The real cost of crops

04 Apr, 2018

The clock is ticking. Pakistan is heading towards water scarcity at an alarming pace while solutions and discourse on the matter still remain largely elusive. According to the United Nations Development Program (UNDP), the country’s per capita water availability has plunged from 2,172 cubic meters in the nineties to 1,306 cubic meters per inhabitant in 2015.

 

The bulk of water consumption goes towards agricultural use with government estimates putting this figure at more than 90 percent. Pakistan’s crop cultivation is heavily tilted towards water intensive crops such as sugarcane, cotton and rice.

But as Pakistan’s water profile shifts for the worse, these crop priorities need to be reassessed. According to various estimates, in order to quench its thirst, the country is putting a massive strain on its surface and groundwater resources.

The problem is that the majority of farmland is dependent on canal irrigation, but this source is grossly under-priced. Couple that with minimum support prices for crops such as wheat and sugar-cane. Also, the supply of these crops is incentivised without taking into account the actual associated costs.

A ground-breaking study published in the Nature Journal has some alarming revelations for Pakistan’s already precarious state of water resources. The paper titled “Groundwater depletion embedded in international food trade” aims to highlight the impact of global food consumption on ground water depletion (GWD).

According to the researchers, almost eleven percent of the non-renewable groundwater use for irrigation is part of the international food trade with two-thirds being exported by Pakistan, America and India alone. Furthermore, India and Pakistan are the biggest users of GWD at 30 and 11 percent respectively, whereas Pakistan is the largest exporter with an alarming 29 percent of global GWD trade volume followed by USA at 27 percent and India at 12 percent.

Even though Pakistan is one of the leading exporters of rice, the country does not account for the huge environmental cost it is bearing for these exports. According to various estimates including UN-Water, it takes around 3500-5000 litres of water to produce just one kilogram of rice. The paper points out that Pakistan exports rice to Iran that have been irrigated using “Upper Ganges and Lower Indus aquifers”, which are overexploited by a factor of 54.2 and 18.4 respectively”.

Another good example is sugar-cane cultivation. Its cultivation area has gone up by almost 7 percent whereas the production has gone up by almost 15 percent. During FY17 crushing season, the provincial governments of Punjab and KPK maintained the (MSP) at Rs180 per 40 kg, while for Sindh it was at Rs182 per 40 Kg for Sindh.

The Pakistan Sugar Mills Association (PSMA) had raised a red-alert last year stating that the mills will be unable to pay more than Rs120/40 kg for the purchase of sugarcane in the upcoming season. The reason is the record surplus sugarcane production that has led to a severe supply glut. According to the association, the mills still have 55 percent surplus stock available even after fulfilling the annual domestic demand of sugar.

On top of that, the differential in international and local sugar prices has made a government export subsidy essential. It should also be noted that crop productivity levels are also dismal compared to global standards. The Pakistan Business Council highlighted in a recent report that the Pakistan’s agricultural productivity ranges between 29 percent and 52 percent against the world’s best for major commodities.

Ideally, crop cultivation should be done with regards to taking the water cost element into account, while emphasis should also be placed on improving yields and adopting conservation techniques in water management. But given that the corridors of power comprise of the industrial and feudal elite, active policymaking with regards to water pricing for agricultural use has been a no-go area for every government.

Copyright Business Recorder, 2018

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