Over the past decade, much has gone sideways in Pakistan’s agricultural sector. Productivity stagnation in primary food and fibre crops – wheat and cotton – has frustrated farmer profitability, compounded by a secular decline in food commodities prices globally. But there have been saving graces, as not all crops were equally doomed.
Pakistan’s rice production has increased by over one-third over the last 10 years, making it the second most valuable domestic crop after wheat – a mantle once proudly worn by cotton (measured in nominal prices). National paddy output is now valued at two-thirds of wheat, even as it utilizes only one-thirds of land area.
Meanwhile, national average paddy yield has barely inched forward, staying put just under 2.5 tons per hectare (ha). Export growth has also lost steam, as volume exported has been trapped under 4 million tons per annum for much of the last decade. In FY11, the country exported over 75 percent of its total rice production; same has fallen to just half in recent years. As export volume has come at a standstill, exchange earnings have also hit a snag due to falling prices globally, in line with other food commodity indices. What then has been fuelling Pakistan’s rice boom?
Two fascinating trends standout. First, area under basmati rice cultivation, an aromatic variety indigenous to north-eastern Punjab, has almost doubled. This has naturally expanded basmati output by two-fold, as yield has also remained intact. Basmati rice now constitutes half of total 8 million national rice production. A decade ago, its share was less than one-third in total national rice output of 6 million tons. Interestingly, basmati exports have received a battering during the period, falling to average of 0.7 million tons annually, against peak volume of million tons per annum achieved between FY07 – FY11.
That means national consumption of domestically produced basmati has doubled in the last 10 years, from 1.2 million tons in FY11 to over 2.4 million tons by FY20 (not accounting for disappearances such as smuggling)! This claim is not entirely without basis; basmati prices as tracked by CPI have more than doubled since FY11, outpacing growth in even flour prices!
This is astonishing because unlike wheat price spiral, basmati prices have rarely made to news headlines. Moreover, increased net domestic availability of basmati (more production + less exports) coupled with deregulated prices for rice should have led to domestic prices finding parity with falling global prices. Unless of course something else was afoot.
Enter other rice varieties. As Pakistan’s basmati exports collapsed, the country managed to replace the lost export volume with lower-grade varieties. Export of “other rice varieties” charged ahead from 2.7 million tons a decade ago to 3.4 million tons by last fiscal, ensuring that overall volume exported stayed put at 4 million tons per annum.
Does that mean Pakistani rice processors are retaining more of premium rice grains (basmati) back home for domestic consumption, while exporting lesser (coarse) varieties that bring less bang for the buck? Consider that unit price of coarse variety grains is less than half of unit prices fetched by basmati (long term average). Except, that another startling trend was also unfolding quietly in the backdrop.
Far south from Pakistan’s basmati territory in Punjab, new paddy varieties (imported from China) were being tested in Sindh a decade ago, which gained wild commercial popularity overnight. These were drought resistant hybrid rice varieties that fast replaced traditional coarse IRRI 6, 8 and 9 grains in the southern province that intermittently faces irrigation water shortages.
Introduced commercially by private sector companies, hybrid rice gained most popularity along the coastal districts such as Badin, where rice cultivation increased to over 120 thousand hectares by 2017 from less than half in late 2000s. But drought resistance was only half of hybrid’s charm; the variety also boasted average yield of over 4.5 tons per ha, against Punjab’s less than 3 tons per ha for both traditional coarse (IRRI) and basmati grains. It is little surprise then that hybrid varieties now command over two-thirds share in Sindh’s paddy output, and one-fourth share in national production.
Although Pakistan’s trade figures do not provide variety-wise breakdown for exports (other than for premium basmati), it appears that rice processors have managed to replace coarse IRRI grains with hybrid varieties in the export mix as well. For one, China – where hybrid varieties originated - has become the biggest buyer of Pakistan’s non-basmati rice varieties (HS code 1006-3090), from virtually zero exports a decade ago. Two, Pakistan has managed to command decent unit prices for its non-basmati rice in in the international market, averaging at $450 per ton for a better part of last decade.
If true, higher share of hybrid rice grains in export volume (instead of coarse or basmati) would mean that Pakistan is no longer indulging in virtual export of water, a common refrain among environmentalists. However, in absence of variety-wise breakup, this is only a theory. What is beyond certain, however, is that Pakistan’s coarse grain output (IRRI) has fallen by more than half in the last 10 years replaced mainly by hybrid. Meanwhile, domestic basmati production has witnessed a phenomenal boom, but only to satiate growing domestic appetite. Remember, during FY20, three-fourths of premium basmati rice produced was consumed at home!
As rice cultivation generally (and basmati in particular) gains wider popularity, Pakistan must ask itself tough questions regarding changing national cereal production and consumption trends. For example, even today, 75 percent of national paddy output (basmati + IRRI) utilizes traditional flood irrigation that has a very high-water footprint. Is it wise to encourage a high delta, high value crop that no longer pre-dominantly contributes export earnings but is instead mainly produced for local consumption? Moreover, since Punjab’s rice cultivation is fuelled by irrigation water, what are its implication for water inequity elsewhere? And let’s not forget that paddy stubble burning is held responsible for smog during autumn months in Punjab, a health hazard.
The changing consumption trend also has implications for domestic nutritional security. Globally, rice is considered a poorer source of nutrition than wheat. What does the fast-growing domestic consumption of rice indicate in the context of static wheat output? Is Pakistan witnessing a wheat-to-rice substitution? What is fuelling this phenomenon if domestic flour prices have not risen as much as basmati prices over the last decade? Historically, as countries graduate out of poverty, they substitute rice with wheat as their dominant/staple cereal grain. Is the same true for basmati, and should it be discouraged as an inferior cereal to wheat-flour?
The trend also has implications for agricultural land utilization. During past 10 years, additional area has been brought under rice cultivation due to loss of cotton acres in Punjab. Between FY12 – FY21, basmati gained 0.9 million hectares in the province, almost equal to the area lost by cotton. As cotton acreage finds a new normal, can growth in rice production be truly sustainable in absence of any noticeable improvement in province’s basmati yield? And lastly, why have hybrid rice varieties failed to gain traction in Punjab?
The past decade has marked a silent rice revolution in Pakistan, which may have wider implications for national nutritional security, export growth, agricultural land allocation, farmer profitability, and environmental sustainability. While there may be many unanswered questions, rice cultivation has clearly been rewarding for Pakistan’s rural community. In coming years, rising production costs will demand increased focus on improving crop productivity, while striking a balance between farmers’ economic returns and environmental sustainability. And for that reason alone, it must not be allowed to become the next casualty of policy indifference like cotton or wheat.