Cultivating palm oil plants
19/01/2024 (Business Recorder) - EDITORIAL: It doesn’t take more than a simple understanding of basic mathematics to see the good sense in the argument of leading edible oil importer and CEO of the Pakistan Edible Oil Conference (PEOC) Rasheed Janmohammed that efforts should be made to enhance cultivation of edible oil plants inside the country.
Pakistan is now the third largest international edible oil importer, after all – after China and India – and imports have grown to 4.5 million tons against local production of 0.75 million tons; hence the pressing need to consider a level of self-sufficiency. Especially since Sindh’s coastal areas provide just the kind of environment that edible oil cultivation requires.
Yet it’s not as if this route has never been considered before. We did try it, in the 1990s, but failed. And instead of investigating the reasons for the failure, the initiative was typically dumped and not looked back on since. PEOC is a giant event, now in its sixth edition, which aims to promote the edible oil business and increase bilateral trading opportunities with other countries. It holds government departments that supervised the cultivation drive of the 1990s responsible for its collapse and suggests that the private sector be given the lead this time.
That makes sense. The government should have realised by now that its subsidiaries, especially the inefficient civil service, are not business savvy and their involvement, especially if they take the lead, has become the textbook recipe for slowing down and destroying crucial projects.
The public-private partnership models has, in fact, also been repeatedly suggested to breathe new life into crippled SOEs (state-owned enterprises) in the desperate attempt to block unnecessary leakages, running into the trillions, from the national exchequer.
It was revealed at PEOC that Pakistan’s per capita edible oil consumption had risen to 20kg, which is “much higher than regional countries”. And, considering the persistent trade deficit and the urgent need to lower the import bill, suggestions for policy measures that lean towards self-sufficiency have already come too late in the day. But now that they have been put on the table, the government needs to appreciate their importance and get the ball rolling quickly.
Pakistan is mired in many crises, but the biggest one is about the economy. Let’s not forget how close we came to sovereign default itself when the IMF lifeline hung in the balance and the government scrambled to enforce very harsh conditions just to keep the money flowing and the repayments constantly rolled over.
The government must also understand that it pays to engage with stakeholders, especially when out-of-the-box ideas are needed to stimulate the economy. Edible oil, unlike crude oil, can be produced locally to reduce the pressure on the import bill.
There’s no reason this initiative should not be given the highest level of priority by the finance and commerce ministries. For, even as the political slugfest dominates the headlines, it is the economy that is the biggest problem at the moment. And ignoring this reality can and will wreck more than the trade balance.