ISLAMABAD, Oct 16: The poorest one-fifth of the country’s population spends 50 to 58 per cent of its income on buying cereal. The skyrocketing wheat prices, therefore, may become a matter of life and death for the extremely poor, according to a report of the Oxfam GB, a UK-based non-governmental organisation.

The report was launched on Thursday to coincide with World Food Day.

The report, “Food Crisis in Pakistan: Real or Artificial”, says the number of poor in the country has risen from 60 to 77 million because of food inflation.

The food market has been relatively unregulated in Pakistan since the military takeover in 1999. But it was only around the time of general elections in February this year that nagging flour shortages erupted into a full-blown crisis. Within weeks the price of wheat had doubled.

Even as search for scapegoats began Pakistanis found out they were not alone — shortages and rising prices had by then become a pretty much global phenomenon. While the crisis in some countries can be attributed to the global market, for a country like Pakistan, which has a sound agricultural base, abrupt shortage of wheat flour was hard to link to external causes, the report argued. Despite persistent inflation and temporary shortages – deliberately created by traders to manipulate prices — a full-blown flour crisis came as a shock, the report states.

Pakistan, it added, is a poor country by virtue of its GDP and per capita income. The government estimates that about 25 per cent of the population is below the poverty line, although independent analysts and groups suspect this is half the real figure if the yardstick a dollar a day is adopted.

Inflation and periodic shortages are tackled by Pakistan’s poor through selective consumer abstinence and budget readjustments, according to Oxfam.

The Oxfam report said a major problem in Pakistan was absence of authentic data on food production. Wheat is the staple food in Pakistan constituting 30 per cent of the cereal consumption in the households. The prices of wheat have usually been lower than those in the international markets over the years. The country reported a bumper crop in 2007, which is when shortages hit the market and prices rose steeply, it took everyone by surprise. In general, targets and practices of wheat sowing, production and yield are considered adequate for domestic needs.

In 1990-91 the production was 13.5 million tons while in 2006-07 it was 23.3 million tons and considered adequate for domestic consumption. However, recent fluctuations in production have begun disturbing the equation and variation in area cultivated, shortages of irrigation water and rains, quality of seed and rising input costs have been cited as causes. The demand scenarios of hoarders and smugglers and government’s tendency to under-report or over-report are likely to exacerbate these fluctuations, the report observed.

Since 2000, commodity prices and cost of services have been rising and wages and incomes, while also increasing, have failed to keep pace. The government has been ascribing such inflationary trends to rising growth rates.

While there were small flour crises in 2005 and 2006, and overcome, these paled before the major food crisis that took shape in January this year.

Shortages of wheat flour were compounded by steep hikes in prices of all major food items — rice, pulses, edible oil, spices, Oxfam said.

Expectations that a new government assuming charge after the February elections would take measures to stem the crisis proved to be unrealistic as political crises overshadowed the economic crunch for several months.

Flour mills and hoarders, meanwhile, waited for the crisis to bloom in order to cash in on steep rise in prices. Political compulsions of the outgoing government prevented rationalisation in prices of energy and food to match the hikes in the international market and by the time the new government took over, the subsidies had assumed unsustainable proportions and extraordinary hikes in prices had to be passed on to the consumers by the new government, the report said.

Oxfam advised the government to ensure that the poorest consumers are protected from high and volatile food prices. It also asked the international community to support developing countries and take steps to generate more financial resources to help meet poor people’s food needs.