Report agri-expo-2012

A GRICULTURE sector plays a critical role inPakistan’s economy through a variety ofchannels. Almost 20 per cent of the nationalincome and 43 per cent of the total employ-ment are generated in this very sector. For

instance, quite a portion of the country’s manufac-tured exports are dependent on raw materials such ascotton and hides that are part of the agriculture sec-tor, while supply shortages and market disruptions infarm products do push up inflationary pressures.

Overall poverty incidence can be reduced only ifrural incomes of the poor are raised from their currentlevels. In other words, gyrations in macro-economicand micro-economic transactions can be attributed toa large extent to the health of the agriculture sector.Wheat consumer and producer prices influence thewage-setting process in urban areas and are political-ly sensitive. Though there is an avowed policy of lib-eralisation of prices in place, every successive govern-ment has pursued an active interventionist policy infixing the minimum guaranteed price, procuring alarge proportion of marketable surplus through pub-lic-sector agencies, storing and releasing the wheat tomillers and monitoring retail prices.

Despite the popular lamentations about the neglectof agriculture in the country, the performance of thesector has been simply impressive. Those who point tothe share of agriculture declining from 50 per cent atthe time of independence to 20 per cent currently asan indicator of poor performance of agriculture aremistaken. In the US, less than five per cent labourforce produces food, fibres and other agriculture pro-duce for 300 million and the rest of the world.

In 1949-50, Pakistan produced only 2.4 million tonsand could not feed its population of 30 million people.By 2009-10 wheat production had increased 10 timesto 24 million tons, not only feeding 170 million of itspeople but exporting the surplus. Pakistan has nowemerged as the third largest exporter of rice, and itsshare in international trade rose from 6.9 per cent in1985 to 14 per cent in 2005.

The country is also the fifth largest producer of cot-ton, with cotton production of 14 million bales from amodest beginning of 1.7 million bales in the early1950s; is self sufficient in sugarcane; and is the fourthlargest producer in the world of milk. Land and waterresources have not risen proportionately, but theincreases have taken place mainly due to gains inlabour and agriculture productivity.

The major breakthrough in crop production tookplace in the late 1960s and 1970s due to the GreenRevolution that made a significant contribution toland and yield increases of wheat and rice. Privatetube-wells led to a 50 per cent increase in the croppingintensity which was augmented by tractor cultivation.While the tube-wells raised crop yields by 50 per cent,the High Yielding Varieties (HYVs) of wheat and riceled to a 50-60 per cent higher yield.

For example, wheat production during the years ofthe Green Revolution jumped from 4.59 million tonsin 1964-65 to 7.29 million by 1969-70; almost a 60 percent rise within five years. Similarly, rice productionwent up by 77 per cent from 1.35 million tons to 2.4million tons in the same period. The adoption of theseseed varieties by the small farmers, however, followedthe large farmers with some time lag.

Fertilizer application rates were similar and theadvantage of the large farmers deploying tractors wasoffset by the higher labour input and bullock powerinput of the small farmers per unit of land. The newvarieties of cotton that were introduced much later in

1980s had also a positive impact on the yields com-pared to the traditional varieties. Cotton productiondoubled within one decade from 4.2 million tons in1979-80 to 8.5 million bales in 1989-90.

Government support price policies particularly forwheat, which is the staple crop of Pakistan, have paiddividends in the form of higher production, increaseduse of modern inputs and higher yields. Studies havefound Pakistani farmers to be responsive to prices andincreases in prices do induce higher output, lowerwaste in consumption and storage, and increasedmarketed supply. Thus, keeping the prices alignedwith international prices provides the right incentivesto the farmers while reducing the tendency for smug-gling across the borders.

Beginning with the 1980s, livestock emerged as the

prime mover of agricultural growth with the crop sec-tor taking a secondary position. This sector now con-tributes 55 per cent to agriculture value addition andabout 11.5 per cent of GDP. Its share is gradually onthe up. Within the crop production sector, commercialcrops such as cotton and sugarcane assumed greatersignificance relative to cereals which were the leadersuntil the 1980s.

Livestock is taken up all over Pakistan by millionsof farming and landless holdings. The livestock sub-sector constitutes a more important source of food andmeans of sustenance in rain-fed, mountainous anddesert ecologies of the country. It is the main agricul-tural activity in deserts because in these areas cropfarming opportunities are relatively few due to verylow rainfall, sandy soils and meagre availability ofgood-quality ground water.

The prospects for agriculture look quite promisingas the yield gaps between progressive farmers andthe national average are quite wide, varyingbetween 30 per cent and 70 per cent. If this gap canbe reduced for wheat, for example, from 40 per centto 30 per cent, production increases of about 4-5 mil-lion tons can be achieved with the same land, labourand water resources. The output growth rate overtime with a larger base can assure domestic food self-sufficiency and large exportable surplus on a sus-tained basis while absorbing the rise in population.Higher incomes to the households at the threshold ofpoverty would help in moving them above the pover-ty line.

Experience with the adoption of higher yieldingvarieties of wheat and rice demonstrate that therewere no known differences between the small andlarge farms. Though the large farms played the lead-ing role in the early adoption of these varieties, thedifferences in the adoption rates of the two groupshad disappeared by the early 1970s. As much as 68 percent of wheat acreage in 1980 both on the small andlarge farms was under HYVs. In rice, the area coveredunder Irri Rice by the large farms was 44 per centcompared to 54 per cent by small farms. Thus, repli-cation of farming practices of the progressive farmersby other farmers is possible if institutional and struc-tural changes are introduced at the policy level.

How can this yield gap be reduced? First and fore-most agriculture production in Pakistan is dependenton one of the world’s most elaborate systems of irri-gation from surface canals and groundwater. In othercountries, this advantage would have been ofimmense value in transforming the pattern of agricul-ture. But in Pakistan, this resource has not been opti-mally utilised and has produced much lower returnthan its potential.

But this water is now becoming scarce and hasreached the stress level of 1000 cubic metre per capi-ta and is on a downward slope. Pakistan is currentlyclose to using all of the surface and groundwater thatit has available, yet it is projected that over 30 percent more water will be needed over the next 20 yearsto meet the needs of the country. The situation hasbeen exacerbated by the latest findings arising out ofthe studies on climate change. Pakistan is among theSouth Asian countries that are going to be adverselyaffected by the melting of glaciers in the Himalayasfrom where most of theIndus Basin System drawsits sustenance.

As water availabilitydecreases, cropping patternsget disrupted due to changesin the monsoon. With therisk of floods and droughtsincreasing, the prospects ofdecreased agriculture pro-ductivity and food insecuritywill face us starkly. Thefocus of attention will haveto shift from productivityper unit of land to productiv-ity per unit of water – to getmore from less.

A comparison of wheatyields in the Indian Punjaband Pakistani Punjabshows that the productivityin Pakistan can be raisedby 40 per cent by better useof irrigation water.Inefficient irrigation appli-cation at the field level canbe curbed through zerotillage, laser levelling andregular de-weeding. Over-irrigation in Sindh and southern Punjab can becurbed by equitable water distribution to the headand tail-end reaches of the canals and distributaries.New drought-resistant varieties for crops that can beresilient and require less water per acre have to bedeveloped. Progressive farmers are growing high-value crops by adopting ‘precision agriculture’ inwhich water plays a central role in delivering

Continued on Page 2

E VERY year we have news of a crisis inwheat, sugar, rice, and/or cotton. Andthese crises are usually about the cropbeing bad, the crop being good, havingtoo much stock or having too little stock

and then exporting at a loss or looking at exportmarkets or importing stocks in an emergency.Whatever action is taken, it is taken in an emer-gency when a situation is spiralling out of con-

trol and people arethreatening to come onto the streets or arealready out on thestreets. Why do wehave so many crises inagricultural products,and more importantly,why are we unable todesign systems thatcan tackle situationsbefore they get con-verted into crises?

It is funny that intextbooks of founda-tional economics, when-ever we want to giveexamples of competi-tive markets we giveexamples from agricul-ture. Competitive mar-kets are defined as hav-ing very large numberof buyers and sellers(each buyer or sellercan have a negligibleimpact on the overallmarket), having ahomogenous product

(so there are no branding and product discrimi-nation issues), and where market information(regarding prices, market conditions, demandand supply) is widely shared and available.

Given these conditions the models derive anumber of very desirable results for such mar-kets. Prices are competitive (at marginal costlevel), there is free entry and exit for buyers and

Continued on Page 16

It is funny that whenever the

textbooks of foundational economics

want to give examples of

competitive markets, they quote

examples from agriculture for

reasons that are not supported by

what happens on the ground

Issues and prospects

The evergreen‘emergency’

February 11-12, 2012Karachi Expo Centre

By Dr Ishrat Husain

Farming looksmighty easy whenyour plough is a

pencil, and you area thousand miles

from the corn field.— Dwight

D. Eisenhower

By Dr. Faisal Bari

With the risk of floods and droughts

increasing, the prospects of

decreased agriculture productivity

and food insecurity will face us

starkly. The focus of attention will

have to shift from productivity per

unit of land to productivity per unit of

water — to get more from less

DAWN FRIDAY FEBRUARY 10, 20122

Continued from Page 1

fertilizers and pesticides to crops. Water pricing has to be rationalised as

Abiana charges recovered from the farm-ers amount to only 20 per cent of opera-tional and maintenance costs. Thesecharges have to be gradually raised inorder to finance the maintenance of theirrigation infrastructure that has been con-sistently neglected and requires majorrepairs and strengthening. The floods of2010 and 2011 clearly exposed the vulner-ability of Pakistan’s irrigation system asweaknesses in Pakistan’s barrages, siltingof canals, encroachments of water chan-nels and damaged embankments becameapparent.

Pakistan’s energy fuel mix has also shift-ed away from hydropower to furnace oil,creating a lot of difficulties for the man-agement of the power sector. Storagedams and reservoirs will, therefore, notonly meet the timely needs of irrigationwater but also help re-orient the fuel mixaway from the environmentally damagingand expensive furnace oil.

The education status of those engagedin the agriculture sector is a key factor.Farmers with five years or more of aver-age schooling demonstrate higher produc-tivity compared to those with no or littleschooling. They are able to follow theinstructions for the use of fertilizers, seedsand planting techniques better than theilliterate farmers. Expansion in schoolingfacilities in the rural areas is an area ofpublic policy that will have a high pay-off.

The inadequacy of marketing and pro-cessing facilities needs to be looked intoas well. Small farmers are found to sufferrelatively higher losses due to a lot ofwaste particularly in perishable commodi-ties such as fruits and vegetable, milk, etc.because of inadequate storage facilities,absence of agro-processing and packagingfacilities nearby and lack of farm-to-mar-ket roads and transport. The private sec-tor should be allowed to set up rural mar-kets and the government’s exclusivemonopoly in this respect should be dis-mantled.

Empirical studies have found that pub-

lic development expenditure leads toenhancement in private investment inagriculture. The implementation of well-targeted public investment in infrastruc-ture projects complements and stimulatesprivate investment in agriculture. Ruralinfrastructure can be effectively designed,planned and implemented by local govern-ments. Provincial governments have nowrecourse to almost 60 per cent of theDivisible Tax Pool. They should allocateresources to the district governments forundertaking public infrastructure projectssuch as farm-to-market roads, on-farmstorage, silos and cold storages, lining ofwater channels, etc. in the rural areas.

Small farmers would thus be able tostore and transport their goods to thenearest markets. They would not makedistress sales to the middlemen who pro-cure the produce directly by visiting thefarms soon after the harvest and pay muchlower prices than the prevailing marketprices.

Next comes the issue of credit tosmall farmers that has been a majorconstraint in the adoption of newtechnologies and productivity-enhancing inputs such as fertilizers,seeds, pesticides, renting agriculturemachinery, etc. Although the liberal-isation of agriculture credit policiesby the State Bank of Pakistan (SBP)since 2001 has expanded disburse-ment from Rs30 billion to Rs250 bil-lion annually with the active partici-pation of private commercial banks,but this amount meets only 15 percent of the total credit needs.

In recent years, microfinance ser-vices have also reached the ruralareas. Their penetration rate is stillquite low. The availability of crediton time would facilitate them to pur-chase certified seeds, fertilizers andother inputs. A more aggressive butcarefully monitored plan to increasethe outreach of agriculture credit

and microfinance would certainly be con-ducive in bridging the yield gap.Revolving credit lines which facilitate thefarmers to have flexibility in disbursementand repayment should be promoted by thebanks.

Besides, there has been a slowdown inthe pace of technological change in yieldsper acre during the last 25 years comparedto the 1960s and the 1970s. Consequently,agricultural growth rates have deceleratedin the last two decades. A large number ofagriculture research institutes operate inthe country both at the federal and provin-cial levels, but their output has not beenhelpful in developing new varieties,improving water utilisation practices, ani-mal husbandry, etc. The transfer of knowl-edge from the progressive farmers toother farmers has been sporadic andunsystematic.

The nexus between agriculture, educa-tion and training, research and extension

is quite weak because of the fragmenta-tion of responsibilities, overlapping andduplication and bureaucratic turf battles.Private-public partnerships have workedin other countries successfully in promot-ing this nexus and delivering integratedpackage of advice, services and inputs.Such partnerships should utilise public-funded research findings for transmissionto farmers through private agents.

The cropping pattern in Pakistan hasn’tchanged very much during the last 64years of its existence. The same fourmajor crops figure prominently.Diversification into high-value productssuch as fruits and vegetables, oil seeds,pulses, etc. should form the main plank ofour agriculture development strategy asthe demand of higher household incomesshifts from cereals and staples to meat,fruits, vegetable, etc. The economics ofirrigation also dictates that water shouldbe utilised for high-value crops. Thechanging demand pattern, efficient utilisa-tion of water and existing shortages ofthese commodities make this diversifica-tion strategy viable.

Finally, the potential in the livestock

sub-sector has not been fully exploitedbecause of a number of constraints.Limited supply of forage and fodder, morephysical exertion of animal during graz-ing, frequent incidence of diseases,drought cycles, lack of access to veterinaryhealth services and vaccination, limitedmarketing opportunities for milk, meatand poultry and non-existence of milkpreservation facilities with the herders aresome of the difficulties faced by the farm-ers.

The yield gap in milk between progres-sive farmers and the national average isestimated at almost 60 per cent. Onlythree per cent of the milk is processed inthe absence of an integrated and coordi-nated system of milk-collection, chillingplants, refrigerated vans and retail out-lets for distribution. Recent efforts inwhich some large, well-respected, public-listed companies have entered the fieldof milk processing and distributionaugur well for the farmers. Income fromlivestock production is a powerful meansfor poverty reduction because most ofthe farm households in rural areas main-tain a few animals. ■

Issues and prospects

Honour ListThe following speakers and experts will be at the conference in Karachi:

• Zafar Mehmood; Secretary, Ministry of Commerce• Dr. Ishrat Hussain; Dean and Director, Institute of Business Administration (IBA)• Agha Jan Akhtar; Sindh Secretary, Agriculture• Saleem Saddiq; Balochistan Secretary, Agriculture• Dr. Ian Golding; SPS Expert under TRTA-II program• Dr. Ali Abbass Qazalbash; TRTA expert• Afnan Ahsan; CEO, Engro Foods Ltd.• Imran Shaikh; Managing Director, Pakistan, DHL Global Forwarding• Zahoor Malik; Director-General, National Animal and Plant Health Inspection

Services (NAPHIS)• Razia Begum; Executive Vice-President, Credit, ZTBL• Khalid Mansoor; CEO, Engro Fertilizers Ltd.• Khalil Sattar; Chairman, Pakistan Poultry Association (PPA)• Aamir Mehmood Mirza; Country Lead, Monsanto Pakistan• Dr. Kevin Gallagher; FAO Representative• Faisal Iftikhar; CEO, Fisheries Development Board of Pakistan, and Chairman

of Pakistan Fisheries Exporters Association• Baber Badaat; President, Pakistan International Freight Forwarders

Association• Dr. Babar Bajwa; Agribusiness Specialist (Horticulture), Agribusiness Support

Fund, USDA• Saleemullah Memon; Engro EXIMP• Shadab Fariduddin; Director, FCG Human Capital• Shamsuddin Shaikh; Senior Vice-President, Supply Chain, Engro Foods Ltd• Dr. Ulfat-un-Nabi; Director-General, Southern Research Centre; PARC• Prof. Dr. Shahana Urooj Kazmi; Pro-Vice-Chancellor, University of Karachi• Dr. Paul Fanning; FAO Senior Marine Fisheries Expert• Dr. Gleyn Bledsoe; Professor, University of Idaho, USA• Mohammed Moazzam Khan; Consultant WWF-P, former director Marine

Fisheries Department, Government of Pakistan• Dr. David Picha; Professor of Horticulture, Louisiana State University Baton

Rouge, Louisiana• Dr. Tahir Waheed; Senior Advisor, Fertilizer Business, Engro Fertilizers Ltd.

T HE agrarian sector inPakistan is oftenreferred to as the‘mainstay’ or the ‘back-bone’ of the economy.

This quixotic refrain has moreto do with romance associatedwith this primary sector whichnurtures life in a more basicway than any other componentof the economy. More than mar-kets and policy, it is MotherNature that determines the out-come of this sector in our con-text, and yet it remains impor-tant because of the sheer num-ber of people directly associat-ed with it. Lately, unanticipatedchanges in the global economyhave forced academics and poli-cy-makers to look at the sectorin a new light.

Standard development theoryand the history of structuralchange together tell us that theshare of agriculture over timewill decline, both in GrossDomestic Product (GDP) as wellas in terms of the number of peo-ple it employs. Essentially, this isbecause of natural limits to theproductivity of land. While theshare of the sector has declinedconsistently in Pakistan, but theproportion of the labour forceassociated with it has remainedcussed. For instance, in the last15 years the share of agriculturein GDP has declined from closeto 30 per cent to 21 per cent, butthe share in employment termshas only declined from 48 percent to 44 per cent in the sameperiod.

At first glance this tells usthat productivity in the sectorlags far behind the other sec-tors, but, given the historicalpattern of structural changeelsewhere, it is actually indica-tive of the fact that productivityand competitiveness in othersectors remain so bad that theprimary sector still carries a fairburden of the economy. Assuch, agriculture is destined tocarry the economic burden in

the foreseeable future. But the problem with the sec-

tor is that the best laid planscan come to nothing if a floodoccurs or there is unusuallyheavy rain (or none, as the casemay be) or a pest attackdestroys a crop. Having saidthat, a number of structuralchanges are required if growthin agriculture is to be sustained,productivity to be improvedand, most of all, if distributionin the sector is to be improved.

While there is sufficientunderstanding of the nature ofstructural shifts that arerequired, they have alluded usfor a long time for various rea-sons and there is every reasonto expect that they will contin-ue to allude in the near to medi-um future.

Rather than grand-standingon land reforms or drip irriga-tion or agricultural insurance,etc. simple tweaking has yield-ed important dividends for thesector. In the last five years orso, an increase in the supportprice of wheat in particular(and of rice and sugar as well)and a fortuitous surge in inter-national commodity prices (cot-ton last year and rice four yearsago) have invigorated the sec-tor.

The agricultural sector hasthe virtue of responding toprice changes fast by changingacreage on which the crop issown. This results in improvingthe terms of trade between agri-culture and other sectors of theeconomy, which by all accountsis positive, given the number ofworkers employed in agricul-ture.

There is also a paradigm shiftof sorts that has occurred in theinternational economy. Sincethe Second World War, pricesof agricultural produceremained virtually stagnant rel-ative to prices of manufacturedfoods, services and non-renew-able natural resources.However, thanks to the casinoeconomy that globalisation hasfostered, agricultural producehas become part of global spec-ulation and prices have becomeextremely volatile.

For countries with a largeagricultural sector, likePakistan, this is a net benefit,best witnessed last year where asurge in cotton prices led torecord exports and a currentaccount surplus in a year whereagriculture was devastated byfloods.

According to the EconomicSurvey 2010-11, transfers to the

rural economy only in the lastyear were to the tune of Rs340billion, whereas transfers to therural economy in the 2000-2008period – when support priceswere depressed – cumulativelywas Rs329 billion. Even if thereis some hyperbole in these fig-ures, it goes to show that a mixof enhancing rural supportprices and fortuitous interna-tional developments can bringabout large improvements forthe sector.

Of course, all of this is notnecessarily good for the urbaneconomy and for those urbanconsumers who have no linkswith the rural economy. Butthen they ought to rememberthat agriculture and those asso-ciated with it, suffered for adecade earlier when supportprices remained depressed andterms of trade were clearly infavour of the urban economy.

Moreover, democratic politicswill mean that favours to agricul-ture will oscillate with those forthe urban economy and of coursethe element of luck will play animportant role in deciding whichway the agricultural economywill move in the near future. ■

In the last few years,increase in thesupport price ofwheat, rice andsugar, and a fortuitous surge ininternational priceshave invigorated thesector, but there isan element of luckthat one mustkeep an eye on

A quixotic refrain

Life on a farm is aschool of patience; youcan’t hurry the crops or

make an ox in twodays. — Henri Alain

By Asad Sayeed

DAWN FRIDAY FEBRUARY 10, 2012 3


T HE Indus basin, its tribu-taries and many alignedlocations have facedcyclic catastrophes inthe form of floods and

torrential rains during 2010 and2011. Damages worth billions ofrupees were caused to standingcrops; produce storage yards;irrigation, communications andfarming infrastructure.

During the heavy rains, theLeft Bank Outfall Drain (LBOD)in Sindh flooded and spilled ontothe adjoining areas and causedenormous damage to the tracts ofland that fell across its right ofway.

Local farmers in the affecteddistricts were of the view thatthe present damage and lossshall need years of investmentand input to reincarnate theaffected lands. But farming landin Pakistan has been otherwiseimpacted by several issues whichare vital to be addressed on apriority basis.

Without doubt, land is a finiteasset that is gifted by Nature tothe mankind. Apart from theforests, natural reserves andother vegetated/non-vegetatedcategories, croplands constitutedthe single largest land-use cate-gory in the national land registerin Pakistan. Whereas the contri-bution of the farming sector tothe GDP oscillates around 20 percent or thereabouts, it extendsdirect employment to about 40per cent of the labour force.

Thus, farm-lands virtuallybecome the reservoirs of produc-tivity that stabilise the nationaleconomy, livelihoods and foodsupply to the end consumer.Pakistan has inherited a vastcomplex of Barani (rain-fed) andirrigated lands, parts of whichwere called the granary of thesubcontinent.

The existence of feudalism and

absentee land-lordism have beencited as longstanding vices thatdid not let the real farmingpotential blossom to the full.Successive land reforms towardsthe re-distribution of land didnot yield the desirable resultsdue to several counts.

A powerful coterie of feudallords thwarted all attempts todeprive their class from vast andmighty scaled land-holdings thataccounted for political influence,social control and economicinfluence over the common folks.Pirs (spiritual leaders), extendedclans, chieftains of large tribesand dynastic descendants of erst-while lords constitute the catego-ry of owners from the old tradi-tional order.

Orthodox in thinking andtyrannical in approach and con-duct, this combine of stakehold-ers kept self-interests and objec-tives as paramount against thenormal progressive options inthe modernisation of agriculture.

Scattered surveys reportedthat due to carelessness, lack ofconsideration or petty predica-ments, many large landlords donot utilise the full scale of farm-ing land under their ownership.A further dent to this decadentorder is made in the form of divi-sion and sub-division of land-holdings as a consequence ofinheritance.

At the level of second andthird generations, the fragmenta-tion of land-holdings oftenreduces land parcels to dimen-sions unviable for extensivefarming. According to one study,there are over four million fami-ly farms with an average farmsize of 4.7 hectares.

It is further estimated that halfof the farmers are owner-opera-tors while the remaining are ten-ants and landless class or wagelabourers. The farmer to landrelation is affected by a numberof factors.

According to a research con-ducted by Ghulam Kibria, aneminent development practition-er, time and revenue losses dueto litigation and administrativeencumbrances cause an enor-mous impact on the overall out-put of farmers and farms. Thegradual decline of village-orient-ed indigenous institutions thatwere used to settle land-basedand other disputes are beingreplaced by ordinary courts oflaw.

Thus, farmers, owners, occu-pants and contestants end upspending exorbitant time andmoney to arrive at basic resolu-tion of disputes. Small time dif-ferences of opinion often acquirethe status of intense conflictsand evolve into bloody feuds ofultra-dangerous proportions.

Easy availability of firearmsleads to settling petty matters ina violent manner. Routine loss oflife in ambushes often causesunending enmities betweenextended families. Instead ofreaping the full potential of landresources and other potentials,the folks become entangled in

inter family and inter-tribalquarrels that cause progressivebankruptcy.

The absence of a crediblemechanism of land records anddescription is perhaps a cardinalproblem in farm management. Itis believed that more than 14,000patwaris manage the entirerepository of land informationacross the country.

Due to an overall decline ingovernance, frequent changes inthe apparatus of administrativesystem during successive mili-tary and democratic regimes andsliding competence in landadministration, enormous cor-ruption emanates from the sce-nario. Several reform attemptshave been initiated during dif-ferent time periods in variousregions of the country.

Land Record ManagementInformation System Programme(LRMISP) in the Punjab andParticipatory InformationSystem (PIS) in Balochistan aretwo recent examples. Eachattempted to introduce scientificprocedures, use of informationand computer technology, ensur-ing access of land-based informa-tion to common folks and reduc-tion of corruption were core fociof the initiatives.

However, the systems weremerely tools with little changefound in the mindset of benefi-ciary officers of the Revenuedepartment and the powerfullandlords who benefited fromthe unclear status of the owner-ship of land.

Disbursement of agriculturalcredit, in many cases, deviatesfrom the standard procedure ofdemanding proper collateralwhich may encourage several touse it as a lever to straighten theanomaly.

Agricultural land managementis also affected by several physi-cal constraints. Soil erosion andconsequent loss of fertility is

now becoming a serious issue.Many studies have informed thatthe top soil layer, which used tobe on an average six inches thickalong the prime alluvial belts ofriver plains is being depleteddue to heavy rains and poorcapacity of farm managers totake preventive measures.

The construction of highways,roads and culverts create hin-drances of smooth farmdrainage. Since our farmers con-tinue to depend upon the archaicmethods of flooding the fields inthe name of irrigation, thedemand of drainage rises enor-mously.

As roads and highways are con-structed on higher levels withoutprovisions of allowing adjoiningfields to drain normal irrigation-based runoffs as well as flood orrain water, the issues related towater-logging and salinity contin-ue to cause destruction.

The incessant use of pesticidesmakes the farm drainage a morestringent pre-requisite for ensur-ing productivity and conserva-tion of fertility. Besides, thestrange practices of clearing wildbushes and vegetation in thekatcha areas lead to soil erosionat a massive scale.

In Khyber Pakhtunkhwa andGilgit-Baltistan, the clearing offorests to make room for farmfootprints was done extensivelyduring the past three decades.No regulatory control of any sortis visible to curb this undesirablepractice.

Land for farming in Pakistanrequires modern and scientificinputs of various kinds. To raiseproductivity, the introduction ofcorporate arrangements must beexperimented with.

Bankability and easy acquisi-tion of land by professional farm-ing groups is one alternative.Scores of private enterpriseshave precious expertise to trans-form wastelands into cultivable

tracts. Similarly, many agrofirms have credible potential ofenhancing crop cycles from con-ventional two to three and evenfour a year.

But the unfriendly businessenvironment, in the absence ofinnovation in agricultural landallocation, large-scale malprac-tices in land administration,orthodox mindset of ‘men behindthe plough’ and a general resis-tance of positive change are corehandicaps that confront this vitalsector.

Value-added farming, which iscapable of generating windfallprofits, is also a strategic avenuethat can be undertaken in landsmeeting the appropriate parame-ters. Precious herbs, spices, med-ical ingredients and assortmentsof fibres are possible choices. Atthe experimental farm level,many locations have shown posi-tive signs of productivity in thisrespect.

A centre for horticulture underthe auspices of a private univer-sity in Deh Bund Murad Khan onthe outskirts of Karachi is anexample. With the right inputs,methods and technology, the cen-tre has been able to produceinvaluable herbs and medicinalplants in an otherwise toughfarming terrain.

It must be realised that vulner-abilities of our farming lands areincreasing fast. Whether waterscarcity, unprecedented rains orflash flooding, the economic andmanagement pressure on lands islikely to multiply.

With declining subsidies, thecountry needs a very progressivefarming strategy. Needless to saythat without a modern land man-agement, any change in agricul-tural practices shall remain elu-sive.

A regional land use plan at thedistrict and tehsil levels is anoth-er option to modernise land man-agement and promote scientificfarming. Basic records aboutland, its ownership and farmingdetails, infrastructural thresh-olds available, cropping prefer-ences and related variables canbe made a part and parcel of thismuch-needed initiative.

With accurate information, notonly will the farm-land utilisa-tion shall benefit, but will alsohelp eradicate corruption andmalpractices from this vitaldomain of our national life. ■

The land toopoor for anyother crop is

best forraising men. — R. Pocock

By Dr Noman Ahmed

With decliningsubsidies, the countryneeds a veryprogressive farmingstrategy, but in theabsence of a modernland managementmechanism, anychange inagricultural practicesshall remain elusive

Issues in land management

Orthodox in thinking and tyrannical in approach, there are many working contrary to the interests of the future generations of Pakistan



M ICRO-FINANCING isan appropriate wayof fulfilling financialrequirements of theagricultural sector.

In a country like Pakistan whereover 90 per cent of the rural pop-ulation does not maintain a bankaccount, the need for developingmicro-financing becomes all themore important.

Internationally, a paradigmshift has taken place in the con-cept of agricultural financingand now the focus is on micro-financing models. Till the 1970s,the concept of rural creditrevolved around the public sec-tor, especially in Asian and LatinAmerican countries. Pakistanwas no exception.

Banks were asked to makelending quotas for the agricul-ture sector; re-finance schemeswere introduced; loans were pro-vided to the farming communityat concessional rates; systems ofproviding credit guarantees wereput in place; and developmentfinance institutions were encour-aged to offer big loans for agri-cultural development in the tar-geted areas.

All this worked well till thetime when signs of the failure ofregulated economies startedemerging – or, in futuristic eco-nomic literature, such a possibili-ty began to be discussed.Towards the end of 1970s, micro-financing emerged as a viablealternative to subsidised-loaningto the agriculture sector and in1980s the idea gained furthercurrency.

As the financial sector becamemore open and market-orientedin the 1990s, there also emergedthe need for evolving a new mar-ket-oriented paradigm of agricul-tural financing and the conceptof micro-financing took roots.And since the beginning of mid-1990s till the global financial cri-sis and recession of 2008-09, thisconcept was successfully imple-mented in Asia and elsewhere inthe world.

But in the post-recession eco-nomic scenario, questions arebeing raised not on whether themodel of agricultural micro-financing is still relevant, butabout how it could be integratedinto new agricultural financingmodules.

These modules are beingevolved the world over to tacklethe issues of minimising the inci-dence of poverty and jobless-ness, and meeting food require-ments of seven billion souls.

Pakistan is grouped among thecountries where agriculturalgrowth over the past few yearshas mitigated ill effects of lower-than-desired growth in the indus-try. Ideally speaking, the countryneeds to sustain a reasonablerate of growth in agricultureover many years to avoid foodshortages at home and benefitfrom the growing demand foragricultural products in theinternational market.

This is where micro-financingfor agriculture sector comes intofocus along with other modes offinancing.

In Pakistan’s context, financ-ing needs of agriculture sectorare met through a number ofsources. Commercial banks offer

loans and advances to the grow-ers under the agriculture creditscheme of the State Bank ofPakistan. Under this scheme,Zarai Taraqiati (AgriculturalDevelopment) Bank, NationalBank, Habib Bank, United Bank,MCB Bank, Allied Bank andPunjab Provincial CooperativeBank are assigned annual indica-tive targets of agriculturalfinancing.

But foreign banks and otherprivate banks or Islamic banksremain outside this scheme.Some of them, however, offerfarm loans on their own. Somebanks and DFIs also offer devel-

opment finance to the agricultur-al sector directly or as selectedpartners of InternationalFinancial Institutions when theIFIs go for such financing.

In addition, provincial banks,like the Bank of Punjab or SindhBank, lend to the agriculturalsector. But the bulk of financingrequirement of farmers is metthrough unofficial sources,including traditional moneylenders in rural areas whocharge very high interest rates.

According to various studies,the share of informal lending tofarmers in their overall borrow-ing mix is no less than 80 percent.

The majority of small farmerswho do not have enough moneyeven for growing crops – let aloneundertaking any developmentproject on their land – continue toremain the victim of high-handed-ness of local landlords who lendmoney to them at very high ratesand force them to sell their pro-duce at throwaway prices.

Microfinance banks have beentrying to cater to this vast major-ity of farmers, but so far thesebanks, only seven in number,have failed to design suitableclient-friendly financial prod-ucts. These banks require bor-rowers to fulfil complex docu-mentation processes and chargehigh rates of interest currently

around 22-24 per cent. In 2010, microfinance banking

in Pakistan completed 10 yearsof its operations. Milestones of adecade of experience includedevelopment of a legal and regu-latory framework that lifted thesubsidies-dependent microfi-nance regime to its current sta-tus of a market-based industry.

The SBP has now developed aStrategic Framework forSustainable Microfinance in con-sultation with the government,donor agencies and microfinanceindustry. This framework pro-vides a future roadmap formicrofinance institutions. The

objectives identified in thisframework include:

* Broadening of inclusivefinancial services.

* Promotion of deposit mobili-sation to make microfinancebanks self-sustainable in fund-ing.

* Promotion of alternativedelivery channels to expand out-reach of microfinance.

* Reduction of operating costsand providing convenience tocustomers.

* Up-scaling of loan productsto serve micro-enterprises.

* Improvement in governanceand transparency to ensure long-term institutional sustainability.

* Encouragement of pro-con-sumer policies to gain public con-fidence, and

* Development of a suitableregulatory mechanism for non-deposit-taking micro-financeinstitutions to create market dis-cipline.

Micro-finance in Pakistan rep-resents a low 0.2 per cent of totalfinancial assets, though thegrowth of formal markets is sec-ond fastest in South Asia (afterAfghanistan). The formal micro-finance sector reaches less thantwo per cent of the poor, asopposed to over a quarter inBangladesh, India, and SriLanka. The informal sector canbe competitive, and has good

lessons to offer to its formalcounterpart.

There is still considerableroom for growth of micro-financein the country. The estimatedpotential market size is in therange of 10-20 million active bor-rowers, and some estimates placethe number to be as high as 35million.

According to an internationalstudy on Pakistan’s micro-finance, women are a poorly-explored clientele with tremen-dous potential. While microfi-nance policy and services havefocused on credit, there is a con-siderable potential for other

products, especially savings. A key challenge to micro-

finance institutions (MFIs) inPakistan is raising considerablefunding, attaining sustainability,and better integration withfinancial markets. MFIs rely con-siderably on non-commercialfunding as the commercial liabil-ities to gross lending portfoliosratio is barely 21 per cent.

Profitability and performancein the microfinance sector is low,but is said to be improving. In2000, microfinance was elevatedto a core aspect of the govern-ment’s poverty reduction pro-gramme. In spite of encourage-ment by the State Bank ofPakistan, commercial banks haveshown little appetite to servicemicro-finance clients.

The SBP strategy of offering abank license to stronger MFIshas proven more successful,though the hoped-for depositmobilisation has not materialisedwith the pace expected, and theoutreach of microfinance banks(MFBs) remains limited. MFBsaccount for 31 per cent of themicrofinance lending portfolio,and 85 per cent of its growth.

After the global recession of2008-09, microfinance lendinghas shown a considerableimprovement. By the end ofMarch 2011 overall microfinancelending volumes shot up to

Rs10.7 billion from Rs5.9 billionin June 2008. Average micro-loansize has also risen to aboutRs17,000 from Rs14,000.

But there has not been a signif-icant increase in the number ofmicro-finance borrowers. Forseveral years the number of peo-ple benefiting from micro-finance schemes range between0.5 million and 0.7 million.

Lately, the number has evenshown a decline. So, the mainissue is the outreach of micro-finance banks and institutions.Security situation in KhyberPakhtunkhwa and Balochistan inparticular and poor law andorder in rural Sindh and Punjabprovinces also block the growthof micro-financing in the farmingsector.

According to a study, thePakistan micro-finance markethas much potential for a rapidoutreach expansion, and facesconsiderable unsatisfieddemand, especially for savingsproducts. Mobile technology canhelp enlarge access considerably,especially in the informal sector.

The financial sector has not yettaken up SBP encouragement tothat effect, and will unlikelychange course given the recentfinancial crisis fallout. Yet, it isimportant to persevere in thisagenda, which directly links withpoverty reduction.

Promising strategies includefinancial awareness campaigns,strengthening of MFI viabilityand commercial sustainability,inclusion of women and clientsegmentation, and developmentof savings products.

Smaller size of products, andbulk service might better attractlower-income groups. Theincreasing use of technology willmake this approach a viablebusiness proposition for banks aswell as affordable for clients.

Two approaches have been usedinternationally to address hightransaction costs due to low popu-lation density – small averageloans and low household savings.

The low-tech, low-cost, high-volume models of Grameen Bankand BRAC (Bangladesh) and thehigh-tech, low-cost, high-volumeapproaches developed in Kenyaor the Philippines are goodexamples. Lately, Bangladeshhas successfully provided micro-finance to hundreds of thousandsof farmers, including womenfolk,through the use of mobilephones.

And by hiring bicycle-ridingyoung women with laptops toreach out to rural households inthe remotest parts of the countrya Bangladeshi NGO has even edu-cated poor farmers about the bestagricultural practices besidesoffering them financial help.

With close to 90 per cent cover-age and 59 per cent outreach(and no gender divide), mobilebanking holds much promise toincrease access. A potentiallymajor player in access to financefor the under-served is thePakistan Post Office, with itsover 13,000 offices, and currentefforts to upgrade technology.

Under government policyencouragement, some MFBs haveexperimented with linking upwith Pakistan Post in a bid toexpand outreach as Brazil andChina have already done.

In addition to microfinancebanks and microfinance institu-tions that are striving to reachout to small growers in Pakistanto help them meet their financialrequirements, Islamic banks andIslamic finance institutions alsoprovide ideal outlets for this pur-pose.

Most of our rural population isaverse to Riba-based banking. IfIslamic banks and Islamicfinance institutions i.e. theIslamic windows of conventionalbanks succeed in designingmicro-finance products for poorfarmers and find a way of reach-ing out to them, for example,through mobile banking micro-finance distribution can growrapidly having a favourableimpact on agricultural growth.

Some Islamic banks haverecently enhanced their lendingto the agricultural sector, butmost of such lending is concen-trated into agro-based industries.Islamic bankers say that a legaland regulatory framework willhave to be designed by the StateBank before they can ventureinto micro-financing whether inagricultural sector or in anyother sector of the economy.

But they do admit that provid-ing Islamic micro-finance at thedoorstep of small farmers wouldbe a sure way of penetratingdeeper into the micro-credit mar-ket, minimising the incidence ofpoverty and reducing joblessnessin rural areas of Pakistan. ■

By Mohiuddin Aazim The share of informallending to farmers intheir overall borrowingmix is said to be ashigh as 80 per cent.The formal sectorneeds to move in to thebenefit of all concerned

Go micro, go forward

To replace their dated tools, the farmers need money which they don’t have

Lack ofmoney is the

root of allevil.

— GeorgeBernard

Shaw



I NSURANCE penetration in Pakistan is muchlower than in other developing economieswhile crop insurance is almost negligibledespite having been introduced more than adecade ago. The previous government took

several decisions to promote crop insurance, butpractical implementation of all the plans and poli-cies remained minimal, if at all.

The reason for this no-growth trend of crop insur-ance is the diversity of risk attached with the agri-culture sector. For an agriculture crop, a number ofsupplies require smooth flow like water, fertilizers,seeds, pesticides, etc. and the risk is attached ateach step.

Once a crop takes its shape in the fields, it passesthrough many phases and all of them need protec-tion or insurance.

And this is the reason that crop insurance evenin the developed countries have never attemptedto cover entire agriculture outputs or entire crops.Even in the Untied States, estimated 60 per centcrops are insured.

Experts recall that the country has been strug-gling since independence to introduce crop insur-ance, but all such efforts have failed to bring thedesired results. The search for a model crop insur-ance scheme still continues at home, while Indiaand Sri Lanka have been insuring crops for overthree decades. However, both the countries havenot been able to fully cover their crops with insur-ance yet.

The Food and Agriculture Organisation of theUnited Nations in its recent report noted that therehave been many attempts to establish crop insur-ance programmes in developing countries. A few ofthese have succeeded in laying the foundation for asustainable risk management service.

But there have also been many failures. Most ofthose programmes that have not proved durablewere set up on the basis of unrealistic expecta-tions.

Crop insurance is not a universal solution to therisk and uncertainties which are part and parcel offarming. Rather insurance can address part of thelosses resulting from some perils. The most impor-tant point is that the insurance has a limited role inrisk management in farming.

There are limitations to the scope for effectiveand economic crop insurance, which though real atany given moment, can change over time. Farmingenterprises and systems are dynamic.

They change over time, and in so doing presentdifferent patterns of risk and new ways by whichfarming technology and farm management tech-niques can cope with production and other risks.

The design of insurance solutions is an equallydynamic field of research and development. Newtechniques of ascertaining that loss-causing perilshave occurred, together with more efficient and eco-nomical methods for measuring losses, mean thatnew types of insurance products can be developed.

In the case of Pakistan where agriculture is thebackbone of economy but the techniques to devel-op the fields and farming are centuries’ old, whichmeans the risk is high, the move towards moderni-sation of agriculture is not only limited and slow,but it seems that most of the people attached withthe agriculture sector are less interested in higheryields and lesser risks.

This is the reason that the agriculture communityhas to face disasters like flood and storm but is yetnot ready to minimise the risks involved. Thedemand for insurance products in Pakistan isinsignificant, and, as such, insurance products areextremely limited and are restricted to a few areas.

Products are manufactured or introduced whendemand arise. The demand in case of crops insur-ance in the country has not yet taken any particu-lar shape that could attract companies.

When companies see a business opportunity withan evident demand, they go for the creation of newproducts or get some old products refined, fundedand marketed.

According FAO, the total annual agricultural and

forestry insurance premiums worldwide in 2001amounted to some $6.5 billion. Of this amount, 70per cent was accounted for by crop and forestryproducts. This sum must be compared with the esti-mated total farm gate value of agricultural produc-tion globally, which is $1400 billion.

In this case the insurance premiums paid repre-sent just 0.4 per cent of this total.

Geographically, these insurance premiums areconcentrated in developed farming and forestryregions, i.e. in North America (55 per cent),Western Europe (29 per cent), Australia and NewZealand (three per cent). Latin America and Asiaaccount for four per cent each, followed byCentral/Eastern Europe, three per cent, and Africa,just two per cent.

It is clear that crop insurance is primarily a busi-ness which involves farmers of the developed coun-tries. However, some 13 per cent of global premi-ums are paid in the developing world.

The crop insurance scene in India is two-pronged.A government programme with a strong socialobjective loses vast sums each year. Officials are

said to be attempting to re-design this programmein order to make it more efficient and sustainable.The task is immense. In the beginning of the lastdecade, the programme insured 10.5 million farm-ers, with a total sum insured of $1.8 billion on 15.7million hectares of crop land.

A recent development is that private-sectorbanking/insurance interests, with some advisoryassistance from the World Bank, now offerindex insurance, an insurance product coveringnon-irrigated farmers against the risk of insuffi-cient rainfall during key parts of the croppingseason.

The policies are offered by a commercial firm,


By Shahid Iqbal While efforts have been made forlong to promote the concept of crop insurance, there has been little success on this count for a variety of reasons, not theleast of them being the absence ofan indigenous model to take care of our specific ground realities

If you can’t earn it in foreign exchange, have some cushion in the local currency

Wanted: a model

Finance is the artof passing moneyfrom hand to hand

until it finally disappears.

— Robert W. Sarnoff



T HOUGH the colonial masters left a goodmodel of agricultural research behindthem, it is a pity that successive policy-mak-ers at the helm the country’s affairs failedto keep pace wit the times and agricultural

research – the importance of which cannot be over-stressed in a country like Pakistan – graduallybecame next to nothing at least at the official level.

All the provinces of Pakistan are naturallyblessed with fertile soil, minerals, naturalresources, suitable environment and favourableweather. The fertile province of Punjab has alwaysbeen the breadbasket of Pakistan. Sindh, KhyberPakhtunkhwa and Balochistan are also contribut-ing well towards the national economy.

The growth in our agricultural sector is beingstagnated by inefficient and outdated farming andproduction techniques, ineffective use of land andwater resources, resulting in poor hygiene and lowfood standards. The main reason of poor agricultur-al growth is the lack of research.

Agricultural research is the key to food security,but we have hardly paid any attention to it. As saidearlier, the British left a good model of agriculturalresearch for Pakistan. Way before Partition, theyset up Cotton Research Station at Multan,Agriculture College in Faisalabad and BasmatiResearch Station in Kala Shah Kaku.

After independence, the system effectivelyplayed its role in agriculture development in ruralareas by generating farm-specific high-yielding andlow-cost technologies. The system, however, lost itscoherence and coordination among various intu-itions. This badly affected the flow of innovationsin the agriculture sector, and, resultantly, the sec-tor lost its competitiveness in the national andinternational markets.

Other problems included lack of planning andmonitoring mechanisms, dwindling research invest-ments, increasing share of research budget beingspent on salaries, missing international collabora-tion, and the lack of incentive to be innovators.

Pakistan has enormous potential to significantlyincrease its agricultural production, but the growthis being stagnated by inefficient and outdatedfarming and production techniques, ineffective useof land and water resources resulting in poorhygiene and low food standards.

The government, like its predecessors, has notaccorded any priority to research. Instability andchanging policies are major obstacles in promotingresearch. Agricultural research can alleviate pover-ty and hunger, and, ideally, the government shouldstrive to develop a research culture in the countrywith an emphasis to work hand in hand with theprivate sector.

Scientists should be given resources, infrastruc-ture and incentives to work for the prosperity ofthe stakeholders. The typical thought among theofficialdom is the consequences of “losing billionsin case a project does not bear fruits”. We mustaccept the fact that research is a process of learn-ing by doing.

You may get the result on the 10th attempt, andit may go up to even 100 trials and there may stillbe no result. The outcome can be fruitful and, ifnot, at least it provides a direction for futureresearch. In any case, research remains a fruitful

product for those who know its worth. We are will-ing to lose billions crop losses, but remain reluc-tant to spend a part of it on develop resistant vari-eties. We must ensure national and internationalcollaboration in research projects.

The public-private partnership approach inresearch has not been very encouraging inPakistan. The private sector has the fear of themuch-maligned typical attitude of governmentinstitutions, so they feel uncomfortable workingwith them. The government has to develop strate-gic plan, sign MOUs with private and internationaldepartments as well as build their confidence.

The danger of climate change is causing night-mares to scientists around the globe. They areworking hard to develop resistant varieties toensure food security. Pakistan should keep inmind the recent losses due to heavy rains andfloods in the last two years. Apart from agriculture,the livestock sector has also suffered a lot in thesecalamities, as a large number of animals becamethe victim of floods, while many others died due tothe non-availability of fodder.

It is abundantly clear from the experiences ofChina, Brazil, Turkey and many other countriesthat without going for innovations, no country canprogress and move forward. We need to strengthenour own local research system and import technolo-gies where local innovation takes too long or is toocostly. It will save us billions of rupees that wespent annually for the import of technology which

is not always needed or serve the purpose in ourown specific environment.

We have qualified scientists, resources, cheaplabour, naturally-blessed environment, the need ofthe hour is to focus on output-oriented research,enhance international collaboration and involvethe industry so that we can increase our productivi-ty.

Food war may be the next world war amongmany countries. Food security is on top agenda ofevery nation as it is necessary for our existence.We should spend more on research and develop-ment (R&D, and encourage scientists at all levels.Practical themes have to be prioritised and a strictmonitoring and evaluation process should beobserved during the implementation of any pro-ject.

The government should make transparent moni-toring and strict actions should be taken againstinstitutions showing irresponsible behaviour.These practices have to be taken very seriously ifwe want to revolutionise the agriculture sectoralong scientific lines.

Importing goods without working on increasingthe yield is an attitude that has caused the countrymassive losses. The pace of inflation and shades ofpoverty can be minimised only when we pay practi-cal attention on agricultural research. Let us notcommit the crime of turning our backs on ourfuture generations by ignoring agricultureresearch. ■

By Maryam Naseer

With minimal research, the countryis not headed in the right direction.The danger of climate change iscausing nightmares to scientistsaround the globe who are workingon improving resistant varieties toensure food security. Pakistanshould keep in mind the losses thatit suffered due to heavy rains andfloods in the last two years More research means a better future for the entire nation and, indeed, its economy

The search for research

If we knew what itwas we were

doing, it would notbe called research,

would it? — Albert Einstein



D ESPITE havingmultiple num-bers of federaland provincialresearch-related

institutes in Sindh, thedesired results in agri-culture sector are notachieved. The situationconcerning losses beforeand after the harvest,seed varieties and tech-nology, irrigation waterusage technology andnew crop varietiesremain unsatisfactory, tosay the very least.

The farmers believethat by and large they donot get much benefitfrom research institu-tions. There seems to bea gap between them andthe farmers who, natu-rally, are the real stake-holders.

The per-acre yield gapin agriculture sector isattributed to the lack ofdissemination of infor-mation by agriculturedepartments concerned,including research andextension wings, non-availability of technolo-gy and the ever-increas-ing cost of inputs.

Other than the naturalcalamities, there is biggap between per-acreyield and potential. Thenational per-acre wheatyield is around 24 to 25maund per acre on anaverage though it can beincreased easily with acombination of measuresinvolving availableinputs, water and imple-ments even on controlledprices. ‘Imdad’, ‘SKD’,‘TJ-83’ are popularwheat varieties with avarying potential of 60 to70 maund per acre,according to wheat

researcher MohammadKhan. Sindh’s averageper-acre wheat yieldstands at 36 maund, fol-lowed by 27 in Punjab.

The non availability ofurea, phosphate fertiliz-er and the required cycleof irrigation water at dif-ferent stages contributeto the low per-acre yield.The same is the casewith sugarcane whosenational per-acre yield is400 to 500 maundalthough individuallyprogressive farmers doget 750 to 800 maund peracre.

“We need concerted

efforts by our researchbodies working at feder-al and provincial levelsto team up with the bod-ies of farmers in order totransfer the benefits oftheir research and tech-nology. I personallybelieve that we can over-come the yield gap withsome effort. The situa-tion is only satisfactoryin wheat’s varietieswhere we feel at home tosome extent. Otherwise,we have borrowed thingsto manage our agricul-ture sector,” said SindhAbadgar Board (SAB)General SecretaryMehmood Nawaz Shah.

Sindh’s rice-growing

belt of the upper regionis hit by a lack of properdrainage system. Thesoil quality has beenbadly affected there.Rice-growers get around40 to 41 maund per acre,which, according to vet-eran rice-grower GadaHussain Mahesar, is thelowest in the world asfarmers are getting over100 maund per acre inother countries. “Its notonly rice whose cultiva-tion is being affectedhere, but in fact the cul-tivation of all other cropsis hit as well,” saidMahesar.

The availability of cer-tified seed remains a farcry due to research inac-tivity at the Sindh SeedCorporation. For ricecultivation, a mixedbreed of rice seed isbeing used.Multinational companieslure farmers with offersof maximum yield if theyuse their seed. Irri-6 andKS-282 are the popularlygrown varieties.

Sub-soil water tablehas increased in upperSindh due to water-log-ging and, according toMahesar, 60 to 70 maundper-acre rice yield isachievable if thedrainage system worksproperly alongside theavailability of certifiedseed.

Farmers believe thatthe research factor isimportant, provided it isgiven serious attentionto come up with certifiedseed, production technol-

ogy and pre- and post-harvest handling mea-sures to lessen produc-tion losses.

Besides, control onpest attack on cropsoften becomes difficult.During the recent disas-ters, growers were seenworking in isolation onways to handle thedrainage of rainwaterthat had accumulated inthe fields.

According to DGResearch HidayatullahChajro, if cost of produc-tion could be managed,there were brighterprospects for increasingthe per-acre yield ofcrops like wheat, cotton,sugarcane and rice.Varieties of wheat seedintroduced by thedepartment are to thebenefit of the growers,he claimed.

He quoted TD-I thatgives 75 to 80 maund peracre, but admitted thatcurrently only 36.13maund per acre yield isobtained on an average.“Our varieties of seedare even purchased byPunjab’s growers,” hesaid, stressed that thefarmers don’t follow theadvice of his departmen-t’s experts regarding cul-tivation practices.

The department iscoming up with ‘Malir’, anew variety of wheatwhich is to be approvedby the Provincial SeedCouncil and, likewise,‘Benazir’ will be intro-duced. Malir will be ben-eficial for areas hit by

drought-like conditions,he said.

In the cotton sector,the Bt variety hasbecome popular, but isvulnerable to suckingpest and when that hap-pens, it remains beyondcontrol. Local varietiesof Hari dost, Shahbazwith 40 to 45 maund per-acre yield are recom-mended by the researchdepartment, while the‘Resham’ variety is rec-ommended for areasalong the coastal belt.‘Kanwal’ is a new varietyof rice which can begrown in low-lying areasthat are hit by accumula-tion of water duringrains and floods.Similarly, DR-83 has agood potential. A varietyof ‘Chandka’ of sugar-cane stands approvedand would be introducedsoon.

Director Programmesand Projects at theSindh AgricultureUniversity, Tandojam,Qazi Suleman, pointedout that the universitywas working in collabo-ration with the HigherEducation Commission

(HEC) and had set upfour important centreson seed production anddevelopment, bio-salineagriculture, plant germplasm conservation, andanimal germ plasm con-servation.

“The centre regardingthe seed production anddevelopment is at anadvance stage and weplan to come up withnew varieties of seedwith desirable character-istics and high poten-tial,” he said and addedthat mainly wheat andcotton crops were thefocus of attention andsoon the scope of thecentre would be widenedto cover other crops aswell.

“We will come up witha chain that will ensurethe availability of basicseeds which will be mul-tiplied by seed organisa-tions in both the publicand private sectors inthe next two years,” heclaimed.

A study is also underway at the centre for bio-saline agriculture, headded. One-third ofSindh’s agriculture land

is affected by salinity.“The study aims at com-ing up with solutions tothe salinity problem andwill hopefully convertthese lands into fertileones for the farmers,”said Suleman.

The SindhHorticulture ResearchInstitute (SHRI) atMirpurkhas has alreadybeen emphasising theneed for high-densityplanting in the mangosector and urging thegrowers to follow thesepractices to improvetheir per-acre yield andthe quality of fruit. SHRIrecommends that at least400 mango plants can begrown under high-densi-ty planting method in anacre instead of 35 plants.

It will be easily man-ageable and the qualitywill be ensured too. Itcan take the productionto 14 tons per acre fromthe current seven tons.Last year’s trial ship-ment of Sindh’s mangoto Europe’s supermar-kets had proved to be anice-breaking for theexport of mangoes fromSindh.

Some global good agri-culture practices (GAP)mango-growers sent theshipment under theUSAID programme andin initial assessmentreport they have beengiven positive indicationof commercial shipmentif certain specifications assuggested in a report aretaken into consideration.

SHRI director AttaMemon pointed out thatthe drainage systemneeds to be improved tosave orchard farming,otherwise another activemonsoon will causesevere damage. ■

P AKISTAN has not been able to realize itspotential in the global trade related to fruits.Despite a decent local production, an almostnegligible quantity is being shipped to vari-ous countries. And, ironically, despite the

low exports, local consumers also miss out on the siz-able production owing to substantial increase in priceson account of handsome profit margins being chargedby the retailers.

It’s a sorry tale of policy neglect, handling wastage,inefficient transportation and outdated storage.Above all, it is the lack of realisation that the worldhas moved on and we have been unable to keep pacewith it.

Pakistani exporters are making every possibleeffort to increase the volume of exports both in termsof quantity and value, but they are facing a lot of chal-lenges at both domestic and global levels.

In the last three to four years, imports of fruits havebeen going on whose main buyers are well-off people

having no cash-flow problems. But the trend of importlooks strange when the country itself is producing avariety of high-quality fruits which do well againsttheir foreign competitors in terms of quality and taste.

At the domestic level, there is literally no effectiveprice checking mechanism that could restrict theretailers from indulging in huge profiteering.Consumers pay almost double the price for most ofthe fruits at the retail level despite the fact that fruitsare lifted by the vendors at nominal rate from thewholesale market.

Amid high production, the export of fruits has yet tomake any substantial growth due to some seriousissues like lack of quality certification, grading, mar-keting, sub-standard packaging and huge post-harvestlosses.

A sizable quantity offruits is lost during trans-portation, storage andharvesting, but no seri-ous efforts have beenmade to curb the losses.

Pakistan mainlyexports kinow, mango,apple, grapes, guava etc.to various countries andkinow is the most domi-nant among them all,with exports of about270,000 tons by sea,fetching foreignexchange worth approxi-mately $150 million perannum against a totalannual kinow productionof over two million tons.

Mango productionstands at 1.6 million tonsin which the share ofexports is only 150,000tons. A total of 2,000 tonsof apple is shipped to var-ious foreign destinationsout of a total productionof 0.5 million tons.Pakistan produces 72,000tons of grapes, butexports only 500 tons perannum. Guava exports ispaltry at 400 tons out of atotal annual productionof 0.55 million tons.

These export figuresversus local productionfigures suggest that a bigexport potential is yet tobe tapped and seriouseffort is required at bothlocal and internationallevels to enhance theexport earning.

Co-Chairman of theAll-Pakistan Fruit andVegetable ExportersImporters and MerchantsA s s o c i a t i o n(APFVEIMA) WaheedAhmed said exporterswere continuously mak-ing a lot of effort to boostthe export. He claimed

that Pakistan had not lost any significant export desti-nation in 2011. In fact, some of the destinations thathad been lying cold in the recent past, like Japan, theUSA and Mauritius, were explored once again.

Talking about the export prospects in the currentyear, he said the exporters have planned to penetrateand explore the potential of new markets likeLebanon, South Korea, Australia, South Africa andIndia.

In collaboration with the Trade DevelopmentAuthority of Pakistan (TDAP), the Association hasarranged participation of its members in differentleading fresh produce international events, exhibi-tions and seminars like the Fruit Logistica inGermany, Fruit Logistica (Asia), the Asia FruitCongress, while delegations were sent to Lebanon,South Korea, Australia, South Africa, Malaysia,Russia, China and India.

On the issue of problems related to quality and stan-dards, he said Pakistani exporters were still managingtheir European markets as far as quality and standardprotocols were concerned, and had not faced any sig-nificant losses on those counts. However, negotiationsrelated to the plant protection protocol were still inprogress, and something positive is expected soonwhich will hopefully result in the lifting of bans bycountries like Australia, South Korea and SouthAfrica, among others.

Those in the know of things believe that there are

some problems in place with shipments to Europe.According to the required standards, the exportersshould upgrade and concentrate on installing Hot WaterTreatment, Irradiation and VHT Plants to improve thequality to bring it in line plant protection standards,while farms should get their acts together to get theGood Agricultural Practices (GAP) certification. So far,only 18 farms have got the certification in Pakistanwhile a few others are in the process of getting it.

When asked how far exporters of fruits hadachieved success in maintaining quality and standard,Waheed said the industry was stable, and adopting allmajor protocols to manage the quality and standards.

“We need improvement in the growing area fromwhere the fruits come and for this we need to educatethe growers, facilitate them in skill development, andestablish a trend towards Research and Development(R&D),” said Waheed.


A pendulum swing

We can’t get tothe $4 trillion insavings that we

need by justcutting the 12 percent of the budget

that pays forthings like

research andeducation.

— Barack Obama

While farmers complain of inactivityat the various research centres,those running the laboratoriesblame the growers for beingindifferent towards scientific advice

By M. H. Khan

The lab-farm gap

The decade ahead is crucial indeciding which way the country isgoing to go. Pakistan could well bea giant fruit exporter at the end ofthe period, or could even end upbeing a leading importer of fruits

By Aamir Shafaat Khan



W HAT has largely gone unreported in themainstream media is the suffering of thefarmers and the agriculture industry inrural Pakistan – and agriculture as weknow represents 22 per cent of the coun-

try’s economy and indirectly affects another 20 percent. Rural Pakistan represents roughly about 60-70per cent of the population and with the after-effects ofthe floods in Sindh, it is being hit hard by the increaseof agriculture inputs which is affecting the livelihoodof this strata of society. Urea, the staple fertilizer toensure productivity and a strong yield for key cashcrops, has gone up astronomically from Rs800 per50kg bag in April 2010 to Rs1810 per bag. In the last21 months, farmers have seen an increase of Rs1,010compared to a historical increase of Rs750 in 32 years.

Clearly this inflationary increase on a bag of urea

driven by government policies and inaction hasamounted to huge pressures on farmers that are help-ing contribute to food inflationary trends. Since 2010the prices of wheat, rice, and cotton have increasedthough global trends have also played a part.

The increase of fertilizer price has been driven pri-marily by the gas curtailment to fertilizer plants.However, only half the increase over the last twoyears has been due to the gas curtailment; the restowes it to taxes which cumulatively cost the farmersRs462 per bag. Add another Rs40 due to shortage fac-tor of local urea, and you know the impact of policyand vested interests.

The problem lies with the gas policy which has beenad hoc and led by urbaninterests. Many seg-ments are also stealinggas and have stolen formonths if not years. Asper the 2005 GasAllocation Policy, the fer-tilizer sector has priorityafter the domestic con-sumers, but as a sector itreceived less gas than theothers, especially in thefirst half of 2011. Theinterest of the country inthe agriculture sectorshould be supported as itsupplements severalother key sectors.

The combined ureaproduction capacity ofPakistani fertilizer com-panies stands at 6.9 mil-lion tons against thedomestic demand of 6.3million tons, which wouldmean the end of a needto import fertilizer if anuninterrupted supply ofgas was ensured. And, asdemonstrated in Augustand September when gaswas supplied to the fertil-izer plants, pricesdropped due to morelocal production andhence more local urea. Itis also ironic that thecapacity of the fertilizersector received a boost inJanuary 2011 whenEngro began operationsof its new fertilizer plant,but still Pakistan had toimport urea.

In India the agricultureindustry is well lookedafter where food infla-tion is a key metric for alarge population. Thegovernment ensures fer-tilizer is cheap andaffordable. Though thereis a significant shortageof gas in the country,especially in the winter

months, the government needs to prioritise gas supplyin Pakistan. Industries like textile, power, transport,glass, steel, plastics and paint have the option of utilis-ing other forms of energy as these do not create anydifficulties in developing the final product.

To overcome the supply-demand gap, the govern-ment spent $784 million to import 1.45 million tons ofurea in 2011, a waste of foreign exchange at a timewhen the country’s export growth has slowed down.Even after such a huge import, the government con-tinues to import urea at a huge cost of Rs2, 980 per 50kg bag having already imported another 300,000 tonsin 2012 while another 250,000 tons is being tendered.

Owing to drop in global price for urea, the govern-ment is expected to further import and tender at aprice of Rs2, 480 per bag or $430 per ton. Millions ofdollars can be saved by resuming the gas supply to fer-tilizer sector, which would ensure urea availability athalf the price. Continuous supply of gas to the fertiliz-er sector helps urea prices come down. By importingdiesel ($22 per mmbtu) and furnace oil ($ 18 permmbtu), instead of international ureas ($25 permmbtu) the government can run the industries andcan also use it for energy production and gas savedduring the process could be diverted to produce ureaat domestic level.

To look at it another way, it is cheaper for the coun-

try to save heavy foreign exchange on imported ureaand import diesel and furnace oil for the other indus-tries because fertilizer plants have no substitute forgas, as they use the gas to make ammonia for the pro-duction of urea. Hence, it would have been cheaper touse $784 million to import diesel and furnace for theenergy sector which is cheaper than imported urea.

Agriculture is by far the most important sector forPakistan’s economy. At the time of independence,Pakistan was primarily an agriculture-based countryand still remains even though the country has over theyears progressed into a more diversified entity. Theforward and backward linkages of agriculture to therest of the local economy, international trade and withpoverty alleviation are very strong. The horizontalintegration it has with other sectors is also somethingthat cannot be overlooked.

The textile industry needs cotton which is a cropthat requires urea as with the sugar industry whichrequires sugarcane, just to name a couple. A bad yearfor agriculture due to drought or other natural calami-ties always has extremely adverse effect on GDPgrowth, living standards of the population, price level,food security, exportable surplus and balance of pay-ments. Thus the dilemma of agriculture vs. industryor services sectors is totally false as our agriculturalsector forms the backbone of the whole economy. ■

Urban interests thwarting rural economy?

W ITH the right set ofpolicy framework,transparency in pric-ing mechanisms andregulatory oversight

of the corporate sector and itstrade, Pakistan is well positioned tocapitalise on its natural advantagein the agriculture economy.

The agriculture sector ofPakistan, despite facing multiplechallenges of both the natural andman-made varieties, posted a rea-sonably good performance on thestrength of higher net capital trans-fers to the sector, estimated to beseveral hundred billion rupees,during the last four years of thePPP-led rule in the country.

The better returns on farm pro-duction owing to surge in demandfired by higher global commodityprices since 2008 till late last year,coupled with the significantincrease in support prices of grainsand fibre in the country, enabledthe farming community to investmore in agriculture inputs inPakistan besides feeding in to thehigher demand for consumer goodsand durables.

The comparative prosperity ofthe farming community also trans-lated in an increased demand forfertilizer, a key input that con-tributes to higher farm productivityin the country. The spur in ureademand supported an enviable per-formance of fertilizer companiesthriving on subsidised feedstockgas supplies by the government.

Industry sources, however,claimed that the fertilizer sectorproductivity is compromisedbecause of suspension in gas supplybecause of natural gas shortages inthe country. They were critical ofwhat they considered “short sight-edness of the policy makers”. A fer-tilizer tycoon asked, “If a govern-ment cannot project demand andsupply of gas even over the medi-um term of five to 10 years andmake policy options to accelerateconsumption of fast depletingresources, what does it reflect?”

“It was criminal on the part of pol-icy-makers to encourage investmentin the CNG sector 10 years back

when they should have known thatgas supply will shrink and fall shortof its demand by the household andindustry by 2010-11,” he lamented.

Others said it was an unfortunatesituation for the investors whomade investment in the CNG sectorand associated trades, and also forthe consumers who switched to thecomparatively cheap fuel.

“Whatever the problems, no onecan deny the fact that the countrystill affords an environment goodfor the fertilizer producers inPakistan. At least their ballooningprofits so indicate,” a seniorbureaucrat said when approachedwith queries in Islamabad.

The recently announced annualresults by the listed fertilizergiants reaffirm their fortunes. Thesun seems to be shining bright onall the players in the fertilizer sec-tor, but Fauji fertilizer is said to beway ahead of the rest in terms ofprofit-making.

There are reports circulating inthe market that fabulous returns inthe said company lead to ratherirresponsible use of resources by itsboard of directors. Such reports ofextravagance, however, did catchthe regulators’ attention.

There have been reports in themedia indicating the interest of theSecurity Exchange Commission ofPakistan in the affairs of the saidcompany, but it is not clear – atleast not confirmed – if the regula-tors went beyond warning the com-pany to improve transparencyrelated to the usage of resources.

The representatives of the farm-ing community, however, have notbeen satisfied with the movers andshakers of the fertilizer market inPakistan. They flay the rising pricetrend in the commodity that ren-ders the key input inaccessible toan average farmer of limited meansin the country, or depress its usagebelow the required level.

They feel that the current policyframework rewards fertilizer manu-

facturers at the cost of the farmers.Besides the lack of transparency inthe pricing of the imported ureabreeds suspicion of massive corrup-tion involving bureaucracy, politi-cians and shady importers.

There are also reports of hoardingby irresponsible elements, creatingshortages in the market just beforethe Rabi season to push up prices.

It is true that the fertilizer priceshave persistently been rising sincethe democratic government tookover in 2008. However, the trendhas become more pronounced overthe past two years. A bag of ureapriced Rs800 in May 2010 now sellsat Rs1,800 or more at the retaillevel against the controlled priceof Rs1,200. Five years back, thesame bag was available for lessthan Rs300. The trend is the samein other varieties.

Syed Mahmood Nawz Shah of theSindh Abadgar Board said that thelucrative business of fertilizer needsto be taken more seriously by therelevant people in the provincialand the federal hierarchies.

He felt that decisions regardingthe import or allowing exports ofagriculture related commoditiesare often so timed that it widens

the scope of market manipulationto the disadvantage of the farmingcommunity.

He cited many examples wheredelayed decision on key compo-nents of agriculture policy hurtboth the farmers and the country atlarge by tilting the market to suitcertain vested interests.

“Had the government allowed theimport of urea three months earlier,it could have helped the growers whoin many cases had to incur excessivecost on fertilizer application for thecurrent Rabi crop because of itsunavailability and consequent black-marketing,” he stressed.

“A bag of urea is currently sell-ing at Rs1,800 or more, reflecting awhopping hike of over 95 per centfrom Rs820 a bag in January,2011,” he said, adding that one rea-son for the higher price was theremoval of subsidy, which urea pro-ducers passed on to the farmers. Hethought that the fertilizer produc-ers, importers and banks may bethe biggest beneficiaries of theincreasing prices.

Sources in the fertilizer manufac-turing circles admitted that the risein fertilizer prices has been steep inthe country. They, however, attrib-uted the trend to the absence of aholistic approach of the govern-ment to deal with multi-layeredissues related to the fertilizer trade.

A source at Engro stressed thatthe hike in the price of urea wasnecessitated by the underutilisa-tion of the new plants put in placeon the government assurance ofuninterrupted gas supply.

“The feasibility of the said ureaplant was based on a certain levelof capacity utilisation. If gas inter-ruptions restrict capacity utilisa-tion, the unit cost for the companyrises. It is but natural for a privatecompany to strive to pass on theburden to the consumers by incor-porating it in the pricing of thecommodity, especially when thedemand is inelastic,” he said.

However, other players who pushup the prices when Engro revisedits urea rates benefit by free-mar-ket mechanics that in this specificcase favour them, he argued. It isfor the government to check unilat-eral price increase by the compa-nies which did not incur additionalcost and are reaping fabulous prof-its.

“A sector that enjoys govern-ment guarantees and utilises sub-sidised raw material (natural gas)should behave professionally. Therelevant law dictates it to consultthe government before announcingany increase in the unit price. I donot think that they ever bother todo that. The fact is that the indus-try is taking advantage of a weakgovernment paralysed by privateinterests pulling it into differentdirections,” said an expert.

Asad Omer, President and CEO ofEngro Corporation, in an exclusiveinterview with Dawn at his office alittle while ago, said that he wasmore concerned about the regulargas supply to fertilizer plants thanthe government policy to continueor do away with the gas subsidy.

“We can spin in the extra cost inthe pricing of urea bag without seri-ously threatening the size of fertil-izer demand in Pakistan. I am will-ing to forego gas subsidy if we canget the required quantity of gas torun our new urea plant at optimalcapacity,” he commented while dis-cussing prospects of the fertilizersector in the country.

“Keeping in view the influencethat security establishment enjoysin the country, I do not think thatthe current government would doanything to threaten their econom-ic interests,” a disgruntled busi-nessman from Punjab, envious ofthe concessions to commercial pro-jects of military-run organisations,told Dawn.

“What kind of even playing fieldis this where one establishment istreated over and above the legal

framework governing its competingbusiness interests,” he wondered.

Khalid Mirza, a former chairmanof the Competition Commission ofPakistan, interviewed on the issuesome months back, felt the criti-cism against the fertilizer industrywas misplaced.

“If an industry is doing well, wemust not necessarily see it with sus-picion. The trend of profit in the fer-tilizer industry is in sync with theglobal trend. Why punish a sectorfor succeeding? I do not believe indirect public intervention in themarket. May be the governmentshould allow private fertilizer com-panies to import gas directly to suittheir needs now that gas has becomescarce,” he commented offhand.

The global fertilizer demand isprojected to rise again to hit a newrecord level, driven by growth inthe emerging economies and strongfundamentals in agricultural mar-kets, the International FertilizerAssociation said in a media reportrecently.

The global fertilizer demand,expressed as consumption of keynutrients: nitrogen, phosphorousand potassium, should rise threeper cent, said a summary of a mar-ket outlook. The local producerscan hardly keep their smiles offtheir faces! ■

By Afshan Subohi The relative prosperityof the farmingcommunity hastranslated in anincreased demand forfertilizer, making it difficult forthe manufacturersto wipe the smileoff their faces

Sun shining bright

The master’seye is the

bestfertilizer.

— Pliny TheElder

By Abdullah Khan


P AKISTAN will only haveto widen the exportrange of its agricultureproduce through value-addition for the next

couple of decades to overcome itsbalance-of-trade problem byearning higher foreign exchange.Besides, such a focus will alsohelp create a large number ofjobs for skilled and unskilledworkers in rural and urban areas.

A country bestowed with alarge range of farm producescould easily go into value-addi-tion by introducing such fiscaland trade policies which couldattract foreign investment tobring in the latest technologythat is needed for setting up afull-scale agro-based industry.

Even on ranking amongst topten producers of many farm prod-ucts in the world, the country hasmiserably failed to benefit fromthese high volumes simplybecause in the last five decadesor so, the policy-makers only con-centrated on the cotton crop anddeveloped supply chain that is

specific to that crop.According to official estimates,

the country is the second largestbuffalo meat and milk producer,but has no share in the worldmarket due to the lack ofrequired infrastructure, includ-ing world standard abattoirs andthe cold chain needed to main-tain quality and standard of suchperishable commodities duringstorage and haulage, startingfrom the processing unit to theend consumer.

This is not all. Pakistan also isthe fourth largest mutton suppli-er, firth largest mango producer,seventh largest wheat producer,the third largest producer of cot-ton-seed and chilies, and thefourth largest cotton producer ofthe world.

Besides, the country grows oneof the best quality Basmati rice ofthe world and has a sizeable sug-arcane crop to meet its domesticrequirement of white refinedsugar.

The diverse climatic conditionsof the country provide opportuni-ty of growing fruits, vegetablesand condiments, including spices.On a fairly large hectares of land,such high-value fruits as apples,mangoes, guavas, dates, peachesand grapes are grown.

However, in the absence ofproper infrastructure, cold chainand marketing for export around30 to 40 per cent of production ofthese fruits annually go to waste.The situation is so grim that alarge portion of fruit productioneven fail to reach the domesticmarketplace in time.

Though it is officially admittedthat the country has failed totranslate these advantages andstrengths in capturing a largershare in the global processedfood market, even then no worth-mentioning steps have beentaken to change things aroundfor the better.

The nature is so kind on thisregion that even small villages inremote areas of Balochistan and

Sindh are producing some of theworld’s finest fruits such aschikoos, papayas, bananas,coconuts, dates etc. Pakistan pro-duces around 350 varieties ofdates and Balochistan is one ofthe largest producers, but around70 per cent of production fails toreach the market place becauseof no road network.

Similarly, more that 36 vari-eties of vegetables are grown inPakistan, but in the absence ofproper infrastructure and coldchain most of the production goto waste or fails to fetch properprice. Even today most of thefarm produces in the country aretransported to the marketplacethrough traditional methodswhich results in a higher ratio ofwastage.

The official estimates putannual production of freshfruits at 7,051,512 tons, of veg-etables (Kharif and Rabi crops

included) at 3,983,326, and ofcondiments at 3,792 tons.

However, experts believe thatproject financing would be need-ed to introduce technology in thevalue addition chain of differentfarm produce and this could onlybe possible once there is afocused approach and investorsare given proper guidance andassistance at all stages and levels.

It simply needs dedication fromthe private sector which couldbring in investment and therequired technology, but withoutthe patronage of federal andprovincial governments this taskcan not be achieved.

There would be greater need todevelop farm-to-market supplychain and logistics if success hasto be achieved in the value-addi-tion of farm produce. The onlyway out is to concentrate onvalue-addition of existing exportsbecause presently, barring tex-

tiles, most of the exports are ofsemi-raw material or are of low-cost value-addition.

Most of the farm produces arebeing exported at a low cost sim-ply because of poor standard andsecondly due to lack of knowl-edge about global requirementfor different type of treatments –vapour or hot water – and sani-tary standards needed for freshfruits and vegetables. Above all,it requires cold chain and properpacking material and systemsmeeting hygienic conditions.

Once awareness is created andthe required facilities are devel-oped, the country could easilymultiply its exports and earningof farmers within a short period.However, Pakistan has to focuson high yielding markets, but forthis our exporters have to meettheir specifications starting fromprocurement, grading, processingand packaging.

After the European Unionimposed a ban on fish importsfrom Pakistan on account ofpoor hygienic conditions of pro-cessing units, all of our fishcatch is now being exported toVietnam from where aftervalue-addition it is being export-ed to EU member states.

However, a lot of efforts in con-trolling contamination in agricul-ture produce, including cotton,fruits and vegetables, will have tobe ensured by following worldstandards. The world has changedso much that some nations evenseek traceability of fresh fruitsstarting from orchard tree.

In short, Pakistan will have todevelop logistics in its entirevalue chain of fresh fruits andvegetables for which a lot ofinvestment would be needed.

Similarly, there would be aneed for setting up the cold chainstarting from the farm to thepoint of export which means thatcold storage facilities will have tobe developed across the countryand goods in transit will alsohave to be transported throughreefer containers.

It is the quality and specifica-tion of fresh fruits and vegetableswhich could fetch good price andmake its place in the world mar-ket and this would require invest-ment and know-how from leadingmanufacturers, producers andretail outlets. ■

By Parvaiz Ishfaq Rana

Not quite the ideal farm-to-market transportation of farm produce

A revolution in pending Despite being a leadingproducer of variousfarm or farm-relateditems, Pakistan hasstruggled to streamlineits farm-to-marketcomponent to convertits progress into a full-scale revolution

It is this withfarming, ifyou do onething late,you will belate in allyour work.— Cato The

Elder



suppliers, and so on. Thewelfare implications ofthis market structure, assuch, are very desirable:it maximises welfare forthe society at large.

This is the typical com-petitive market thatAdam Smith thought ofand used when he wenton to postulate that if allor most markets metthese conditions, or wereclose enough, the “invisi-ble hand” (each buyerand seller trying to do thebest for themselves) willlead to overall welfaremaximisation for the soci-ety as well.

Agricultural productmarkets fit the bill to thedot. There are a very largenumber of buyers and sell-ers in wheat, rice, sugar-cane, cotton, and in eachfruit and vegetable mar-ket. The product can begraded, but is usuallymore or less homogenousand also non-distinguish-able on the basis of pro-ducers, which means thereis no issue of branding.And price information isalso widely available foragricultural products.

But we also find thatagriculture markets,instead of being primeexamples of competitivemarkets, are ones wheregovernment involvementand interference is verycommon and almost uni-versal.

US intervenes in itswheat market quite heav-ily, as do other large pro-ducers such as Canadaand Australia, and so dothe Europeans, and notjust in the market forwheat, but for a numberof other agriculturalproducts too.

Similarly, the interven-tion is also done in devel-oping countries, especial-ly the ones where agricul-ture is an important con-tributor to national out-put and employment.

In the Pakistani con-text the example ofwheat may be relevant.The government does notonly intervene on theside of determining theprices of most inputs, butby offering (or trying tooffer) a floor underwheat prices it guaran-tees a wheat price for thefarmers to ensure certainincome for them and tocreate an incentive forsowing. Simultaneously,however, it is also cog-nisant of the need to

ensure reasonable pricesof flour for all consumers,especially for urban con-sumers, and so managesthe price of flour too.

Hence, effectivelyspeaking, it tries to man-age all prices in thewheat market: inputprices, price of output,price of flour, and by con-trolling import andexport, it controls theprice of imported wheattoo. The government alsomaintains wheat stocksso that it can supply themarket in case flourprices go up at any pointin time and beyond theacceptable limits.

Why does the govern-ment need to do all this?And, more importantly,why does the govern-ment do it in the mannerit does? Without goinginto the issue of whetherall of the above objec-tives regarding farmerincome and keepingprice of wheat stable andin a certain range aredesirable, it does seemthat all of the above canbe achieved by the gov-ernment with a lot lesshassle and expense andwithout invoking a crisisevery time.

If the objective is toensure a minimum levelof income for the farmer,all that the governmentneeds to do is to ensurethere is a guaranteedfloor for wheat. To makethe floor effective, thegovernment will need toensure that if prices gobelow the floor there issomeone (government orits agent) to buy wheat atthe floor price.

The government needsnot interfere in the inputmarkets to manage farmerincome. Similarly, if it waspossible for small farmers,and it is usually the smallfarmers who have to selltheir wheat quickly afterharvest time as they needthe income, to get accessto capital markets, theneed for buying wheat toensure a floor will becomeless binding.

If the farmers have theability to hold on to theirwheat and not sell it tothe middlemen due tofinancial constraints, themarket for wheat willremain widely dispersedas well. And, in addition,the price fluctuation,

which is caused by in-sea-son and out-of-seasonavailability of wheat dif-ferentials and the abilityof the middlemen to holdthe market hostage, willalso decrease.

To make prices of flourstable, the governmenthas to ensure that flourmills compete with eachother and are not able tocollude, implicitly orexplicitly, and there issufficient supply avail-able so that panic buyingor manipulation of themarket, by some players,is not possible. This canbe quite easily managedas long as the govern-ment has a strategic storeof wheat.

The critical aspect isthat the governmentneeds good information.It needs information onhow much wheat was pro-duced in the currentyear, how much is in thestores, and how muchwheat consumption isexpected till the nextcrop. If it has good infor-mation on the abovecounts, it should be easyfor the government tomanage flour prices atthe desirable levels.

If the government has astrategic store and knowsthere is enough wheat inthe country till the nextharvest, or till it canimport wheat, it will behard for any player, bigor small, to manipulatethe market.

What is interestingabout the wheat marketis that almost every yearthere is a crisis.Whatever the harvest,the crisis seems to beindependent of it. If thecrop is good we first havea crisis in how to manageprocurement. Then thegovernment allows wheatexports, saying that wehave too much. And thenin the last part of theyear the crisis is aboutnot having enough andwe have to import wheat– at the sellers’ price ofcourse – from whichevercountry is willing to sellwheat to us at that stage.

If the crop is poor thegovernment resorts toextortionary tactics likethe imposition of Section144 to restrict the move-ment of wheat betweendistricts and/or provincesto procure wheat. Or it

starts raiding warehousesto find the alleged black-marketers. And then wehave to import wheaturgently and on a “warfooting”.

If we had a strategicstock and the ability toimport, we would not needto do that. And if pricesremain stable, therewould be no incentive fora black market to developeither. All this does notseem to be too difficult toachieve: most other coun-tries seem to be doing thispretty well for theirrespective food staples.

What is incongruous inthis entire setup is themoral high ground thatgovernment officials tryto take against the mid-dlemen and the allegedblack-marketers. One ofthe stated aims of thegovernment for thewheat sector is to involvethe private sector in thismarket: in procurementand storage of wheat andin flour production aswell as marketing.

The private sectorwould, clearly, enter themarket for profits. Themiddlemen would like tobuy wheat when it ischeap and to sell it whenit is expensive. This is theprinciple behind demandand supply as well asbehind all trading activi-ty. People buy stockswhen they are lowerpriced and sell them at ahigh. The same is true forthose who speculate infutures or in currenciesand so on. If you have aplot of land, you wouldalso like to sell it when itis more expensive.

But when the middle-men do it in the wheatsector, the governmenttries to portray them asevil beings. The govern-ment raids warehousesand cracks down on peo-ple who sell flour orwheat beyond a certainprice. This just createsuncertainty for theinvestors in the wheat

market. The result isexactly opposite of whatthe government actuallydesires: where we wantmore players to enter themarket, we end up scar-ing them away from themarket. We could domuch better by workingon managing the supply

of wheat from the stocksbetter and by ensuringstable policies so that theenvironment can becomemore predictable and lessuncertain for privateentrepreneurs.

It should not be too dif-ficult to predict, with afair bit of accuracy, whatour yearly requirementof wheat is. We know theconsumption over the last

many years. Even findingthe trend over this periodwould allow us to predictwhat would be theapproximate demand forwheat next year.

In addition, if we allowfor any sudden taste orother changes to occur,our estimates would beeven better. We havefairly decent crop esti-mates too. And they getbetter as we get closer tothe time of harvest.

Given the above, itshould not be difficult topredict whether wewould be in a surplusyear or a deficit yearahead, and knowing thatwould allow us to organ-ise for some exports fromPakistan or importsand/or adjustment of thelevel of stock.

How can it happenthen that in the same sea-

son we first say that thecrop in a year was verygood and so we allowexports to take place, butlater in the same seasonwe announce that we donot have enough for localdemand and then allowimport of a certainamount?

The answer must lie ininterest-group activitywhere some people areallowed to make moneythrough exports, while

others are given licensesfor import later in thesame year. The cost ofsuch activity is borne bythe masses, while thebenefit goes to a handfulof individuals.

The same sort ofdynamics prevails inother commodities too.We have seen export andimport of the same com-modity in the same sea-

son in fruits and vegeta-bles as well. In the caseof sugarcane, ensuring acertain price for thefarmers from factorieswhere the cane isbrought for eventual con-version to sugar is not atrivial exercise. Sugarproducers are monopsonybuyers in many places,and farmers, especiallythe smaller ones, aredependent on the mills.

Mills take advantageand delay making pay-ments as well as theweighing of the cane sothat it may get drier andlighter, and so on. Evenon the sugar market side,the government hasrepeatedly failed, like inthe wheat market, tomaintain effective stocksand to keep the pricesstable. The same sort ofissues crop up in cottontoo. So, the problemsidentified above go acrossa number of markets.

There are large gainsto be made by makingagricultural product mar-kets more efficient, pre-dictable and transparent.These gains would be inthe form of price stabili-ty, investment increaseand income stability forcertain groups. But thatrequires sector leveland/or micro level think-ing for each area.

Currently we are toomired in and open tointerest-group activityand these groups areable to use governmentpresence in these sectorsto extract rents from thelarger population.

The government hasrepeatedly said that itwants to involve the pri-vate sector, but if policiesremain unpredictable andnon-transparent, the largerprivate sector will shyaway from the sector. Foragriculture markets tomatch its theoretical depic-tion and to garner the ben-efits of competitive forces,we have to avail of oppor-tunities for private-sectorinvolvement and the cre-ation of optimal structuresfor that. We seem to bequite a distance from thatright now. ■

The evergreen ‘emergency’

There seem to be but three waysfor a nation to acquire wealth. Thefirst is by war, as the Romans did,

in plundering their conqueredneighbours. This is robbery. Thesecond by commerce, which isgenerally cheating. The third byagriculture, the only honest way,

wherein man receives a realincrease of the seed thrown into

the ground, in a kind of continuousmiracle, wrought by the hand of

God in his favour, as a reward forhis innocent life and his virtuous

industry. — Benjamin Franklin


He added that R&D was themost important element whichcan not be ignored, and the gov-ernment should facilitate theexporters by establishing a full-scale R&D department throughwhich the Association would beable to improve the skills of thegrower, and educate them aboutproper pre- and post-harvest pro-tocols to increase the yield andquality of fresh produce.

When asked how Pakistan wascompeting with China, India andother countries, he said everycountry had its own special vari-eties of fruits according to ori-gin, climate, weather, soil condi-tions, and their attributes andtaste were not comparable.However, Pakistanikinow and mango, hesaid, were far superior interms of taste, aroma andtexture compared tothose produced by, say,China and India.

Talking about prob-lems in terms of farm-to-market transportationand shipments, Waheedsaid fruits, being highlyperishable in nature,needed proper cold stor-age facilities where idealtemperature could bemaintained. Such facili-ties were partially avail-able and had a negativeeffect on the quality side.

The importance ofR&D can be seen by thefact that without improv-ing the yield, there is noother way of managingeither the local marketor the exports. If a grow-er is achieving 10 tonsper acre, with a littlefine-tuning based onresearch and develop-ment, the production cango up to 30 tons per acre.

On export targets ofvarious fruits for 2012,Waheed said the govern-ment had not assignedany task/target to theexporters, but theAssociation had volun-tary given targets to itsmembers to improve the

country’s exports. TheAssociation has fixed targets forKinow at about 300,000 tons,and for mango it is 175,000 tons.

The coming 10 years, he said,were crucial in deciding whichway the country is going to go.Pakistan, he said, could well bea giant fruit exporter at the endof the period, or could even endup being a leading importer offruits. It depends on how muchinterest the government takes.

“If the government is seriousabout earning foreign exchangethrough its fruit exports, it willhave to think about establishing

an R&D department under theAssociation’s supervision wheretechnical and field-relatedskilled personnel may work onimproving the per-acre yield, itsquality, output and standards,”he stressed.

The Association, he said,would facilitate the growers byeducating them about the wayforward through productivetraining courses and workshops.

Alongside, the availability ofproper resources like the provi-sion of water, power and gas sup-plies, such innovations can takePakistani exports of fresh fruits

to $8 billion in the decadeahead, he said.

The import of apples, grapesand oranges has been going onfor the last three to four years,but the quantity is negligible.Apple is arriving from China,Australia, the US, New Zealand,Brazil and Iran, while Indiangrapes are finding their way intothe local market via Dubai, andorange import is going on fromTurkey, Egypt and South Africa.If the trend continues, this willconvert the country into a fruitimporter by the end of the samedecade, he warned. ■

A pendulum swing






I N the last decade or so, the poultryindustry in Pakistan has come ofages: the sheer statistics are over-whelming – the annual broiler pro-duction has reached close to one bil-

lion birds that meets 40 per cent of thenational protein requirements, while eggproduction has reached 8.6 billion perannum.

The share of poultry in the nationalmeat consumption mix has increasedfrom 16.4 to 24.3 per cent, pushing theconsumption of mutton down to 0.616million tons from 0.649 million – a fall of20 per cent. Currently, the industry car-ries an investment of over Rs300 billion,with an annual turnover of Rs40 billion,and employs 1.5 million people.

The major development in the poultryindustry came in 2004-05 when the threatof bird flu almost destroyed the industry.To its credit, the industry took the scareas an opportunity to raise defencesagainst diseases, not only that of the birdflu, but also others like swine flu.

Since then, it has matured into a worldclass business concern, being run alongscientific lines. It is the financial andtechnological strength of the industrythat has attained and maintained the‘bird flu-free’ status for Pakistan since2007.

There is, however, a flip side: alongside its expansion, the industry has con-solidated in the hands of some big housesthat now cover the entire productionline. This trend has led to accusations ofcartelisation and money-minting, whichbecame loud enough to draw the attrac-tion of the Competition Commission ofPakistan.

The Commission found certain mea-sure of truth in these accusations andslapped a fine of Rs50 million on it in2009. The industry, once again, took it inits stride, and continued its technologicaland business expansion to reach a levelwhere it can compete in the world mar-ket.

Following the bird flu scare, where theindustry had to cull millions of birds fortwo years, it found a technologicaldefence against the disease in controlledsheds that separate the chicks from theseasonal carriers (migratory birds) of thedisease. The entire industry quicklymoved to these sheds, which multipliedthe cost of doing business many timesover. Though the industry has insulateditself against one particular disease, it,however, gave birth to new trends thathad their own cost-benefit ratio.

To begin with, the business becamehighly capital-intensive. Before 2004, it

was known as a poor man’s business;more like a cottage industry, contribut-ing hugely to poverty alleviation in ruraland urban areas of the country. The birdflu epidemic turned the table on the poorand small farmers. Once down, a hugemajority of them could not replenishtheir stocks, and went out of business.

As industry went hi-tech – confined tothe controlled sheds – it became highlycapital-intensive, needing millions ofrupees to set up even smaller sheds. Thesheds were necessary because flockswould not survive outside them.

This trend drove even the mid-levelfarmers out of the race, with the entirebusiness started concentrating into a fewwealthy hands. The entire range of thebusiness – poultry-feed, grandparentstock, parent stock, day old chick, broilerchicken, and eggs – went into the samehands.

The figure, as furnished by the indus-try to the Competition Commission ofPakistan (CCP) in 2008, showed 20,000broiler and 6,000 layer farmers, 150

hatcheries and 141 feed companies oper-ating in the country. However, over 60per cent of the market share, as docu-mented by the CCP, is held by a few bighouses, which are now involved in theentire range of the business.

The second trend that the industry wit-nessed was its concentration in thePunjab, particularly around the city ofLahore. The major national concentra-tion of business is within 30 miles ofLahore.

Karachi, which houses around 40 percent of the total urban population ofPakistan, should have seen a huge devel-opment of business around it if normalcommercial sense was to prevail. It, how-ever, lost initiative to Lahore because ofcontinued law and order problem there.This major business activity aroundLahore has its own consequences; itkeeps the market suppressed in andaround the city and high in other parts ofthe country.

Having attained a certain level of tech-nological and scientific advancement, itmay be time for the industry to developprocessing – hitherto a relatively neglect-ed part, with only two per cent of thetotal production being processed by twobig business houses.

The processing part is necessary forthe industry because without it, it canneither bring stability in the domesticbusiness nor can export poultry productsto foreign markets. The internationalmarket, after the bird flu scare, nowaccepts only hygienically processedchicken for health reasons. Thus, theindustry now has to move to invest in theprocessing and value-addition facilities.

It is precisely for this reason that theindustry, which has technological where-withal to compete in international mar-ket, has not been able to claim its sharein the world. Before the bird flu scare in2004, poultry exports from Pakistanstood at a healthy $20 million. After allthat technological and fiscal investmentin the industry, the exports have comedown to almost zero.

The industry, as usual, blames the gov-ernment for failure to give incentives toexporters or even go for necessary bilat-eral and multi-lateral agreements toallow such exports from Pakistan. Itwants the government to initiate theprocess of getting Pakistan approved as ameat exporter in halal food importingcountries as it sees a great potential for

value-added chicken products in theEuropean Union, the Gulf CooperationCouncil countries and the NorthAmerica. The international trade in halalmeat is estimated to be worth $300 bil-lion, with Pakistan having almost noshare.

The industry has since long been ask-ing the government to disallow poultryfarm clusters through a law to space outchicken farms at least 1.5 kilometresapart to reduce the risk of the spread ofdiseases among various poultry flocks.

But the government has not moved onthe issue, which threatens the industrywith different disease. After all, exhaustfans in these sheds bring in as much airas they throw out. Most of the diseasesbeing air-borne, close sheds could easilytransmit diseases to each other. Such alaw certainly makes sense, but has stillnot been enacted.

The government, on its part, main-tains that it is a completely privateconcern, and the industry should findits way to international consumersrather than looking for official help.Though it promises to keep a high andstrict duty regime to protect the localindustry, it also expresses helpless-ness as it has to keep lowering dutyon the insistence of the lenders andthe multi-lateral trade agreementsthat it is part of.

Surely, the industry cannot itself gofor bilateral and multi-lateral agree-ments for allowing imports in otherscountries and the federal governmentmust create such a legal platform forthe industry. The federation can alsotake a cue from Punjab, which recentlylaunched a multi-billion rupee pro-gramme to make 15 agriculture and live-stock products acceptable in the worldmarket.

Under the supply chain managementprogramme, thousands of agriculture andlivestock farmers will be trained andtheir farmers certified for export. Thefederation must start such elaborateplans for other products as well, poultryincluded.

But the industry should also come for-ward, and invest in internationally-accepted processing facilities. After all,it is in its benefit to look beyond thedomestic market and increase its profits.

Between July 2007 and March 2011,the industry helped the government toput up 10 well-equipped labs, 40 regional

surveillance centres and 66 rapidresponse units to ensure that Pakistanretains its bird flu-free status. It needs toinitiate the second part of the initiativeand go for putting in place processingfacilities with the same spirit.

The poultry industry, with the help ofthe government or independently,should put up an elaborate plan andmechanism for supply chain improve-ment, certifications and traceability – alatest license for export to the worldmarket.

In order to do that, the industry nowhas to adopt a strict regime of food safe-ty; the entire supply chain has to weavein demonstrable safety measures and getcertifications for the purpose.

Both the industry and the governmentneed to shoulder their responsibilitiestowards the sector. It is their jointresponsibility to ensure that the qualityof meat is safe, disease-free and healthy.Processing plants are responsible forsafe, hygienic, nutritious and healthychicken meat. The production of poultrymeat as per international standardsshould be ensured even for the domesticmarket.

The importance of the poultry canhardly be exaggerated. It is still thecheapest source of animal protein forthe Pakistanis. If developed further, theindustry can remove the national pro-tein deficit: average daily animal pro-tein consumption in Pakistan is only 17-gram per capita against internationalminimum requirement of 27 grams. ■

The highs and the lows

P OULTRY products haveassumed greater signifi-cance in Pakistan’s meat-consumption scenario asthe other sources of ani-

mal protein – mutton, beef and fish– are literally out of the reach ofthe masses in view of the ever-ris-ing prices. This is not to suggestthat poultry prices have not goneup, but, comparatively speaking,they are on the lower side.

Despite preference for the ‘whitemeat’, however, the per capita con-sumption of poultry meat perannum is extremely low inPakistan (4-6kg) compared to thedeveloped countries (25-30kg),though there has been an increaseof about 138 per cent in poultrymeat consumption over the lastdecade. This basically means thatthe market is up and can look for-ward to even better days ahead.

People directly involved in the

business take credit for what theycalled making provision of poultryproducts possible at a price that“really doesn’t include” the impactof inflation. The situation, they say,has to do with the significantgrowth of the poultry industry thathas largely happened without help-ful government policies.

The viewpoint is supported byfigures that the share of poultry intotal meat production now standsat about 30-40 per cent and thepoultry industry is stated to have agrowth rate of 8 to 10 per centannually.

The increase in poultry consump-tion and production, expertsbelieve, should raise concernsrelated to the quality of poultryproducts, which, they say, is direct-

ly linked to the feed provided tothe birds.

Feed, it is said, accounts for 80per cent of the cost of poultry pro-duction and right now about sixmillion metric tons of poultry feedis being produced in the country.Of the total, 82 per cent is manu-factured in Punjab, while theremaining 18 per cent comes fromSindh. The feed requirement forKhyber Pakhtunkhwa andBalochistan are mainly met by

Punjab.To a question about what consti-

tutes poultry feed, Dr JameelAbidi, heading the nutrition divi-sion of the Poultry ResearchInstitute (PRI) in Karachi , saidthat the major portion was of grainand the rest comprised plantbyproducts, vegetable protein, ani-mal protein and molasses in addi-tion to vitamins and minerals.

The feed is given dependingupon the type of bird, its age and

its nutritional requirements. Thesamples often brought for exami-nation are found having low pro-tein and carbohydrate levels andthere is hardly any complaintsrelated to adulteration or contami-nation, he said, adding that feed-millers were themselves very cau-tious about the ingredients of thefeed as the buyer won’t buy theproduct if it was harming hisbirds,” he argued.

Regarding the institute’s ser-vices, he said the institute, set upwith the help of the Food andAgriculture Organisation in the1970s, provided free assistancerelated to pathology, nutrition,incubation, housing, managementand marketing to the farmers.There was, however, no provision

for manufacturing standardisedfeed at the institute.

In the absence of any quality con-trol checks from the governmentside, a number of concerns existamong consumers regarding thequality of poultry feed. Major con-cerns are related to the quality ofblood meal and fish meal providedto the birds as a source of animalprotein and the high use of antibi-otics that leave residues in thepoultry, thereby making the prod-uct unfit for human consumption.

There are also some concerns ormisconceptions related to themethods adopted to increase thegrowth potential of the bird.

“Despite being an agricultural


How white is the white meat?

Having matured into a worldclass business concern inthe last few years, thenational poultry industryhas also faced allegationsof cartelisation andmoney-minting. The biggerworry, however, is itsinability to take the next stepforward that will convert itinto an exporting industry

Ahmad Fraz Khan

An election iscoming.

Universal peaceis declared, andthe foxes have

a sincereinterest in

prolonging thelives of the

poultry.— George Eliot

Concerns related to the quality of poultryfeed, though denied by many in the industry,are common among the consumers

Faiza Ilyas


T HE most shocking news for thefisheries sector in recent timeswas the April 2007 ban imposedby the European Union onPakistan’s seafood exports.

However, it made the exporters to look fornew markets and the changing world mar-ket scenario and high prices of fish nulli-fies the negative impact of the ban andsince 2007, exporters have been fetchinggood prices from elsewhere, like, forinstance, Egypt and China.

However, they are still keen to get backthe lost European market and feel frus-trated over what the see as lukewarmefforts made by the federal and provincialgovernments in pursuing the case beforethe EU.

The big question is whether Pakistanwill be able to resume exports to EU thisyear. With the Program of Audit 2012issued by the Food and Veterinary Officein the last week of December 2011 showsno EU delegation is due in the currentyear, which makes it an unlikely scenariofor the exporters.

Chairman, Pakistan Fisheries ExportersAssociation, Faisal Iftikhar said the Sindhgovernment had not done its job and avisit to the fish harbour would have beenenough to clear the issue. The Sindh gov-ernment was provided Rs800 millionwhich all went into the pockets of thebureaucracy and the ministry, he alleged,adding that the depleted condition of theharbour “says it all”.

He said only one good thing had hap-pened as over 400 boats were modified asper EU standard. The condition of hygieneat the harbour is still really bad.

At the federal government level, theMarine Fisheries Department (MFD) hasserious competence issues. Frankly speak-ing, its head cannot face the EU authori-ties and thus the private sector is not will-ing to aggressively pursue this matter, hesaid.

There are more than 400 seafoodexporters who are active while the numberof registered exporters exceeds 600. Thecountry’s annual exports vary between$280-300 million. The growth is limitedbecause of the shortage of raw material.

He said Pakistan’s main exports of fishare destined to China, the Middle East,Saudi Arabia, Thailand, Korea, Egypt etc.Products include shrimps, squid, cuttlefish, ribbon fish, grouper, reef cod, threadfin bream, Indian mackerel and grey mul-

let. Iftikhar said exporters are not facingany kind of quality related serious issuewith these countries.

On utilizing true potential of export, hesaid that 90 per cent of fish that lands onthe Karachi harbour is wasted and goes tofish-meal plants to make chicken feed.Because of the use of illegal nets, everyfishing boat brings 70 tons of small-sizefish and sells them at Rs15 per kg.

Fish is also being imported fromVietnam because of its low price, good

white colour and being odourless.On the issue of future challenges, he

said shrimp and fish farming should bestarted in a big way to release the pressureoff the sea catch.

Pakistan has been trying to meet the 13recommendations of the previous inspec-tion report based on the visit of a team ofFood and Veterinary Organisation (FVO)in January 2007.

Ambassador Lars Gunnar Wigemark ofthe European Union delegation to

Pakistan informed the director-general ofthe MFD, Shaukat Hussain, on Oct 18,2011, that the Health and ConsumersDirectorate-General of the EuropeanCommission assessed the file presented byPakistan on Aug 18 which contained infor-mation about recent actions taken toaddress the recommendations of the 2007FVO inspection.

The EU inspection in 2007 highlighteddeficiencies regarding hygienic conditionson the premises at all stages of production,processing and distribution of fisheryproducts. The ambassador said that regret-fully the assessment concluded that themeasures taken so far do not provide nec-essary guarantees to demonstrate that allthe 13 recommendations have been met.He assured the official to continue work-ing on this matter and said that theEuropean Union delegation remains com-mitted to finding a solution to the currentban on export of fisheries products.

An MFD official dispelled the impres-sion that Pakistan had permanently lostthe EU market. He claimed that 85 percent of the recommendations had beenmet and the rest would be met soonerrather than later.

A former MFD chief, Moazzam Khan,said the EU ban was imposed because ofsystemic failure and not a single organisa-tion can be held responsible. He said therewas no doubt that the export was increas-ing, but this was at the cost of losing theworld’s largest and expanding seafoodmarket i.e. the EU.

The total production of Pakistan is about560,000 tons whereas Pakistan is exportingabout 140,000 tons which speaks of thepotential. Exports can be doubled byreducing losses and wastages.

He said fish processing was one of theoldest industries and trade of the country,but organised processing of seafood hadstarted in the country in the late 1960swhen a number of seafood freezing andcanning plants were established. There aremany types of processing that is beingpractised in Pakistan, which include cur-ing/salted drying, freezing, canning, valueadded products and fish meal production.

During 2009 a total of 7,600 metric tonsof salted dried products valued at Rs0.852million was exported primarily to SriLanka. The contribution of salted driedand cured products in total seafood exportis decreasing. It now contributes about sixper cent in the total exports whereas atone stage in 1989 its contribution wasabout 48 per cent.

There are 59 seafood freezing plants inthe country. Out of these, 21 processingplants are operating in Balochistan. Anumber of processing plants, mainly thoselocated in Karachi, have improved theiroperational and hygienic conditions andcomply with rules and regulations pre-scribed under the Pakistan Fish Inspectionand Quality Control Act, 1997.

Deep sea fishing vessels which used to beoperating in the Exclusive Economic Zoneof Pakistan under licenses issued by thefederal government are also engaged in thefreezing of seafood. Presently, no deep seavessel is operating in EEZ, but at one stage55 tuna long liners (in 1993) and 21 sterntrawlers (in 1999) were operating inPakistan which used to export substantialquantity of frozen seafood mainly to SouthKorea, China, Singapore and Japan. ■


country, Pakistan produces no cropto feed its livestock. Either thecrop meant for human consump-tion is used as poultry feed, or therejected stuff is used for the pur-pose. The country lacks a propersystem for grain storage thatincreases contamination risk.These factors naturally bring intoquestion the quality of the feed,”said Dr Ashfaq Qureshi, a seniorveterinary specialist working at aprivate poultry laboratory inKarachi.

The fact that Pakistan’s poultryindustry had 10-15 per cent mor-bidity and mortality rates com-pared to around a quarter thatmuch in the developed countries isindicative of the fact that therewas a dire need for improvementin the poultry sector, he said.

Referring to the start of poultryproduction in the US, he said thatthe first thing they did was to pro-

duce soybean as the basic ingredi-ent for poultry feed. Pakistan wascurrently importing soybean fromIndia to meet its poultry needs.

“We couldn’t produce a purebreed of chicken in 60 years norcould prepare an authentic diseasedata. All poultry vaccines areimported and there are no qualitychecks on the vaccines and medi-cines being imported and we haveleft these critical subjects at thediscretion of the country exportingits products to us,” he said.

Successive governments, he said,spent billions of rupees on live-stock boards, but they actuallydelivered nothing. Rejecting theimpression that birds are givenhormonal treatment to increaseweight, he said the major issue wasof drug residues in poultry prod-ucts and poor-quality blood andfish meal.

“A majority of farmers, who lackhygienic environment at the farmsand have no concept of bio-safety

measures, make high use of antibi-otics to increase the growth poten-tial of the chicken and protect itfrom diseases,” he said.

Seconding his opinion, DrMohammad Akram, another seniorKarachi-based vet who also had theopportunity to work abroad, said,“Antibiotics’ residues left in thepoultry products could lead toantibiotic resistance in the humanbody.” Besides, the drug residuesin poultry products could alsocause allergy to sensitive individu-als, added Dr Qureshi.

Giving an overview of the devel-opments in the poultry industryand issues related to the feed, ProfDr Talat Naseer Pasha, a PhD inpoultry nutrition and vice-chancel-lor of the University of Veterinaryand Animal Sciences, Lahore, saidthat a revolution had come about inthe poultry industry in Punjab overthe past four years as most farmsnow had controlled houses and lab-oratories to check feed contents.

“The old open-shed method is nomore viable. Many people who hadno expertise in the field but hadmoney, invested in the business ina big way and are making profitsince modern technology, expertiseand feed are all available inPakistan. There are hardly two tothree per cent of small farmers leftin Punjab. A similar change is fastcoming in Sindh as well,” he said.

The preparation of poultry feed,he said, was taken care of scientifi-cally at modern poultry houses.“You can’t give more or less, elseyou would compromise the bird’shealth. There is high competition,too, and some have installedsophisticated chemical analysers attheir setups. Most farmers whohave adopted the new methods arenot using blood meal and fish mealbecause of quality concerns andare instead using soybean.”

Regarding complaints related tothe poultry feed, he said that thequality of feed was more of an

issue for other domesticated ani-mals than poultry, as farmersinvolved in poultry business used100 per cent packaged feed.

There was no difference in thequality of poultry meat and eggs ofindigenous chicken and commer-cial birds, he said, while agreeingthat drug residue posed a majorhealth issue at farms set up in theopen.

“Birds are genetically modifiedabroad through a process of selec-tion. The companies involved inthe business are also operating inPakistan. So, what is available inthe US is also available inPakistan,” he said.

Khalil Sattar, representingPakistan Poultry Association, saidthat the application of technologywas bringing about a big positivechange in the poultry business andmorbidity and mortality rates hadbeen reduced since the concept ofcontrolled housing had been popu-larised.

“By using agro by-products inthe feed, poultry farmers are play-ing a critical role in supporting theagriculture sector. As conscious-ness is increasing, and more and

more poultry farmers are rejectingthe use of blood and fish meal,” hesaid.

He was also of the opinion that ifthe government started producingsoybean, it would give a majorboost to the poultry industry as evi-dence showed that countries whichhad a strong livestock were also amajor producer of soybean.

Dr Zafarul Islam Siddiqui, apoultry farmer and feed miller,said 90 per cent feed mills hadtheir own laboratories and it wasalmost impossible to compromisequality in these days of cut-throatcompetition. “Despite making a lotof investment, the return is not sat-isfactory and we are hardly meet-ing our expenses. This is becausepeople are not ready to pay a littlemore for a product prepared inhygienic conditions.

“When our consumer would startacknowledging the efforts that gointo producing hygienic food, sup-plies of unhealthy and substandardfood would automatically end,” hesaid while pointing out that infre-quent supplies of electricity were abig hurdle in poultry productionthese days. ■

How white is the white meat?

Fishing is boring unlessyou catch anactual fish,

and then it isdisgusting.

— Dave Berry

By Aamir Shafaat Khan Though Pakistan lost thelucrative European Unionmarket about five years ago, fish exporters havefound newer markets tokeep things moving

Life goes on

If Europe has issues with them, there are others who want the catch


I T was only a decade agowhen the textile industry forthe first time started to con-sume the entire domestic cot-ton production on enhanced

installed capacity of around 9.060million spindles, 141,000 rotorsand 10,000 looms. Prior to thisthat, much of the cotton crop waseither exported in raw form orsemi-raw material in the shape ofcotton yarn for well over 40 years.

At the time of independence in1947, the cotton crop size wasmerely at 1.106 million bales.Since there was only one textileunit in the country, the domesticconsumption was at about 75,000bales only and the huge balancewas exported with most of itgoing to the neighbouring India.

Progress in developing a com-plete supply chain of the cottoncrop had been slow because ini-tially much of the investment andconcessions were received byspinning units against their pro-duction to meet the cotton yarn

demand of value-added textileindustry of developed countrieslike Japan and some Europeandestinations.

Pakistan had been a leadingexporter of cotton yarn for manyyears and up to the 1990s much ofthe cotton crop after being con-verted into yarn was directlyexported without further value-addition.

However, the situation hasentirely changed, particularlyafter a fabulous growth recordedby the textile industry on thebasis of a huge investment ofaround $5 billion made justbefore the phasing out of the tex-tile quote regime in 2005.

In order to meet the post-quotaregime challenges, the textileindustry in a big way went intoBalancing, Modernisation andRehabilitation (BMR) process toensure its due share in the freemarket where quality, competi-tive price and prompt deliverywould have prevailed for survivalin the world market. This gaveimpetus to exports on the one

hand, while on the other it provid-ed jobs to millions of people.

Ever since, there has been agap between consumption andproduction of raw cotton and thespinning industry has to importaround two to three million balesper annum to meet its require-ment.

In the last 10 years, the countryhas been harvesting on an aver-age 12 million bales with recordproduction touching 14.265 mil-lion bales in the year 2004-05.

Since agriculture produceslargely depend on climatic condi-tions, the cotton crop also hasbeen witnessing unstable produc-tion patterns, resulting in pricefluctuations and thereby creatingdifficulties for the industry andexport trade which have to com-pete in the world market.

In order to overcome the unpre-dictable pattern of the crop sizethe premier trade body, theKarachi Cotton Association(KCA), has been advocating forthe re-introduction of hedge trad-ing in cotton trade which was sus-

pended by first government ofPakistan people’s Party whichwas headed by the late ZulfikarAli Bhutto in the 1970s.

According to the KCA, hedgetrading performs an economicfunction by providing hedgecover against the risk of fluctua-tions in prices, thereby facilitat-ing smooth conduct of nationaland international trade in cottonto all sectors of the cotton tradein a more equitable manner.

However, Abdul RazzakDawood, the commerce ministerof military ruler PervezMusharraf in the early 2000s, pre-ferred to give a solution byputting cotton under the list offree trade items and felt that anysurplus production will be export-ed and shortfall will be metthrough imports. In return, hehoped, this would help to stabilisecotton prices in the domestic mar-ket.

However, one will have toaccept that the country has so faronly managed to develop supplychain for cotton crop and all othermajor farm produces have beenneglected and left to fend forthemselves without proper offi-cial patronage.

As a result of this, the textileindustry is presently having 56per cent share in merchandiseexports of the country and 46 percent in the manufacturing sector.The industry provides 38 per centindustrial jobs and contributesaround nine per cent towards theGDP of the country.

The industry has witnessed arobust growth and is presentlyhaving 12 million installed spin-dles which is twice the capacitythat was in place five years ago.

Similarly, there are 24,000shuttle-less looms, 6,000 air-jetlooms, 300,000 auto-power looms,and 18,000 knitting machines inservice today. The processingcapacity of fabric stands at 4.6billion square metres and theindustry has 450,000 stitchingmachines.

Due to spike in the prices ofraw cotton in domestic and worldmarkets last year (2010-11), tex-tile exports touched an all-timehigh level at $14 billion out of thetotal exports that were worth $25billion. This represented agrowth of 35 per cent over thepreceding fiscal (2009-10). It isencouraging that the bulk of tex-tile goods exports belonged to thevalue-added sector and only$2.185 billion exports were of cot-ton yarn and $2.561 billion ofgrey cloth. ■

Quality isremembered

long afterthe price isforgotten. — GucciSlogan

The textile industry is leading the way for Pakistani exporters, but the days are ahead are likely to be tough mainly because of recession in the importing countries

From a country thatexported raw cottonand yarn, the privatesector has done wellto take the country forward by focussingon the finished productin order to remaincompetitive in the post-quota regime

By Parvaiz Ishfaq Rana

Value-addition is the key


O F the major crop cate-gories – food, pulses andedible seeds – cotton andcane fall in the cash cropcolumn because they

provide cash flow to farmers,enabling them to invest in othercrops and carry on the agricultur-al cycle.

Both these crops are wortharound Rs650 billion, at currentprice and production factor. Thecountry would produce around 65million tons of sugarcane thisyear, which at average price ofRs150 per maund, would have aworth of approximately Rs245 bil-lion.

Similarly, cotton is expected tofall around 12 million bales, andmay bring farmers about Rs415billion. These Rs650 billion arecrucial for the farmers if the sec-tor has to survive the entire cropcycle.

However, of the two crops, cot-ton plays a more vital role inPakistan’s economy and povertyalleviation. Sown on around 7.4million acres, the crop provideslint to textile industry that bringsover $12 billion foreign exchangein exports.

Besides, it provides seed cottonto the solvent industry that pro-duces around 25 per cent of theedible oil and correspondinglyreduces the oil import bill, whichhas become a big drag on thenational economy.

It also produces oil cake thatgoes into livestock feed. The cropthus has a pivotal role to play inthe economy of Pakistan.

Most of the agriculture expertsalso agree that cotton crop, if han-dled properly, can single-handed-ly lift Pakistan’s economy out ofthe current morass. For the lastsix decades, it has been sufferingstagnant yield, poor or non-exis-tent improvement in variety, evenpoor agronomic practices andgrossly imbalanced fertilizerapplication.

If the planners can take care ofthese four areas, the country caneasily touch a target of 20 millionbales. Citing the example ofIndia, which has gone to 30 mil-lion bales within a span of adecade, the experts insist thatopportunity cost of cottonbungling is nothing less than $10billion a year.

In order to achieve the target of20 million bales, varietal improve-ment in seed would be crucial. Atpresent, it is almost free for all in

the cotton seed market. Thoughthe government tried to knocksome sanity when it approvedsome BT varieties, follow-ups,which are even crucial for docu-menting the character and yieldpotential of these varieties, haveleft much to be desired.

Everyone is selling something inthe name of BT. Even governmentofficials are working as agents ofthe private seed companies. Untiland unless the government canregulate the seed sector, cottoncrop may be on the decline.

Against 14.7 million bales afew years ago, this year Pakistanis hopping for 12.4 million bales.The government has to improvedomestic seed market as the firststep to long-term cotton plan-ning.

On the second prong, it needsto ask its scientists to come upwith local cotton varieties thatare drought, salt and temperatureresistant. The weather variations,which hurt cotton crop every sea-son, are now part of the agricul-ture cycle in Pakistan.

They require genetic engineer-ing that brings weather changes

and cotton varieties in harmonywith each other. Ensuring a credi-ble weather-friendly seed is ofcrucial importance to the crop’sfuture in Pakistan, and also to thecountry’s economic health.

India could be quoted as primeexample of determined effort toincrease yield, which has takenthe tally from 17 million bales to30 million bales. It has done so byshifting major portion of crop tobarrani (rain-fed) belt, saving itscotton from regular pests andviruses.

Pakistan also has that option,and could bring around 3.5 mil-lion acres of barrani area undercultivation for the crop. But allthese options could only be exer-cised if it has a dependable seedvariety. Until then, it can onlypray for better weather, less virusattack, and remain engaged infire-fighting.

Agronomical practices haveassumed an added importancebecause of climate change. Thefarmers in Pakistan have beensowing cotton without improvingtheir knowledge and getting poor-er by the day as extension ser-vices fail.

Though extension services arenow almost taken over by the pri-vate seed companies, their opera-tions are limited and restricted totheir own varieties. The publicsector has to move in to ensurethat cotton gets better soil andplant husbandry.

Cotton is a deep-rooted crop,which can go as deep as four feetin the soil. The soil, however, hasdeveloped a hard pan because ofcontinuous ploughing of theupper layer.

Most of the farmers cannotafford chisel ploughing for eco-nomic reasons and keep workingon the upper part of soil, grosslyaffecting their production. That iswhere officials need to move in;provide machinery or money to goafter the hard pan.

The cotton crop has emerged as

one of the most difficult cropsbecause of climate change, pestattack and water stress. It isassumed that the country loses,on average, almost one millionbales to cotton curl leave virus(CLCV) and another million balesto water stress.

Both the factors need profes-sional tending of the crop, whichis possible only through betterknowledge and even better train-ing.

Promoting balanced use of fer-tilizer is another important area.Successive governments’ undueemphasis, mostly for political rea-sons, on urea production andapplication has hurt the soil. Tosome eyes, the damage is alreadybeyond redemption.

Since urea is relatively cheapand causes vegetative growth, allgovernments have preferred it atthe cost of two other essentialvarieties – potash and phospho-rous.

Fertilizer planning the worldover is carried out as per the soilrequirements, not as per politicalpreferences of the incumbent gov-ernments.

Thus, the government needs toshow equal sensitivity to the sup-ply and price control of other fer-tiliser varieties, as it has beendoing in the case of urea, if itwanted to break free to currentcotton stagnation, rather allcrops.

As far as the other cash crop –sugarcane – is concerned, it hasbecome a totally political cropthat hardly makes sense for thecountry (and in no way for thePunjab), especially after waterstress.

The country, however, has beenpersisting with the crop for pure-ly political reasons, as the power-ful lobby of millers, which oftenincludes even presidents andprime ministers of the countryalong with a host of ministers, has

kept a policy regime intact thatsuits the industry and to someextent the cane crop, and forcesfarmers into growing cane.

Unfortunately, all of this isbeing done in total disregard tonational and provincial ecologicalendowments. Despite the crop giv-ing a negative competitive advan-tage, when compared to othercrops like rice, cotton, wheat andmaize, the country is sticking tothe crop through a regime of pro-tective duties, subsidised inputs,subsidised loans etc.

It also causes a serious misallo-cation of agricultural resourceslike land, water, finances, loansand labour inputs into low produc-tivity and sub-optimal output.

Precisely for this reason, thefarmers are forced to sow sugar-cane extensively in semi-arid cli-mate – with less than 15 inchesaverage rainfall per annum,humidity less than 30 per cent for75 per cent of the crop cycle andwater does not stay in the rootzone.

Given the water stress, if noth-ing else, the country should not besowing cane in semi-arid areas,which the Punjab largely offers tothe crop.

The crop requires at leas 60 acreinches of water over two seasons,while cotton and maize are below20 acre inches. Its yields range 50-55 tons per hectare, whereas theworld produces 100-130 tons perhectare.

With that kind of average pro-duction and 11 per cent recoveryrate, the world produces on kilo-gramme sugar with 1,500 litters ofwater. In Pakistan, water con-sumption is more than triple forone-third of production and 2.5per cent less sugar recovery.

These factors suggest that thepolicymakers need to think twiceabout sugarcane being the idealcrop for Pakistan. If we still haveto persist with it, the governmentmust go for value addition anddiversification.

World over, sugar is a by-prod-uct of the mills; they mainly pro-duce alcohol. Ethanol and bio-fuels are other options.

Only with these additions, thecrop would start making any com-mercial sense. Otherwise, thesethree million acres would be bet-ter used for other crops. ■

You can plant them inthe fall and have berries

by the spring. It isbasically a cash cropthat could be grown

quickly. — Edna Pierce

By Ahmad Fraz Khan

The cotton and the caneThe two cash cropsare worth aroundRs650 billion at current price and production levels. Theamount is crucial forthe farmers if the sector has to survivethe entire crop cycle

Cotton and the sugarcane are like ready cash for the farmers who naturally feel attracted to the two crops


T HE agriculture sector is amajor consumer of ener-gy in Pakistan. With oneof the world’s extendedbut deficient irrigation

system and extensive use of tube-wells across the country, the sec-tor accounts for a large share ofpeak electrical demand.

According to one estimate thereare about a million tube-wells;about 250,000 use electricity foroperation, whereas 750,000 arediesel-operated. In both categoriesit is becoming increasingly expen-sive to keep them functional asmany of the pumps operate at only30 per cent efficiency.

Frequent increases in the elec-tric power tariff and price ofimported diesel definitely madethe incentive package for farmersrather ineffective in the long term.The advantage of lower electrictariff in the 1999 that had encour-aged many to switch over fromdiesel to electricity-operated tube-wells has now been completelylost. The long duration of poweroutages and the rising cost ofinput, including fuel, has made theproposition difficult for the farm-ers.

Normally the electricity-operat-ed tube-wells consume around1000MW power supply, whereasduring the sowing season it cansoar up to 2700MW. As the tube-wells are located in far flung areas,the cost of providing them elec-tricity from the national grid is notonly expensive, but also a cause ofmassive line losses.

Last year in June some experi-mental measures were unfolded inNankana where more than 150farmers, government officials, andproducers of water pumps hadgathered to a briefing by represen-tatives of the US Agency forInternational Development(USAID) whose experts explainedthe ways of reducing electricityuse in agriculture by up to 40 percent by replacing their waterpumps with more efficient models.

USAID, through its Tube-wellEfficiency ImprovementProgramme, is planning to co-fundthe replacement of 11,000 waterpumps by 2013, saving an estimat-ed 45 megawatts of electricity andreducing farmer electricity bills byRs650 million annually. This initia-tive will also result in increasedrevenues for the power distribu-tion companies, which will be ableto sell the electricity thus saved tocommercial entities at full price,instead of the current subsidisedrates for the farmers.

USAID’s Tube well EfficiencyImprovement Program is one of sixU.S. government projects focusedon reduction of Pakistan’s powershortages. Other programs helpcomplete dams and renovatepower plants that are priority tothe Government of Pakistan.

It has certified six Pakistanipump suppliers, FLOWPAK,HMA, KSB, MAK, PECO, andVictoria, to be compliant with ISO9906, an international standard forenergy efficiency. These compa-nies can provide farmers with cer-

tified energy efficient motor-pumps that are eligible for a 50%subsidy from USAID. By installingthese motor-pumps, farmers willbe able to extract the sameamount of water for irrigationmore efficiently, thus reducing theuse of electricity and costs. It isessential for making the ultimateincome from different types ofcrop more rewarding for thefarmer.

Agriculture is the main source oflivelihood of nearly 60 per cent ofthe population of Pakistan. Thissector meets the ever-increasingrequirements of the food for thepopulation and raw materials ofthe manufacturing sector.Pakistan’s irrigated agriculturemainly depends on both surfaceand groundwater sources. The sur-face water (canal) is mainly in thepublic sector and this is the cheap-est source of irrigation. However,this facility can not be extended toall farms and farmers.

The ground water is pulled outby artisan well generally run bybullock or pumps that are operat-ed either by electricity or diesel.

In Pakistan the canal irrigationsystem was introduced during thecolonial period. At the time ofindependence (1947), the canalshare in the total irrigation area(8.7million hectares) was as highas 82 per cent and the rest wereaccounted for artisan well, tankand other means, whereas therewas no tube-well irrigation. Thetube-wells were introduced in thecountry in 1953-54.

One study relying on theAgricultural Statistics of Pakistan1993-94 and the Agricultural

Statistics of Pakistan 2003-04 sug-gested that the irrigated area ofthe country during the periodincreased by more than 100 percent. The contribution of tube-well-based irrigation increasedfrom 0.36 million hectares in 1959-60 to 5.99 million hectares (32.38per cent of the total irrigated area)in 2003-04, showing an increase ofnearly 16 times over the period.This means that tube-well irriga-tion plays a major role in the agri-cultural sector of the country.

The study pointed out that in theKhyber Pakhtunkhwa (formerlythe North West FrontierProvince), the total irrigated areaincreased from 0.40 millionhectares in 1949-50 to about 0.96million hectares in 2003-04 repre-senting an increase of about 140per cent. Similarly, the tube-well-irrigated area increased from just2,000 hectares in 1955-56 to about80,000 hectares in 2003-04, show-ing a phenomenal increase.

In the KPK, surface water ismainly drawn from the public sec-tor to which the farmers have togenerally pay a uniform rate foreach crop per hectare. The othersource of irrigation is tube-wellswhich are operated either throughelectricity or diesel. Expenditureon tube-well irrigation contributesabout three to 10 per cent to thetotal cost of production, dependingupon the types of crops and the sys-tem of irrigation. Thus, cost of pro-duction and economics of variouscrops is significantly affected bythe irrigation expenses. As such,there is a need to find out ways ofreducing the cost of electrical anddiesel-operated tube-wells.

The irrigation cost of maize islower than that of wheat and sug-arcane. It is due to the fact thatirrigation requirements of maizeare comparatively low than that ofthe other crops. Wheat is a Rabiand maize is a Kharif crop, but theoverall crop maturity period of theformer is more than that of the lat-ter. Therefore, water require-ments of wheat are more than thatof maize. As sugarcane is a round-the-year crop, its water require-ments are more than that of othercrops.

There is a need to replace thediesel and electric operatedtube wells with solar poweredtube-wells that would not onlycut the cost, but also reduce linelosses and the cost of maintain-ing the transmission lines. In thetransition period, the dieselelectricity users in the agricul-tural sector may be given arelief for tube-well operation orthey may be given soft loans forswitching from diesel to electric-ity-operated tube-wells. This, inturn, will reduce the productioncost for the grower and pricereduction to the consumers. Assuch, the price hike will bearrested.

But the best option would be tolook for the alternatives for run-ning these tube-wells. Producingelectricity from the energy of sun-rays is a straightforward process asdirect solar radiation can be con-centrated and collected by a rangeof Concentrating Solar Power(CSP) technologies to providemedium- to high-temperatureheat. This heat is then used tooperate a conventional powercycle through, for example, asteam turbine or a Stirling engine.Solar heat collected during theday can also be stored in liquid orsolid media such as molten salts,ceramics and concrete, or, in thefuture, phase-changing salt mix-tures. At night, it can be extractedfrom the storage medium, therebycontinuing the turbine operation.

Solar thermal power plants,often also called Concentrating

Solar Power (CSP) plants, produceelectricity in almost the same wayas conventional power stations.The difference is that they obtaintheir energy input by concentrat-ing solar radiation and convertingit to high-temperature steam orgas to drive a turbine or motorengine.

Pakistan has a wide spectrum ofhigh potential of renewable ener-gy sources, conventional and non-conventional as well, which havenot been adequately explored,exploited or developed. As aresult, the primary energy sup-plies today are not enough to meeteven the present demand.

Moreover, a very large part ofthe rural areas does not have theelectrification facilities becausethey are either too remote and/ortoo expensive to connect to thenational grid. So, Pakistan, likeother developing countries of theregion, is facing a serious chal-lenge of energy deficit. Thedevelopment of the renewableenergy sources can play animportant role in meeting thischallenge.

Solar energy makes much sensefor Pakistan for several reasons.Firstly, 70 per cent of the popula-tion lives in 50,000 villages thatare very far away from the nation-al grid. Connecting these villagesto the national grid would be verycostly, thus giving each house asolar panel would be cost efficientand would empower people botheconomically and socially.

The easiest and the fastest wayto overcome the energy shortage iselectrification based on solar ener-gy. In addition to electrification ofvillages, single homes, waterheaters, tube-wells and street, traf-fic and parking lights could be litby solar energy.

Many developed countries,including the United States ofAmerica, Spain, Germany andeven the United Arab Emirates,are planning entire cities beingelectrified on solar energy simplybecause it is the cheapest sourceof energy. Solar energy is pollu-

tion-free and with the help ofphotovoltaic devices light energycan be converted into electricity.By opting for the technology,rural areas will get electrifiedwhich is otherwise a very costlyoperation if connected throughthe national grid as we mostlyhave villages that are scatteredover long distances with limitedpopulation.

In the short term, the govern-ment should encourage directusers or investors through subsi-dising the cost of solar photovolta-ic (for electricity requirement ofusers) solar thermal options (e.g.solar water space heating, solarwater pumps) in all possible sec-tors.

By doing so it will not onlyavoid huge investments in explo-ration, refining of fossil fuels orsetting of power plants and majorHydal projects, but reduce thecost of setting up new infrastruc-ture (transmission/grid) andexpansion of the existing net-work. And the funds can be easi-ly allocated in parts in annualbudgets without putting extraburden on it. It can boost thegreen revolution and improvefood security for Pakistan. ■

By Shamim-ur-Rahman

Statistics underline the significance of therole tube-wells haveplayed in theagricultural sector ofthe country, but it istime to look for somepractical alternativesto keep them running

Conventional tube-well (top) versus the modern solar panel (left)

Tube-wells: bane or boon?

Edison failed10,000 times

before hemade theelectriclight. Donot be

discouragedif you fail afew times.

— NapoleonHill


T HE concept of halal,which means ‘permissi-ble’ in Arabic, is strictlyadhered to by Muslims inconsuming slaughtered

meat and some eatables. This hasbeen the norm over the centuries.That is why in predominantlyMuslim societies, it is assumedthat all the food and meat avail-able is halal. The problem sur-faced when Muslims beganmigrating to and settling down innon-Muslim countries in search ofgreener pastures. There, most ofthe Muslim migrants, being aminority, faced difficulties inobtaining the ‘permissible’ meatand food.

This difficulty gave birth to thehalal industry. The manufacturersin the West saw a great potentialof profits in the Islamic conceptwhich has now moved beyond rawmeat. Today, almost all goods andservices, even cosmetics, pharma-ceuticals, clothing and financialservices are available as certifiedhalal to woo Muslim customers.

Small wonder, religion and com-merce can sometimes blendtogether innovatively and go along way towards creating a mar-ket of products which can ensurenot only good returns to investors,but also satisfy religious need of acommunity.

Today, it is a big business, worthan estimated $700 billion globally.Halal cosmetics include alcohol-free perfume, which along withother products such as lipsticksand deodorants, contain ingredi-ents of animals slaughteredaccording to the Islamic code.Even the small amount of collagenin the night cream is derived fromhalal sheep raised at a Muslim-runfarm.

Being a Muslim country,Pakistan is in an advantageousposition to clinch a significantshare in the halal market. Butunfortunately, it has no presenceas yet in the global halal market;not even in countries and citieswhere big clusters of Pakistanisare located. They can be accessedwithout any hassles by Pakistanifirms. In fact, these firms will bewelcomed there.

But Pakistan’s private sectorand the Commerce Ministry havemiserably failed to capture evena small share of the global halalmarket because of indifference,lethargy, poor business visionand short-sightedness. Ironically,to an average Pakistani business-

man, halal still means slaughter-ing of chicken and animals andnothing more. He is still unawareof the fact that there exists alucrative market in the name ofhalal and which has almost beenovertaken by western food firms.

In a sense, halal products havealready gone mainstream in theWest and the Middle East as onecan find them being processedand sold by some reputed multi-nationals such as Nestle,McDonald’s, KFC, TESCO, AussieBeef, New Zealand Lamb,Australian Lamb and Quickrestaurant chain in France.

The incompetence at our endcan be judged from the fact thatthe Pakistan Halal ProductDevelopment Board (PHPDB)whose establishment wasannounced on December 5, 2009,by the then minister for scienceand technology Azam Khan Swatihas yet to be established. OnJanuary 10, 2012, the new minis-ter for science and technology,Mir Changez Khan Jamali, said,“Some technical issues are delay-ing the issuance of a notificationfor establishing the PHPDB.”

The board, to be linked to theOrganisation of IslamicConference (OIC) and attached to

the Ministry of Science andTechnology, was to help Pakistanientrepreneurs get recognition inthe global halal market. Theboard’s key objectives are toassist and facilitate the develop-ment of halal industry in the coun-try, and develop halal standardsfor food and non-food items.

A few Pakistani companieshave started making halal prod-ucts such as English Biscuits,Rooh Afza and Qarshi haveapplied for halal certification.Engro has also purchased a halalfood chain in the United States.

Punjab Chief Minister ShahbazSharif has shown extraordinaryinterest in the development of thehalal industry. He arranged ashipment of 25 tons of halal meat,first such export in the country, inNovember, 2010, to Malaysia by aLahore-based company.

Malaysia is currently importing60 per cent of its halal meat needsfrom India. Shahbaz Sharif wantsPunjab entrepreneurs to set upmeat processing plants and exporthalal meat by utilising moderntechnology. He said he was readyto spend one billion rupees on pro-viding facilities to the halal indus-try if the private sector promisesto export halal meat worth two bil-lion dollars during the next twoyears.

In September, the Sindh govern-ment initiated setting up of halalindustrial parks to promote manu-facture and export of halal foods.The park will be established bythe National Industrial ParksCompany. It will be spread over avast area near Ghaghar Phatak atNational Highway near Thatta.The entire chain of facilities,including halal certification,would be provided there underone roof by the Sindh Board ofInvestment.

There are currently some 1.5billion Muslims in the world andmajority of them are consumers ofhalal products. Since it is not aproblem within the Muslim soci-eties, the halal meat and productsneed no label.

This factor has led some food

manufacturers to label even theirnon-halal products as halal toboost sales. As a result, Muslimbuyers prefer to visit only thoseshops which keep or display thehalal certification documents.

A major problem buyers facearises from the fact that there isno single centralised body as yetin the world that could define thestandards of halal, and issue cer-tificates to producer organisa-tions. If, at all, there exist localbodies to look after standards andissue certificates.

The lack of order and disciplinein the halal certification systemhas been acute in some countriesof the Middle East, which is hometo a significant percentage of theworld’s Muslim population. TheUS has, surprisingly, a relatively

good record of halal certification,but, of late, there, too, have beenproblems and Muslims are nowtrying to make the trade more sys-tematic.

The certification of halal stan-dard for food products is a com-plex issue and requires numerousfactors to be considered beforereaching a consensus. These fac-tors were discussed during a ses-sion on “standards developmentand the implications for industry”in the International Halal MarketConference 2009 held at KualaLumpur.

The conference also advocateddissemination of ‘halal values’ inthe market by which it meant hon-esty and fairness in dealing withthe customers.

Currently, most of the countriesexporting halal products are non-Muslim. Brazil, USA, Canada,Australia, New Zealand, France,Thailand and India are the leadersin export of halal products.

In 2010, India exported halalbrand products worth $21 billion.It is interesting to note thatawareness about what is halal ismuch more in those countrieswhere Muslims are in a minority.There is a strong demand forhalal products among Muslims ina number of non-Muslim coun-tries. These include India (150million Muslims), China (40 mil-lion Muslims), United States(eight million Muslims),Philippines (six million Muslims),France (six million Muslims),Germany (three million Muslims)and the United Kingdom (1.5 mil-lion Muslims).

The Asian continent is home toover one billion Muslims but over70 per cent live in parts of Asiaoutside the Middle East.Indonesia, Pakistan, India andBangladesh have a combined

Muslim population of approxi-mately 640 million. Nonetheless,despite large populations, manyAsian nations have modest percapita incomes and lower foodconsumption than many otherareas of the world, posing a chal-lenge for food exporters to theregion.

In August last year, the chairmanof the Sindh Board of Investmentasked Malaysia to assist Pakistanin setting up halal food industry,particularly in respect of establish-ing technical training centres andhalal laboratories. The Sindh gov-ernment has already signed amemorandum of understandingwith the Halal DevelopmentCouncil of Malaysia. ■

By Ashfak Bokhari

Being a Muslimcountry, Pakistan isin a position to clinch asignificant share in theglobal halal marketwhich is worth $700billion. Unfortunately,we have no presenceas yet; not even incountries and citieswhere big clusters ofPakistanis are located

An opportunity in waiting

They look good in the local shelves, but there is some way to go before they occupy shelf space abroad


ICICI Lombard General Insurance,and are marketed to growersthrough micro-finance bankswhich are linked to an apex micro-finance entity known as BASIX.

Pakistan has no comparisonwith the India as insurance coverhas taken a substantial spacethere, but sharing of experiencescould help Pakistan to developits own model for insurance.Particularly, the Barani area (thearid zone which depends on rain-water) requires special attentionfor insurance cover as it is morevulnerable than the other areas.

The two neighbouring coun-tries have improved bilateraleconomic relations and Indiamay be given a most favouritenation (MFN) status soon. Thiscould help Pakistan to get expe-rience on this subject as well.

The main reasons for the poorperformance of the crop insur-ance mechanism in Pakistan andtheir possible remedies are listedbelow:

* Most of the farmers are noteven aware about the availabili-ty of insurance products. An edu-cation programme to make thefarmers aware of it across thecountry is required.

* No insurance company hasdeveloped a model insuranceproduct for crop insurance inPakistan as each countryrequires a different model sincethe risks are different in differ-ent scenarios. Insurance compa-nies need to look into it.

* Many developing countrieshave developed insurance mod-els that could be adopted withtheir consultancy and with therequirement of the local agricul-ture system and environment.Models in the regional countrieswould be more helpful.

* Banks are reluctant to partic-ipate in risk-sharing with theinsurance companies. The StateBank of Pakistan must use itsinfluence on the banks to bringthem on board which will amajor step to realise the poten-tial of crop insurance.

* The government is not readyto subsidise the premium whichis common in developing coun-tries like India, Brazil,Argentina, etc. There is fear thelarge landowners having politicalclout may exploit the insurancecover and the insurance compa-nies would not be able to chasethem for recovery of theirmoney. The government needs tobring in certain guarantees tocalm down the nerves of theinsurance companies.

* Small farmers do not haveenough money to insure theircrops. The facility for small farm-ers would require governmentassistance.

The government interventionor participation is different indifferent countries. In the case ofIndia, the government allows 50per cent subsidy in premium tosmall and marginal farmers.

In many countries, the govern-ment has a role of the re-insurer,while in some countries, govern-ments have a direct controllingrole for the insurance scheme.Pakistan requires a partnershiprole for the government toimprove crop insurance. It mayhelp to develop a shape for a cropinsurance model in Pakistan. ■

Wanted: a model

A strong and well-constitutedman digests his experiences

(deeds and misdeeds all included) just as he digests hismeat, even when he has some

tough morsels to swallow. — Friedrich Nietzsche


I T is encouraging tosee country’s meatexports grow strong-ly for the fifth con-secutive year, which,

according to news reports,have increased four-foldsince 2007. What is of con-cern, however, is to seethe local consumerdeprived. The consumer isdisadvantaged not onlybecause the meat is get-ting costlier by the day,but also because he/shehas no clue about its qual-ity and the conditions inwhich it has beenprocessed. In fact, the con-sumer is completely at themercy of the butchers.

According to some esti-mates, there are a littleover 300 registered abat-toirs in operationthroughout the country,which account for 60 to 70per cent of legal slaugh-tering of animals. Therest are slaughtered illic-itly in backyards, isolatedrural areas and otherunlicensed locations.

By and large, all abat-toirs – legal and illegal –are primitive in design,immensely crowded, inad-equately maintained, un-hygienically operated andare a major source of

environmental and healthproblems.

Undoubtedly, the situa-tion has developedbecause of failure on thepart of successive govern-ments to develop con-sumer-friendly policiesand to attend to issues ofpublic health.

A sign of changeappears, though, with theinitiation of a few pro-jects in both the publicand the private sectors in

recent years. One such major project

was launched last year bythe Punjab governmentin collaboration with theIranian government thataims at developing theprovince’s livestock andhorticulture sector.

The Punjab govern-ment contributed aboutRs1 billion, while theIranian governmentinvested Rs300 million inthe project.

An important compo-nent of the project is theLahore Meat ProcessingComplex that is stated tobe the country’s biggestautomated processingplant that would providehygienically processedmeat to local consumers.

The complex has thecapacity of processing1,000 large animals and12,000 small animals intwo shifts per day and hasbeen built on internation-al quality standards ofmeat processing.

Dr Hamid Jalil, whoheads the PunjabAgriculture and MeatCompany (Pamco), saidthat the firm was a merg-er of the Punjab AgriMarketing Company andthe Lahore MeatCompany. According tohim, a consignment of 25tons of meat is being sentto Iran weekly, thoughthe demand is of 100 tons,while requests have alsobeen received from Iraq,Turkey and Syria.

“Right now, our majorfocus is to improve thebackward supply chain.For this purpose, we haveinitiated a number of pro-jects, including Save theCalf, Feedlot Fattening,Mutton Farming, OstrichFarming and AnimalDisease Free Zoning. Sofar, we have registered2,000 cattle-farms andpeople having minimumof 10 animals can benefitfrom the schemes that arepart of the project,” hesaid.

The company, he said,had received a very posi-tive feedback. “We wantto run it like a business sothat the project could berun on sustainable basis,”he said.

Highlighting the prob-lems, Dr Jalil said thatthe real challenge was to

bring in a policy changeat the government leveland ensure compliancewith the globally recog-nized standards.

“For instance,Cholistan has beendeclared as a disease-freezone. But this is notenough. We have to haveregular vaccination cam-paigns in order to achievethat status,” he said.

In Karachi, a localchain of meat supplieswith the name of MeatOne, a subsidiary of ameat-exporting company(Al Shaheer), has startedfunctioning more than ayear ago.

Sharing his expertiseand experience, KamranKhalili, the head of thecompany, said that thesupplies of beef and mut-ton to Meat One comesfrom the same state-of-

the-art abattoir set up inGadap town that providesmeat for export.

“The idea of establish-ing a local chain devel-oped from the desire toprovide the local con-sumer with the samequality of meat that wehave been exporting tothe international marketfor many years,” he said,claiming that the meatprocessing plant meetsthe highest internationalstandards and is certifiedby most Health and FoodImport departments ofcountries in the Gulfregion.

“Our prices are only 10per cent higher as com-pared to those prevailingin the local market. Butthe difference is that themeat is not only safe andhealthy for human con-sumption, the consumer

is also benefited by get-ting what he pays for aswe weigh the meat cutafter trimming thewastages whereas con-ventional practice is tofirst weigh the meat cutand then remove thewastages,” he contended.

Regarding the practicesat the plant, he said thatall animals not more thattwo years of age are med-ically examined beforeslaughter. Besides, theirmeat is also tested beforesupplies are sent to thecity or abroad. Slaughterof milching animals isalso discouraged.

“There is a greatdemand for Pakistanimeat abroad and weshould cash on it. Thegovernment can help byproviding quality feed atsubsidised rates to farm-ers and investing in live-

stock research,” he sug-gested, adding that hehad received a very posi-tive feedback and rightnow nine outlets of MeatOne were operating inthe city while two arefunctional in Dubai.

Another company, P.K.Livestock and MeatCompany, a leading meatexporter, has started localproduction of value-added products frombeef, chicken and mutton.The products being pre-pared at a processingplant in Karachi on theNational Highway isbeing supplied to 15 citiesacross the country.

“We found it moreviable to produce frozenvalue-added products forlocal consumers insteadof supplying fresh meat.

“However, we believethat the future belongs tovalue-added productsand, after receiving avery good response inPakistan, we do plan toexport our products,”concluded TariqMehmood, who heads thecompany. ■

By Faiza Ilyas

Halal it may well be, but this is surely not cow meat that buyers are made to think

At the mercy of the butchers

While meat exports have showna steady upward growth, thelocal market remains plaguedwith the same old maladies.Things, however, seem to bechanging albeit at a slow pace

Meat isn’tmurder, it’sdelicious.

— JohnLydon


L IVESTOCK has been a hid-ing place for politiciansand planners. Historically,whenever the agriculturesector shows a slow or even

negative growth, which it mostlydoes, high claims about the live-stock – a sub-sector – are made togive respectability to the growthof the parent sector. The claimswere so exaggerated that theyonce gave birth to an independentfederal ministry for livestock anddairy development, further raisingnational hopes about the sector.

However, these claims havealways failed the reality check fortwo reasons; firstly, they vary toowildly to be believed by even thecommon man, and, secondly,almost all of them are belied bythe market and agriculture reali-ties in the country.

For example, according to vari-ous official sources, livestock ani-mal population in Pakistan variessomewhere between 50 to 66 mil-lion animals. The sheer differencebetween these two figures is acause of doubt and concern forindependent analysts.

Similarly, milk production fig-ures are even wilder. As far asPakistan’s world ranking on milkproduction is concerned, variousofficial documents differentlyplace the country from third tosixth positions. The figures of actu-al milk production are as erratic asthe world ranking or animal popu-lation; they vary from 35 to 46 bil-lion litters per year.

The market realities, however,contradict them all. Had Pakistanbeen having that kind of high milkproduction (even if lower figure of

35 billion litters is taken as thebenchmark), the country, with apopulation of 170 million, musthave a per capita availability ofover 200 litters. That does notseem to be the case given the everincreasing milk prices – bothprocessed and open.

Beef and mutton prices havegone even higher, defeating thelogic of demand-supply equation.The less one talks about the poul-try sector, the better it would be.It literally shames all the develop-ment and supply figures – theprices of chicken meat and eggshave tripled in the last threeyears, depriving the poor of whatcould have been a cheap source ofprotein.

The fodder realities created fur-ther doubts. According to the offi-cial claim, buffalo and cattle popu-lation grew from 62.9 million in2008-09 to 65.1 million in 2009-10in Punjab alone. These 65 millioncattle and buffaloes, leave aloneother animals (goat, sheep andcamels), need little less than 1.1million acres of fodder if six-ani-mals-to-one-acre ratio is acceptedas a benchmark.

Punjab traditionally sows fodderonly on 4 to 4.5 million acres.There has been no increase in theacreage during the last manyyears. Where did the additionalfodder come from that may havecatered to the entire need? No oneknows. Other provinces are notknown for big animal population,at least not buffaloes and cattle.

If numbers of horses, mules andassess are added, the total popula-tion touches a staggering figure of170 million – as much as thehuman population of the country.Why has there been no increase in

fodder acreage?It shows how the federation had

been dealing with the sector forthe last many years. The sector hasnow been lobbed on to the provin-cial laps, which now need to planthe sector and take it forward. So,it is now their duty to sift fictionfrom the facts and plan accordingto the realities on ground.

The provinces have been madecustodians of 55 or 66 milliondairy animals, which yield a huge35 billion litters of tradable milk –ranking among the first few in theworld. Overall yield is 46 billionlitters, but 20 per cent of it goeswaste or for feeding calves. Thecountry is also a proud host of twoprecious breeds – Neeli Ravi (buf-falo) and Sahiwal (cow) – geneti-cally comparable to any animal inthe world.

Despite having such a rich live-stock portfolio, the country – as amatter of national shame – stillimports milk, milk-products, andeven dairy animals. Two reasonsare cited for this pathetic situation:low productivity and even lowerprofitability for domestic farmers.The sector thus suffers both afflic-tions that its parent sector (agricul-ture) is victim of – low productivityand lower profitability.

The livestock productivity, asexperts put it, is a matter of fourfactors – breeding, nutrition,health and husbandry manage-ment. The country, unfortunately,has been falling well short on allfour accounts.

As far as breeding is concerned,the official services only coverseven per cent of buffaloes and 26per cent cattle. The rest of the ani-mals depend on private bulls, ofunknown parentage, for reproduc-tion – polluting genetic line andseverely hampering health andproductivity of two main milk-yielding animals.

Due to paucity of bulls, theinsemination cycle of buffalos andcows routinely spans four to fiveyears against 15 to 18 months inthe developed world, bringing pro-duction down correspondingly.

The nutrition front is not betteroff: some 71 per cent of livestockfarmers are either landless (38 percent) or own less than five acres(33 per cent) of land. Practicallyspeaking, it means that over 70per cent of animals are mal- orunder-nourished – mainly depend-ing on the casual grazing, affectingtheir health and productivity.

Only 30 per cent stockaffords the luxury silage-baseddiet. Couple this diet pattern withthe impure parentage, and poorperformance of these animals isnot hard to understand.

Health front also leaves much tobe desired. Only 16 per cent ofstock is vaccinated and the restremains on curative regime. Theofficial agencies in Pakistan haveturned planning of the developedworld on its head, and are execut-ing it with a spirited fervour.Critics put it down to systematiccorruption among the officialdomwhich is continuing with completeimpunity.

All over the world, the publicsector concentrates on vaccina-tion, leaving cure to the privatesector. But in Pakistan, the entire

official effort is riveted on curebecause it involves huge purchasesthat benefit many. That is why theofficial agencies, with their entirewherewithal, have not been ableto control old diseases like foot-and-mouth, as vaccination is not apriority. In Punjab, each districtgets around Rs5 million annuallyfor purchasing medicines.

The less one says about hus-bandry management, the better itwould be. The farmers neitherhave training, nor awareness norextension service nor technology.One simple fact reveals the officialattitude towards management.

Experts believe, as practised theworld over, the animals must haveaccess to water 24 hours and befed thrice a day. With this onestep, the milk yield, they say,could go up by one litter a day. InPakistan’s rural areas, the oppo-site is true: most animals haveaccess to feed on 24 hours a daybut taken for drinking once a day.With these kinds of extension ser-vices, no wonder productivityresults are as bad as they havebeen showing.

The profitability factor in thesector is even worse for the farm-ers. All the above-mentioned fac-tors ensure that productivityremains as low as being on the bot-tom of world ranking.

In Pakistan, yearly lactation ofan animal is 1,200 litters against9,500 litters in the EU orAustralia. Out of 35 billion litters,only three per cent is processed,with 70 per cent sold through themiddleman. The middleman saleonly adds to farmer’s poverty. InPunjab, which produces 61 percent (2.1 billion litters) of the milk,the cost of production, at currentprice factor, is around Rs23 per lit-ter. In most of the rural Punjab,the sale price is around the samefigure. It touches Rs40 in subur-ban city areas. In the cities, howev-er, the sale price is over Rs60 perlitter.

The situation is even worse inthe processing industry, whichpurchases milk at Rs25 and sells itaround Rs60 in the cities. Theprofit margin triples given the factthat it sells milk with 3.5 per centof fats, and purchases at six percent – creating almost two littersout of one or selling cream sepa-rately. The poor quality ofprocessed milk has been a sourceof loud noises by the consumer

rights bodies, and even legal wran-gling.

The province now needs toadopt a two-pronged strategy: live-stock development must beginwith culling the bad stock anddeveloping elite breeds. Gettingrid of bad breeds is equally impor-tant. If Pakistan categorises itsanimal population (supposing it is66 million) into three classes, itwould roughly have 22 million bet-ter animals, 22 million averageand 22 million poor.

If it is able to get rid of the 22million animals of bad stock andexport meat, it would not only getbillions of dollars in foreignexchange, but also spare preciousfodder for the rest of the animals.Each of these 22 million animalswould roughly yield 200 kilogram.So, it would not only bring moneyin, but also spare 22 millionmaund of fodder and 66 million lit-ters of water on a daily basis forthe better breeds.

The provinces should note that acountry like the USA used to have9.5 million animal population. Itactually brought it down drastical-ly, but took the milk yield from3,000 to 13,000 litters per annumper animal. Pakistan must take acue and cut animal population andincrease productivity.

The major challenge thatPunjab would face is poverty ofthe animal owners. They can firstpump the money into rural areasand then recover it throughexports, or it can develop someother mechanism for compensat-ing owners of these animals. But itis an essential step to clear thebacklog and start afresh. ■

Time to begin afreshBy Ahmad Fraz Khan

My favouriteanimal is

steak.— Fran

Lebowitz

Conventional grazing is said to be a stumbling block in the way of modernisation.

Experts believe animalsmust have access towater 24 hours and befed thrice a day. InPakistan’s rural areas,the opposite is true:most animals haveaccess to feed roundthe clock, but are takenfor drinking once a day


P AKISTAN’S struggle torealise its full potential inthe dairy sector continuesmainly due to inconsis-tent policies of successive

governments in terms of regulatingprivate and public sectors. Beingone of the leading milk producersin the world, the country’s farmersstill need proper education andpatronage to increase their per-ani-mal yield. They continue handletheir herds under conventionalmethods without knowing how toincrease the milk yield.

Pakistan’s livestock contributes12 per cent to the national GDP,and out of that 12 percent, nine percent comes from milk. Multiplereasons serve as barriers in achiev-ing the desired results of milk pro-duction on the one hand andchanging the lives of the farmerson the other.

One must remember that thecountry’s economy largely dependson the agriculture sector and oneof its components – livestock – issupposed to support the poorest ofthe poor. Yet, they remain themost vulnerable. In the last twosuccessive disasters – the floodsthat hit the agriculture sector in2010, and then the devastatingrains of the last year, especially inthe lower Sindh region which tooka heavy toll of livestock in additionto the farmlands – the pathetic con-dition of the farmers and the live-stock sector stood totally exposed.

Let us discuss in a broader sensesome of the primary issues thathamper the growth of dairy sectorthat ultimately affect milk produc-tion. Some of them pertain to themissing cold chain, demand-and-supply gap that is increasing, pro-cessing of the packaged milk andthe animal upkeep.

The last one is foremost in termsof its significance if the optimumpotential of the dairy sector is tobe realised. Amidst fast-changingweather patterns in view of cli-mate change, food security hasbecome a matter of attention forgovernments and policy-makersaround the world. These policies,however, still leave a lot to bedesired at our end.

One would hardly disagree withthe fact that a noticeable conver-sion of agriculture land into com-mercial zones in the vicinity of set-tled urban centres has been takingplace for some time. Either plazasare being built or filling stationshave been set up by the investors.Owners of farmlands have soldtheir land because of the lucrativeprices they were offered for doingaway with their fertile agriculturelands.

According to figures provided bythe Sindh Livestock Department,Pakistan produces 140.4 millionlitres per day of milk, including53.1 million of cattle [cow] and82.1 million litres of buffalo milk.Punjab produces 74.7 million litresper day, followed by Sindh whichproduces 43.4 million litres,Khyber Pakhtunkhwa whichaccounts for 17 million litres, andBalochistan, which contributes 6.3million litres per day.

For farmers, crops remain theirmajor source of earning, whiletheir herds are their second priori-ty. No rangeland policy existsapparently to help animal breed-ers. Availability of fodder is fastbecoming a major impediment in

the growth of the number of ani-mals.

Pastures and fertile land (1.2 to1.3 million acres approximately)that used to exist in coastal dis-tricts of Badin and Thatta havebeen devoured by the Arabian Seain the absence of enough water tobe discharged downstream Kotri.

Non-availability of fodder willbecome more serious in the future,as 80 per cent of subsoil water inSindh is brackish and environmentexperts believe that due to climatechange, resources of freshwateraquifers will shrink. No research iscurrently taking place on salt anddrought resistant fodder in orderto meet the consumption needs oflivestock.

Being the fourth largest produc-er of milk in the world after India,China and the United States,Pakistan is said to be having eightmillion farming households thatproduce around 35 billion litres ofmilk annually from around 50 mil-lion animals. Annual milk produc-tion is estimated at Rs177 billion infinancial terms.

The value of milk is more thanthe combined value of three cashcrops, wheat, cotton and rice. Asenior Sindh government livestockofficer, Rasheed Nizamani,recalled the federal government’sAgriculture Inquiry CommitteeReport of 1976 which had conclud-ed that our animals remain hungryand they don’t get their requirednutritional value.

“To me, the situation has notchanged to date. We do not haveenough grazing areas and the areawill shrink further. Staple foodavailability is the priority of thegovernment from the food securitypoint of view,” he said, adding thatlivestock population was increas-ing at a rapid pace.

He, however, emphasised theneed for keeping productive ani-mals instead of raising themnumerically, and said that India’s

efforts were more concerted in thisregard.

There is no denying the factsthat are narrated by Nizamani.Pakistan lacks a proper breedingprogramme which adverselyaffects the dairy sector. Figuresshow that the country producesmilk somewhere between 30 to 35billion litres per year, but it stillhas the lowest yield of around1,700 to 1,800 litres per animalannually.

This goes to show that we are farbehind other countries like India,the USA, New Zealand andAustralia in this sector where theaverage milk production stands at8,000 to 12,000 litres per animalper annum.

Experts point out that so far wehave not differentiated between orseparated milk and meat produc-

ing breed of animals. It requiresresearch which has hardly been apriority of successive governments.Our animals are immune to thingslike ticks and temperature, andcan survive even if the mercuryshoots up.

The farmers are not encouragedto keep record of their animals toselect the best of them breed-wise.As a resultant, a mix of animalbreeds has emerged. Farmers arenot aware of their animals’ pedi-gree that is otherwise essential toensure the preservation of produc-tive animals.

Animal breeders are uneducatedand handle animals through con-ventional livestock keeping prac-tices only to tell that the breed ofSahiwal is popular in Punjab andRed Sindh or Kundi in Sindh.That’s all. Good livestock farmpractices are rarely seen being fol-lowed.

This is again due to inconsistentgovernment policies. Before the18th Constitutional Amendment’spassage that led to the devolutionof many a ministry to provinces,the federal government estab-lished a Livestock DairyDevelopment Board (LDDB) to pro-mote dairy and meat sectorsthrough separate programmes.And it had started giving results tosome extent as the breeders tookgreat interest in these programmesto supplement their income. It wasa five-year project.

Now it stands disbanded becausethe government didn’t extend itstenure. As far as Sindh is con-cerned, it is not rare to come acrosslivestock farmers who were learn-ing good animal-keeping practicesand were keen to see the pro-gramme continuing. Under themeat-development programme,farmers were taught how to followdiet protocol, vaccination, farmpractices up-gradation etc.

They used to get good returnswhen they sold their cow or goaton the eve of Eidul Azha after fol-lowing the protocol of the fatteningcycle. But the programme stands

discontinued and the LDDB is saidto be part of the Federal Ministryfor Food Security.

The same is the case with thePakistan Dairy DevelopmentCompany (PDDC), known as DairyPakistan. Its fate remains undecid-ed. The PDDC did make progressin Punjab, but didn’t make its pres-ence felt in Sindh. The provincialgovernment wanted to replicatethe PDDC through its Sindh Dairyand Meat Development Company(SDMDC), but its foreign donoragency is believed to have had sec-ond thoughts about funding theproject.

The Sindh government had allo-cated Rs930 million under theAnnual Development Programme(ADP) and it was to get Rs1 billionfor each of the next three years tohelp the SDMDC in its operationsbefore becoming a self-dependingentity.

Even otherwise, the perfor-mance of the livestock departmenthas always been under clouds ofvarious kinds. Huge losses werereported to the livestock duringthe monsoon rains that hit thelower Sindh region in Septemberlast year. Experts, however,believe that the official figureswere pretty unrealistic.

According to a progressivefarmer, Mehmood Nawaz Shah,who has been studying this subjectfor some time, there is lack offocus on being innovative. There isa very big gap related to under-standing of issues between thefarmers and other stakeholders.That gap needs to be bridged. Thiscan be done by adopting a public-private approach.

“UHT (ultra high temperature)is extraordinarily expensive and itstemperature is kept abnormallyhigh. Elsewhere in the world, adebate is going on to keep the pro-cessing level within reasonablelimits,” argued Shah.

If the quality of the pasteurisedmilk is improved, it will give aboost to the rural economy withnew avenues of skills. “While a

retail milk-seller is arrested forselling milk at a certain price, butat the same time no one is interest-ed in keeping an eye on how andwhy the cost of packaged milkkeeps going up,” he pointed out.He said he believed that if freshand pure milk was made availableat a low cost, people will tend to gofor it.

A programme of geneticimprovement through embryotransfer technology implementa-tion is being taken up in Sindh bythe provincial livestock depart-ment at a cost of Rs50 million,according to Secretary Dr. LaiqMemon.

Under the programme, 100selected cows – to serve as surro-gate mothers – are to be impreg-nated through transfer of embryobeing imported from the USA bya private Karachi-based livestockfarmer, Jamil Memon. Its successrate is 40 per cent, but under theproject, the livestock departmentwill get 100 confirmed pregnan-cies regardless of the number ofembryos used in the process.

Though the share is 50-50, theprivate investor will get 80 percent of females, while 20 per centwill be given to the government.Besides, he will keep 20 per centof the males, with 80 per centgoing to the government. It wouldbe followed by an inseminationprocess. Comparisons show thatthe role played by indigenousbreeds such as Sahiwal, RedSindhi, Neeli and other breedsnative to Pakistan, is useful and,if properly managed, this roleshould become more than usefuland indeed important.

These breeds have importanttraits of adjusting to local condi-tions like resistance to heat anddiseases. These native breeds needfurther improvement under a pub-lic-private partnership programme.

In the words of Engro Foods’milk procurement head, AamirKhawas, the situation of milk pro-duction vis-a-vis processed milk isdisturbing. He disagrees with thegovernment’s inflation figure of 12per cent, arguing that only milk’sprice shows an annual increase of20 to 22 per cent annually.

His analysis is that given thedemand of milk, which goes up 15per cent per annum, the milk pro-duction is showing a growth at analarmingly low level of just two to


By Mohammad Hussain Khan Despite being one ofthe largest producersof milk in the world,the dairy sector hasserious issues that arehampering progresstowards maintainingour position for long.Ironically, it is notdifficult to see whatneeds to be done

Good, but can be better

There is no threat of the dairy supply line getting dried up, but it has potential for a lot more

Man is the only creaturethat consumes withoutproducing. He does not

give milk, he does not layeggs, he is too weak to

pull the plough, he cannotrun fast enough to catchrabbits. Yet he is the lord

of all animals. — George Orwell


A FTER the financial cri-sis and global recessionof 2008-09 and amidstlooming double-diprecession in Eurozone

economy, experts around theworld are advocating the idea ofmarket risks-mitigated sustain-able economic growth and moreequitable distribution of wealth.

One of the lessons of the globalrecession is that too much con-centration on financial productswithout backing them up withreal assets or without having asystem in place to check manipu-lation in the market by a fewpowerful players can be disas-trous.

Economists have come tobelieve that unchecked growth ofcurrency and financial deriva-tives in markets can negativelyaffect real sector economy inmore ways than they had initiallythought. And it is in this contextthat a number of them are nowexamining the role of commodityexchanges in terms of theirstrengths and weaknesses thatcan affect global economichealth. Future trading of fuel oil,for example, is fraught with risksthat if remain unchecked, canimmensely affect the global econ-omy.

While the advanced economiesof the world would remainfocussed on such issues for sometime to come, we in South Asiaare facing a different scenario.Barring India, commodityexchanges are in early phase ofevolution in the South Asianregion.

Pakistan Mercantile Exchangeor PMEX (formerly known as theNational Commodity ExchangeLtd) started its operations in May2007 as a fully electronicexchange. This first technology-driven, web-based de-mutualisedcommodity exchange is regulatedby the Securities and ExchangeCommission of Pakistan and hasa 100 per cent institutional share-holding.

The shareholders include theNational Bank of Pakistan, theKarachi Stock Exchange, theLahore Stock Exchange, theIslamabad Stock Exchange, PakKuwait Investment Company(Pvt.) Limited, and the ZaraiTaraqiati (Agriculture

Development) Bank Ltd.From 2007 till date, PMEX has

covered many milestones andnow has over 100 brokers and 300members. The only commoditybourse in the country looks set togrow further. During fiscal year2010-11, the traded volumes atthe Exchange increased to Rs490billion from Rs63 billion in theprevious year, a growth of 671per cent.

The number of new investorsgrew 245 per cent during theyear as 20 new brokers initiatedtheir business at the exchange,and added on new clients. Thiswas a strong signal that more andmore investors are entering theCommodity Market for diversify-ing their investment portfoliosand hedging against the uncer-tainties of the traditional invest-ment markets and the consistent-ly low returns offered by theexisting traditional asset classes.

Also in fiscal year 2010-11,PMEX successfully placed aPreference Share issue, whichwas subscribed by the NationalBank of Pakistan and the Pak-Brunei Investment Company.

The fact that the shares weretaken up by two leading financialinstitutions of the country servesas a strong vote of confidencethat PMEX is on its way to sus-tained growth, and reinforces thefact that PMEX is a fast growingexchange of the country. Theother shareholders of PMEXinclude the Pak-KuwaitInvestment Company, the ZaraiTaraqiati Bank and the threestock exchanges of the country.

Over the last several years,PMEX has established a strongfootprint in managing and offer-ing international commodities inthe Pakistan market – especiallygold, silver and crude oil. Thistrend is expected to continuewith the introduction of newproducts in the coming years.

PMEX officials say that in the

next five years they will alsofocus on the agricultural marketdevelopment. The main objectivewill be to initially list all themajor domestic agricultural prod-ucts on the exchange. This will befollowed by an extensive market-ing plan to create awareness ofthe immense benefits that anactive futures market offers forthe growers and traders andusers of agricultural commoditiesin Pakistan.

This is going to be a major chal-lenge for PMEX as it requirescreating awareness of new prod-ucts and practices to traditionalmarkets. The intention is to fol-low best international practicesin terms of transparency, fairnessand open access so that all play-ers in the value chain benefitequally.

In order to achieve the objec-tives set out, PMEX is planningto open offices near the majoragricultural zones of the countryfor easy access and trust buildingto take place between theexchange and the agriculturalstakeholders. The initial plan isto open four offices during 2012in the approved areas.

PMEX will continue to followthe tight risk management proce-dures and controls that it has pio-neered in Pakistan and that havestood it in good stead, especiallyin recent times of immense volatil-

ity in the international markets.Markets for futures trading

were developed initially to helpagricultural producers to managethe price risks they faced whileharvesting, marketing and pro-cessing food crops each year.Today, futures exist not only onagricultural products, but also ona wide array of financial, stockand forex markets.

The world’s oldest establishedfutures exchange, the ChicagoBoard of Trade, was founded in1848 by 82 Chicago merchants.The first of what were then called‘to arrive’ contracts were flour,timothy seed and hay, whichcame into use in 1849. ‘Forward’contracts on corn came into usein 1851 and gained popularityamong merchants and foodprocessors.

What is now known as thelargest futures exchange, theChicago Mercantile Exchange,was founded as the ChicagoButter and Egg Board in 1898. Atthat time, trading was offered inbutter and eggs.

Pakistan needs to bring moreand more agricultural and live-stock items on the list of the eligi-ble items for trading on PMEXplatform. Initially some of theseitems can be traded only againstphysical delivery before PMEXbegins its future trading.Commodity experts point out

that facilitating trading againstphysical delivery requires invest-ment in physical infrastructureand imparting of market knowl-edge to farmers and animalbreeders and other stakeholdersin the supply chain of livestock.

They say that in a country likePakistan where financial literacyis low and people are also con-cerned about whether trading infutures is Islamic or not, insteadof expanding the scope of futuresmarket, PMEX should betterfocus on developing commoditytrading against physical delivery.

In the 21st century, online com-modity trading has becomeincreasingly popular, and com-modity brokers offer front-endinterfaces to trade these electron-ic-based markets. A commoditiesbroker may also continue to offeraccess to the traditional pit-trad-ed, or open-outcry, markets thatestablished the commodityexchanges.

In Pakistan, PMEX offersfutures trading in gold and silver,Irri rice, sugar, crude oil, palm oiland international cotton. Plansare under way to allow it to startfutures trading in cotton andwheat as well as maize. But oneof the issues facing PMEX is thatso far only big investors and bro-kerage houses have become usedto commodity trading. Small andmedium investors have shown lit-tle interest.

For them, the main impedi-ment is the T+O system for set-tlement. In layman’s words, itmeans that unlike in the stockmarket which allows its investorsto make up the difference in itsbalance after entering into atransaction, two to three daysfrom the date of transactionPMEX offers no time at all.Settlements have to be madethrough electronic transfer offunds in real time.

Small and medium investorssay this is a big hassle. Theyeither do not have enough moneyin their accounts to make up thedifference in their PMEXaccounts after entering a deal orafter changes in the prices ofcommodities, or it is the odd tim-ing which bothers them.

Despite this shortcoming, vol-umes of trade have been growingphenomenally at PMEX and inthe year 2011 traded volumes atPMEX grew more than three-foldfrom the year ago.

Growers are happy that thelisting of Irri-rice and sugar hasled to stability in the prices ofthese commodities. But con-sumers fear that excessivefutures trading of agriculturalcommodities is fraught with therisk of artificial price hikes.Some of them even think thatthe surge in prices of Irri-riceand sugar in the last two, threeyears was in part a result of theirfutures trading on PMEX.

But even this problem can beaddressed through listing ofmore and more commodities onPMEX and by expanding theambit of its operations. “If wehave more products to offer, nat-urally our business volumes

would increase, enabling us todesign the tools that allow settle-ment against physical delivery ofsmaller lots of commodities,” asenior PMEX official explainedto Dawn.

“Similarly when the number ofbrokers and members willincrease, it would also pave theway for more transparency, morereal price discovery and innova-tion in products,” he added.

He said that in addition to thelisting of agricultural products,including edible oils, there isalso scope for initiating futurestrading in animal hides andskins, iron and steel, fertilizersand plastic materials etc. “Theleather sector industries wouldbe able to make right projectionsahead of their peak working sea-son, and hides and skin traderswould not have to wait for EidulAzha to set new price trends.”

Small and medium investorsinterested in commodity tradingsay that in addition to web linksavailable for this purpose, theyalso need easy and friendlyhuman assistance. AlthoughPMEX operates in more than adozen big cities of Pakistan, itemploys a negligible number ofstaff who can assist prospectiveinvestors.

Lately, PMEX has made someefforts to enliven its marketingdepartment, but shortage of staffcontinues to belittle its movesfor making commodity tradingpopular among rural and urbaninvestors.

With regard to rural investors,the absence of an Urdu versionof the PMEX website is also aproblem. At least most importantinformation with regard to themodes of trading and the prod-ucts available for trading can beput on PMEX website in Urdulanguage.

Development of a vibrantcommodity exchange alsorequires induction of skilledcommodity dealers at theexchange. This brings into dis-cussion the question of agricul-tural universities where gradua-tion degrees are offered in vari-ous disciplines except for com-modities trading.

Policy-makers ought to give itsome thought. Producing younggraduates in commoditiesanalysis and trading would notonly help in expanding the out-reach of PMEX, but would“also benefit the entire eco-nomic policy-making and tradeand industry for they requireinputs for commodity analystsfor informed decision-makingand analyses,” said a formerchairman of PMEX. ■

By Mohiuddin Aazim The only commodityexchange in the countryregistered a growth of671 per cent in tradedvolumes, and 245 percent in the number ofnew investors. But thatis not the whole story

The commodity exchange is anonline activity that is yet to getas popular as the storck exchange

Going, going, gone!

In practicallife, the

wisest andsoundest

people avoidspeculation.

— George EarlBuckle


P AKISTAN is pre-dominantly an agriculturalcountry where agricultural credit has beenconsidered an important element in alldevelopmental efforts. Since the indepen-dence of the country in 1947, it has strongly

been realised that the magnitude of rural populationand the contribution of agriculture sector to nationalincome make it important that the agricultural cred-it must take precedence over other types of credit inthe country.

In view of this realisation on the part of the policy-makers, farmers have been extended loans throughvarious institutions so that they may get salvationfrom private money lenders who used to providethem loans at a rate of interest which was more of anextortion rather than a business transaction. Some ofthe institutional loans in this regard are narratedhereunder:

TACCAVI LOAN: As clear from the word‘Taccavi’, it is nominally meant for helping farmersin the event of damage or loss of their crops due tonatural vagaries or other economic upheavals. Thegovernment of the time felt sympathy for the affect-ed farmers and tried to remove their financial hard-ships by making use of two long-standing pieces oflegislation – the Land Improvement Act of 1883 andthe Agriculturists Loans Act of 1884 – and convert-ing them into the West Pakistan AgriculturistsLoans Act of 1958.

The Land Improvement Act of 1883 vested pow-ers to sanction loans for medium and long-term pur-poses such as construction and repair of wells,preparation of land for irrigation and reclamationand clearance of land for cultivation purposes. TheAgriculturists Loans Act allowed for the preventionor relief of distress and for purchasing seeds, cattle,fodder, manure and agricultural implements.

These loans are termed direct government loansauthorised by the above mentioned two acts, and wereto be granted by the Revenue Department under theapproval and supervision of the deputy commissionerconcerned for a period ranging from one year to 20years on the basis of a personal bond and a surety sig-nature.

COOPERATIVE CREDIT: The main objective of

the cooperative movement has been to organisefarmers for relieving them of their debt burden onthe basis of self-help and mutual help. Under theCooperative Credit Societies Act 1904, (later onamended in 1912 and 1925), farmers were financiallyhelped to meet their expenditure to be incurred on‘the production and development of agriculturebefore Pakistan came into existence. It is a matter offact that Cooperative Societies have been the secondsource of institutional credit since independence.The provincial cooperative banks, in turn, borrowedpart of their working capital from the State Bank ofPakistan.

AGRICULTURAL DEVELOPMENT BANK OFPAKISTAN: It was considered after independencethat the existing institutional sources of credit i.e.Taccavi and Cooperatives, were not sufficiently meet-ing the credit needs of the farmers, and, therefore, a

need for the establishment of a third source of agricul-tural credit was essentially percolated so as to fulfilthe credit requirements of the farmers even for devel-opment purposes.

Consequently, the Agricultural DevelopmentFinance Corporation was brought into existence in1952 under a Central Government Act for the purposeof expanding financial facilities and promoting thedevelopment and modernisation of agriculture inPakistan.

Subsequently, it was in 1957 that the AgriculturalBank of Pakistan was established. The bankadvanced both short and long-term loans mostly tothe bigger farmers. Both these institutions weremerged together as the Agricultural DevelopmentBank of Pakistan in 1961 and re-branded as theZarai Taraqiati Bank Limited in 1993-94.

COMMERCIAL BANKS: In the wider interest ofagricultural development by helping the peasantry ofPakistan, especially the small landholders, the exist-ing coverage of institutional credit was found to bebugged by shortfalls and shortcomings. In view ofexpanding the flow of institutional credit, its wide-spread disbursement was considered effectivethrough the commercial banks which had easy reachto the small villagers through their branches that wereopened in every hook and corner of the country.

The Banking Reforms of 1972 inducted the commer-cial banks of the country in providing the credit facili-ties to the farmers with great stress on looking afterthe interests of small farmers. Although the natureand type of commercial banks lending policies hereinbefore related to the progress of commerce, business,industry and other non-farm activities, they acceptednew challenge and started performing their newassignment of extending their hand of help to thefarming community for the sake of boosting agricul-tural production and bringing home prosperity for theneglected section of rural community, with greatenthusiasm and success.

For the attainment of such a national objective,under the Banks’ Nationalisation Act, 1974, all the pri-vate banks within the country were nationalised and aBanking Council was set up to run the smooth admin-istration of all the nationalised banks like theNational Bank of Pakistan, Habib Bank, MuslimCommercial Bank,United Bank, and theAllied Bank of Pakistan.

Under the scheme of‘Agricultural Loans byCommercial Banks’,advances were given forthe purposes of meetingthe needs of productionas well as development ofland, against acharge/mortgage over“the borrower’s agricul-tural land”. Productionloans up to Rs6,000 perborrower per seasonwere also granted againsttwo personal sureties.

From the accompany-ing chart, it is evidentthat the Taccavi loanswere disbanded from theyear 1989-90.

Besides, cooperativecredit was discontinuedin three provinces –Sindh, the NWFP andBalochistan – from 1990-91, but it continued to bedisbursed in the provinceof Punjab through thePunjab ProvincialCooperative Bank Ltd(PPBCL).

After the privatisationof commercial banks,domestic private banksstarted lending agricul-tural credit to the farm-ing community from theyear 2001-02.

The mandatory targetsare being given yearly tothe commercial anddomestic private banksby the State Bank ofPakistan. In case ofdefault, the rest of theamount that they couldnot lend to the farmers,has to be deposited withthe State Bank withoutcharging any interest tillthe amount of default ofmandatory targets are

fulfilled by the defaulting banks.It is almost beyond belief that such a huge amount

of Rs2.5 trillion is being disbursed by the banks. Theyprobably only show such a heavy disbursement intheir records in order to save themselves from thepenalty of the mandatory defaulting amount to bedeposited with State Bank free of interest.

It is, therefore, to be probed by the State Bank withhigh vigilance to check whether such a huge amount isbeing actually disbursed by the banks because it is amatter of fact that farmers in their hundreds andthousands have been wailing for long that the banksare not providing them agricultural loans, but are try-ing to save their own skin from the penalty of default.There are allegations to the effect that commercialbanks pass on the credit to other sectors in the econo-my and show it in their statements as agriculturalcredit.

There is a common complaint from the farmersthat some of the banks are biased against grantingnew loans to new borrowers, but continue to provideloans to those who have been defaulting on theirpayments for long. There are times when new loansare granted to the defaulters in order to recover baddebts. The regulatory authority will do well to inves-tigate such practices which will be a great help to thefarmers.

There is a common complaint fromthe farmers that some of the banksare biased against granting newloans to new borrowers, but continue to provide loans to thosewho have been defaulting on theirpayments for long

The rigmarole of agro-creditBy Dr Ali Akbar Dhakan

The farmer is theonly man in our

economy who buyseverything at retail,sells everything at

wholesale, and paysthe freight both

ways. —John F. Kennedy

The fruits of financing fail to reach those who need it the most


D ESPITE reports of sur-plus wheat crop thisyear one should not bemisled that all is well inthe agriculture sector of

Pakistan because its irrigationsystem is in a precarious situa-tion, especially since the devas-tating floods and the menacingrainfall of the last two years.

While the population being onthe rise alarmingly, water isbecoming scarce every day andaccess to it in the future will bedifficult because of the massivestructures built by India on therivers that were supposed to beunder the exclusive use ofPakistan under the flawed IndusBasin Water Treaty.

As noted by a World Bankreport a few years ago onPakistan’s agriculture economy,with an average rainfall of lessthan 240 millimetres a year,Pakistan is one of the world’smost arid countries. Pakistan’sprime problem is the lack ofinvestment in building newreservoirs to deal with anticipat-ed water shortage. It has notbeen able to repair and re-modelthe existing irrigation systemdespite knowing that water issine quo non for human survival.“Civilizations had thrived andperished because of availabilityor lack of adequate waterresources. Lack of adequatefunds is one of the reasons,” thereport had said.

Pakistan’s water economy hasalso suffered due to political andnatural challenges. Its naturalresource base is being degradedon a large scale by salinity,uncontrolled pollution and inad-equate levels of water and silt tosustain the delta.

Groundwater is now beingover-exploited in many areas,and its quality is deteriorating.Yet, tens of thousands of addi-

tional wells are being put intoservice every year. Flooding anddrainage problems have becomemenacing and getting worse,especially in the lower IndusBasin, as silt builds up and nar-row embankments force therivers to flow within relativelynarrow beds above the level ofthe land, said the WB report.

Pakistan has done little in con-

nection with modern AssetManagement Plans for any of themajor infrastructure, and, assuch, the country continues tosuffer from low crop yields.

As the country has very littlewater storage capacity, andTarbela and Mangla are siltingrapidly, Pakistan must investwithout delay in costly and evencontentious new large dams.Progress on Bhasha is, to say thevery least, very slow.

On top of it has been the crimi-nal negligence on our part toanticipate and monitor thethreat posed by India’s inter-basin river-linking projects,especially in the OccupiedKashmir.

Over the years, India has builtseveral reservoirs not only on theso-called Eastern Rivers underthe Indus Basin Water Treaty,but has quietly built structureson the Indus, Jehlum andChenab rivers that would cripplePakistan’s water economy.

The Kishanganga project willleave hardly a trickle of waterto flow downstream into AzadJammu and Kashmir (AJK) andPakistan. Wuller Barrage, SalalDam and a number of big orsmall projects on Chenab andits tributaries upstream acrossthe Line of Control in theIndian-held Kashmir now poseserious threat to Pakistan’sagriculture.

India has recently demonstrat-ed the menacing use of water asa weapon against Pakistan – anuclear country – by releasingwater in the rivers without priorwarning. It not only damagedstanding crops, but also had adevastating impact on humansettlements. Water is increasing-ly becoming a potent issue inIndia-Pakistan relationship andmany analysts believe that con-

trol of water sources could leadto a war between these countriesin the future. But successive gov-ernments are to be blamed forthis fait accompli because theydid not maintain the vigil andour man negotiating with hisIndian counterpart allegedlyplayed a debatable role.

Experts here have been talkinga lot about regional and one-basin solution to the problem,but forget the impact on theavailability of water for Pakistanonce it executes the plan ofbuilding reservoirs on riverKabul and other tributaries thatmingle with it before it entersPakistan.

There were reports that Indiaand the United States and someWestern and Arab countrieswere encouraging Kabul withfunding. For New Delhi it willbe an important component ofits proxy war with Pakistan forestablishing regional hegemo-ny.

Such a scenario calls for judi-cious use of available water andusing water conservation meth-ods to cater to agriculture andhuman needs. While drip irriga-tion is being suggested for meet-ing the future needs, the biggestchallenge yet will be to increaseper-acre yield through the devel-opment of better seeds.

The water courses that suf-fered during the floods all overthe country and stagnant rainwa-ter, especially in Sindh, for sev-eral months speak volume aboutthe lack of sincerity in overcom-ing this problem.

According to State Bank ofPakistan’s annual report for2010-11, while the economyshowed modest performance dur-ing FY11 as real GDP recorded agrowth of 2.4 per cent, agricul-ture was badly affected by floods

in July-August 2010 as this sectorsuffered damages of about $5 bil-lion; of that 89 per cent were ofcrops. The total area underKharif crops – cotton, rice, sugar-cane and maize – was 6.98 mil-lion hectare of which around 2.10million hectare was directly dam-aged by the floods.

The sector also suffered as thegovernment had to divert suffi-cient development funds for dis-aster management and rehabili-tation.

The SBP report says thatdespite experiencing substantialflood-related losses, particularlyin the cotton and rice crops, theagriculture sector recorded agrowth of 1.2 per cent during theyear. This growth exceeded theprevious year’s level, and wasmainly led by the livestock sub-sector, followed by minor cropsand two major crops (namelysugarcane and wheat).

A higher price for the previoussugarcane crop, favourableweather conditions and timelyavailability of inputs helped

enhance sugarcane production to55.3 million tons – a growth of 12per cent over the 2010 crop size.Encouragingly, the crop yieldincreased to a record level of 56tons per hectare.

The record wheat crop of 24.2million tons showed a growth of3.9 per cent in FY11 against adecline of three per cent a yearearlier. Increase in wheat pro-duction is attributable to: (a)improved water availability; (b)supportive weather conditions;(c) increased use of fertilizer;and (d) provision of free-of-costseeds in the flood-affected areas,noted the SBP report. Both cropsaccount for more than one-thirdof the total value addition bymajor crops.

The floods of early FY11affected livelihoods and assets.The challenge for the agriculturesector was more demandingbeyond the standing crops forrice and cotton that were badlyaffected (in some cases com-pletely destroyed). There werefears that the damage would

extend to the next cropping sea-son, as affected land becamewaterlogged, and for the landthat did dry up, timely availabili-ty of seeds was uncertain.

The government was forced tolook for assistance towards donorcountries and agencies, and wasable to limit the damage.Surprisingly, farmers alsoresponded strongly to this chal-lenge, particularly in preparingthe food-affected lands for crop-ping. The positive results of theirefforts were evident in terms ofsignificant gains both in wheatand sugarcane, the SBP reportsaid.

Floods also destroyed seedswhich farmers generally store forthe next planting season ofwheat. Furthermore, due to theshortage of alternative foods,people were compelled to usetheir seeds as food.

The floods, however, left medi-um to large landlords in anunusual social dilemma: theircrops worth million of rupeeshad been destroyed, but due totheir white-collar standing in thecommunity, it was difficult forthem to align with landless work-ers and small farmers, or securein-kind support (free seed andfertilizer) from the governmentand other non-government organ-isations.

Another key development wasthe surge in prices of cotton dur-ing most of FY11, which morethan compensated farmers forproduction losses due to thefloods. Looking ahead, the govern-ment has set an agro-growth tar-get of 3.4 per cent for FY12 –sig-nificantly higher than the realisedgrowth of 1.2 per cent in FY11.

Unfortunately, the countrywas hit again by another flood;this time the damage was con-centrated in central and lowerSindh. This flood caused signifi-cant loss of life, infrastructure,livestock and crops. More impor-tantly, these flood-related losseswere concentrated in the cottoncrop area. It may be pointed outthat the cotton crop outlook wasquite promising prior to theflood.

According to the EconomicSurvey of Pakistan 2010-11,higher prices of major crops ledto income transfers of Rs342 bil-lion to rural areas during 2010-11 alone. By contrast, estimatesfor crop damages due to floodsstood at around Rs282 billion.

While severe gas shortages tofertilizer plants led to a substan-tial under-utilisation of theircapacity, the timely availabilityof urea became a major concernfollowing considerable delays inurea imports and incentives tohoard the commodity in anticipa-tion of price increase.

Cotton-sowing in both Punjaband Sindh exceeded the target inFY12. In contrast, cotton-sowingin Sindh during FY11 was 80 percent of the target.

Some experts believe that ifPakistan has to overcome theissue of future food security, itmust take note of climate changeand plan crop-sowing accordingly.

It cannot survive on the con-ventional method and crops tomeet the needs of the growingpopulation. They also suggestthat government must build mod-ern and large storage houses foragricultural produce. ■

Water is a finite resourcethat is essential in the

advancement ofagriculture, and is vital tohuman life. — Jim Costa

The country’s watereconomy has suffereddue to political andnatural challenges. Itsnatural resource baseis being degradedlargely by salinity,uncontrolled pollutionand inadequate levelsof water and siltto sustain the delta

The hydra threat

By Shamim-ur-Rahman

With water going scarce by the day, the farming community has genuine fears about the future


Fatima Group

ESTABLISHED in 1936 and with a suc-cess story spread over seven decades,Fatima group is one of the leading corpo-rate entities of Pakistan, playing a sub-stantial role in the growth and sustainabil-ity of one of the most important industriesof Pakistan. With a talented and dedicat-ed workforce, state-of-the-art manufactur-ing facilities and a diverse range of prod-ucts and services comprising of fertilizers,textiles, sugar, energy, mining and trad-ing, we are relentlessly aiming for higherlevels of excellence.

With our robust businesses that are cre-ating continuous value for customers andshareholders, through quality productsand services, we at the Group inspire con-fidence and respect in the markets weoperate in. With our dynamic businesspractices, we are striving to achievegreater economic growth and sustainabledevelopment for Pakistan.

The Group comprises: Fatima FertilizerCompany Ltd; Pakarab Fertilizers Ltd;Reliance Weaving Mills Ltd; Fazal ClothMills Ltd; Fatima Sugar Mills Ltd;Reliance Commodities (Pvt) Ltd; FatimaEnergy Ltd; Pakistan Mining CompanyLtd; Air One (Pvt) Ltd; Reliance SacksLtd;

Our fertilizer business is a consortium oftwo leading business houses of Pakistan:Fatima Group and Arif Habib Group.

The Arif Habib Group ranks amongstthe fastest growing financial servicesproviders in Pakistan today. This has beenmade possible by a strong brand franchisebuilt on decades of first-rate services tothe clients. Managing assets in excess ofRs37 billion, the group holds interests inthe securities brokerage, investment andfinancial advisory, investment manage-ment, commercial banking, commodities,private equity, cement and fertilizerindustries.

The Group takes pride in its orientationtowards client service. It believes that itskey success factors includes continuousinvestment in staff, systems and capacitybuilding, and its insistence on universalbest practices at all times.

Arif Habib Group comprises: Arif HabibCorporation Ltd; Arif Habib Ltd; ArifHabib Investment Ltd; Pakarab FertilizersLtd; Fatima Fertilizer Company Ltd;Aisha Steel Mills Ltd; Sweet WaterDairies Pakistan (Pvt.) Ltd; SKM LankaHoldings (Pvt.) Ltd; Dolmen City; JavedanCement Ltd; and Arif Habib ReitManagement.

Pakarab Fertilizers Limited was estab-lished as a result of protocol concludedand signed on November 15, 1972, by theIslamic Republic of Pakistan and theEmirate of Abu Dhabi. A Memorandum ofUnderstanding was concluded betweenPakistan Industrial DevelopmentCorporation (PIDC) and the Abu DhabiNational Oil Company Limited (ADNOC)on March 7, 1973. A participation agree-ment emerged on November 1, 1973, toestablish a joint venture for the expansionand modernisation of the old Natural GasFertilizer Factory (NGFF) at Multan.

Located at Khanewal Road in Multan,Pakarab Fertilizer Limited producesUrea, CAN (Calcium AmmoniumNitrate) and NP (Nitro Phosphate). ThePlant is spread over 300 acres and iscapable of producing: Urea: 92,000MPTD; CAN: 450,000 MPTD; and NP:304,500 MPTD.

Pakarab Fertilizer Limited has alwaysdemonstrated its high commitment to cor-porate health and safety. The company isa recipient of British Safety Council’sInternational Safety Award, an awardacknowledged by UK Health and SafetyExecutive as a powerful motivator forachieving high safety standards.

Incorporated on December 24, 2003, asa joint venture of Fatima Group and ArifHabib Group, Fatima Fertilizer CompanyLimited is the first green field projectwhich has been materialised under the2001 Fertilizer Policy of the Governmentof Pakistan. Located in Sadiqabad, RahimYar Khan, it is one of the largest fertilizercomplexes in Pakistan.

The fertilizer complex is a fully integrat-ed production facility, capable of produc-ing two intermediate products: Ammoniaand Nitric Acid and the four final prod-ucts include Urea, Calcium AmmoniumNitrate (CAN), Nitro Phosphate (NP) and

Nitrogen Phosphorus Potassium (NPK).The Complex has a 56MW captive powerplant in addition to off-sites and utilities.The Complex has been allocated 110MMCFD of gas from the dedicated MariGas fields. During its construction phase,it engaged over 4,000 engineers and tech-nicians from Pakistan, China, Europe,USA and Japan.

The design production of the complexis: Urea: 500,000 Metric Tons/Annum;CAN: 420,000 Metric Tons/Annum; NP:360,000 Metric Tons/Annum.

Fatima Fertilizer Company Limited is a‘Public Limited Company’, listed on allthree stock exchanges of Pakistan(Karachi, Lahore and Islamabad) througha successful Initial Public Offering (IPO)in February 2010. It is included in theKSE 100 Index companies and in 2011,was rated as the top company in terms ofreturns (102%) among all others regis-tered.

Fatima Fertilizer is the first and onlyPakistan-based company to begin tradingon the United States, Over-The-Counter(OTC) market. Through the ADR pro-gramme, the stock of Fatima FertilizerCompany Limited traded under the sym-bol of “FTMFY”; these stocks are readilyavailable to the individual and institution-al investors in the US. The company hasappointed BNY Mellon New York USA, aglobal leader in asset management andsecurities as its Depository Bank for thefirst OTC-traded Depository Receipt fromPakistan.

Pakarab Fertilizers Limited hasinstalled Clean Development Mechanism(CDM) project at the plant under the pro-vision of the United Nations FrameworkConvention on Climate Change (UNFC-CC) and the Kyoto Protocol, which is thefirst project of its kind in Pakistan. Thesecond CDM project at power plant wasapproved by UNFCCC in 2009.Subsequently Fatima Fertilizer CompanyLimited signed an agreement with N.Serve Environmental Services GmbH, aGerman Limited Liability Company, fordevelopment and implementation of CDMproject at the plant. The project was com-pleted in December 2011. The central fea-ture of the Kyoto Protocol is the require-ment that countries limit or reduce theirgreenhouse gas emissions to set levels.The CDM allows emission-reduction pro-jects in developing countries to earnCertified Emission Reduction (CER) cred-its, each equivalent to one ton of CO2.

Sarsabz, our fertilizer brand, is a repre-sentation of our ambition to be an icon inthe soil nutrient solutions market, and bethe preferred brand of choice for ourfarmers and business associates. The‘Sarsabz’ logo signifies the integral role ofthe people of the organisation, the leadingtechnology and quality inputs and outputsto meet consumer needs. With the tagline‘Zameen ki Jaan, Fasal ki Shan’, we aspireto provide a portfolio equipped with quali-ty products and farmer focused productiv-ity improving solutions, which will enrichour soils, nourish our crops, enable betteryield and bring prosperity to our country.

The brand ‘Sarsabz’ includes productsbeing produced at both Fatima FertilizerLimited and Pakarab Fertilizer Limited.These include the following:

Sarsabz Urea: Urea is the world’s mostcommonly used nitrogen fertilizer. It con-tains 46% nitrogen.

Sarsabz Calcium Ammonium Nitrate(CAN): It is a nitrogenous fertilizer withhigh efficiency. It contains 26% nitrogen.The combination of nitrate and ammoniamakes it a special product with a neutralpH level. It is effective with water and it isalso effective in soils with low moisturecontent.

Sarsabz Nitro Phosphate (NP): It is abalanced combination of phosphate andnitrogen. It contains 22% nitrogen and20% Phosphorus. It has a low pH of 3.5,which makes the product acidic and suit-able for highly alkaline soils, which arecommon in Pakistan.

We have an extensive network of deal-ership throughout Pakistan, which effi-ciently caters for the needs of our farmers.The purpose of this vast network is to pro-vide our farmers with the most suitable

fertilizers, closer to their homes.We are committed to enhancing farm

productivity and profitability by improv-ing farmer’s knowledge and perception onbalanced fertilizer use. For this purpose,we have a team of highly qualified andexperienced Technical Services Officers,serving the farming community through-out the country. The team is equippedwith the latest scientific knowledge,updated time-to-time, about crop produc-tion and fertilizer management practicesand balanced fertilizer use to restore soilfertility and enhance farm yields.

The team uses state of the art method-ologies and tools to educate the farmingcommunity for improving their knowledgeto improve crop yields, farm income andprofitability. The team has a close liaisonwith the Government and privateresearch institutes, seed and pesticidecompanies for day-to-day updates on newproducts and technologies being used inthe field. Farmers are regularly contactedby the Technical field staff through vari-ous means. The basic purpose of meetingfarmers is to educate them on crop andfertilizer management to get maximumoutput. This educational programme isrun on well-planned activities.

American Soybean Association

THE American Soybean Association(ASA) was founded in 1920 by US soybeanfarmers and extension workers looking topromote the crop for high protein applica-tions in developmental settings. Overseasactivities began in the mid-1950s and todate, ASA has served in more than 80countries globally.

In 2000, ASA expanded and focused itsinternational role and founded the WorldInitiative for Soy in Human Health(WISHH) whose mission is to create sus-tainable solutions for the protein demandsof people in developing countries throughthe introduction and use of soy products.

Since its creation, WISHH has workedin approximately 25 countries, enhancingthe protein intake of many nationsthrough market development, humanitari-an assistance, education and research.

In accordance with the organisation’smission, ASA/WISHH’s three-year‘FEEDing Pakistan’ programme, fundedby the US Department of Agriculture(USDA), will assist Pakistan in using USsoybean meal to make high-protein fishfeeds.

Other elements of the program include:an assessment of the Pakistani fish farm-ing industry, feeding trials to demonstratethe results of fish feed formulations, train-ing courses on fish feed manufacturingand best management practices as well astechnical assistance to industry stakehold-ers, such as feed manufacturers and farm-ers.

Imtiaz Super Market

WE are one of the Karachi’s leadingretailers, with over 60,000 to 70,000 peo-ple visiting our stores each week. We offergood-quality products, wide range of med-icines, huge variety of household itemsand many more, as well as outstandingquality foods, responsibly sourced fromaround 2,000 suppliers globally. Weemploy over 800 people in the city, andcurrently have three stores, plus plans forexpanding business.

Now, more than ever, we are also knownfor our rice and in-house blend of spices.Our plan is to grow Imtiaz Super Marketinto a world-class retailer that is customer-focused, fast-moving and flexible.

We work hard to ensure we offer onlythe highest quality products, service andshopping environments in all of our stores.We will focus on five key growth areaswhich are: continue to invest in and growour core Pakistan retail business by intro-ducing new goods and services; strengthenour Pakistan property portfolio; drive ourImtiaz Super Market Direct business;expand our business nationwide; and inte-grate our plans into every aspect of howwe do business so that we grow in a sus-tainable way.

Our brand values – quality, value, ser-

vice, innovation and trust – are moreimportant than ever. Our commitment tothese values sets us apart from our com-petitors, and enables us to offer our cus-tomers something truly special.

Imtiaz Super Market has a setup havinghigh-standard shelving, eye-catching dis-play and sophisticated shopping environ-ment and maintenance of high standards.

While our main branch is inBahadurabad Commercial Area, we alsohave branches in Awami Markaz on mainSharea Faisal, and in Nazimabad, whileour Clifton branch is also in advancedstages of being functional.

Imtiaz Super Market maintains a hugerange of variety of all items according tocustomer needs. Our main categories are:all food stuff – local and imported; our in-house range of products which is very pop-ular with customers, such as Imtiaz Riceand our own blend of spices; confec-tionery; frozen meat and chicken; high-quality crockery – local and imported; allrange of general household, kitchen andbathroom items; average to high range ofcosmetics and perfumes; wide range ofmedicines; kitchen and household appar-el; household electronic appliances,mobile phones and mobile accessories.

Imtiaz Super Market has planned togive 16 hours a day, seven days a weekand 365 days a year services to the cus-tomers with timing from 10am till 2am tofacilitate its customers up to the maxi-mum level. In this way, every person relat-ed to any profession can do the shoppingaccording to their own schedule.

Imtiaz Super Market is the only retailerin the city which is providing home deliv-ery services to its customers with very eco-nomical transaction amount and withoutapplying any distance condition.

We have our own magazine ImtiazSavings which is published twice a monthand 250,000 copies are distributed.

Krone

KRONE, manufacturing modern for-age harvesting equipment to the high-est quality standards and at competitiveprices at the small village of Spelle innorthern Germany, is committed to con-tinuously push the efficiency of farmmachinery to ever higher levels.

It is the right blend of innovation,expertise and customer focus that hasmade Krone one of the German marketleaders and the long-term marketleader in disc mowers and round balers.The full product range comprises discmowers, tedders, rotor rakes, foragewagons as well as round and squarebalers and includes the two SF har-vesters Big M and Big X. Big M is ahigh-capacity mower conditioner thatworks at widths of 13.20 m. The Big Xprecision-chop forage harvester is cur-rently the world’s most powerful forageharvester. Krone markets Big X in vari-ous power bands that range from 500hpto more than 1,000hp.

As the first mover in the agriculturalsector, Krone has again and again pre-sented spearheading innovations in for-age technology. After all, advancedfarm machinery is absolutely essentialto make farming a viable operation.For example, Krone was the first manu-facturer to introduce a round balerwith integral wrapper – our CombiPack baler wrapper that bales andwraps in one operation. Our Big Mhigh-capacity SF mower conditionerquickly set up new and welcomedbench marks in the farming communi-ty. After all, there are currently morethan 1,000 units working in the fieldsaround the world.

The latest innovation is the new Big Xforage harvester range, which wasunveiled in August 2010. Big X standsout for its new common-rail engine fromMAN, which delivers more output atgreater fuel economy and offers opera-tors an absolutely new cab dimension.The engine features the innovativeKrone output management system,which provides the flexibility of operat-ing the machine to different powercurves that match different applica-

tions.In road transport, for example, the

engine operates to a specific powercurve that allows the machine to travelat 40km/h at the most economical con-sumption rate. Back in the field, theoperator selects one of two modes, eachmode catering for specific conditions. Inapplications that do not require highoutput levels (e.g. in second cuts), theoperator selects Eco Power mode forextremely economical operation. Bycomparison, when set to X-Power mode,the MAN common-rail system developsits full power under full load in difficultmaize conditions, enabling Big X to tapinto a new – and for a forager –unprecedented dimension of power.

Malaysian Palm Oil Council

THE Malaysian Palm Oil Council(MPOC) was incorporated on January25, 1990. It is charged with spearhead-ing the promotional and marketingactivities of Malaysian palm oil in theeffort to make it the leading oil in theglobal oils and fats market.

The mission is to promote the marketexpansion of Malaysian palm oil andits products by enhancing their imageand creating better acceptance troughawareness of various techno-economicadvantages and environmental sustain-ability of palm oil.

Our objectives are: To enhance tradeopportunities in the market place byaddressing the latest opportunities inthe market and diversification of prod-ucts for the betterment of total salesand exports of Malaysian palm oil; toimprove understanding of palm oil, itsapplications and its benefits; to upholdthe good name of Malaysian palm oilby closing the gap between the issuesof perceptions, allegations and therealities of palm oil; to safeguardMalaysian palm oil as the most domi-nant palm oil in terms of market cover-age, nutritional benefits, environmen-tal sustainability and commercial suc-cess.

In delivering our services to thestakeholders and to the global masses,we at MPOC are shaped by a corporateidentity that defines the organisationas forward-looking and insightful in itsmission to promote the Malaysian palmoil industry. This shaping of MPOC’scorporate identity can be found in theMPOC acronym where its identity isderived from the following:

M – Manpower development: Thehuman resource growth in MPOC is notconfined to the number of employeesbut is shaped by the development ofindividual employees where the rightlevels of expertise are the leading fac-tors in reaching our objectives. Withthe right levels of expertise, MPOCbecomes the reference point for theindustry.

P – Planning and Promotional effec-tiveness: Objectives and goals can beachieved only with proper planning.The planning stages in MPOC are guid-ed by the objectives in hand and withcalculated planning, be it in pro-grammes and activities organised byMPOC, the planning stages are crucialin the success of the activities. Thenew operational exercise puts in placea system that hones the planning ofour activities. The effectiveness of ourpromotional programmes and activitiesis vital in upholding the corporateidentity. The promotional aspects ofour programmes and activities arestructured within the scope of man-power development, planning andoperational efficiency. With the com-bination of this corporate identity, thevital promotional effectiveness can becarried through MPOC’s promotionalactivities. We focus on delivering theresults efficiently.

O – Operational efficiency: The pro-grammes and activities that are fea-tured under the new MPOC’s approachwill encompass the absolute necessaryand practical methods in reaching ourobjectives. In MPOC’s daily opera-tions, the identity will assist the organi-zation to efficiently operate within thecontext of its role and responsibilities.


Partners in Progress


three per cent. He disputed theprojection of figures by the govern-ment, saying that the governmentclaims the production of 36 billionlitres of milk in the country, where-as the ground reality is that it is notmore than 22 to 23 billion litres.

Only five per cent of the totalproduced milk is being processed.The rest is consumed as freshmilk, wasted or consumed bysweetmeat manufacturers andother dairy-sector areas.

“Our assessment is that only 70per cent of livestock holders haveonly five acres of land to managetheir herds which seems difficult.Farmers remain crop-centred for itis a question of their survival. Ourdoctors’ team visit farmers, butthey tend to avoid their advices.So the government’s interventionis needed to improve breed, fod-der and farm techniques,” he said.

The milk’s fat content ischecked. The payment to farmer issubject to the level of fat contentin the milk. As per the formulaworked out, it is mandatory that abuffalo’s milk must have 14 percent total solids, which means bothfats and solids. If the total solidsare less than 14 per cent, the pay-ment is deducted, and if it is 15per cent, the per-litre rate isaccordingly increased.

Packaging of milk through UHTmethod is expensive and that iswhy farmers are denied the actualcost of their production as thesame is spent on packing by pri-vate entrepreneurs. UHT increas-es milk’s shelf life to 12 weeks.

In doing so, it adds heavily tothe cost of milk, requiring biginvestment to set up plant, produc-

tion of packaging material and,above all, the collection cost ofmilk, thus rendering it beyond thepurchasing power of the poor andeven the lower-middle class.

Then there is the pasteurisationprocess and is inexpensive thoughwith small shelf-life and is depen-dent on the cold chain. But it is acheaper option and simple. Itssmall units – set up at the commu-nity level – can play an importantrole in meeting the increasing milkdemand. An efficient organisationis needed to ensure necessary pre-cautions and hygienic require-ments for pasteurisation before thesupply of milk to the end users.

In India, it is effectively doneand pasteurised milk is promoted.Some experts have pointed outthat in India the pasteurised milk

is sold at Rs15 a litre against Rs24a litre for the UHT-processed andpackaged milk.

All over the world it is cow thatis mainly used for producing milkwhile in Pakistan, buffalo is thebasic unit for milk productionthough it damages infrastructureof the canal systems in rural areas.

Food and AgricultureOrganisation (FAO) 2009 figuresput world cow’s milk production atover 583 million tones, with theUSA being the largest cow-milkproducer, accounting for 14.7 percent of the global production. TheUnited Kingdom is the ninthlargest producer of cow-milk,accounting for 2.3 per cent of theoverall production.

In terms of cow-milk production,Pakistan does not feature in the

top 10 category. India is the secondlargest cow-milk producer with acontribution of 7.7 per cent to theglobal production, and producingover 45 million tones in 2009.

Another issue related to thewhole scenario relates to the lackof preservation of local popularbreeds like Sahiwal, Red Sindhi orKundi. In developed countries,preservation is given top priority.The sale of calf is a routine affairin local markets without therequired checked by health andmunicipal authorities over slaugh-ter houses that dot our cities.

The contribution of the formalprocessed milk sector to real GDPin Pakistan was 0.43 per cent in2004-05. The PDDC had aimed totake the annual milk production to40 billion litres of milk by 2015.Pakistan outnumbers Germanyand New Zealand by three times,but our yields are one-fifth ofGermany and one-third of New

Zealand.According to Allah Dino Pahore,

a livestock farmer from Thul areaof Jacobabad district, the privatesector is purchasing milk from thefarmers for between Rs30 andRs35 in the upper Sindh region.He gets around 20kg of milk fromhis five buffaloes and argues thatproper guidance or education pro-gramme for farmers remain a non-existent entity in upper Sindh.

Patronage of farmers is direlyneeded with consistency in poli-cies. Extensive breed preservationand genetic improvement pro-grammes are some other initia-tives that the government mustundertake. This will increase milkproduction and ensure its exporttoo which seems not difficult if thegovernment shows serious commit-ment to the task. ■

Good, but can be better

All photos by Fahim Siddiqi / White Star



C – Commitment: Customer commit-ment is greatly emphasised in ouroperational strategy and MPOC’s pro-grammes are highly geared towardsmeting and exceeding the expectationsof the industry players. The level ofcustomer commitment can be seen inMPOC’s output in terms of its success-ful programmes and positive feedbacksfrom the industry.

The overall strategy adopted by theCouncil will draw upon the expertiseof communication experts, researches,environmental experts, and pro-activeand experienced trade and industryrepresentatives. The strategy has thefollowing main points:

Channel resources into events thatgive the highest and most efficientexposure to target groups and gatherexpert resources to strengthen theinformation base to address currentand emerging trends in the market.

Continue to improve scope and depthof information by utilizing effectivecommunication channels such as tradefairs, promotional programmes,newsletters, magazines and websites.

Identify experts and tap their knowl-edge to facilitate information deliverythus ensuring the information con-veyed by the Council project an accu-rate and positive image of Malaysianpalm oil in areas related to environ-ment, trade and nutrition. Ultimately,this will assist to limit and rectify anyimpact of adverse publicity.

Coordinate resources for promotion-al programmes with other relatedagencies in the industry.

Palm Oil

“IT has the scent of violets, the tasteof olive oil and a colour which tingesthe food like saffron but is more attrac-tive” … thus did Portuguese adventur-er Ca’da Mosto describe palm oil. Palmoil is a natural food consumed for morethan 5,000 years. Palm oil is ‘fruit oil’,and is derived from the mesocarp oforange-red olive-sized fruits. It is aperennial crop and starts to bear fruitthree years after planting and has aneconomic life span of 25 years.

No oil is used in so many ways andthe phenomenal number of uses ofpalm oil is overwhelming. The whole-some and nutritious palm oil has nowmade its presence felt all over theworld and become a universal food. Itis used worldwide as cooking oil, forshortening, margarine and also incor-porated into fat blends and a variety offood products.

Palm Oil is cholesterol-free and richin natural vitamin E, consisting of toco-pherols and tocotrienols. Palm oil infact has the highest quantity oftocotrienols in any edible oil. The mostimportant characteristic of a frying fatis the ability to withstand the hightemperature used, without excessivechemical change. Palm oil with its highantioxidants is suitable for direct usein most frying applications.

Palm Oil is consumed in over 150countries all over the world in restau-rants, fast food outlets, snack foodmanufacturing and in the home world-wide. Palm Oil has the highest share of27% in world oils & fats production of30 million tons and Malaysia con-tributes to almost 40% of productionshare.

Fractions of palm oil and palm ker-nel oil are also, widely used to producea wide variety of non-dairy creamer,chocolate, confectionery, ice creamand biscuit coating. Malaysian palm oilis the natural and excellent choice ofthe millennium consumed by billionsof users

National Bank of Pakistan

THE National Bank of Pakistan hasbeen rated AAA/A-1+ (Triple A/A-OnePlus) by JCR-VIS Credit RatingCompany Limited (JCR-VIS). It is thelargest banking institution of the coun-try serving the nation for the 63 years.It was established through an ordi-nance on November 09, 1949, and start-ed its operation with an issued capitalof Rs15 million and 100 employees.Today, NBP has become the first-everbank of the country to cross the ‘OneTrillion Rupee’ benchmark with morethan 16,500 employees and 1271branches across Pakistan and 23 over-seas branches and representativeoffices in four countries and uniquefootprint in South Asia, Central Asiaand the Middle East.

From Corporate and Retail Bankingto Agriculture and Islamic Banking,NBP is offering valuable services inalmost all the areas of banking. Apartfrom this, NBP has taken major stepsin the areas of risk management, infor-mation technology, operations andhuman resources. The bank stronglybelieves in hiring young energeticemployees and also attracting, devel-oping and retaining good quality pro-fessionals. The Bank also stronglybelieves in equal opportunity employ-ment and pays special attention toencourage women to take part in orga-nizational development which inreturn allows their career progression.

The bank has also fulfilled its com-

mitment towards the community andhas been one of the major contributorsin the times of need for the nation.NBP heavily contributed inEarthquake 2005, Earthquake inBalochistan in 2008 and NWFP floodsin 2008. Apart from above-mentionedCSR activities, NBP played a majorrole for the relief and rehabilitation offlood affectees of 2010. Similarly NBPearmarked Rs141.5 million for theflood affected people out of whichRs25 million contributed in PrimeMinister Relief Fund 2011; Rs50 mil-lion for Medical Camps and ration bagsand Rs66.5 million for tents. Apartfrom Rs141.5 million, all NBP Staff,clerical/non-clerical staff, officers,junior to senior management con-tributed Rs16.774 million from theirsalaries to the Prime Minister’s FloodRelief Fund-2011. This amount is inaddition to Rs141.5 million paid by theBank.

The NBP also distributed eatables inthe shape of ration bags, containingfood items sufficient for family of sixpersons for a week. So far, more than25,000 bags have been donated con-taining ten essential items: Flour, Rice,Pulses, Sugar, Milk Powder, CookingOil, Tea, Water Purification Tablets,Soap and Short cakes. The Bank alsogave 10,000 tents and 4,000 mosquitonets.

Apart from supporting public wel-fare projects, the Bank regularly par-ticipates in sports, educational, healthand art and culture related activities.The focus in less pressing times hasbeen on the promotion of sportingactivities in the country. Patronage isbeing given for the promotion of thenational game of hockey. Apart fromhockey, special attention is given tocricket. To promote sports activities,NBP has built a state-of-the-art sportscomplex in Karachi where world classfacilities are available.

The Global Finance Magazine hasawarded National Bank of Pakistan‘The Best Emerging Markets Bank2011’. The criterion for the said awardwas based on the market leadership inassets, advances and deposits. In 2010NBP became the first Pakistani bankto surpass the Rs1 trillion mark interms of total assets.

National Bank of Pakistan has thehighest market share among commer-cial banks for agriculture financingand offers a wide range of differentfinancing schemes to supportPakistan’s economy and a diverse cus-tomer base. The Global Finance award-ed NBP as ‘The Best Emerging MarketsBank’ in 2003, 2005 and 2006 and NBPwas awarded the ‘Best ForeignExchange Bank in Pakistan’ in 2004,2005, 2006 and 2008 years.

NBP has outperformed all the banksin Pakistan according to the recentlyannounced “Top 1000 World Banks2011” by The Banker magazine of UK.Every year The Banker publishes a listof Top 1000 banks based on Strength,Size, Soundness, Profit andPerformance. NBP, based on Tier 1Capital Strength, has been awarded asthe Top Bank in Pakistan. Among theglobal leading banks from Pakistan,NBP is ranked the top bank again in2011 that has made to the list of top1,000 banks of the world.

National Bank of Pakistan havingremotest branch network in far flungareas has converted its entire branchnetwork completely on-line in twoprovinces Gilgit/Baltistan (all 14branches) and Balochistan (all 62branches) and Federal Capital,Islamabad (all 24 branches) ofPakistan. From Sindh province 219 outof 226; from Punjab 522 out of 632;from Khyber Pakhtunkhwa 123 out of212; from Azad Kashmir out of 88branches have been made completelyonline. From all regions of the Bank,10 regions Sukkur, Quetta, Larkana,Gilgit, Gwadar, Islamabad, Jhelum,Karachi South, Lahore Central andLahore East. Cumulatively the Bankhas converted its more than 1000branches online out of its countrywidenetwork of 1271 branches. NBP com-plete online branch network is almost80% which includes Balochistan andGilgit/Baltistan also.

It is worth mentioning that NBP ispresent in the remotest areas of thecountry, where no other financial insti-tution exists mainly due to commercialviability. With majority of branchesgoing online people living in suchremote areas will benefit the most.Through these online branches cus-tomers enjoy instant credit to benefi-ciary accounts in Pakistan throughNBP Foree Remittance Services fromacross the globe; deposit and withdrawcash from any of the 1,000 onlinebranches through Inter BranchTransaction (IBT); avail ATM DebitCard facility; access real time fundtransfer facility.

It is worth mentioning that in theyear 2000 NBP’s profit before tax wasonly Rs1 billion which rose to Rs24 bil-lion in the year 2010. As far as divi-

dend is concerned NBP paid Rs466 mil-lion in the year 2001 which stood at thelevel of Rs10,090 million in the year2010. From Corporate and RetailBanking to Agriculture and IslamicBanking, NBP is offering valuable ser-vices in almost all the areas of bank-ing. Apart from this, NBP has takenmajor steps in the areas of risk man-agement, information technology,operations and human resources. Thebank strongly believes in hiring youngenergetic employees and also attract-ing, developing and retaining goodquality professionals. The Bank alsostrongly believes in equal opportunityemployment and pays special attentionto encourage women to take part inorganizational development which inreturn allows their career progression.National Bank of Pakistan is takingnumber of steps in order to enhance itsimage; few of the initiatives are branchrenovations; branch branding; intro-ducing new products and setting high-er standards of service and quality andspecial services to senior citizens.

With a strong brand, customer base,branch network, largest array of prod-ucts and services, NBP is truly thenation’s bank providing selfless serviceto the people of Pakistan for the lastsixty three years.

Quality Polypack Printers

ESTABLISHED in the year 1979, weare one of the eminent manufacturersand suppliers of flexographic or roto-gravure printed material in form ofpouches and rolls in two layers andthree layers structures.

One of our latest innovation lies inoffering Multicolor Printed BOPPLaminated PP Woven Bags that areprecision manufactured using qualityraw material which provides in it highusage value. BOPP bag is a new attrac-tive and advanced concept of bulkpackaging from 5 kg to 50 kg.

This packaging is very attractive andis ideal for creating brand names.These bags are widely used across theglobe for the packaging of rice, sugar,fertilizer, pesticides, pigments, othergrains, etc.

Salient features of our range are:Durability; Reliability; Easy to handle;Fungus and termite resistant; Light inweight; Available in various sizes,colours, designs; Attractive looks; Bestfor branding.

Facilities include: Roto-gravureprinting; Flexographic printing;Solvent-less lamination; Dry lamina-tion; Extrusion lamination; High-speedcentre seal and three-side sealmachines; Multi-layer extruders formaking polythene film; Wax/Hot meltcoating; Slitting/Rewinding andInspection machines.

Functioning as a professional organi-sation, we have a fully-equipped labo-ratory and quality control system fordelivering high quality jobs to our cus-tomers.

Alpha Penta (Pvt.) Ltd.

ALPHA Penta (Pvt.) Ltd. is aBusiness and Trade ConsultancyCompany. We have two Divisions: Foodand Textiles. We are currentlyengaged in sales of Complete PlantsMachines, Equipments and ProcessTechnologies for various sectors ofAgriculture, Food, Beverage, PoultryLivestock and Dairy industries.

We offer through our reputable part-ners solutions in various Agri, Food,Beverage, Juice Dairy, Poultry, Meatand Meat Processing sectors. We feelthat quality machines and equipmentsand processes can significantly addvalue to the products being manufac-tured by well-reputed concerns.

Our goal is to help and support ourcustomers with not only quality prod-ucts, but to develop a relationship ofmutual benefit which in turn helpstheir brand and the market in general.We strongly believe that be it ingredi-ents or machine and equipments thereal value is derived from a customerfocused philosophy which in turn is aconstant effort to develop, innovateand a trustworthy exchange of ideas.

Dairy & Dairy by Products; Juice andother Beverages; Fresh fruits,Vegetables and Dry Fruit ProcessingSolutions; Hatcheries for Chicken,Quail and Ostrich; Abattoir Solutionsfor Livestock; Slaughterhouse for poul-try; Solutions for Meat, Poultry andSeafood processing.

Our current activities involve repre-sentation of highly reputed suppliersfor the above mentioned industrial sec-tors. We provide Project Planning,Sales and After Sales Service for thecompanies we represent.

USAID-DRDF Project

THE dairy and livestock sector con-tributes around 11 per cent to theGross Domestic Product (GDP) ofPakistan. There are seven millionfarming families and 67 million cattle

and buffaloes in Pakistan. More thanhalf of the dairy farmers live in thePunjab province. Most of the dairyfarmers have only two to three dairyanimals and do not follow progressivedairy farming practices. Moreover,few farmers have access to veterinaryand breed improvement services,which can improve dairy animals’milk yield. As a result, milk and meatsupply is growing by less than two percent a year, while demand for theseproducts is increasing by five per centa year.

The USAID-DRDF project has a geo-graphic focus on all the provinces, withmajor focus on Punjab. It has a time-frame of three years (July 2011 – July2014)

The Dairy Project is a joint effort bythe United States Agency forInternational Development (USAID)and the Dairy and Rural DevelopmentFoundation (DRDF) to foster sustain-able increase in dairy and livestockproductivity through adoption of bestfarming practices, breed improvement,availability of timely extension ser-vices, and promotion of livestock busi-nesses.

Due to the vital importance of live-stock sector in the rural economy ofPakistan, the Dairy Project’s extensivetraining programs for dairy farmers,women livestock extension workers,and artificial insemination technicianswill play an important role in trans-forming livelihoods of rural communi-ties.

Project Components include trainingof 9,000 dairy farmers and 100 farmmanagers on best dairy farm manage-ment techniques; training of 2,000 arti-ficial insemination technicians andestablishing them as self-employedentrepreneurs; training of 5,000women livestock extension workersand establishing them as entrepre-neurs; and implementing a mass aware-ness campaign to increase knowledgeof best dairy farming practices.

The project aims at increasing: useof livestock health and nutrition ser-vices, which will lead to better live-stock health and productivity; farmers’access to the services of livestockextension workers; use of livestockhealth and other related services(including entrepreneurial services);use of best dairy farm practices; use ofartificial insemination services, whichwill lead to breed improvement; farm-ers’ use of quality artificial insemina-tion services from self-employed artifi-cial insemination technicians; marketlinkages of dairy farmers, women live-stock extension workers, and artificialinsemination technicians.

USAID Entrepreneurs Project

AS a part of economic growth pro-grammes in Pakistan, the UnitedStates Agency for InternationalDevelopment (USAID) has designed asophisticated and result-driven pro-ject, Entrepreneurs, to mitigate theadverse affects of socio-economic situa-tion in the lives of marginalised com-munities. Funded by the Americanpeople and implemented by MennoniteEconomic Development Associates(MEDA), this five-year project waslaunched in 2009 with the aim to sig-nificantly increase the incomes of75,000 micro entrepreneurs and smallenterprise owners, with particularfocus on women.

The conflict in Malakand Divisionleft deep scars on the lives of many.Entrepreneurs’ Livelihoods RecoverySupport to Conflict-affected familiesbenefitted 7,200 families of Swat andDir with in-kind grants to restart theireconomic activities. Today, these peo-ple have a respectable way to earn aliving for their children and depen-dents.

Later in 2010 through mid of 2011,Entrepreneur project revived thehopes and became a galvanising forcefor economic revitalisation of flood-affected communities by implementingthe Livelihoods Recovery Support andassisting 41,500 flood-affected DairyFarmers, Artisans, Medicinal andAromatic Plant Collectors and BeeKeepers in the four provinces ofPakistan.

While the country continues to cometo grips with the increasing femaleilliteracy, Entrepreneurs projectstepped up and provided basic trainingin finance, basic bookkeeping andenterprise management to 70,000women micro-entrepreneurs

As a part of its CapacityDevelopment Support to local organi-sations, Entrepreneurs provided train-ings on product development, exportmarket exposure and research, designstudio, sample development unit estab-lishment, business plan, website devel-opment and retail outlet establish-ment.

The Entrepreneurs employs thevalue chain approach and works infour growing value chains, namelyEmbellished Fabric, Dairy, Honey and

Medicinal and Aromatic Plants utilis-ing market-based solutions that ensuresustainable economic growth in thetargeted communities. By end of pro-ject in 2014, 75,000 micro-entrepre-neurs, particularly women, will haveincreased their incomes substantially,at least 50%, through access to bettermarkets, higher productivity, andimproved product quality.

USAID Firms Project

THE USAID Firms Project is work-ing to improve government servicedelivery and develop dynamic, interna-tionally competitive private sectorfirms to accelerate sales, investment,and job growth in Pakistan. The pro-ject is doing this by assisting the gov-ernment at the district, provincial, andfederal level with policy reforms andby strengthening private sector firmsin select value chains. Policy and regu-latory reforms underway include agri-culture (fresh produce) market policy,livestock policy, and cotton and textileregulatory reform.

Additionally, the project is support-ing the formation of an InvestmentPromotion Council (IPC) for KhyberPakhtunkhwa and FATA. The projectis also expanding its scope to addresspolicy reform needs of Balochistanprovince. Project interventions invalue chain development includeextensive work in the mango sectorincluding fresh mango production aswell as value-added products.

In the Malakand region the projecthas also started its work in sectorssuch as peaches and potatoes. The pro-ject is exploring strategies to strength-en private businesses in these sectorsand introduce them to internationalbest practices. Under the MalakandSME Recovery Assistance Programme,the USAID Firms Project also restoredfully and partially damaged hotels andtrout fish farms in Swat and Kalam.

US Assistance to Agriculturein Balochistan Border Areas

THE United States ‘Assistance toAgriculture in Balochistan BorderAreas’ (USABBA) is a USAID-fundedproject that is directly implemented bythe Food and Agriculture Organisation(FAO) of the United Nations. With thetechnical expertise of national andinternational project experts and thecommitment and hard work projectfield staff (CDMFs) and Team Leaders,the ABBA team works hard to reducerural poverty in the five districts of theprovince that lie close to the borderwith Afghanistan.

The rural population of Quetta, KillaSaifullah, Mastung, Loralai and Zhob ismainly employed in agriculture and isparticularly deserving of assistance as ithas been battling from the effects of theprolonged drought of 1995-2005, generalwater and food shortages, as well as therising insurgency. Adding to this, thenatural disaster of the floods in 2007 andagain 2010-11, and the circumstances formost people in Balochistan translatesinto grinding poverty, especially in themore remote areas.

Since 2009, USABBA has been work-ing with farmers through communityorganisations, to increase their liveli-hoods by improving agriculture tech-niques through training programs, rais-ing crop and livestock productivitythrough access to better inputs andtraining, improving marketing tech-niques and increasing access to marketsboth regional and countrywide. The pro-ject helped farmers improve theirincomes by 23% and their cereal yieldsby 35%.

The total outreach of the project hasnow 561 communities (337 male, 224female) against a life of project target of500, benefiting 11,786 households andnearly 114,324 beneficiaries (based onaverage household size from the projectbaseline survey of April 2010).

The project has helped farmersimprove their incomes by increasingtheir cereal yields through distributionof 682 tons of improved wheat seed giv-ing an economic benefit of over USD2.4million, developing 21,054 acres of newland through land-levelling, rehabilita-tion 17 Karezes, constructing 13 waterreservoirs and paved channels, vaccinat-ing, dosing and drenching 15,861 animalsand constructing 5 clean drinking watersupply schemes for women. The cost ofinputs and infrastructure are covered bythe farmers themselves on a 50% costsharing basis for Men’s Cos and 25% forWomen Cos, with the rest covered by theproject.

As many as 14 marketing value chainstudies have been undertaken on arange of products form wool, throughhigh value horticultural crops to embell-ished garments. Value chain studies onwool has been utilised to developimproved wool marketing activities ofdirect benefit to women, with washedand colour sorted white wool attracting80% price premium and a 400% priceincrease through a trial shipment in theoff season (December). The project hasalso supported specific livestock marketstargeted on the annual sacrifice Eid cele-brations with total sale in the marketsduring 2009, 2010 and 2011 of overUSD14.95 million.

Partners in Progress



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