January 20, 2008


Filed under: DOMESTIC — civilsocietypakistan @ 3:25 am
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JANUARY 20, 2008

Rising food prices fuelling poverty 80 per cent Pakistanis spending 50-60 per cent of their total income on food have been forced to curtail clothing, health education expenses to stave off starvation

Sunday, January 20, 2008
By Mansoor Ahmad

LAHORE: Not everyone who is poor was born into poverty. New research shows that large numbers of poor people have fallen into poverty within their lifetimes as is happening in recent months in Pakistan where poverty is on rise due to food inflation and shortages.

Any inflationary impact that increases the rates of food badly impacts majority of people living in Pakistan as more than 80 per cent of them earn less than $2 per day. They are more vulnerable than the affluent class because they spend 50-60 per cent of their total income on food. When food becomes expensive they have to curtail other essential expenses to save themselves from starvation. It is time for starvation for those 23.4 per cent of the population that the government officially recognizes at living below poverty line.

Conventionally, poverty has been measured as a stock, considering the numbers of poor people at a particular moment in time. Such stocks can be compared across two points in time and the net change calculated. Such analysis does not reveal, however, exactly how this change was derived: how many people fell into poverty within the specified time frame, and how many others concurrently escaped poverty?

Poverty is definitely on rise in Pakistan as its citizen fight to buy wheat, rice or ghee at whatever price they could get it. Price has lost significance, as it is the availability that matters. Past experience indicates that poverty rises sharply in these circumstances. This according to economic experts is the right time to assess the poverty in the country, which would give the planners an insight to the vulnerable population of the country that could fall into poverty on slightest disturbance in economic out look.

The experts point out that except fixed income groups or elite class majority of families in Pakistan buy food on daily basis. There are families in poor localities that do not afford to buy as 20 kg atta bag. In normal circumstances they used to buy one or two kg of this commodity on daily basis or the shopkeeper in their neighbourhood provided them the 20 kg bag on credit.

They said now that the atta is not available through normal retail channels. They have to buy atta now at cash and that too at much higher rates. The alternate staple food to atta is rice the rates of which have risen more sharply.

Almost doubling of edible oil rates in one year and historic high rates of vegetables have further compounded the problems of lower middleclass and poor families. The poor families have been forced to neglect the health or education of their children just to ensure that they are adequately fed.

Poor planning and bad governance has landed the nation in to present mess. According to economists the governments poverty reduction strategy lacked substance. They said the government did not conduct any study about the development and policy measures that reduce poverty. They said studies in neighboring India indicate that investment on road infrastructure reduces poverty more sharply then other developments. They said India experience shows that for every one million rupees spent on rural roads, 124 poor people could be lifted above the poverty line-the largest rate of poverty reduction among all types of investment. Furthermore, one rupee invested in rural roads would generate more than five rupees in returns from agricultural production, which is the second-largest production growth effect after agricultural research and development (R&D). Additional government spending on agricultural R&D and extension has the largest impact on production growth, with a cost- benefit ratio of 13; it also leads to large rural poverty-reduction benefits, second only to rural road investment. Additional government spending on education has the third-largest impact in reducing rural poverty, largely because of the increases in non-farm employment and rural wages that it induces. Finally, public investment in irrigation has an impact on agricultural productivity similar to that of education investments and only a small impact in reducing rural poverty. The economists regret that no such analysis is available in Pakistan.



  1. Pakistan produced RECORD wheat!

    In 2005-06, Pakistan produced 21,591,400 metric tons of wheat, more than all of Africa (20,304,585 metric tons) and nearly as much as all of South America (24,557,784 metric tons).
    The Federal Bureau of Statistics valued Major Crops yields at Rs.504,868 million in 2005 thus registering over 55% growth since year 2000.

    “Wheat crop damaged in USA and Australia”

    The U.S. is the largest exporter of wheat, followed by Canada, Russia, Argentina and Australia.

    Wheat prices soared to record highs on the Chicago Board of Trade and European markets on Wednesday as news of damage to key exporter Australia’s crop heightened concern about shrinking global stocks.

    The US Department of Agriculture has projected that world wheat stocks will drop to 114.8 million tonnes by the end of the 2007/08 marketing year, a 26-year low, following poor weather earlier this year in parts of Europe and the United States.

    “Australia’s crop concerns will definitely add pressure on global stocks already hit by dry conditions and strong demand,” an official at a South Korean flour miller said.

    “Wheat shortage in the world and food inflation”

    Higher grain prices are triggering food inflation in several countries, including India and Pakistan. In Croatia, inflation accelerated at a record pace in December as food prices soared, the state statistics office said today.

    The People’s Bank of China has raised interest rates five times this year to curb inflation and damp speculation in stocks and real estate. Australia’s consumer prices increased more than expected in the second quarter as fuel, housing and food costs surged. Cattle prices in Australia, the world’s second-biggest beef exporter, have soared about 23 percent this year. Rising bread and flour prices have sparked protests across drought-stricken Morocco, where the wheat crop dropped by 76% this year.

    Public disturbances have also been reported in Yemen, Niger, and the Ivory Coast. In Italy pasta producers have taken great pains to justify the increase by pointing to the soaring cost of wheat, which has increased by 60% over the past year. Consumer groups organized protests in Rome, Milan and Palermo.
    Wheat prices in Europe have been rising steadily over the past three months, driven up by growing demand particularly in developing markets such as China, coupled with a poor harvest in Australia that has led demand to far outstrip supply. France inflation rose to highest annual level in at least 11 years; with food, fuel and energy prices rising sharply.

    PAK Government’s stance and action
    President Pervez Musharraf Monday blamed hoarders and smugglers for the problem and said that wheat flour is being smuggled to Afghanistan, Central Asia and even Russia.
    Pakistan faced shortage of wheat flour, prima facie due to hoarding by elements – which are minting money at the cost of the poor consumers.

    Last week, the authorities deployed paramilitary troops at flour mills across the country to ensure wheat supplies to the people. The Utility Stores have been selling flour at the official rate of 18 rupees ($0.30) per kg but it is sold in market around 30 rupees per kilogram.

    Shortage occurred due to three reasons:
    1. Some wheat smuggled out of country, as the world faces wheat shortage.
    2. Hoarding up by Mill owners and profiteers.
    3. Panic created by the Media in general Public. Due to which, public in general ran to buy extra three months quota. Naturally, excessive buying creates shortage and raises prices. I consider the panic created by the Media as much responsible!

    Comment by M.R.B — March 4, 2008 @ 3:18 pm | Reply


    According to Economic Survey 2005 & CIA Factbook 2007. Poverty in Pakistan in 2001 was 34.46%. And, now after 7 years of Musharraf; Poverty in 2005 was 23.9%. Poverty DECREASED by 10.56%.

    Overall, 12 million people have been pushed out of Poverty in 2001 -2005!

    Comment by M.R.B — March 4, 2008 @ 3:19 pm | Reply

  3. […] protests over food shortages was one of the many reasons Musharraf.  As reported in this January 2008 story from Lahore: Not everyone who is poor was born into poverty. New research shows that large numbers […]

    Pingback by Grassroots and Food « Grassroots New Mexico — April 3, 2008 @ 3:42 am | Reply

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