February 25, 2008 By SULTAN AHMAD
World food prices have been rising for long. They had more than doubled within the last two years and within a year the price index of the Economist of London has registered a rise of 54.1 per cent. The process continues to the glee of those who are growing food crops.
Spurred by such developments, farmers in Pakistan are calling for support prices at the world level. If that demand had been met, wheat would have cost more than Rs40 a kilo.
So some in the trade chose a middle course and called for a support price of Rs600 for 40 per kilogramme or Rs15 per kilogramme.
The ministry of food and agriculture accepted the demand for Rs600 for 40 kilogrammes asking the government to fix that as a support price for the 2007-08 crop while harvesting in Sindh has already begun. The official policy is not to announce any support price this year but to buy 0.7 million tones from the farmers. The government did not accept the advice of the ministry of food and agriculture on support price hike.
The economic committee of the cabinet rejected the proposal saying it meant a rise of 42 per cent in the procurement price which it considered excessive. The caretaker cabinet has set up a committee comprising among others, Dr Akram Sheikh, chairman of the Planning Commission, to make his recommendation to the government.
Meanwhile, it has been reported that the government has decided to import 1.7 million tones of wheat to avoid any shortage. As soon as the wheat prices rise, the fertiliser prices go up. This has already happened as Engro Chemicals has increased the price of DAP fertilisers by Rs570 a bag. There are indications that the price would rise further and other fertiliser companies would follow suit. Usually when agricultural prices rise and if they are not food crops, the pesticide prices are also increased.
When wheat prices go up, the wages of farmer workers should also rise. If the farmers get world prices, farm workers should also have the international level wages.
When it comes to the elections, whether it is the local body or the general elections, it is usually the farm lords who contest against each other. The farm workers are expected to support their farm lords. After the polls are over, the feudal lord is in the assemblies with fat allowances and amenities while the farm worker is on his farm, sweating it out for low wages.
It is accepted that poverty in Asia cannot be eliminated until rural poverty particularly of the farm workers is eliminated. In the developed West, the governments spend a billion dollar a day in subsidising their farmers. In the developing countries, the subsidy is nominal and goes into the pockets of the landlords. So if the farmer has to be far more productive his wages should be of international standards.
If a Pakistani worker can produce far better when he is paid handsomely in Dubai or in the West he can do the same in Pakistan if paid adequately. Of course, any change in the wage structure has to follow major changes in the feudal order. The liberation of the farm workers has to take place in stages and has to follow the evolution from the feudal order to a more equitable social system based on fair rewards for work done. The earlier it takes place, the better for the economy.
The economic liberation of East Asia has been brought about considerably by the end of the feudal order. But Pakistani continues to be a feudal stronghold in the sub-continent. Even the Nepalese farmer is getting liberated because of the Maoist movement. If Pakistan wants to achieve the UN Millennium Development goal of reducing poverty by a half, determined efforts have to be made to reduce poverty, if not eliminate it all together.
Meanwhile, the Grameen bank of Bangladesh has opened its office in New York to lend to the poor of the richest country in the world who have no bank accounts of their own. Mr. Mohammed Younus says this is the best time to open the Grameen bank branches in the US as the western banks are facing a serious credit crisis.
In the US, about 28 million people have no bank accounts and 44.7 million have only a limited access to the banks. Mr Younus hopes to fill the gap as much as he can.