Economy
 
Less rains may jeopardize agriculture output
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August 17, 2012
Pakistan is moving slowly into another kind of crisis that would be compound the miseries of inhabitants of the country, especially the vulnerable segment. Meteorologists have predicted that country would receive less rains this year as compared to previous years, rainfall is likely to be around 20 to 40 percent less in the current monsoon season.

The less rainfall would negatively impact agriculture sector of the country. The crop which is likely to be damaged in absence of water would be wheat. Besides, the country would be unable to generate electricity from the dams as water flow from the upcountry, glaciers, is still slow and is insufficient to meet future requirements.

The Meteorological department of Pakistan had first forecasted 15 to 20 percent more rains initially and had predicted huge devastations to be caused by the floods but now it says that the rains will be less than the initial forecast, 40 percent less in Sindh. The water shortage will also stir controversies among the provinces as has happened in the past. The country may face drought like situation.

Water shortage would not only impact the wheat crop in next season but other crops would also be affected, harvest of Rabi season. In case of crop damage the country would have to rely on imports of commodities thus spending huge foreign exchange. The prices of commodities in the country in the drought situation would be beyond the reach of poor segment, already suffering from the malnutrition.

On the other hand country would have to suffer in the backdrop of prolong electricity shortages. The country is currently facing hours of load shedding which sparked countrywide violent protests. The industries are almost shutdown and remaining units are reeling resultant the trade deficit for the current fiscal year will also be as huge as was previous year.

Pakistan’s agriculture sector is the largest contributor to the to national economy. Agriculture accounts more than 21 percent to GDP and employs around 43 percent of the labour force.

According to the State Bank of Pakistan the minor crops, which represent 11 percent of the value addition in agriculture sector, have already suffered multiple shocks, particularly in Sindh: firstly, the July 2011 floods damaged chilies, onion, and tomato crops; this was followed by another setback, when exceptionally severe winter conditions resulted in losses to banana, chilies and tomatoes. As a result, minor crops posted a decline of 1.3 percent in FY12, compared to growth of 2.4 percent in the previous year. This year the situation would be worst if the harsh weather conditions persist.


In the shortage of agri out put at home the country would have to opt for imports. The conditions in the international market are not suitable because the harsh weather has also impacted the agriculture of other countries as well. The prices are also increasing for the food items worldwide, so the number of poor.

A recent report by the FAO says that the double whammy of high food prices and the global economic slump pushed an additional 115 million people into poverty and hunger. By 2009, the total number of hungry people in the world had topped one billion.

According to new global hunger figures, that number has since dipped to 925 million people. However, with the recent sharp increase in food prices, that number may rise.

From July to September 2010, wheat prices had surged by 60 to 80 percent in response to drought-fuelled crops losses in Russia and a subsequent export ban by the Russian Federation. Rice and maize prices also rose during that period.

By December 2010, the FAO Food Price Index had topped its 2008 peak, with sugar, oils and fats increasing the most. In March 2011, the index dropped for the first time after eight months of continuous price spikes. The index dropped to an 11-month low in October 2011, but food prices still remain very volatile.

The cost of basic food staples remains high in many developing countries, making life difficult for the world’s poorest people who already spend between 60 and 80 percent of their meager income on food.

Following international commodities market trends the government of Pakistan will have to take measure to insulate the country from the impacts of global price hikes. Though the wheat production in the country for the current season was reasonable but hoarding may create artificial food crisis as was witness previous years. Sensible use of water may lessen the impacts of droughts in the coming days.


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