LOOMING FOOD CRISES IN PAKISTAN

Final Report

Seminar In Economic Policy

Name: Muhammad Altaf

ID: 3035
CID: 53608
 Date: Dec 13, 2009
Instructor: Pro. Dr. Rafique A.Khan

“The
greatest challenge to the world is not US$125 oil; it’s
getting enough food so that the new middle class can eat
the way our middle class does, and that means we’ve got
to expand food output dramatically,”

(Donald Coxe, global portfolio strategist at BMO Financial Group

Toronto on 17th may 2008)

2
Table of Contents

3
S.NO Description Pg No

Global food crises 3

1. 1.1 Introduction:
1.2 Some Of Major Reason Behind Food Cries
Increase in oil prices
Demand for higher-input food
Decreasing levels of food stocks
Climate change and environmental degradation
3-4
2.
Growing use of bio-fuels
Inelastic food-production market
Population growth
Stock market trends
2.1 challenges of global food cries
Social and political unrest
Limitations on emergency distributions 5-6
3. Shifting national reactions
Greater food insecurity and malnutrition
Impact of climate change

3.1 UNO World Food Program and Food Crises 6

4.

4.1 Riots against food scarcity 6

5.

5.1 Future prospect of Global food crises: 6

6.

7. 6.1 Food prices statistics according to World Bank 7

7.1 Looming Food Crises in Pakistan 8

8. Introduction

7.2 Food Crises in Pakistan: 8

9.

7.3 Recent Rise in Prices of Food Items 9

10.

7.4 Current situating according to Economy survey of10

11. Pakistan

7.4 World Food Program and Pakistan’s food crises 9-10

12.

7.5 High Food Prices causing suicide 10-11

13.

8.1 Flour, sugar, edible oil and other commodity crises at12
14 its peak

13
8.2 Sugar crises
15. 4

8.3 Hoarding and smuggling- another major reason behind

14-15
 GLOBAL FOOD CRISES

1.1 Introduction:

According to the website of UN International task force on global food

crisis the price of food commodities has risen by 83 per cent over the last 36
months on international markets, and it is estimated that 854 million people
are in a state of food insecurity around the world. Nations Secretary General
Ban Ki-moon lead a concerted effort by 27 key UN agencies to tackle the
growing crisis caused by a worldwide sharp rise in basic foodstuff prices at a
conference in the Swiss capital Bern

According to the report, most of the people suffering from chronic hunger are
in Asia and the Pacific, where the number has reached 642 million people.
Sub-Saharan Africa has the second highest number of chronically hungry
people at 265 million, while Latin America, the Caribbean, the Near East and
North Africa have about 95 million people.
FAO said unless the international community started investing in agriculture
and food distribution, it would not be able to meet its UN Millennium
Development Goal of cutting the number of hungry people in half by 2015.

5
The WFP-FAO report called for increased investment in agriculture to help poor
farmers increase productivity and to be more resilient in crisis. The FAO
representative said leaders at the Group of Eight summit in July had set up the
goal to raise $20 billion to help farmers in poor countries increase production.

Map of world poverty by country, showing percentage of population living on less

than 1 dollar per day.

The percentage of the world's population living on less than $1 per day has
halved in twenty years. However, most of this improvement has occurred in
East and South Asia. The graph shows the 1981-2001 periods.

1.2 Some Of Major Reason Behind Food Cries:

The world food situation is rapidly changing as a result of

numerous factors. The most critical is the unprecedented increase in the price
of food. Together with diminishing food stocks and difficulties accessing food
by some communities, these conditions have led to a complex set of
challenges – humanitarian, socio-economic, developmental, political and
security-related.

Most urgent are the immediate hunger needs of millions of people. Over the
longer term, agriculture and trade practices must be restructured to meet
essential needs. There are several trends driving the current price boom and
strain on food stocks:

i. Increase in oil prices: Record-high oil prices have had two effects.
First, food crops are increasingly diverted for use as fuel. Second, high oil
and energy prices impact the entire value chain of food production – both
directly (cultivation, processing, refrigeration, shipping, distribution) and
indirectly (manufacture of fertilizers, pesticides etc).
ii. Demand for higher-input food: Rapid economic growth in
populous countries such as China and India is leading to increased demand
for meat and dairy products and driving up overall grain prices. One kilo of
beef requires about 7 kilos of cereals to feed.

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 iii. Decreasing levels of food stocks: In 2006-2007, a year’s worth
of wheat was lost to drought in Australia, and cold weather caused grain
crops to fail in Europe and the United States. Export restrictions by major
grain producers – imposed in order to secure domestic supply – have
further exacerbated rising prices.
iv. Climate change and environmental degradation: Extreme
weather events – drought, floods, and cold snaps – are affecting local
harvests and food availability. Global demand for water has tripled in the
last 50 years, and high rates of soil loss to erosion and desertification could
diminish the capacity to produce enough food.
v. Growing use of bio-fuels: Demand for fuels made from crops such
as sugarcane, wheat, and maize is pushing up commodity prices. Food
supply decreases as crops are shifted to the fuel market. Currently 20 per
cent of the United States corn crop goes into ethanol production – a figure
likely to rise to 32 per cent by 2016.
vi. Inelastic food-production market: A short-term issue is that
food supply is quite inelastic – in other words, supply reacts slowly to
increases in demand. IFPRI estimates that aggregate agricultural supply
increases by about 1-2 per cent for each 10 per cent increase in price - and
by even less when processes are so volatile.

Table: Global Food Crisis - Confronting Challenges

vii. Population growth: It is estimated that by 2050 there will be

billions more mouths to feed, exacerbating the demand for food (from 6.1
billion people in 2000 to an estimated 9.2 billion in 2050).
viii. Stock market trends: A shift in investment strategy toward
commodity future markets in the past year has also affected food prices.
When futures prices bumped up, the low dollar made many firms channel
their funds into agricultural markets, further raising prices (as expected).

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 As firms now face the mortgage crunch, there is uncertainty if will they
retrench, sell out of food futures, and let prices ease.

Although the analysis of the consequences of global food trends is developing

on almost a daily basis, the humanitarian and development communities are
defining immediate actions and messages to respond to the challenges - and
opportunities - that are already evident.

2.1 CHALLENGES OF GLOBLA FOOD CRIES

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 i. Social and political unrest: Riots and protests
over rising food prices demonstrate the potential
impact on security and stability. In countries
emerging from violent conflict, political and
economic progress is easily derailed. Urgent efforts
are needed to monitor food markets and prices,
factor food-related unrest into conflict early-warning
systems, integrate food security into peace-building
and prepare contingency plans.

ii. Limitations on emergency distributions:

Additional funds to support food and transport costs Burundi: Food worries for thousands
rendered homeless by heavy rains
will be needed by numerous organizations and that have destroyed at least 1,000
agencies just to maintain current levels of assistance houses in Mugina commune,
If trends continue as predicted, extra needs for humanitarian operations
could easily run into billions of dollars. The donor
community must therefore be prepared both to
provide significant extra resources and also, together
with the food aid and assistance community, to
establish clear priorities and plans.

iii. Shifting national reactions: Most food-

importing countries have reduced or eliminated
import tariffs and taxes; many food-exporting
countries, at the same time, have imposed export tariffs and quotas, or
have banned exports altogether. A few countries are making purchases to
replenish stockpiles and strategic reserves, while others are increasing
subsidy levels or examining the possibility of rationing. The potential
impacts of such measures need to be assessed in order to avoid long-term
According to a WFP representative
consequences. in Yemen, 40 percent of the
population is malnourished

iv. Greater food insecurity and malnutrition: There are currently

no global estimates of how many people is becoming food insecure.
Multiple signs of distress in the poorest households – selling assets,
eating less and eating less well – provide anecdotal evidence of the
impact of higher food prices. Needs assessments and vulnerability
analyses require urgent improvements, and effective safety nets
established (in the form of food, vouchers or cash transfers, school
feeding, employment programs, etc.) to protect vulnerable populations.
v. Impact of climate change: Seventy per cent of the world’s poorest
people live in rural areas and rely largely on agriculture for their
livelihoods. Drought and climate variations will affect agricultural yields,
particularly in sub-Saharan Africa, where 93 per cent of farmland is rain-
fed. Environmental degradation, compounded by the effects of climate
change, will further impair agricultural production.

The rise in global temperatures caused by pollution is also beginning to

disrupt food production in many countries. According to the UN, an area of
fertile soil the size of Ukraine is lost every year because of drought,

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deforestation and climate instability. Last year Australia experienced its worst
drought for over a century, and saw its wheat crop shrink by 60%. China’s
grain harvest has also fallen by 10% over the past seven years.

The UN Intergovernmental Panel on Climate Change has predicted that, over

the next 100 years, a one-metre rise in sea levels would flood almost a third of
the world’s crop-growing land.

A perfect storm of food scarcity, global warming, rocketing oil prices and the
world population explosion is plunging humanity into the biggest crisis of the
21st century by pushing up food prices and spreading hunger and poverty
from rural areas into cities.

3.1UNO World Food Program and Food Crises:

More than 73 million people in 78 countries that depend on

food handouts from the United Nations World Food Program (WFP) are facing
reduced rations this year. The increasing scarcity of food is the biggest crisis
looming for the world, according to WFP officials. At the same time, the UN
Food and Agriculture Organization have warned that rising prices have
triggered a food crisis in 36 countries.

The WFP’s Greg Barrow said

“Food scarcity means a big increase in the number of people going hungry
Without doubt, we are passing through a difficult period for the world’s hungry
poor.. The WFP estimates it needs an additional $500 million to keep feeding
the 73 million people in Africa, Asia and central America who require its help.
We need extra money by the middle of 2008 so we don’t have to reduce
rations,”

4.1 Riots against food scarcity:

High prices have already prompted a string of food protests around

the world, with tortilla riots in Mexico, disputes over food rationing in West
Bengal and protests over grain prices in Senegal, Mauritania and other parts of
Africa. In Yemen, children have marched to highlight their hunger, while in
London last week hundreds of pig farmers protested outside Downing Street.
In India last year, more than 25,000 farmers took their own lives, driven to
despair by grain shortages and farming debts

5.1 Future prospect of Global food crises:

A new crisis is emerging, a global food catastrophe that will reach further and
be more crippling than anything the world has ever seen. The credit crunch
and the reverberations of soaring oil prices around the world will pale in
comparison to what is about to transpire.

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Donald Coxe, global portfolio strategist at BMO Financial Group said at the
Empire Club’s 14th annual investment outlook in Toronto on 17 th may 2008
said

“The greatest challenge to the world is not US$125 oil; it’s getting enough
food so that the new middle class can eat the way our middle class does, and
that means we’ve got to expand food output dramatically,”

Mr. Coxe said the sharp rise in raw food prices in the past year will intensify in
the next few years amid increased demand for meat and dairy products from
the growing middle classes of countries such as China and India.

6.1 Food prices statistics according to World Bank:

The World Bank points out that global food prices have
risen by 75% since 2000, while wheat prices have increased by 200%. The
costs of other staples such as rice and soya bean have also hit record highs,
while corn is at its most expensive in 12 years. The increasing cost of grains is
also pushing up the price of meat, poultry, eggs and dairy products. And there
is every likelihood prices will continue their relentless rise, according to expert
predictions by the UN and developed countries. The World Bank predicts
global demand for food will double by 2030. This is partly because the world’s
population is expected to grow by three billion by 2050, but that is only one of
many interlocking causes. Tackling hunger has become a “forgotten” UN
millennium development goal, says the bank’s president, Robert Zoellick

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 Looming Food Crises in Pakistan

7.1 Introduction:

Pakistan, with a population of 164 million, is the most populated country in the
Eastern Mediterranean Region (EMR) of World Health Organization and
accounts for 30% of the regional population and about 24% of the population
lives below poverty line with 17% earning less than a dollar a day.

Pakistan is an agriculture based country with most of its population living in

rural areas practicing agriculture, yet it is one
of the many developing nations facing a
serious food crisis that is speculated to cause
wide scale food riots if the problems are not
taken care of at the earliest

According to Economic survey of

Pakistan 2008 agricultural sector has only
19% in GDP and it is constantly decreasing. In
19560’s agricultural sector contribution in
GDP was around 53%. In last decade or so
policies of government had not supported the
farmer in any way, from purchase of seed to market the crop and timely
payments to farmer. He was poor and he is getting poor. More ever
government is also planning to impose tax on agricultural sector (As pre IMF

12
package) and these government anti agricultural polices will definitely harm
the agricultural sector. This poor performance in agriculture sector is main
responsible behind looming food crises in Pakistan.

7.2 Food Crises in Pakistan:

Like rest of the world Pakistan is also facing food crisis, and
it has two sides; one is unavailability of edibles and second is soaring prices
due to gap in demand and supply of edibles. The world’s financial experts
have placed Pakistan on a list of 36 countries that face a serious food crisis,
warning that if the situation worsens people may raid storage facilities for
food. United Nations World Food Program (WFP)
has predicted that Pakistan is in the grave danger
of becoming an acutely food insecure country in
the very near future and according to other
sources it is expected that food riots would break
in the streets

The increase in food prices started in January,

2002 but steep rise took place during January,
2007 to June, 2008. The inflation turned out to be
23.34 per cent during the month of December
2008 whereas it was 8.79 per cent in the month of December 2007 last year.
The main contributor to this inflation has been the food inflation which stood
at 27.92 per cent

Our elite classes are just enjoying their life with peace. Look at these
politicians, top army brass, bureaucrats and industrialists. How fat and pink
cheeks they are. They are demanding more and more KFCs, McDonalds and
Metros. Their over-weight giants like children are devouring everything in
sight while wasting equal amount of food. They are the ones who don’t know
from where the flour comes and how it is bought and is t there any lack of it.
They don’t know about load-shedding and they don’t know about suicides.

7.3 Recent Rise in Prices of Food Items:

The skyrocketing prices are jeopardizing the purchasing power

of financially crumbling consumers. According to official statistics

 The price of food items such as vegetables, chicken and meat has
increased by more than 20 percent just in one month, which has further
made the half of the population of country food insecure.
 It is stated that 50 percent of the population is talking less calories
recognized for average human need, 20 percent out of those 50 percent
population, bottom line people were the greater suffers and were miserably
struggling to meet their basic food needs even by compromising on their
non-food expenses.

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 Table: Commodities Price Hike in Pakistan (June 06 – March 08)

7.4 Current situating according to Economy survey of

Pakistan:

According to economy survey of Pakistan Inflation rate

as measured by the change in Consumer Price Index (CPI), averaged at 22.3
percent during the first ten months (July-April) 2008-09 as against 10.3
percent in the same period last year. Food and non-food inflation have been
estimated at 26.6 percent and 19.0 percent against 15.0 percent and 6.8
percent in the same period of last year. This year inflation accelerated at rapid
pace mainly because of food prices which increased as result of high prices of
widely consumable items such wheat, wheat flour, sugar and meat etc, owing
to their supply shortage. Other major factors that effected domestic prices
include phasing out of subsidies on petroleum products, upward revision of
support prices of wheat by above 50 percent thus pushing up the retail prices
of wheat and wheat flour across the country.

Food prices have a significant bearing on poverty incidence. A

review of price trends of essential items during 2007-08 indicates that the
major portion of food inflation during this period stemmed from hike in the
prices consumed by the poor household such as wheat, flour, rice, edible oil,
vegetables and pulses. Since April 2007, the economy has witnessed over 200
percent increase in the price of palm oil; and an increase of 150 percent in
wheat prices, while over 100 percent increase in the price of oil in the
international market.

The current crisis would further worsen if the government is failed to come up
with an informed policy and decisions, the majority of the people particularly
the poor would be the greater sufferer, however their attention is more
towards the political issues and people are suffering due to energy and food
shortage.

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7.4 World Food Program and Pakistan’s food crises:

Facts given by WFP director Wolfgang Berbinger to media were

alarming and
According to him

 Currently 60 million food insecure people are present in the Pakistan

 The increase of 35 per cent in wheat prices and more for some other
food items, did not match the increase in wage rate that was 18 per cent as
compared to last year.

 According to the WFP statistics, 38 per cent of Pakistanis are food

insecure, and that basically means that they are not able to afford poverty
line intake of 2,350 kcal per day.

 WFP also reveal that approximately 12.5 of wheat is wasted on way from
field to the consumer whereas vegetable loss is 30 per cent..

 The food insecurity is in every district of Pakistan. In the most populated

province of Pakistan, in Punjab, out of 34 districts only 9 are almost food
secure. In NWFP, out of 16 districts, only five are food secure. In Sindh, out
of 15 districts, only 9 are food secure. In Balochistan, out of 25 districts
only 4 are food secure

These statistics are alarming and demand immediate attention from the high-
ups. The restoration of judiciary and the matter of war on terror are extremely
important, but prolonged hunger can turn any nation into angry animals
frantically searching for food to appease their natural instinct.

7.5 High Food Prices causing suicide:

Due to high inflation rate middle class of Pakistan

are in serious problem. Without any exaggeration, millions of Pakistanis are at
the verge of suicide. They don’t have jobs and work, and they see no ray of
hope anywhere. They are being exploited and they
are being rummaged .The problem is that they
simply don’t have enough money to buy flour and
food. They go to shops, utility stores and stores and
come out empty handed due to their inability to
buy anything. Prices are sky high and the lower and
middle class families are unable to feed themselves
even one time a day. They cannot beg, so they are
committing suicide.

According to the media reports, a 37-year-old man doused himself in kerosene

oil and set himself on fire in Topi bazaar on Monday in protest against
skyrocketing prices and unemployment. Mohammad Shafiq, a farmer from
Charoona, 56 kilometers south-east of Swabi, in the Gadoon Amazai area, had

15
gone to the bazaar to buy foodstuff for his family. But he was unable to buy
anything because of the high prices

On 11th April this year, a Bushra of Lahore reached to the railway track with
her two children, Zubair, 5, and Saima, 3. She put a hand on the eyes of her
children and leaped in front of the train. Her husband was a welder and was
jobless and they were unable to feed their children for many days.

On 11th April this year, of Lahore commit suicide along with her children and
these are the times when Zareena of Multan puts her children for sale.
Bushra’s husband earned hardly Rs. 3000 monthly and was unable to feed his
family and that is the same story of Zareena’s husband who just earns the
same amount every month. Both ladies went to extreme because their
husbands lost their work due to load-shedding and their children were unable
to understand the unavailability of food. Zareena took her two children:
daughter Arooj Fatima (8) and son Rehan
(10) to a nearby Qaddaffi Chowk, and sat
them on the footpath and hung “For Sale”
in their necks and started weeping.
Passerby people got shocked, they probed
into their pockets to help the lady a little,
but then they recalled their own hungry
children. Police came afterwards, took the
family to police station and threatened the
lady to not to do it again, as it gave bad
name to the authorities.

From wheat to rice and from milk to vegetales everything is scarce and
whatever is available in the market is of low quality and of extremely high and
unaffordable price. The common people of Pakistan which comprises of 99% of
the population are compelled to cut down the meals and now most of the
households are living on just one meal a day and that one meal is not lavish
by any means

A nation wide austerity program should be initiated starting from the top, and
food budgets of Army, Police and other security officials must be made simple
and short while there must be a strangled restriction on meals provided in the
government functions in the country.

8.1 Flour, sugar, edible oil and other commodity

crises at its peak
It wouldn’t be wrong if we remember 2006-09 as a Years of
Crises for Pakistan. On most occasions, authorities could have controlled
situation by strict administration and better management. The inability to act
and indifferent among the top government officials on these serious issues is
astonishing.

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The slogan of ruling political and
democratically elected party is ‘Roti, Kapra
aur Makan’ but now days people find hard to
buy flour how they can think of clothes and
house. The flour, sugar, edible oil and other
commodity crisis has intensified as people
facing hardships to buy the essential food
item on increased price. In Karachi wheat
flour, ghee and edible oil have not been
available at most of the utility stores. The
flour if available at a utility store being sold at Rs.155 ten kilogram instead of
the official rate of Rs. 130/-

Long queues of the people can be seen outside the utility

stores in the city for flour, ghee and edible oil. The 10-kilogram bag of wheat
flour being sold at 155 rupees instead of the official rate of Rs. 130/- at utility
stores in the city. The other shops are selling the 10-KG bag of flour at Rs 280.
The situation in other areas is much worst. The flour price in Zhob, Mastung,
Loralai and other parts of Balochistan has hiked, while the food item is
unavailable at utility stores in Quetta and other cities of the province. The
chief minister of Balochistan has issued directives to the concerned officials
for action against hoarders and called report on the issue within two days.
According to the provincial secretary food Azam Baloch, 20-KG bag of flour
being sold at Rs. 278, at 130 Fear Price Shops in Quetta and at various sale
points arranged by the flour mills

In Peshawar wheat flour is available only at few shops

and being sold at Rs. 500 per 20-KG bag. According to the shopkeepers the
flour supplies from the mills have decreased. The crowds of people can be
witnessed at the utility stores but a spokesman of Utility Stores Corporation
has said the stores could not meet the rising demand of the flour. According to
the NWFP Flour Mills Association the crisis was the result of dwindling supplies
of wheat and flour from Punjab. We are also hearing the news of upcoming
Rice Crisis which is expected very soon..

8.2 Sugar crises:

Pakistan is the 5th largest No. of Mills 81

country in the world in
terms of area under sugar
cane cultivation, 11th by
production and 60th in;
yield. Sugarcane is the
primary raw material for
the production of sugar.
Since independence, the
area under cultivation has
Crushing Capacity 6.1 Milluion tones
Contribution to Economy 3.0 – 4.0 Million Tonnes
• Share in GDP 1.9%
• Employment 1.5 million (directly &
indirectly)
• Total Investment
PKR 100 Billion (Approx)
Average Yield Per Hector 46.8 Tonnes
Total Cane Production 45.0 – 55.0 Million Tonnes
Cane Available 30-43 Million Tonnes
Average recovery of sugar 9.1 (vs. world avg. 10.6%)
17
Per Capita Consumption 25.8 kgs.
Contribution to exchequer Rs. 12.16 Billion
increased more rapidly than any other major crop. It is one of the major crops
in Pakistan cultivated over an area of around one million hectares. The sugar
industry in Pakistan is the 2nd largest agro based industry comprising 81
sugar mills with annual crushing capacity of over 6.1 million tones.

Pakistanis like their tea sweet and often, and without sugar their daily routine
just isn't the same. But prices have soared as sugar mills allegedly hoard
supplies, leading to chaotic lines at distribution points and another headache
for the government

Like many other crises hitting the country, the sugar crisis too came
unwarned and struck the public head-on. The average Pakistani rarely got any
clue of how a crisis of sugar flashed on them while everything seemed ‘okay’
till the last minute. Perhaps, it’s another reminder of the need for a proper
monitoring system in the agro-industrial sector.

For a country wrapped up in an existential battle

against extremists, the sugar crisis has attained unusual prominence. The
issue dominates front pages and leads off newscasts. The timing factors
heavily into the play; the shortages hit during the holy month of Ramadan,
which ended over the weekend, when people savor a sweet cup of tea after
their daily fast. It is also a time when Pakistanis, most of whom are poor, save
whatever money they can to buy gifts
and entertain, making special desserts,
during Eid al-Fitr, the holiday that marks
the end of Ramadan. Currently the
country is estimated to have only 4.5
million tons of sugar stock left, which
would meet demand for just two months

8.3 Hoarding and smuggling-

another major reason behind
crises:

Mill owners blame the government. Last year, they said, they
knew that farmers would be producing a smaller crop this year and asked the
government to import 700,000 tons of raw sugar to keep prices stable. The
government balked, said Iskander Khan, chairman of the Pakistan Sugar Mills
Assn. He also denied that hording is being done to increase sugar prices, he
said in his press conference "Hoarding means something hidden, kept away,"
he said. "But this isn't the case with the
sugar industry. We declared all of our
stocks."

The Mill owners demand the

government should take steps to curb

18
sugar smuggling to Afghanistan in disguise of Gur export if the government
wants to control the prices of sugar in the country, mills representatives said
this in a meeting of Sugar Advisory Board held on Tuesday. The price of sugar
in Afghanistan is from Rs 75-80 per kg. The price of sugar in Pakistan is Rs 45-
46 per kg. The price difference gives smugglers a chance

Experts and government officials disagree and say hoarding has aggravated
the shortfall. In Punjab province, the heart of Pakistan's sugar industry, police
have raided mills and seized thousands of tons of sugar that the government
said was being held back to artificially raise prices. Police in the southern
Punjab city of Rahim Yar Khan said they recently arrested 13 people on
charges of hoarding. Checkpoints have been set up on the city's outskirts to
prevent the mills from moving sugar to different locations.

But experts say police do not have the manpower to deploy officers at all of
the nation's mills. And, even if police ranks were beefed up, officials probably
wouldn't dispatch officers to mills with ties to the government or major
political parties.

It started with the Pakistan Sugar Mills Association

(PSMA) arguing that they should be allowed to sell sugar at international
prices, which just happened to be hovering around Rs60 per kilo. The PSMA is
fooling no one. It leans on the government when it is in its interest to do so
(e.g. to delay importing sugar until prices have climbed sufficiently high or to
stop imports entirely when international prices are lower than domestic rates),
and happily accepts subsidized inputs such as water and fertilizer. It should
also be prepared to share a percentage of its profits with its consumers when
market forces are acting against them. It is the state’s responsibility to ensure
that. That the Supreme Court has to intervene to make this happen is a matter
of shame for the government

Such food crisis shortages will escalate further because we have a useless
government, which does not know what to do. No trade body takes action
against the black marketers and hoarders and we see total anarchy

8.7 Mills owners- many of them are our politician:

In Pakistan, apart from capitalism and socialism, all

kinds of ‘isms’ exist. The same people or families produce goods, make laws
about the production of those goods and then implement them. Therefore, the
system is not structured for a free market economy. The exploitative classes
have started playing their games again and very openly.

In Pakistan many of the mills are owned by some of Pakistan's most powerful
politicians. Some of the country's 80 mills are owned by influential lawmakers
affiliated both to the government and the opposition, injecting politics into
sugar as into almost everything else in Pakistan. Out of the 85 sugar mills we
have, 33 are either owned directly by politicians or indirectly through

19
relatives. There's every evidence that the sugar cartel has enormous power,
and has been wielding it without the slightest fear of administrative action.
According to Mr. Manzoor Wattoo

“The Brother Sugar Mills owned by PML-N Quaid Nawaz Sharif and his family,
has a stock of 10,000 tonnes, while the third mills is the Kashmir Sugar Mills
with a stock of 5,000 tonnes,” .

The aid & financial help, which comes in this country for these people, goes in
the pocket of all these government culprits. Government is blind they can only
see the danger (which all ministers proclaims) for his ministers and investing
millions dollars to import bullet proof vehicles for them, let them die , save
that money and invest on the daily commodities of these poor people. Why
the Government don't hang such ATTA, CHEENE hoarders, which are sitting in
the assemblies. The lives of poor people are more precious than the culprits
sitting in the assemblies

8.5 Some of sugar Mills and their owners:

As I mentioned earlier that most of sugar mills are own by out leading
politician and details of these mill and there owners name are given below

 The military owns Fauji sugar mills; more than 50% of the sugar in
Pakistan is produced in sugar mills owned by the most powerful politicians
of all major parties and their families.

 Multiple sources indicate that the mills owned by President Asif Ali
Zardari’s family and the ruling PPP leaders include Ansari Sugar Mills, Mirza
Sugar Mills, Pangrio Sugar Mills, Sakrand Sugar Mills and Kiran Sugar Mills.

 Ashraf Sugar mills are owned by PPP leader and incumbent ZTBL
President Ch Zaka Ashraf.

 The media reports also indicate Kamalia Sugar Mills and Layyah Sugar
Mills are owned by PML-N leaders.

 Former minister Abbas Sarfaraz is the owner of five out of six sugar mills
in the NWFP.

 Nasrullah Khan Dareshak owns Indus Sugar Mills while Jahangir Khan
Tareen has two sugar mills; JDW Sugar Mills and United Sugar Mills.

 PML-Q leader Anwar Cheema owns National Sugar Mills while Chaudhrys
family is or was the owner of Pahrianwali Sugar Mills as it is being heard
that they have sold the said mills.

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  Senator Haroon Akhtar Khan owns Tandianwala Sugar Mills while Pattoki
Sugar Mills is owned by Mian Mohammad Azhar, former Governor Punjab.

 PML-F leader Makhdoom Ahmad Mehmood owns Jamaldin Wali Sugar

Mills.

 Chaudhry Muneer owns two mills in Rahimyar Khan District and Ch

Pervaiz Elahi and former Minister of State for Foreign Affairs, Khusro
Bakhtiar have shares in these mills.

Just think who is responsible for this crisis; it has been created through a well
planned. Apparently, government was showing to control the crisis, but failed
completely and hopeful that government will accept higher price as per
planned. Same had happened with wheat in past. Our opposition and our
favorite political parties are doing nothing, not raising any voice for their
vulnerable people in this crisis. No doubt, they have their own interest either
directly or indirectly. Our most MNAs and MPAs have their own sugar mills or
have some sort of interest on other sugar mills (if they are not owner of any);
they are all land lords and have no sympathy for their people. I believe sugar
can be easily sold Rs.35 per kilo Ex-Mill, and if sold at Rs.40 in the Market yet
they can earn Rs.5 per Kg which is the standard profit

8.6 Supreme Court Decision On Sugar Prices:

The Supreme Court, however, held its own, arguing that market or no market,
it was the constitutional duty of the government to make essential
commodities available at affordable prices to the masses. In order to set a
ceiling for the sugar price, the court asked the Competition Commission of
Pakistan to calculate the cost of production for sugar in the country.

Iftikhar Muhammad Chaudhry Chief Justice of Pakistan Justice said there are
two sides of the sugar prices—on one side, there are 170 million people of
Pakistan and on the other, all the governments are united. Wondering how the
government filed an appeal against high court’s verdict, he directed Attorney
General and Advocate Generals to bring their respective rules of business,
which have justified it.

Recently Supreme court of Pakistan has taken notice and has advised to sell
the sugar at Rs.40 per Kg. During the hearing of a case regarding sugar prices,
Chief Justice Iftikhar Chaudhary said they should have implemented on the
verdict of High Court, instead of challenging the high court’s verdict in the
higher court. He faced the government officials and said, ‘You came here for
the perpetuation of this cartel and that sugar be sold at Rs60/kg.’

On this occasion, Acting President Javed Kiani was summoned a the court for
submitting a fake document and the CJ directed Chairman Sugar Mills
Association Iskandar Khan to present to the court the original meeting minutes

21
and the record of the meeting. He also warned if the required documents were
not submitted, the consequences would have to be suffered.

8.7 Arguments by Sugar Mills owners and PSMA

The Mill owners demand the government should take steps to curb sugar
smuggling to Afghanistan in disguise of Gur export if the government wants to
control the prices of sugar in the country, mills representatives said this in a
meeting of Sugar Advisory Board held on Tuesday. The price of sugar in
Afghanistan is from Rs 75-80 per kg. The price of sugar in Pakistan is Rs 45-46
per kg. The price difference gives smugglers a chance

The farmers have reportedly blamed the mill owners of not providing
adequate payments. Records state that the payments to the growers were
delayed for more than eight to ten months. This discouraged farmers from
sowing sugar cane and opt for growing wheat instead to avail attractive
incentives. Now comes time for manipulations by the mill owners. Not only are
the mill owners accused of delaying payments causing a decrease in supply of
about 15 to 20 percent as compared to last year, they have also hoarded large
amounts of supplies. These supplies have been hoarded (conveniently) in
order to create an artificial shortage in the market. The shortage then allows
them to release stock as they wish with prices that give them maximum profit.
A man made crisis, which in fact is a monopoly to earn maximum profit during
peak consumption. Withholding supplies and increasing prices for maximum
profit has become a popular tactic. Previously during the wheat crisis reports
of withholding stocks kept surfacing

According to a press release by Pakistan Sugar Mills Association, dated July 23,
2009; Sugar mills have stocks of 1.74 million tonnes white sugar, which are
sufficient to cater to the domestic requirement as of June 30, 2009 until the
start of next crushing season in November, said Pakistan Sugar Mills
Association, Punjab Zone Chairman, Javed Kayani. He said keeping in view of
the sugar stocks and consumption pattern of the country we can assure that
there is hardly any possibility of shortage of the commodity in the current
calendar year. Replying to a question, Javed Kayani said cancellation of sugar
import tenders by Trading Corporation of Pakistan (TCP) was a step taken in
the right direction. As a result of this decision, government has saved huge
amount of foreign exchange, as price of the commodity has increased
manifold in the international market. He said last year well before start of
crushing season 2008-2009, PSMA had proposed to the government that raw
sugar may be allowed to be imported to maintain strategic buffer stock and to
keep the price of sugarcane and sugar under control.

So On 23rd of July 2009, the PSMA Zonal Chairman could not expect a
shortage, they also canceled the import and right after a few days there is a
shortage. How can we expect that?

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9.1 Khori Garden Karachi Incident

During
month of ramazan in a desperate bid
to get their hands on free ration,
eighteen women, many of them
teenagers, died in a stampede near
Jodia Bazaar. According to press
release a large number of women had
gathered outside a building, where
ration was to be distributed free of
cost by a private trader, Haji
Chaudhry Iftikhar, in the Khori Garden
area. Jodia Bazaar, the city’s biggest
wholesale market, saw heart-rending
scenes of poor families retrieving bodies instead of sacks.

Reports suggest there were close to 700 women in the cramped building at
the time of the incident. According to eyewitnesses, the jostling among the
crowd of women started when some of them, desperate to get free ration,
attempted to charge into the building from the exit point, leading to a
stampede on the narrow staircase of the building. Caught under the
stampede, many women suffocated to death in hot and humid conditions in
the narrow staircase, compounded by the lack of electricity in the building.

Why this incident happened in Khori Garden. To plead the side of Government
many ministers as usual gave their statements and put blame either on the
pious man, who distributed this ATTA or on the victimized women & innocent
girls, who died in this incident. Neither the President nor his team accepted
their mismanagement on this issue.

If the ZAKAT, which is by force debited from the individual accounts and goes
directly in the pockets of all ministers for their personal use, which they use on
their favorable journalists and
their personal workers. In
Pakistan Zakat funds are always
misappropriated by every
government and their all
ministers & assembly members. If the
Zakat should be properly
distributed at the doors of such
victims, then this incident should not
have happened.

9.2 Over-come Food Crises:

The situation of food shortage in Pakistan calls for a multi-sectoral strategy to
address this serious issue. it is also important to note that Ministry of Finance

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alone cannot provide a solution to the worsening problem. Pakistan needs
cohesive strategy including the focus on revising the import parity; pricing
formula and revised structure of taxes levied on petroleum products, further
demand and supply management in energy sector, agriculture, and
communication. it is also suggested that the Planning Commission of Pakistan
should take lead in formulating proposals in this regard. The culture of
accountability of the political leadership which was responsible for current
energy deficit and the resultant price hikes; is also needed.

It is believed that Agriculture scientists will have to introduce modern

technologies for high yield at low price to enable the government to cope with
the persistent crisis of food shortage. Even the UN Secretary general has said
that agriculture is need to be improved for coup up current food crisis all over
the world. “After a quarter century of relative neglect, agriculture is back on
the international agenda, sadly with a vengeance,” Mr. Ban said in an address
at the start of the three-day high-level segment of the annual meeting of the
Commission for Sustainable Development (CSD). “The onset of the current
food crisis has highlighted the fragility of our success in feeding the world’s
growing population with the technologies of the first green revolution and
subsequent agricultural improvements,”

According to Daily Times an “Economic analyst, Khalid Mahmood underlined

the need for increasing agricultural yields though usage of hybrid seeds,
better water management, increased role of government for ensuring
effective safety and support mechanisms such as making a reservoir of food
grain, and also public-private partnerships to overcome the crisis”.

Another important point in this regard is atta smuggling to Afghanistan though

NWFP atta dealers saythat the atta was exported to Afghanistan under the
trade policy and a regulatory tax of Rs500 is charged on every bag of 100-kg
exported to Afghanistan. It is also said that Currently, there is no smuggling on
Afghanistan level and whatever is transported to Afghanistan is legal, and is
on accordance with an agreement signed between Pakistan and Afghanistan,
that is an open lie. Interestingly President George W. Bush has urged Afghan
Government. to gain self food sufficiency to reduce food pressure on Pakistan
in SHARM El-SHEIKH Egypt.

9.3 Major Reason Behind Food Crises:

There are many problems behind these
crises. The problem can be attributed to a lot of factors that need to be looked
into. Some of major problem are discussed as

 Government policies towards the agricultural sector are a major

problem. The farmers in the country are not given any incentives to grow
what is needed.
 There is no funding for research and development.
 The majority of farmers are uneducated and there is no system of
educating them of the latest developments in the agricultural field.

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  Most farmers are still using centuries old methods of farming which yield
them very little crop as compared to developed countries.

9.4 How to overcome these problems:

 The government needs to step up and do what it is supposed to do.

Train farmers to the latest methods of agriculture, provide them with
incentives and expertise and this will help in reducing the shortage of food.
 The government also needs to check smuggling of essential food to
neighboring countries.
 When 10-20% of a whole crop is smuggled out of the country of course
there will be shortage of food for the people of the country, recently a
United Nations vehicle was caught smuggling wheat out of the country.
Another major policy flaw is exporting wheat when the crop is harvested
and then when there is a shortage importing it at outrageous rates, making
in unaffordable for the population.

References:

 Pakistan Spectator. “The year of global food crisis” By Kate Smith and
Rob Edwards
http://www.pakspectator.com/escalating-food-crisi

 Pakistan Spectator: ‘’High Prices: Another Suicide’’ By Ghazala Khan,

May 7th, 2008

25
 http://www.pakspectator.com/high-prices-another-suicide/trackback/

 Food Crisis in Pakistan By Dr. Hassan Isfahani Apr 21st, 2008

 http://islandbreath.blogspot.com/2009/07/agriculture-food-crisis

 http://www.spiegel.de/fotostrecke/fotostrecke-30613-2.html

 “Food crisis in Pakistan” Sun, May 18, 2008

http://www.pak-times.com/2008/05/18/food-crisis-in-pakistan/

 Pakistan Spectator. “The year of global food crisis” By Kate Smith and
Rob Edwards
http://www.pakspectator.com/escalating-food-crisi

 Pakistan Spectator: ‘’High Prices: Another Suicide’’ By Ghazala Khan,

May 7th, 2008
http://www.pakspectator.com/high-prices-another-suicide/trackback/

 Food Crisis in Pakistan By Dr. Hassan Isfahani Apr 21st, 2008

 http://islandbreath.blogspot.com/2009/07/agriculture-food-crisis

 http://www.spiegel.de/fotostrecke/fotostrecke-30613-2.html

 “Food crisis in Pakistan” Sun, May 18, 2008

http://www.pak-times.com/2008/05/18/food-crisis-in-pakistan/

 Khori Garden Karachi Incident; Struggle for Food Ends in Tragedy-

September 17th,
2009 by Hina Safdar
http://www.chowrangi.com/khori-garden-karachi-incident-struggle-for-
food-

 http://www.thenews.com.pk/blog/blog_details.asp?id=283

 More Crises in Pakistan – Electricity, Flour, Sugar, Water, Sui Gas Crises -
What is the way out? Posted on January 3, 2008 By Moshin Ali
http://pakistaniat.com/2008/01/03/more-crises-in-pakistan-electricity-flour-
sugar-water-sui-gas-crises-what-is-the-way-out/

 Pakistan reels under a new crisis -- a sugar shortage

http://www.latimes.com/news/nationworld/world/la-fg-pakistan-sugar23-
2009sep23

 Sugar crisis in Pakistan, SC calls for explanation from government

www.apakistannews.com/wp-content/uploads/2009/10/Govt-to-
Restore-Ration-Depots-

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 CJ-Iftikhar-.

 Sugar Dealers versus Lahore High Court: Sugar Crisis Turns into Legal
Battle
http://www.instablogsimages.com- Sugar/Dealers versus/ Lahore- High

 Pressure groups blamed for sugar crisis By Khawar Ghumman

Saturday, 22 Aug, 2009

 http://www.scridb.com
Business Economics, BUS 202
Presented to Mr. Masood Haider Zaidi / Ms. Amna Niazi

 http://www.psmaonline.com/psma/prelease/prelease1.aspx?xyz=24
 http://www.thenews.com.pk/print1.asp?id=198643

 http://www.bloomberg.com/apps/news?
pid=20601091&sid=auoSufP3juuI
Pakistan Buys 25,000 Tons of Sugar at $676 from Al-Khaleej

 http://www.nation.com.pk/pakistan-news-newspaper-daily-english-

 http://www.psmaonline.com/psma/sugarnews/sugarnews.aspx
Hoarding of sugar: PSMA denies SBP allegation

 online/Regional/Islamabad/05-Oct-2009/Sugar-sale-continues-at-
Rs50-per-kg

 Allaunddin Masood, “Impact of sugar crisis, how the “game” was

played” Business and Finance Review Magzine, 24/8/2009

 Aslam Memon, "Sugar Industry in Pakistan", Pak Economics, Sep 23 -

29, 2002

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