Wheat Industry of Pakistan
Successes and Failures of Wheat Market /Price Policy in Pakistan: What are the Alternatives?
Abstract: This paper aims to describe the current wheat policy and evaluates the current policy in light of its original objectives of food security and price stability. The paper uses percentage of undernourished and average calorie deficit of the malnourished as indicators of food security and variation in the farm gate price of wheat relative to other South Asian countries as a measure of price stability. The results based on FAO data show that policy has failed terribly in achieving the first objective of food security whereas it did a satisfactory job towards the objective of price stability. Finally, the paper recommends some alternatives for the existing strategy.
Introduction: Since, wheat is a staple crop in the context of Pakistan and it is believed that wheat price has a direct impact on consumption decisions of millions of poor people and through these decisions on food security. For this imperative role of wheat in the life of urban and rural poor, food price policy in Pakistan has attracted and continues to attract huge attention. Sadly, due to such strong tie-up between wheat prices and prosperity of the deprived, wheat pricing in Pakistan has been more influenced by political consideration rather than economic rationale. Pakistan has pursued interventionist policies in almost whole of the agriculture sector but the extent to which the outcome diverges from the open market equilibrium varies greatly across different agriculture commodities. The impetus behind these interventions in the wheat market was to achieve two objectives: a) Food security for a greater proportion of the population. b) Shield domestic producers from price variations in the world markets. The purpose of this paper is to critically analyze the wheat price policy and the factors that shape and guide the formation of this policy as well as the impact of different
Abstract: This paper aims to describe the current wheat policy and evaluates the current policy in light of its original objectives of food security and price stability. The paper uses percentage of undernourished and average calorie deficit of the malnourished as indicators of food security and variation in the farm gate price of wheat relative to other South Asian countries as a measure of price stability. The results based on FAO data show that policy has failed terribly in achieving the first objective of food security whereas it did a satisfactory job towards the objective of price stability. Finally, the paper recommends some alternatives for the existing strategy.
Introduction: Since, wheat is a staple crop in the context of Pakistan and it is believed that wheat price has a direct impact on consumption decisions of millions of poor people and through these decisions on food security. For this imperative role of wheat in the life of urban and rural poor, food price policy in Pakistan has attracted and continues to attract huge attention. Sadly, due to such strong tie-up between wheat prices and prosperity of the deprived, wheat pricing in Pakistan has been more influenced by political consideration rather than economic rationale. Pakistan has pursued interventionist policies in almost whole of the agriculture sector but the extent to which the outcome diverges from the open market equilibrium varies greatly across different agriculture commodities. The impetus behind these interventions in the wheat market was to achieve two objectives: a) Food security for a greater proportion of the population. b) Shield domestic producers from price variations in the world markets. The purpose of this paper is to critically analyze the wheat price policy and the factors that shape and guide the formation of this policy as well as the impact of different