47. Pakistan Economic Survey 2011-12 - Consultancy Services in ...

Pakistan Economic Survey 2011-12recently approved the report of the sub committeeon the control of price of essential commoditieswhich is primarily aimed at finding ways andmeans to control prices.with direct damages amounting to 1.3 percent ofGDP and indirect losses of 0.2 percent of GDP.The floods remained confined to Sindh andBalochistan, with almost 96 percent of the damageoccurred in Sindh. The flood in terms of theirFlood Impacteconomic impact, especially in Sindh was moreSevere monsoon rains have triggered floods indevastating and caused an estimated damage of RsSouthern Pakistan of unprecedented scale, both in311 billion (6.1 percent of provincial GDP) in theterms of volume and spatial coverage. Accordingprovince. The floods impacted the richer districtsto report of ADB, it is estimated thaton the left bank of Indus, the agricultural heartlandapproximately 9.6 million people have beenof the province. The damage just in agriculture isaffected in Sindh and Balochistan as a result of theestimated to be Rs. 151 billion. On the other hand,floods. The overall damage from 2011 floods isdamages in Balochistan in 2011, are Rs. 12 billion,estimated at Rs 324.5 billion (1.6 percent of GDP),(1.4 percent of provincial GDP).Table 7.15: 2011 Kharif Area Affected by FloodCrop AreaArea Damaged (000 Ha)Province Damaged(000‟ ha)Cotton Rice Sugarcane Maize Vegetables Fruit OtherBalochistan 21.42 1.29 14.30 - - 1.78 0.17 3.88Sindh 859.61 494.94 163.85 88.40 - 99.24 13.19 -Total 881.03 496.22 178.14 88.40 - 101.03 13.36 3.88The floods have had a large and direct impact onthe Kharif cropping season. It has been estimatedby the World Bank and Asian Development Bank,that about 10 percent (142,434 ha) of the affectedKharif crop area will not be available forcultivation in Rabi and 5 percent in the Kharif2012. The main Rabi crop in Pakistan is wheatwhich is grown on some 8.5 million ha. In Sindh95 percent of the land was allocated to wheat inRabi 2010. There is a high possibility that wheatplanting in Sindh may face substantial constraints,mainly due to fact that the flood waters have notfully receded. In Balochistan, water have recededexcept for some low lying areas and, provided thenecessary support system for land clearing andinput supplies are put in place for the plantingseason, wheat planting may not be substantiallyaffected. However, damage to watercourses andtube wells, which are a critical source ofsupplementary water, may affect yields. Anotherfactor that may contribute to decrease in the areaunder wheat will be the delayed start of sugarcanecrushing but a recovery in the gap may be filled bythe early clearing of the damaged cotton areas.SUPARCO estimates 0.5 million tons loss ofwheat production in Sindh due to non availabilityof land. These damages of crops may affect thesupply position and as a result prices may rise. Theincrease in wheat procurement prices from Rs. 950per maund to Rs. 1,050 per maund may add toprice increase.Future OutlookThe government is focusing on restricting inflationto 12 percent during the current fiscal year 2011-12. The current trend of inflation reported duringthe first 10 months Jul-Apr 2011-12 suggests thatinflation has been stabilized on account ofpursuing tight monetary policy and declining trendin global commodity prices. Inflation is likely tofurther decelerate gradually over the next fewmonths, as better crops production and bettermanagement of supply chain may bring pricestability in the country. The decline in inflationmay continue further by falling global commodityprices and steps towards fiscal consolidation tocontain inflation. However, long term solutions lieincrease in agricultural investment; strong marketintegration; and, regional cooperation to securefood supplies for the country’s growingpopulation.110