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Wheat self-sufficiency: myth and reality.

Wheat Self-Sufficiency: Myth and Reality

At the time of Independence in 1947, wheat production in Pakistan was not only sufficient to meet her domestic requirements, but also generated some surplus for export. In the early 1950's, however, the country started experiencing wheat shortages and by the mid-1950's, about one million tonnes of wheat from the USA had to be imported, in order to meet the requirements of an increasing population. This made the policy planners, who had hitherto been giving higher priority to industrial development and had been complacent about agricultural development, realise the weaknesses of their approach. As a result, the development of agriculture started being accorded high priority in policy planning, and the attainment of self-sufficiency in the production of wheat and other foodgrains started to be emphasized in policy pronouncements. Despite the offer from the US Government to provide under its PL-480 programme any quantity of wheat needed by Pakistan to meet her domestic requirements and the implied pressure, efforts continued to be made to raise foodgrain production.

Although the country has succeeded in increasing its production of foodgrains including wheat substantially during the past 40 years or so, the problem of wheat shortages has not been fully overcome mainly because population growth, and rising incomes have outpaced the success on the production front. Pakistan has thus been depending on imports from abroad, except for a few years. These were the years when the amount of rainfall and its distribution, the canal water supplies during the pre-sowing and growin periods of the crop, and the weather at the time of crop maturity and harvesting, were favourable and helped wheat production exceed the domestic requirements. Capitalising on these factors, which were in fact confined to only exceptional years, the Governments of the day started making valuable claims that Pakistan had already attained wheat self-sufficiency. In one of these years, the country even planned to export wheat to one of the neighbouring countries.

It is relevant to mention in this context that during the quinquennium ending 1970-71, Pakistan imported, on an average, over 700,000 tonnes of wheat annually. These average annual imports increased to almost a million tonnes during the quinquennium, ending 1974-75, and remained at the same level during the following five years that ended in 1979-80. During the following quinquennium no wheat imports were made in two out of the five years, except those which were received from various sources for the Afghan refugees. In the years 1985-86 and 1988-89, each about 1.6 million tonnes of wheat (excluding the quantities required for the Afghan refugees) was imported. During 1987-88, the country imported only nominal quantities other than those required for the refugees. It is understood that the Government is planning to import about 1.8 million tonnes during 1989-90.

It is apparent from the foregoing data, that wheat production has not, on trend basis, kept pace with its growing demand in the country. According to calculations made by the Agricultural Prices Commission, the production of wheat during the period 1978-79 to 1988-89 increased at an average compound rate of 2.64 per cent a year, whereas during the same period population is reported to have grown at the rate of over 3 per cent a year. Wheat production during the decade, therefore, fell short of the requirements, on an average, by 0.36 per cent a year, assuming no increase in per capita consumption during the period under review due the rise in per capita income.

There is no denying the fact that in recent years the production of wheat in Pakistan has gone up in one year to about 13 and in another to 14 million tonnes, which is more than three times the production obtaining in the immediate post-Independence period. Most of these increases have been attained after the mid-1960's, when the new seed-fertilizer-cum-water technology adopted by the farmers on a large scale started showing its impact. On the other hand, the demand for wheat has also been expanding and has in general been outpacing the production line. The main reasons for this expansion in demand have been the increasing population (at the rate of 3 per cent or so a year) rise in per capita incomes and the relatively low prices of wheat and the migration of population from the rural areas to the cities. Changes in the consumption patterns of the population were also in favour of wheat, which was partly also encouraged by the relatively lower prices of wheat vis-a-vis coarse grains, thus further adding to the increasing demand for wheat. As a result, the gains in production realised by the adoption of new technology were off-set by the expanding demand for wheat.

For lack of adequate data, particularly on the quantities of wheat retained by the private sector and used for seed feed etc., it is not possible to precisely work out the average annual per-capita consumption of this cereal. However, relaying on the "balance sheet" approach adopted by the Agricultural Prices Commission, the per-capita availability of wheat during the last few years has shown year to year variations. However, it has been around 120 kgs. During the year 1988-89, the per-capita availability of wheat according to the "balance-sheet" methodology comes to over 125 kgs. However, this level seems rather too high and especially in view of the alleged smuggling across the borders. It may, however, be pointed out that according to the Agricultural Statistics of Pakistan, 1987-88, published by the Ministry of Food and Agriculture, the average annual net available supplies for the three years ending 1986-87 amounted to about 116 kgs. per head. Presumably, the difference between the two sets of figures is mainly due to the methodology used.

The author is of the view that it is safe to assume, for planning purposes, a wheat consumption level of 120 kgs. per head a year. On this basis, the domestic needs of wheat for a population of 113.56 million to be fed during 1989-90 (13.62 million tonnes), plus an allowance of 10 per cent of production for seed, feed and waste (1.51 million tonnes), and 220,000 tonnes to be provided to the Azad Jammu and Kashmir Government, would amount to a total requirement of about 15.4 million tonnes. The Government has been fixing the production target at 15 million tonnes for the last few years, while the actual production has remained much short of this target. It was only in 1988-89 that the country harvested 14.11 million tonnes of wheat, whereas past production did not exceed 12.6 million tonnes exception in 1985-86 when it almost touched 14 million tonnes. Thus a gap has constantly been developing between the demand and the domestic production. The annual demand would continue expanding at least at the same rate as the population growth of over 3 per cent a year even if no increase in per capita consumption is assumed due to higher incomes. If, therefore, the self-sufficiency objective is to be realised, wheat production must be stepped up at a much higher rate than the population growth so that it would not only take care of the population increases but should also help reduce the imports so that over time the imports could be totally dispensed with. Only for meeting the additional demand arising from the population growth, wheat production must go up by over 400,000 tonnes at the present level of annual per capita consumption.

It should also be noted that "self-sufficiency" is not static. It represents an equilibrium between production and requirements, and the latter, like the former, depend on a variety of factors such as the price structure, income elasticity of demand, and requirements for seed and feed. In our context, it is like a moving target where production has to continuously increase to match the ever-increasing requirements.

In the situation elaborated above, it seems quite clear that the task before the Government is by no means an easy one. Increased production can be encouraged on a stable basis almost solely through vertical expansion by improving the yield of wheat per-hectare, since any increase in wheat area would adversely affect the production of other crops which compete directly (e.g. oilseeds) or indirectly (e.g. cotton and rice) with wheat. It also appears that the fruits of the seed-fertilizer-water technology, as currently known, have already been substantially reaped and one would not expect any spectacular increases in yields in the years to result from this factor unless some new technological breakthrough is achieved. The Government has, therefore, to think very deeply about this serious situation if the country is to accomplish its cherished goal of wheat self-sufficiency. Intervention in prices through increases in support price can be carried out to induce the farmers to increase productivity only to a limited extent, as it has serious repercussions on the consumers' prices particularly for the urban population which is quite vocal, and the adverse effect that it could have on the production of other competing crops such as oilseeds, the increased production of wheat is also important for the country. The problem is thus not easy but quite complex, and needs to be given the very thoughtful attention that it deserves on a top priority basis. For this purpose, proper planning is needed. The factors which can contribute to improve the productivity should be identified through sound analysis, and arrangements made for taking timely policy decisions and for their effective implementation. Laying down the targets without providing the necessary facilities would be just meaningless. This has happened in most of the years in the past and may also happen in the future years if necessary home-work is not properly done with the result that the attainment of wheat self sufficiency would remain a myth rather than becoming a reality.
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Title Annotation:Pakistan's wheat production
Author:Niaz, M. Shafi
Publication:Economic Review
Date:Oct 1, 1990
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