugar for the general public. A phased reform of government food policy is underway. The overriding objective is to promote efficient markets for wheat in order to ensure market-based incentives for farmers.
The reform program would also include measures for increasing private sector involvement in the wheat market. The wheat policy until recently distorted market operations, created disincentives for farmers and traders, costing the government huge expenditure on subsidies. The government has removed all restrictions and allowed inter-district and inter-provincial movement of wheat.
The Wheat Policy-2005 has since been operative and the key elements of the policy consisting of (a) a clear distinction made during stock build-up between guaranteed minimum price and procurement price, (b) a strategic reserve is being maintained (initially one million ton) separated from the operational stock needed for public distribution system, (c) the government will determine a price band for wheat procurement and marketing, of which the lower end is dictated by the objective of providing incentive to the growers and the upper ceiling is pre-determined to serve the interest of the consumers, (d) targeted subsidy programs is being extended to the food insecure groups, and (e) providing comfortable cash credit margins to private sector to increase wheat procurement, sources said.
According to official sources, country's economy is still predominantly agrarian in nature. Agriculture accounts for 20.9 percent of the GDP and 43.4 percent of the total work force and is the main source of livelihood for 66 percent of the country's population living in rural areas.
Growth in the agriculture sector registered a sharp recovery in 2006-07 and grew by 5 percent, which is expected to contribute significantly to reduce rural poverty. It contributes substantially to the country's exports. It also provides raw material to major industries such as textile, sugar, dairy, leather and other agro-based industries as well as market for industrial products.
Agriculture is playing a key role in stability and growth of country's economy. Main policy focus in agriculture has been ensuring food security for growing population, expanding foreign exchange flow through agricultural exports and reduction in poverty through agriculture growth.
To achieve these objectives, main policy initiatives adopted by the government include increasing productivity and profitability of major crops, providing rural infrastructure and access to agriculture inputs, ensuring water availability and efficiency, and liberalising commodity markets and trade regimes on sustainable basis.
Improving support services, especially for small farmers, enhancing efficiency and delivery capability of agriculture institutions, and providing an enabling environment for public-private partnership are other policy concerns of Minfal.