The underlying and fundamental reason for Pakistan’s economic collapse is the country’s trade deficit. According to figures released last week by the Pakistan Bureau of Statistics, the country’s trade imbalance increased by an alarming 57.85% year on year to an all-time high of $43.33 billion in the first 11 months of 2021-22.
Food imports by an agro-based country are the most frightening figure. Imports of food totaled $7.75 billion during the year, up from $6.9 billion in the previous year. This exemplifies the government’s complete failure to achieve agricultural value-added growth in both domestic and export markets.
Agriculture industry accounts for 22% of GDP and employs 45% of the workforce in the country. It is essential for economic growth, food security and employment opportunities and requires leadership that will allow Pakistan to meet domestic demand while also exporting farm and food products.
Despite having the most extensive irrigation network and the highest agricultural employment rate, the country is still unable to feed its own people, which is concerning for the nation ’s future and food security. The government has failed to make high-quality seeds, fertilizer, and pesticides available at affordable prices. As a result, the country is compelled to import wheat, sugar, edible oil, and legumes, in order to control food inflation in the country.
Furthermore, as a consequence of these vast food imports, the trade deficit is widening, since the country’s overall import bill has been on the rise since November, 2021
Pakistan is now ranked among the top tea importing and consuming countries, with $590 million in total tea imports. Is it possible for Pakistan to become self-sufficient in tea production? The country has conducive tracts of land ideal for tea cultivation in Azad Kashmir, KPK, and Murree. The Pakistan Tea Board initiated tea cultivation for the first time in 1958 in village Baffa, district Mansehra. However, due to a lack of government cooperation, the efforts could not become fruitful.
This was also due to the former East Pakistan’s self-sufficiency in domestic tea production(Now Bangladesh). From 1986 to 1989, a team of tea experts from Pakistan and China tested 64 sites in these areas suitable for tea. In Mansehra, an area of around 70,000 hectares had been reserved for tea planting hence the dilemma of Pakistan has been only to raise institutions rather than maximize productivity to their advantage.
The overall endeavor resulted in the establishment of the National Tea Research Station (NTRS) on 50 acres of Mansehra in 1986. The economic impact includes self-sufficiency in tea production in 5-8 years, which will not only help create jobs for millions of unemployed youth, but will also reduce the import bill, thereby saving foreign currency.
Pakistan is the fourth largest importer of edible oil as 75% of the oil is consumed in the country in order to meet its demand. The vast majority of the total imports are accounted by palm oil. In fact, palm and soybean-related imports surpassed $4 billion in fiscal year 2021, a 47% increase annually. In the first 10 months of the fiscal year, the import bill for palm oil alone climbed by 45% to $3.1 billion.
Even though Pakistan has one of the most fertile regions on earth, particularly Punjab, and has immense potential to produce all types of oil, including sunflower, canola, soybean oil, and mustard oil. What is the burden of importing edible oils on the government’s exchequer?
In Pakistan, the major crops in the existing cropping system are wheat, cotton, rice, and maize. There is a less established system for oil seed crops in the country as only 0.754 million hectares of the total cropped area are under them , such as sunflower, soybean, canola, and mustard oil.
While it is a harsh reality that palm oil contains saturated fat and is associated with an increased risk of heart disease and other chronic health conditions. Sunflower, canola, and soybean oils, on the other hand, are unanimously regarded as the healthiest dietary oils. Unfortunately, our economists do not prioritize edible oil production, which has resulted in a decrease in oil seeds and oil production during the last 16 years. An inefficient crop mix and resource overuse are stifling productivity growth in edible oil production.
The sunflower oil production was 0.2 million tons in 2006, but has since been reduced to 0.05 million tons in 2021. Similarly, canola oil production fell from 0.06 million tons in 2006 to only 0.03 million tons in 2021. Worst of all, Pakistan’s soybean yield is declining as the production of soybean was 1404 tons in 2001, but it is now nil. Pakistan imported 126 million soybean products in fiscal year 2021 alone.
Soybean is the world’s most important protein and oil crop. In the early 1960s, the development of soybean was introduced in India and Pakistan . The production of soybean reached 12.5 million tons in 2021, including the export of 2, 25,000 tons of organic soybean meal to US. In Bangladesh, the soybean harvest was zero in 2009, while total production reached 14000 tons.
Farmers in Pakistan confront various challenges in managing oilseed production, ranging from lack of soil testing on farms, fertilizer scarcity, lack of warehouses, machinery and equipment, and, most importantly, a reduction in soil fertility. Having massive public sector agro-organizations staffed by bureaucrats despised for their inefficiency, nepotism, and corruption, but mainly for their arrogance, a huge chasm has been created between farmers and agriculture budget allocation.
Otherwise, various types of sunflowers, soybeans, and canola need between 80 and 120 to mature and develop seeds on an average. New varieties of these crops have the potential to lessen reliance on imported hazardous palm oil, but doing so would be too difficult without weeding out corrupt mafias from the government.
Pakistan’s exports are estimated to be approximately $28 billion.. However, with self-sufficiency in edible oil, tea, and particularly, soybean production, it meets the demand for an all-weather and time-tested ally, China, that can alone bridge the trade deficit. Although Pakistan will have to arrange a new soybean variety that yields 4000 kg per hectare, in order to meet this target.
Pakistani premier is looking for accord on the revival of the national economy. By defining targets and KPIs for large idle agro-intuitions, this writing may assist him achieve his goal.. Instead of tasking spy agencies to analyse their Annual Confidential Report, he can assign the role of country monitoring to them for a more practical outcome.
However, the most significant threat is a nexus between politicians, bureaucrats, and corporations, as well as ineffective and dishonest governance. Whoever breaks this Nexus, represents a real challenge for Pakistan.
