Muneeb ur Rehman

Food inflation is on the rise in Pakistan. Devastating floods, the Ukraine crisis, and currency devaluations proved to be the contributing factors. Chinese policies offer Pakistan a solution to bring this trend down, said Professor Anjum Baig, head of Economics Department at the Karakoram International University, Gilgit while talking to WealthPK.

According to the Bureau of Statistics, the consumer price index (CPI) stands at 31.5%. Food inflation in Pakistan jumped up to 45.1% in February from 42.9% in January this year. The upward trend is causing stress among the poor and lower-middle-income groups.

In contrast, food inflation in China stood at 2.6% in February 2023 compared with 6.2% in the previous month.Agricultural goods such as wheat and vegetables are less likely to reach the expected output for the current year, as the Punjab and Sindh provinces are expected to produce 50% less wheat this year.

Baig said China promoted its agriculture sector through various policies. The Chinese government is protecting the agricultural land from rapid urbanization through ‘farmland red-lining’. Through this initiative, the agricultural land used for commercial purposes is compensated by creating new farmlands somewhere else in the region. Keeping the rapid urbanization in view, he advised similar policies for Pakistan.

He said small farmers in China are provided with interest-free loans to incentivize food production. The facilitation of e-commerce is also linking farmers with agricultural suppliers in the country. ‘’The private sector collaborates with farmers who have small land holdings. The farmers, in return, provide agricultural raw materials to the private sector for further value addition. Collaboration of this nature will help Pakistan ensure the supply of food to avert supply-side inflation,’’ said Prof Anjum Baig.

Pakistan’s agriculture sector is also recovering slowly. A report published by the Ministry of Finance titled “Economic Update and Outlook 2023” says the Rabi season sowing for wheat has touched 96%, as it covers 21.94 million acres in Pakistan. Improvements in Pakistan’s agriculture sector are necessary to reverse the prevailing food inflation in the country. To bring further improvement, Pakistan’s agriculture sector needs to learn from China’s experience.

Credit: Independent News Pakistan-WealthPk