Review of Input and Output Policies for Cereals Production in Pakistan

Abstract

The marketing of farm inputs and outputs has become a major problem for farmers in Pakistan. Farm input supplies are irregular, characterized by shortages and high prices at critical times. This report reviews the input and output policies for cereals implemented in Pakistan during the period 1996–2010. Pakistan has a long and varied history of intervening in farm input and output markets, going back decades before the period under review. Most significantly, in the wake of economic reforms launched during the 1980s, it has withdrawn from most of the commodity markets except wheat. In other commodity markets, intervention is by and large notional and without much practical involvement. The rolling back of the public sector from markets has certainly saved public funds, but the savings have come at a cost. Some of the cost, in terms of higher prices and variability stemming from the uncertain economic environment and supply, is borne by consumers, and some, in terms of lower producer prices at harvest, is borne by farmers, especially small and medium farmers, whose farms account for more than 50 percent of the area under cereals. The devolution of decision making in agriculture, food, livestock, and related subsectors to the provinces under the 18th constitutional amendment (and subsequent establishment of the federal-level Ministry of Food Security and Research with its National Food Security and Research Division) have reduced clarity in terms of the public sector’s role and responsibilities in relation to agriculture. While the many challenges facing the agriculture sector continue, the ability to address these with concerted science-based interventions seems less clear at this moment. To transform these challenges into opportunities and address the emerging issues, it is imperative to develop and strengthen institutional capacity for policymaking based on coordinated and concerted technical and economic analyses at the federal and provincial levels. To meet the technological challenges facing agriculture, the research system needs major restructuring and overhauling, administrative decentralization, financial support, autonomy, and accountability. Simply pumping in more resources, without deciding on the strategic priorities and making the system accountable, will not serve a useful purpose. The entire research-based policymaking and implementation system needs direction and coordination.