ISLAMABAD: Pakistan has seen a higher rate of food inflation in the region which is partly linked to global trend due to Covid and partly to domestic policies, said NajyBenhassine, World Bank (WB) country director for Pakistan.

"Around 68 percent of Pakistan's population is unable to afford a healthy diet leading to malnutrition and food inflation makes the situation further worse and increase the vulnerability", said Benhassine, while addressing at the Pakistan Development Policy Series 2021's sixth webinar of the series: Food Inflation and Market Interventions.

The webinar focused on the nature of food price inflation in Pakistan, especially in the fresh produce and milk and meat market, which was attended by among others, Asad Rehman Gilani, Secretary Agriculture, Punjab, Kaukab Iqbal, chairman, Consumers Association of Pakistan, Namesh Nazar, Agricultural Economist, World Bank, Omar Hayat Gondal, PhD Candidate at the University of Washington, former Civil Servant, Shariq Vohra, President, Karachi Chamber of Commerce and Industry, and Shaukat Mukhtar, General Secretary and Spokesperson of the Dairy Farmers' Association, and Amina Bajwa, Member, Prime Minister's Strategic Reforms Unit.

The World Bank country director for Pakistan said that during May 2020 and May 2021 prices of food increased by 14.8 percent in Pakistan.

Recently, a note was produced on this topic and look to the channels through which lots of it is linked to long-term, system, vulnerability to external shocks, bad weather, inefficient resources use, as well as, distortionary policies, which led to stagnant agriculture productivity and high reliance on imports to meet productivity gap.

Amina Bajwa, Member, Prime Minister's Strategic Reforms Unit said that there could be three reasons for food inflation including supply side issues, demand side issues and domestic and international market shocks that affect food prices.

An average household in Pakistan spends more than a third (nearly 36 percent) of its consumption expenditure on food, she added.

She said that supply side issue is due to low yield and low productivity of agriculture in Pakistan, bunch of reason for that is high cost of production. She said there is hoarding and smuggling, which hamper supply in the country.

Furthermore, costly input, climate change, low production inefficient food supply chain, lack of storage facilities, processing and distribution losses all that contribute to supply-sided issues that result in inflation in Pakistan.

She further said that on demand side, Pakistan has high population growth rate.

The rising GDP, which result in increasing per capita income and further result in increase in consumption and inflation. Currency fluctuation and oil prices affect imports and result in affecting the market. She said inflation in Pakistan where huge population is living below the poverty line is a matter of great concern and sometime government intervention is needed to arrest the inflation and give relief but some time it distorts the market.

Dr IjazNabi, Chairperson of the Consortium for Development Policy Research (CDPR) and Country Director of the International Growth Centre (IGC) Pakistan said that food inflation has gone very high in Pakistan which is partly due to supply shocks but also due to the market structure. When we talk to the farmers they say they do not get the right prices and consumers complain about higher prices.

Copyright Business Recorder, 2021


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