Saturday, January 22, 2011

Pakistan's Rural Economy Showing Strength

Since taking the reins of power almost three years ago, the coalition government in Islamabad, which is led by the Pakistan Peoples' Party, has been increasing the support prices of wheat and other agricultural commodities every year. This policy has had the following effects:

1. It is transferring the additional new income of about Rs. 300 billion in the current fiscal year alone to the ruling party's power base of landowners in small towns and villages, from those working in the urban industrial and service sectors.

2. It has driven up food prices dramatically for all Pakistanis, particularly hurting the poor people the most.

3. It has reduced government tax revenues because the agricultural income is not taxed by either the federal or the provincial governments, and resulted in growing budget deficits.

4. It has significantly increased demand for consumer and industrial goods and services in the rural areas.

5. It has forced the State Bank of Pakistan to maintain a tight monetary policy which is drying up the much-needed credit for the industries and the average consumers alike.

6. It's likely to slow rural-to-urban migration and relieve pressure on major cities and their inadequate infrastructure.



In 2008, the government pushed the procurement price of wheat up from Rs. 625 per 40 kg to Rs. 950 per 40 kg. This action immediately triggered inflationary pressures that have continued to persist as food accounts for just over 40% of Pakistan's consumer price index. According to State Bank of Pakistan (SBP) analysis, cumulative price of wheat surged by 120 per cent since 2008, far higher than the 40 per cent between 2003 and 2007. it is also many times greater than the international market price increase of 22 per cent for wheat in the same period. Similarly, sugar prices have surged 184 per cent higher since 2008, compared with 46 per cent increase during 2003-07.

The transfer of additional Rs. 300 billion to Pakistan's agriculture sector during the current fiscal year 2010-2011 by higher prices of agriculture produce and direct flood compensation to 1.6 million affected families at the rate of one hundred thousands rupees each will boost economic confidence in the countryside. It will generate rural demand for consumer items including consumer durables such as fans, TVs, motorcycles, cars, refrigerators, etc.

The big feudal landowners have been the biggest beneficiaries of the PPP's gift of high crop prices. However, the policy has helped small farmers as well, as shown by a recent survey reported by The Nation newspaper. The survey of 300 farmers in Sind's Sukkur district was conducted by Sukkur Institute of Business Administration for the State Bank of Pakistan (SBP). It has highlighted the following about district's rural economy:

1. In Sukkur district, majority of the farmers are subsistence farmers. 31 percent of them own less than 5 acres of land, and another 34 percent own up to 12.5 acres of land.

2. They spend an average of Rs. 1,611 a month on their children's education, with some of them spending up to Rs. 12,000 a month.

3. Wheat, rice, cotton and sugarcane are the major crops being cultivated by 93 per cent, 58 percent, 37 percent and 12 percent of the respondent farmers in that order.

4. 24 percent of them are also growing fruits including dates, mangoes and bananas.

5. 22 percent of the respondent own livestock.

6. About half (49 percent) use privately purchased seeds for wheat cultivation, 33 perecent use their own retained seed and 18 perecent use the seed purchased from Public Sector Seed Corporations.

7. On average, a farmer uses 96.73 Kg chemical fertilizer per acre with the maximum and minimum of 350 Kg and 40 Kg respectively. The average per acre cost of wheat production is Rs. 10,670.

8. All 300 farmers are using tractors for cultivation and preparing land for crops, and some are using tractors for fetching their crop produce to market.

Already, the upside of the government policy is that Pakistan's rural economy is being spurred by high crop prices that may help the GDP growth this year and next. Increased farm incomes are whetting the rural households' appetite for industrial and consumer goods in 2011 and beyond.



A key indicator of growing rural economy is the double digit increase in the sale of tractors. Millat Tractors Limited, the largest supplier of tractors in Pakistan, had record sales of 41,500 tractors in the calendar year 2010, an increase of nearly 11% over 37,537 tractors sold in 2009. Of these 41,500 tractors, a record 5000 tractors were sold in the month of Dec, 2010 alone, acording to The Nation newspaper. Millat sold 10,000 units under Benazir Tractor Scheme and 5,000 units under the Sindh government tractor scheme in the last fiscal year. Another 10,000 units were sold as part of the Punjab government scheme, 70 per cent of the units were sold, according to Dawn News.

Earlier, the sales of Fiat and Massey Ferguson tractors grew to 1,632 and 3,194 units in September 2010 from 537 and 3,100 in August 2010. The overall sales of these tractors rose to 13,931 during July-September 2010 as compared to 12,690 units in the same period of 2009, according to Dawn news.

Over 50 per cent of the motorcycles and 40-45 per cent of cars in Pakistan are purchased by people living in rural areas. Total car sales in July-September 2010(including Suzuki Bolan) rose by 12 per cent to 30,030 units as compared to 26,812 units in the same period of 2009, according to Pakistan Automotive Manufactureres Association PAMA). Furqan Punjani of Topline Securities said car sales are expected to reach 154,000 units by the end of June 2011.

In addition to rising demand for cars and tractors, there is also an upward trend in two-wheeler sales. The cumulative sales of motorcycles in July-September 2010 rose to 126,701 units from 105,862 units in the same period of 2009.

While it is good to see Pakistan's rural farm economy perk up, it is also important to recognize that the overall national economic outlook can not improve significantly unless the growing budget deficits and rising inflation are brought under control. And this will require the ruling feudal elite to pitch in by paying their fair share of income tax on their rising farm incomes. It is time for them to lead by example.

Related Links:

Haq's Musings

Pakistan's Exports and Remittances Rise to New Highs

Sugar Crisis in Pakistan

Agricultural Growth in India, Pakistan and Bangladesh

Pakistan's Rural Economic Survey

Pakistan's KSE Outperforms BRIC Exchanges in 2010

High Cost of Failure to Aid Flood Victims

Karachi Tops Mumbai in Stock Performance

India and Pakistan Contrasted in 2010

Pakistan's Decade 1999-2009

Musharraf's Economic Legacy

World Bank Report on Rural Poverty in Pakistan

USAID Report on Pakistan Food & Agriculture

Copper, Gold Deposits Worth $500 Billion at Reko Diq, Pakistan

China's Trade and Investment in South Asia

India's Twin Deficits

Pakistan's Economy 2008-2010

181 comments:

Riaz Haq said...

Here's an agriculture survey in Pakistan, as reported by The Nation newspaper:

According to details, the total sample size was 300 respondents, five farmers were selected randomly from each village to collect their responses on the survey questions; at some villages 4 or 6 farmers were selected randomly. In district Sukkur, majority of the farmers comprise subsistence farmers as 31pc farmers of district are those who own less than 5 acres of land, while about 34pc farmers holding up to 12.5 acres of land.
Farmers, studied during survey, spend around Rs.1,611 monthly on their children education, with the maximum amount of Rs. 12,000.
Farming is a major component of the district's rural economy as almost all the respondents were engaged in farming. Wheat, rice, cotton and sugarcane are the major crops being cultivated by 93pc, 58pc, 37pc and 12pc of the respondent farmers.
Around 24pc of the respondent farmers are also cultivating fruits including dates, mangoes and bananas. Only 22pc of the respondent farmers are rearing animal (livestock).
Almost half (49pc) of the farmers used privately purchased seeds for wheat cultivation, 33pc of the farmers used their own retained seed and 18pc of the farmers used the seed purchased from Public Sector Seed Corporations.
On the average, a farmer used 96.73 Kg chemical fertilizer per acre with the maximum and minimum of 350 Kg and 40 Kg respectively. The average per acre cost of wheat production was Rs. 10,670/-, based upon the average figures of cost given by respondents of the survey.
All the respondent farmers are using tractor for cultivation and preparing land for crops and few are using tractor for fetching their crop produce to market.

Anonymous said...

We're talking about the same pakistan that's on an IMF bailout program, right?

Riaz Haq said...

Anon: "We're talking about the same pakistan that's on an IMF bailout program, right?"

Let me try and help you understand basic economics here.

The IMF is there to help Pakistani government deal with the public finances which are a mess.

The rural economy in Pakistan is doing well because of high food (and cther commodity) prices in Pakistan and the rest of the world.

As I say in my concluding paragraph of the post: "The overall national economic outlook can not improve significantly unless the growing budget deficits and rising inflation are brought under control. And this will require the ruling feudal elite to pitch in by paying their fair share of income tax on their rising farm incomes. It is time for them to lead by example."

Rahul said...

k Mr.Riaz...

But I fail to understand that why then Pakistani mainstream newspapers are painting a doomsday scenario for your economy. Now I have read each article very carefully and they all say about immense collapse of pakistan's economy. What is the reason behind it?

And your answer that IMF is there to help the government manage public finances is non-buyable. Its there to bailout the pakistan economy because of the balance of payment crisis which started during the recent worldwide economic crisis.

Riaz Haq said...

Rahul:"And your answer that IMF is there to help the government manage public finances is non-buyable. Its there to bailout the pakistan economy because of the balance of payment crisis which started during the recent worldwide economic crisis."

It's true that Zardari govt initially sought IMF help to deal with the BoP crisis of 2008.

However, the problem in 2011 is now different.

Pakistan's current account balance and foreign exchange reserves have improved dramatically since 2008.

In fact, with surging remittances and exports, Pakistan had a current account surplus of $26 million for July-December 2010, compared with a deficit of $2.570 billion in the same period in 2009, according to Dawn newspaper.

The big problem Pakistan government faces now is a large and growing budget deficit that could exceed 5% of the GDP in current fiscal year, and the govt is borrowing heavily from IMF and others to fund this deficit.

This post on rural economy is to talk about the fact that booming agriculture sector should begin to pay at least a modest income tax to help balance Pakistani govt budget.

Riaz Haq said...

Here are some interesting highlights from a paper "Land-use Changes and Agricultural Growth in India, Pakistan, and Bangladesh, 1901-2004" by Takashi Kurosaki:

1. In India and Pakistan, the area under forests and under cultivation increased substantially throughout the post-independence period. The annual growth rates were higher in Pakistan than in India: the forest area increased at an annual growth rate of 1.91% and 0.75% in Pakistan, well above the figures of British India before independence. In India, the growth rates were lower than in Pakistan but comparable to rates recorde before independence.

2. During post-independence period, output (Q) in Pakistan grew at 3.5 percent per annum while Output/Area (Q/A) increased at 2.3 percent. Therefore, the major contribution to agri growth after independence came from increase in land productivity.

3. The level of growth was highest in Pakistan, followed by India, with Bangladesh at the bottom.

4. In all three countries, the growth rate of land productivity was not high enough to cancel the negative growth of land availability per capita. But the output per capita growth in Pakistan continues to be higher than in India and Bangladesh.

Suhail H. said...

Thailand is a country reputed for its tourism and agriculture; it is largest rice exporter in the world. Still its agriculture contributes just 11% of GDP while industry's share is 45%. Services sector (including tourism) contributes 44% of which the greater share will probably be of the banking and financial sector compared to tourism. Thailand was a country of very similar economic conditions to Pakistan about 20-30 years ago while we were much better off in the 60s. Now compare this to Pakistan's agriculture's contribution of only 19% to GDP, compared to the 26% from the industry and a whopping 53% from services (c.f. Karachi). When seen in the back drop of industries closing in Pakistan by the hundreds in the last 3 years, one can see the weakness of our situation. The whopping 53% from services only means that the role of industry, the organized sector, is diminishing and people are earning their subsistence through marginal petty activities in the unorganized services sector. This amply demonstrates our bad economic situation.

Now coming to agriculture itself. In the developed and real developing countries, this is now a highly industrialized activity. Mostly it is organized on corporate basis, attracting big finances and utilizing industrial resources; more like industrialized agriculture. Land productivity with primitive and industrialized agriculture varies a lot. On a scale of 1:10, Pakistan stands on 1, while India has gone up to 3. The developed and really developing world ranks at 6-10. South American countries, the most advanced of the developing world in terms of agriculture, would rank in the 6-10 range.

Collating all the above factors, purchase of over 50 per cent of the motorcycles and 40-45 per cent of cars by people living in rural areas represents a pathetic situation. This means that with very low land productivity by international standards, the rural population is the biggest consumer of vehicles. You can well imagine the decimating state of our industrial and services sectors which still contribute 79% of our GDP, compared to only 19% of agriculture.

Riaz Haq said...

Suhail,

I agree that improved governance is the key to increased economic growth in Pakistan.

But, since this post is about rural economy, let me share with you some anecdotal evidence as well as research and data that shows that agriculture sector Pakistan has done better than India and Bangladesh, offering a more appropriate regional comparison than with Thailand.

First, India has had lower productivity and higher poverty in its rural areas than Pakistan, as can be seen in terms of hundreds of thousands of farmers' suicides in the last decade. Over 17000 Indian farmers killed themselves in 2009 alone, according to Indian govt data. Over 75% of Indians live on less than $2 a day versus 60% of Pakistanis.

A recent satirical Indian film "Peepli Live" has amply shown how the Indian politicians and bureaucracy have bugled the situation of farmers.

Second, 60% of India's workforce produces 16% of Inda's GDP in agriculture. Compare that with 42% of Pakistani workforce in agriculture contributing 19.4% of GDP. Assuming India's PPP GDP of $3.75 trillion (population 1.2 billion, nominal gdp $1.3 trillion) and Pakistan's $450 billion (population 175 million, nominal gdp $167 billion)), here is what I calculated in terms of per capita GDP in different sectors of the economy:

India vs. Pakistan: Per Capita GDP $3,125 PPP ($1,083 nom) vs. $2,570 ($955 nom)

Agriculture: $833 PPP ($288 nom) vs. $1,225 PPP ($454 nom)

Textiles: $1,242 ($433) vs. $1,714 ($636)

Non-Textile Mfg: $11,155 ($3,870) vs $5,785 ($2,142)

Services $7,246 ($2,590) vs $3,654 ($1356)

Data shows that the majority of Indians who work in agriculture and textiles are on average 50% poorer than their Pakistani counterparts, as also reflected in the under-$2 a day per capita income figures for 60% of Pakistanis and 76% of Indians.

Third, here are some interesting highlights from a paper "Land-use Changes and Agricultural Growth in India, Pakistan, and Bangladesh, 1901-2004" by Takashi Kurosaki:

1. In India and Pakistan, the area under forests and under cultivation increased substantially throughout the post-independence period. The annual growth rates were higher in Pakistan than in India: the forest area increased at an annual growth rate of 1.91% and 0.75% in Pakistan, well above the figures of British India before independence. In India, the growth rates were lower than in Pakistan but comparable to rates recorde before independence.

2. During post-independence period, output (Q) in Pakistan grew at 3.5 percent per annum while Output/Area (Q/A) increased at 2.3 percent. Therefore, the major contribution to agri growth after independence came from increase in land productivity.

3. The level of growth was highest in Pakistan, followed by India, with Bangladesh at the bottom.

4. In all three countries, the growth rate of land productivity was not high enough to cancel the negative growth of land availability per capita. But the output per capita growth in Pakistan continues to be higher than in India and Bangladesh.

Riaz Haq said...

In terms of export potential, California argriculture industry offers a model for developing nations.

Take almonds for example.

After making big investments in almonds in the past few years, California farmers are seeing their efforts pay off with predictions their recent harvest will be a record 1.65 billion pounds or more, according to Businessweek.

The big harvest comes amid strong worldwide demand and relatively high prices. Exports to China have increased eight times in the past five years, and India and Pakistan doubled their almond consumption in that time. Even with a record harvest, there's no risk California, the world's No. 1 almond producer, will saturate the market, industry experts said.

The Golden State has seen a big growth in almond orchards in the past five years as farmers shifted from less profitable vegetables to lucrative nuts. California now has 810,000 acres planted in almonds -- a 25 percent increase from a decade ago -- and produces 80 percent of the world's supply. Spain is the second-biggest producer, but its harvest is only a fraction of California's.

The state's most recent crop appeared uncertain after cold wind and rain last spring partially disrupted pollination of the trees' pink and white blooms. But recent forecasts from the U.S. Department of Agriculture predicted a record crop with at least a 17 percent increase from the previous year.

"The nut crops in general are looking good in California," said John Edstrom, who recently retired after 26 years as a Colusa County farm advisor. The market is generating "cautious optimism" among walnut, pistachio and pecan growers as well, he said.

California farmers began shifting to almonds when increases in fertilizer and other costs made it harder to make money on row crops, such as tomatoes and onions. When almond prices spiked to more than $2.80 per pound in 2006, growers leapt to plant 49,000 acres of new trees. After five years, those trees are now bearing significant fruit, contributing to the record 2010 harvest.

Improved agricultural techniques used by California's 6,000 almond growers, such as planting trees closer together, cutting back on pruning and knocking hollow shells off trees during winter to control a debilitating pest called the navel orangeworm, also have helped boost production, said Bruce Lampinen, an almond specialist at the University of California, Davis.

Farmers said they are concerned about a loss of bees with major die-offs in recent years. UC Davis apiculturist Eric Mussen said bees are still available, though they are more expensive. The cost of renting them has doubled to $150 per acre over the past five years.

Water shortages also have been a concern for some, although Almond Board chairman Mike Mason said they haven't been so bad as to affect the whole industry.

sohail khan said...

This is bad for the Pakistan economy. Higher food prices for evryone else - farm workers, factory workers, small farners teachers and office workers - except the rich farmers and industrialists. Politicians do this to stay in power. Economy will suffer because inflation will be higher and rupee will be wort less!

Riaz Haq said...

Here are some interesting excepts from a piece on Pakistan by Nancy Birdsall of Center for Global Development:

------------U.S. policymakers should note well this series of events and remember a simple lesson. Billions of dollars of U.S. assistance-and a sustained diplomatic focus on the reform agenda-have not given the United States the ability to dictate the outcomes of Pakistan's political process. This is inconvenient for the United States, but not surprising. For the United States and for other major donors in Pakistan, money has never brought leverage.

Pakistan's energy sector demonstrates the difficulty in achieving the kind of influence donor countries would like to have. For decades, the World Bank and the Asian Development Bank-armed with sums greater than the current Kerry-Lugar-Berman U.S. aid package-have urged the Government of Pakistan to finally reduce the price subsidies on electricity, to no avail. Time and again, project documents cite the same problems, the donors recommend the same solutions, the government of Pakistan promises to implement the same reform, the government breaks (and donors lament) the same promises. Meanwhile, the basic politics maintaining the status quo have not changed-there are too many reaping the benefits of subsidized power, and ordinary consumers feel they aren't getting service that warrants paying more.

When Vice President Biden visited Islamabad this week, he promised that the United States would "keep the entire commitment" of the pledged $7.5 billion in Kerry-Lugar assistance. This assurance will surely be welcomed by Pakistan, and it's a fair reflection of Pakistan's short-term and long-term importance to U.S. interests. Adjusting where and how aid is spent-including by taking the requests of the Pakistani government into account-is necessary to respond to the real needs on the ground. (On that note, we applaud the decision to put $190 million into direct smartcard grants to help Pakistani flood victims rebuild their lives). But U.S. policymakers should not expect the aid money to give the United States greater influence on economic reforms in Islamabad. This is not the point, nor the potential, of U.S. aid.
----------
The key point is that certain aid projects can carry both direct benefits (better services and infrastructure for the people of Pakistan) and indirect benefits (incentives for the Pakistani political system to achieve greater results with their existing resources). Here are a few examples to consider: U.S. investments in energy generation and transmission capacity can be linked to public commitments to raise electricity tariffs only when brownouts have been reduced below an announced benchmark. In this grand bargain, as service quality improves, tariffs would go up, and another round of aid investments would be delivered. In another case, U.S.-financed tools can be deployed to help Pakistani citizens hold their government accountable-with regular reports on simple indicators of development, for example, or an easily accessible database of all development projects funded from internal or external resources. Or a pilot Cash on Delivery aid contract in one or more Pakistani provinces could put levers in the hands of education reformers and help their ideas gain traction.

Riaz Haq said...

Here are excerpts from a piece by Christine Fair on "What Pakistan Did Right" in 2010 floods:

Arguably, the Pakistan Meteorological Department (PMD) is one of the most important reasons why the floods claimed relatively fewer lives than may have been expected, given the scale of the event. In January, I met with the Director General Arif Mahmood and his team in Islamabad. They walked me through, in painstakingly scientific detail, how their organization saved lives in 2010, as they had done before and as they will continue to do in the future.
-----------
Some six months have passed since the onset of the floods. Surprisingly, many of the predicted disasters did not happen. Pakistan did not have the predicted second wave of deaths in the camps for the millions of internally displaced persons. Astonishingly, none of the predicted epidemics (such as cholera) took place. Pakistan has even managed to stave off the expected food insecurity.
-----------------
Pakistan's National Disaster Management Agency (NDMA), headed by Major General (Ret.) Nadeem Ahmed is part of the reason these catastrophes were prevented. The NDMA, along with the four Provincial Disaster Management Agencies, coordinated the massive effort to rescue flood victims, establish camps for internally displaced people, provide the victims with shelter, water and sanitation facilities, food and other logistical requirements. The NDMA coordinates with international donors and maintains a situation room where staff track calls and resolve problems. In a country that routinely sustains criticism for organizations that that underperform, NDMA excels.

Some of the worst fears about lost crops have not materialized. While many of Pakistan's fields have not been properly prepared for planting this year, NDMA working with its domestic and international partners was able to provide seeds to many cultivators. In many cases, they simply flung the seed into the land once the water receded. Many of these efforts are resulting in bumper crops. This was not expected in September of 2010. To be sure, this is only the beginning and much more needs to be done. But measures of this type helped stave off some of the gravest outcomes expected.
----------------
There are still challenges. Complaints persist about corruption with the pre-paid ATM cards (Watan cards) distributed to IDPs. In Sindh, serious charges of corruption persist regarding the purchase of tents, blankets, medicines and food for the flood-affected people. Reports continue that food supplies are languishing in depots while IDPs go without in Sindh. Indeed, the IDP camp I visited in near the office of the District Coordination Officer for Dadu, was saddening. The residents and the camp administrator claimed that there had been no food distributed in a month.
-----------
Nonetheless, half a year after the floods devastated the country and after most of the media has left the story behind, 20 million Pakistanis still need help -- and they need help now. While Pakistan must expand its own tax net to contribute to the long-term costs of rebuilding its infrastructure and preparing for future disasters, the international community should also continue to support immediate needs such as winterization, food support and rehabilitation of the flood victims.

Suhail H. said...

I'll agree on the 1991-2004 situation but let's analyze the causes. During this period Pakistan was mostly under Musharraf and Nawaz Sharif governments whose policies were industry friendly and against agricultural subsidies. I personally know from farmer friends in the 2001-2005 period that they adopted the following measures to increase their revenues:
- switched to more productive crops, vegetables etc.
- increased cultivation on their lands to utilize it to the maximum.
- increased livestock farming
Since yields from wheat were lower, switching to high value crops did result in wheat shortages but then the country had enough funds to import wheat.
Going further back into history, the real breakthrough in Pakistani agriculture came in the 1960s when the policies were heavily industry friendly; this is still called the green revolution. The reason being that when pressed for funds, the farmers have no option but to improve revenues from their land holdings by increasing land productivity.

The rot set in around 2007 when the rural elites exploited the pro-democracy wave and finally triumphed in 2008. Agriculture is now heavily subsidized and while obviously this has resulted in more money supply to the rural population thus more consumer spending, the disadvantages are manifold, such as:
1- The subsidy is being funded by loans from the State Bank thus resulting in weakening of the currency.
2- The subsidy is funded by the industry and service sectors as they're the only tax payers; agriculture remains out of tax net. This has greatly weakened these sectors which should have been the engines of national economic growth, and were up to around 2006. Industry is fast going out of business resulting in growing unemployment. The maximum no. of tax payers in Pakistan reached 2.7 million around 2006-7; this figure has now gone down to 2 million. With continuing of the present policies, subsidies will further increase and tax base will further narrow down. So you can see the snowball effect that is taking the economy to destruction.
3- Wheat production, being the most subsidized, has increased sharply which must be at the expenses of other high value crops. The current situation is that wheat purchased and available with the government is double the storage capacity available in the country. This surplus wheat is rotting and most of it will go waste.

In the long run, our agricultural productivity will be going down, because the "farmer friendly" policies take out whatever efficiency is developed in the agricultural sector.

krash said...

Riaz Sahib,

Do you support agriculture subsidies like the one documented in your article?

Riaz Haq said...

krash: "Do you support agriculture subsidies like the one documented in your article?"

Ag subsidies are a fact of life around the world...particularly in US and Europe.

Farmers' lobbies are very strong in most democracies, and they use their power and influence in the government to get favorable policies to enrich farmers.

sohail khan said...

Riazbhai

Pakistani people suffer a lot but, we are better than India. Like you have said all their economy
is fraud because Indians are suffering more now than before.

I think Indian economy is a big fraud and RAW is behind the printing the wrong numbers in the media. RAW has an agenda to make Pakistan look bad by making India look good and they are trying to match with China!

When we were in school in Islamabad 30 years ago everyone knew that we were stronger than India in ecomomics. India has more people so ofcourse economy will be bigger. Riazbhai, per each person Pakistan is definitely stronger in economy.

Riaz Haq said...

SK: "I think Indian economy is a big fraud and RAW is behind the printing the wrong numbers in the media. RAW has an agenda to make Pakistan look bad by making India look good and they are trying to match with China!"

I disagree with you.

I think Indian economy is doing well, certainly much better than Pakistan's, although its comparisons with China are just nonsense.

The problems in Indian economy stem mainly from deep inequities that have produced 50 billionaires in the midst of widespread abject poverty and extreme hunger.

Inequities exist in Pakistan as well, but such inequities are not as stark and as shocking as those in India.

Anonymous said...

Indian economy

Strenght:
-Advanced industrial base
-Advanced regulatory framework
-Elitist but high quality education system
-Excellent relations with West,Russia and Japan

Weakness:
-Massive social inequality
-MAss education system of poor quality
-Adversarial/cold war type relation with China likely to be world's largest economy in 2020.
-Unstable Pakistan next door
-Inefficient legal system


On the whole this decade will decide whether the strenghts triumph over the weaknesses...

Riaz Haq said...

Pakistan suffered a decline in FDI inflow in July-Dec 2010 of 15.5 per cent to $828.5 million from $968.9 million in the same period last year, according to The Nation newspaper.

Increased exports and remittances still helped Pakistan achieve a small current account surplus of $26 million in July-Dec 2010 period, according to Dawn News.

Pakistan wasn't the only developing nation in South Asia to see FDI decline. India suffered 31.5% decline in FDI in 2010, according to UNCTAD.

FDI inflow in India declined from $34.6 billion in 2009 to $23.7 billion in 2010.

With decline in FDI, India is now running a huge current account deficit of over 3.0% of its GDP for July-Dec, 2010, according to Trading Economics.

Riaz Haq said...

Templeton Asset Management Ltd. is buying shares in Pakistan, the worst-performing stock market globally this month (August 2010), after the nation’s worst-ever floods prompted a sell-off, investor Mark Mobius told Businessweek:

About 1,600 people have been killed and 20 million lost homes, farms and livelihoods as heavy monsoon rains sent flood waters across the South Asian nation. The disaster may cut Pakistan’s economic growth in half, Finance Secretary Salman Siddique said Aug. 13, with expansion falling as much as 2.5 percentage points short of a 4.5 percent target.

“There will be an impact on growth but company valuations are very, very attractive now and therefore we continue to invest in Pakistan despite all the negatives,” Mobius said in an interview in Singapore yesterday. “The bottom line is that Pakistan is not going to go away. We want to buy stocks that look cheap as prices come down as a result of the flood.”

The Karachi Stock Exchange 100 Index has dropped 8.7 percent this month, the most among 93 benchmark indexes tracked by Bloomberg globally. The gauge is valued at 7.1 times this year’s estimated earnings, making it cheaper than any other Asian or emerging-market benchmark index tracked by Bloomberg.

The Karachi index climbed as much as 1.2 percent, the most in a month, and traded 0.7 percent higher to 9,604.65 as of 11:37 a.m. local time on speculation that recent losses were excessive. The gauge plunged 2.9 percent yesterday, the most in more than two months.

‘Oversold’

“The market was oversold from yesterday and news of Mark Mobius’s plans to buy Pakistani Stocks because of their attractive valuations supported overall market sentiments,” said Khurram Schehzad, head of research at Invest Capital & Securities Ltd., in Karachi. “Local investors are encouraged and realize the prospect of future gains.”

The World Bank yesterday pledged $900 million in financial support to Pakistan, joining the United Nations, the U.S. and other countries in providing aid.

Mobius, who oversees about $34 billion in developing-nation assets as executive chairman of Templeton’s emerging markets group, said the investment company favors banks and energy companies within Pakistan. He didn’t identify any companies.

Templeton owned more than 5 percent of MCB Bank Ltd., the nation’s biggest lender by market value, as of June 30, according to data compiled by Bloomberg.

MCB gained 1.7 percent to 185.50 rupees today, trimming losses for the year to 7.1 percent. Oil & Gas Development Co., Pakistan’s biggest energy explorer, rose 1.3 percent, extending its 2010 gains to 23 percent.

Anonymous said...

riaz jee

youe been warning Indians about hot money flows.
Templeton/m mobius is hot money par excellence.

Riaz Haq said...

Anon: "Templeton/m mobius is hot money par excellence."

Yes, it is. But a small amount of FII (about $500 million in a $180 billion economy) can be healthy in providing liquidity.

It only becomes a problem when it's a torrent, as it is in Indian stock markets.

In fact, as India's FDI has dropped by 31.5% last year, India is relying heavily on FII to fund its growing balance of payment deficit of over 3% of GDP.

Riaz Haq said...

Pakistan has resumed wheat export after a bumper crop last year, according to Tribune Express:

SINGAPORE: Pakistan has resumed wheat exports for the first time in three years, selling cargoes to Bangladesh and Myanmar and more deals are likely as the nation takes advantage of rising global prices and surplus stocks at home, following last year’s bumper harvest.

The deals come as fears of global food inflation grow, with devastating floods damaging crops in Australia, forecasts of US corn inventories sliding to uncomfortable levels and dry weather hampering production in Argentina.

Asia’s third largest wheat producer, Pakistan has sold 200,000-500,000 tonnes mainly to Bangladesh and Myanmar and international traders are taking positions for more deals after Islamabad lifted a ban on overseas sales last month.

“Pakistani wheat is now competitive, they are actively selling cargoes for the last one week or 10 days,” said one trader with an international trading company in Singapore.

“Traders are taking positions in the domestic market to corner more supplies for exports.”

The benchmark US wheat and corn climbed nearly 50 per cent in 2010 on tightening supplies of grains and recent price surge have stoked worries over food inflation, already in double digits in Asia’s top consumers China and India.

On Thursday, Chicago corn rose 1 per cent to its highest in 2-1/2 years, while soybeans were steady after 4 per cent gains in the previous session, buoyed by a surprisingly steep reduction in global supply of grains and oilseeds forecast by the US government. Wheat has risen nearly 2 per cent in as many trading sessions.

Uncomfortable stocks, rising prices

US stockpiles of corn and soybeans will be drawn down to uncomfortably thin levels this year, according to a government report on Wednesday that sent grain prices soaring and added to concerns over surging world food prices.

But Pakistan decided to allow the private sector to export wheat last month, lifting a three-year ban after a bumper crop led to a market surplus.

Pakistan in August deferred earlier plans to export 2 million tonnes of surplus wheat after summer floods washed away at least 725,000 tonnes of the grain.

Traders have said that despite damages from summer floods, Pakistan still has a surplus for export after a bumper crop of 23.86 million tonnes in 2009/10 added to a carryover of 4.2 million tonnes from the previous crop.

A Karachi-based trader said Pakistan has booked orders for about 500,000 tonnes of wheat and shipments had already started.

“Our traders have made deals for about 500,000 tonnes for January-March shipment, and we expect more orders,” Javed Thara said. “Most of our wheat went to Bangladesh.”

He said Pakistan could export more than 2 million tonnes of wheat in the coming months.

Another Singapore dealer confirming the news, said deals for Pakistani wheat were signed around $350-$370 a tonne, including cost and freight. “It is 11.0 to 11.5 per cent protein content, perfect for Bangladesh and Myanmar markets,” he said.

The sowing for the next crop in Pakistan has almost completed and harvesting will begin in April. The government has set an output target of 24 million tonnes for the 2010//11 crop.

Anonymous said...

very stupid move!
The revenue earned by wheat exports is negligible.

OTOH there is almost sure to be chronic under invoicing by wheat producers in pakistan given the massive difference between international and domestic prices and thus create artificial shortages at home leading to more unrest.

The hunger situation in Sindh here and now is like Chad.
http://www.dawn.com/2011/01/28/stalked-by-hunger.html

http://www.guardian.co.uk/world/2011/jan/27/pakistan-flood-crisis-african-famines

Riaz Haq said...

Anon: "The hunger situation in Sindh here and now is like Chad."

First, there is no famine in any part of Pakistan, including the flood-hit areas of Sind, which is a temporary malnutition crisis that needs to be highlighted and addressed.

Second, unfortunately, high levels of malnutrition exist in South Asia under normal circumstances. The 2010 floods in Pakistan have just made the situation worse.

But the malnutrition rate among Indian children is 45.6 percent in normal times, according to India Family Health Survey.

At 45.6 percent, the Indian children malnutrition is twice as high as the 23% malnutrition in Pakistan's flood-hit areas as reported in the links you have shared.

This is a fact that has long been recognized by Indian government.

India is worse than Bangladesh and Pakistan when it comes to nourishment and is showing little improvement in the area despite big money being spent on it, says Planning Commission member Syeda Hameed.

"I should not compare. But countries like Bangladesh, Pakistan and Sri Lanka are better," Indian Planing Commission member Syeda Hamed has said.

According to India's National Family Health Survey, almost 46 percent of children are undernourished - an improvement of just one percent in the last seven years.

sohail khan said...

Riaz bhai
Parts of Pakistan were known as Switzerland of Asia. Whenever I go there it is always beautiful and gettin prosperous. Many Pakistani dont have to pay tax so government does not know how much you make like IRS here.

To the government economy is not good but people are doing well. Before they had no TV and only bicycle and now they have TV cellphone and motorcycle. They work hard overthere and save a lot.

I have heard India poverty is very very high compared to Pakistan and water is not available or food. No one take care of roads which in Pakistan is similar to american freeways. Some of the pictures on your site even show people in India without clothes and lot of beggars. Pakistan is much better.
For Pakistani they suffer but they work hard and still do well without government and bad politicians. India has democracy but they are not as good.

Riaz Haq said...

Here are a couple of reports on flood recovery in Pakistan:

World Food Program Report: "Six months after Pakistan was hit by devastating monsoon flooding, the recovery is at different stages in different parts of the country. In the north and central Pakistan, most families have been able to return to their homes, rebuild their houses, plant crops and take back their former lives.

But in a few areas of the southern province of Sindh, many communities are still surrounded by floodwaters. Thousands of families in Balochistan, in the southwest, are also unable to return to their homes. Between the two provinces, some 600,000 flood victims are still living in temporary camps and for these people recovery seems some way off."


BBC Report: " A village in Pakistan devastated by flooding has been renamed Midlands after a West Midlands charity raised money to help rebuild it.

Walsall-based Midland International Aid Trust raised £113,000 to help the 20 million people thought to be affected by the monsoon floods last year.

The village of Lal Pir, now named Midlands, had been cut off by water.

Mohammed Aslam MBE, the trust's founder, has been visiting the country to oversee how the aid is spent.

Mr Aslam, 71, originally from Kashmir, said he wanted to make sure every penny of aid went to the people living in the region.

He said in August he could only reach Lal Pir by boat.

Now all 36 homes which were destroyed have been rebuilt, at a cost of £2,000 each, after the charity provided the villagers with materials and tools.

The floods struck the north of the country in August. At least 1,500 died in the deluge."

Riaz Haq said...

Here's a story about the promise of Danish Schools, a series of boarding schools being set up in Pakistani Punjab by the provincial govt of chief minister Sahbaz Sharif for the poor as an alteranative to the madrassa system:

Outside the window, a Pakistani flag flutters, inside, a teacher asks a group of 6th-grader girls and boys, “Who can make a food chain?” A girl comes up to the board and uses a pen as a mouse to click and drag an animated plant to the first box, a worm to the second and a bird to the third. “Excellent,” Says the teacher. She goes and sits down with a smile on her face.

This is not an ordinary board, it’s a smart board, the first of its kind in Pakistan, and this is no ordinary school. Inaugurated January 18th, The Danish School System at Rahim Yar Khan stands in stark contrast to the rural terrain of this Southern Punjab city. Children enrolled in this school have to fit a certain criteria, not just that they have to pass an entry test, but they have to either have a missing parent, or both parents, they have to have an illiterate parent and they must have a monthly income of less than USD 100 - they must belong in short to the forgotten class of Pakistan’s poor and minorities.

This is affirmative action, giving the underprivileged a chance to have a level playing field. But how real is it? For one, it has the clear support of the government of Punjab which has faced severe criticism from all quarters about the surge of 25 billion rupees invested in a series of these purpose-built campuses for both girls and boys all over Punjab. These critics claim that money could have been better spent elsewhere on better alternatives like building roads or canals.
---------
The Danish Schools stands as an alternative to madrassa education because the school provides free lodging and boarding to all its students. It not only gives students a rounded education in the sciences and the arts but also provides social and extracurricular exposure. An on call psychologist also monitors each of the student’s behavior and has counseling sessions with the children and their parent or gurdian for a smooth transition into boarding life.

Despite the challenges, there is a certain spark and energy in the entire Danish school core committee headed by LUMS Provost, Dr Zafar Iqbal Qureshi, and the teachers and students. At the inaugural ceremony, one child danced on Shakira’s Waka Waka, another child, Aasia Allah-Wasiah told a 500 odd gathering the story of her life, how she became an orphan and how Danish school was her only hope for a future.

Not all parents were this easily convinced of Danish School’s objectives. One asked the girls’ school principle, “Why would you give me back my child after giving her clothes and shoes and spending so much on her? I know this is a conspiracy to buy our children from us.”

Other parents objected to there being non-Muslim students eating in the same utensils. The management responded by saying “we all eat in the same plates as any Hindu or Christian boy because this school is for everyone equally.” Needless to say that Rahim Yar Khan, despite scattered industrial units is largely agrarian and the people are deeply influenced by the exclusivist brand of Wahabism.
---
With a meager amount of the GDP being spent on education, it is a positive sign to have politicians finally focus on this sector to secure their vote bank. With time the criticism towards these initiatives, such as the importance of Danish schools adopting the O-Levels system, may fine tune the programs into being more effective for the people. And especially those people who don’t have a voice.

Riaz Haq said...

There seems to be consensus developing among Pakistani economists that "prompt measures needed to control rising inflation", according to a report in Daily Times:

LAHORE: Pakistan is fast heading towards higher inflation and to overcome this grim scenario; improvement in governance coupled with a drastic cut in expenditure and revenue generation is crucial.

The doom and gloom scenario needs an urgent handling. Good governance, good policies, good institutions, good macroeconomic management are the drivers of economic growth that have gone dormant for quite some time. This was the crux of the speeches delivered at Economic Dialogue 2011 held at Lahore Chamber of Commerce and Industry on Tuesday. Senior economist Dr Akmal Hussain said the country is facing its gravest economic crisis in history after 1971. He said the economy is in deep recession, poverty along with high inflation is a recipe for disaster.

Unfortunately, he added, the government has zero fiscal space. He warned that Pakistan was heading towards higher inflation if immediate improvement in governance is not accompanied with cut in expenditure and substantial increase in revenue.

The former WB Executive Abid Hassan said that the institutional decay has now started taking its toll and the government should take appropriate measures on emergent basis to stop this decay. He said that with every passing day the country is going deeper and deeper into the economic mire. “Today we have reached a situation where even an economic stimulus would not work. The government should concentrate on tax collection and controlling unnecessary expenditures. Unless and until these two measures are not taken, the economy would not be able to be back on rails,” he said. The PIDE Vice Chancellor Dr Rashid Amjad said that the present day doom and gloom scenario could be changed by overcoming the acute energy shortage being witnessed by the country. The issue of circular debt needs to be taken care of by those sitting at the helm of affairs. “PSDP has a multiplier effect on the employment and economy. It should not be cut,” he said.

Former chief Economist Planning Commission Dr Pervaiz Tahir blamed the political chaos for our economic woes and termed the dictatorship democracy cycle as mother of all ills.

Energy sector expert Munawar Baseer, ex Executive committee member Almas Hyder and LCCI President Shahzad Ali Malik while appreciating the input provided by the economists said that most of the issues and challenges faced by the country are more of political. The political leadership while realizing the sensitivity of the situation should come up with a solid solution with close coordination with the chambers. “The policies are being made in isolation without the consultation of real stakeholders and that’s why the economic situation today has become more complex and directionless,” he said. The speakers said that the business community should be involved for the sake of correct decision-making.

They urged the government to evolve a more realistic and pragmatic framework by putting an end to inter-provincial disparity and the disparities within the province. The government should re-do its priority list and concentrate on the few areas that come on the top of that priority list.

It is very unfortunate, the speakers said, that the country has become the most inhospitable for both the local and the foreign investors for security reasons.

“Our inability to reach a consensus on water issue and inability to tap hydrocarbon potential of Balochistan has virtually pushed us to the wall,” they said. staff report

Riaz Haq said...

Thousands of Indian illegal immigrants are slipping into Texas from Mexico, according to LA Times:

Reporting from Harlingen, Texas — Thousands of immigrants from India have crossed into the United States illegally at the southern tip of Texas in the last year, part of a mysterious and rapidly growing human-smuggling pipeline that is backing up court dockets, filling detention centers and triggering investigations.

The immigrants, mostly young men from poor villages, say they are fleeing religious and political persecution. More than 1,600 Indians have been caught since the influx began here early last year, while an undetermined number, perhaps thousands, are believed to have sneaked through undetected, according to U.S. border authorities.

Hundreds have been released on their own recognizance or after posting bond. They catch buses or go to local Indian-run motels before flying north for the final leg of their months-long journeys.

"It was long … dangerous, very dangerous," said one young man wearing a turban outside the bus station in the Rio Grande Valley town of Harlingen.

The Indian migration in some ways mirrors the journeys of previous waves of immigrants from far-flung places, such as China and Brazil, who have illegally crossed the U.S. border here. But the suddenness and still-undetermined cause of the Indian migration baffles many border authorities and judges.

The trend has caught the attention of anti-terrorism officials because of the pipeline's efficiency in delivering to America's doorstep large numbers of people from a troubled region. Authorities interview the immigrants, most of whom arrive with no documents, to ensure that people from neighboring Pakistan or Middle Eastern countries are not slipping through.

There is no evidence that terrorists are using the smuggling pipeline, FBI and Department of Homeland Security officials said.

The influx shows signs of accelerating: About 650 Indians were arrested in southern Texas in the last three months of 2010 alone. Indians are now the largest group of immigrants other than Latin Americans being caught at the Southwest border.

Riaz Haq said...

Here's an interesting assessment of Pakistan's economy in 2H-2010:

...“The country’s exports, money sent by overseas Pakistanis, balance-of-payments position and foreign exchange reserves have reflected an encouraging growth during July-December FY11, showing strong signs of improvement in the economy,” Saad-bin-Naseer, CEO of Pearl Capital, told Central Asia Online January 28. Pakistan’s exports were $10.97 billion, an increase of US $1.88 billion, in the first six months of FY11.

That 21% increase was a very positive sign for the growth of export-oriented industry and the national economy, he said.

In FY11 exports could cross the $22 billion mark for the first time because of a significant increase in the value of Pakistani products on world markets, Naseer added.

“The textile industry had taken the lead by fetching $1.28 billion in additional foreign exchange through exports,” Anisul Haq, secretary of All Pakistan Textile Mills, told Central Asia Online.“The textile industry had taken the lead by fetching $1.28 billion in additional foreign exchange through exports,” Anisul Haq, secretary of All Pakistan Textile Mills, told Central Asia Online by telephone from Lahore. “From July-December FY11 textile exports increased to $6.28 billion” compared to 2010 figures.

Total annual textile exports could exceed $13 billion for the first time, he added. In 2009-10, they totalled $10.5 billion.
“The textile industry had taken the lead by fetching $1.28 billion in additional foreign exchange through exports,” Anisul Haq, secretary of All Pakistan Textile Mills, told Central Asia Online.
---------
Another pillar of the economy is remittances from overseas Pakistanis. The money they sent home increased by $780m in the first half of FY11, to $5.3 billion, Haq said.

“We hope the country would receive $11 billion from overseas Pakistanis in 2010-11 with major increase in inflows from Pakistanis staying in Arab countries and other western countries,” Haq said.

Foreign aid from institutions and countries, not just individuals, helped. The disbursement of $633m in coalition support and the extension that the IMF gave the government for imposing the Reformed General Sales Tax (RGST) helped improve some of the major economic indicators, Naseer said.

The picture did much to bolster Pakistan’s balance sheet, which has had its ups and downs. Pakistan recorded a current account surplus in the first six months of the fiscal year, which enabled growth in foreign exchange reserves and stabilised the dollar-rupee exchange rate, Pearl Capital’s Naseer added.

In 2009-10, the country incurred a $2.5 billion current account deficit from July-December, but for the same period in 2010-11 it enjoyed a surplus of $26m – a dazzling switch from red ink to black, he said.

The robust performance of exports and remittances enabled Pakistan to accrue a record $17.3 billion in foreign exchange reserves by January 21, he said.

Investor confidence has grown in response to these positive indicators. The stock market capitalisation grew to $36 billion in January 2011 from $32 billion in October 2010, he said, adding that such growth would encourage foreign and local investment.
-----
warned.

Islamabad, which still hasn’t imposed the RGST the IMF wants, doesn’t collect enough taxes, Khan said. It levies only about 9% of GDP against the required international standard of a minimum 15% tax-to-GDP ratio, Khan said.

The government must implement tax reform, reduce reliance on borrowing from the IMF and generate its own resources to enhance tax revenues and to bolster economic growth, he added.

Serious efforts to solve chronic gas and power shortages are also imperative, he said.

Riaz Haq said...

Here are a few excerpts from a NY Times story on lagging agriculture in India:

BAMNOD, India — The 50-year-old farmer knew from experience that his onion crop was doomed when torrential rains pounded his fields throughout September, a month when the Indian monsoon normally peters out.
------
Mr. Talele’s misfortune, and that of many other farmers here, is a grim reminder of a persistent fact: India, despite its ambitions as an emerging economic giant, still struggles to feed its 1.1 billion people.

Four decades after the Green Revolution seemed to be solving India’s food problems, nearly half of Indian children age 5 or younger are malnourished. And soaring food prices, a problem around the world, are especially acute in India.
------
Critics say Indian policy makers have failed to follow up on the country’s investments in agricultural technology of the 1960s and ’70s, as they focused on more glamorous, urban industries like information technology, financial services and construction.
----------
Food inflation hits especially hard here because Indians — most of whom live on less than $2 a day — spend a bigger portion of their disposable incomes on food than people in other big, developing economies like China and Brazil.

“This is the worst form of taxation on the poorest of the poor,” said Ashok Gulati, Asia director for the International Food Policy Research Institute.
---------
But experts say the widening gap between agriculture’s anemic supply and the rising demand for food calls for fundamental changes in farming policies.

During the Green Revolution the government invested heavily in rural agriculture, with an emphasis on hybrid seeds, fertilizers and irrigation canals.

----------
And rural India has far too few temperature-controlled warehouses that could help farmers and the nation build up reserves as a hedge against poor growing seasons.

When Mr. Talele’s vegetables are ready for harvest he immediately takes them to wholesale markets, which are controlled by committees of local traders. “Whatever the market decides, that’s the price we get,” he said.

Indian officials acknowledge that the country needs to increase investment in irrigation, encourage competition in wholesale and retail markets, and provide targeted food subsidies to the poor. And they also have to provide more education and jobs to villagers, so fewer people are forced to live off the land.

Experts say India needs to make changes like some of the ones China made, beginning in the late 1970s, when it started investing heavily in agriculture and eased regulations on farming.

-------

Riaz Haq said...

With rising cotton and yarn prices, Pakistan has the potential to export $50 billion in textiles, according to a report in Gulf Today:

KARACHI: Pakistan has a potential of at least $50 billion in value-added textile exports if human resource in this sector is fully developed, said Textile Commissioner Muhammad Idrees.

Addressing the closing ceremony of 9th round of apparel manufacturing and management training programme at the Readymade Garments Technical Training Institute, the official said that the present volume of exports was not at all satisfactory.

The stakeholders could easily double this volume by improving skills of workers and through compliance with the standards of buyers, he added.

The skills development programme comprised one-month training, which covered cutting, sewing, production management, industrial engineering and quality control. Experts and consultants from Technopak, a world renowned consultancy firm, were hired for the training.

Thirty-one master trainers or middle management professionals from Artistic Milliners, Naz Textiles, Rajby Industries and Selimpex International and Soorty Enterprises attended the ninth round of training project.

The training project has so far been successfully implemented in 30 factories in Sindh and has trained 279 master trainers/middle management professionals and 3,693 workers.

The project delivered complete training system, course curriculum, manuals and consulting guidelines to the factories. Training manuals are also translated into Urdu language to transfer appropriate knowledge and skills to workers.

Pakistan’s textile sector is optimistic about meeting the annual export target, as high cotton prices in domestic and international markets have caused an increase in prices of value-added textile products, industry people say.

The government had fixed the textile export target at $14 billion for the current fiscal year. Members of the textile sector are of the view that achieving the target is possible, as exports of highly value-added items such as knitwear and garments have increased in terms of value.

Statistics released by the Federal Bureau of Statistics (FBS) show the textile sector has performed well in the first half (July to December) of the current fiscal year, as its exports increased by 25.79 per cent as compared to the corresponding period of the previous year.

The industry, however, believes they would need to import up to five million bales of cotton because the 11 million bales produced so far in the country will not meet the requirements as some of the crop has been destroyed by flood.

The industrialists also expressed reservations about gas shortage in the country that has already caused a huge loss to the industry, particularly in Punjab. All Pakistan Textile Processing Mills Association Chairman Maqsood Ahmad Butt stressed that cotton prices reached Rs13,000 per maund (37.324 kg) and the sector may face a shortage of cotton in June if India did not lift the ban on exports.

“There is a possibility that exports will cross $14 billion target if cotton shortages are met and gas supply is restored,” he opined.

Riaz Haq said...

Rising crop prices in the US are helping economic recovery in the farm belt and lifting the value of farmland in the Midwest, according to the Wall Street Journal:

Farmland values in much of the Midwest are climbing at their fastest rates since the 2008 boom, the Federal Reserve Bank of Kansas City said Tuesday.

Fueled by rising crop prices, the value of irrigated and nonirrigated cropland across the region known as the 10th District jumped 14.8% and 12.9%, respectively, in the fourth quarter, compared with a year earlier.

The bank's quarterly survey of the region, which covers western Missouri, Nebraska, Kansas, Oklahoma, Wyoming, Colorado and northern New Mexico, found that farmland prices rose for the fifth consecutive quarter since a drop in the third quarter of 2009, when the livestock sector was contracting amid the recession.

The Federal Reserve's regional banks closely track farm real-estate prices because they are a key indicator of the health of U.S. farming, which uses about half of the nation's land. Land is farming's largest asset and source of collateral, which means any increase in value lifts farmers' borrowing power.

The Federal Reserve Banks in Chicago and Minneapolis have yet to issue their quarterly surveys, but their reports are also expected to show that the farm belt is continuing to rebound from the recession more quickly than the general economy, which has been hobbled by high unemployment rates and weak home values.

Farmland prices in the 10th District are generating their biggest gains since the third quarter of 2008, when prices of irrigated farmland jumped 23.4% and prices of nonirrigated farmland rose 21.2%.

Still, it's not clear how long farmland prices can continue to climb so sharply. The Federal Deposit Insurance Corp. has already said it's watching for whether an asset bubble is building. One red flag in Tuesday's report is that cash rental rates for cropland across the 10th District rose only about 6% in the fourth quarter, far too little to justify such a big increase in land prices.

As a result, some farm bankers across the region are beginning to tighten their standards on real estate loans.

"Bankers in the survey were starting to raise questions about the sustainability of farmland values" and "paying closer attention to their loan-to-value ratios," said Brian Briggeman, an economist at the Omaha branch of the Kansas City Fed.

Farmland prices are heavily influenced by crop prices, which were climbing until the financial crisis and recession popped the commodity-price bubble in late 2008. Led by wheat, U.S. crop prices resumed their upward climb in June 2010 amid harvest problems in places such as Russia, and then the U.S. corn belt, as demand was recovering in the world's emerging economies.

The prices of corn and wheat grown in the Midwest are about double what they were a year ago, while cotton prices are up 155%. Soybean prices have climbed 50%. Those high commodity prices are giving farmers more money to spend on land, as well as attracting the interest of outside investors looking for an inflation hedge at a time when the cost of borrowing money for buying real estate is low.

The U.S. Agriculture Department said Monday that it expects net farm income, a widely followed barometer of the U.S. agriculture sector's profitability, to climb 19.8% this year to $94.7 billion, which would be the second-highest inflation-adjusted figure for net farm income in 35 years.

Riaz Haq said...

Here's a report in The News on how Pakistan's Engro company sees the economy:

KARACHI: Engro Corporation remains unsure about Pakistan’s economic trajectory as the country battles militants and tries to contain a growing fiscal deficit, a top company official said on Tuesday.

“Nobody knows what will happen in the coming months,” said Ruhail Mohammad, Engro’s Chief Financial Officer. “I have my numbers worked out. I know where sales and profit will be. But things are changing so fast that being sure remains almost impossible.”

Political and economic events of the past six months that saw the government retreating on key reforms such as raising taxes and cutting borrowing from the central bank have left businesses without a firm outlook, he said.

Although Engro posted a 79 percent rise in yearly profit to Rs6.8 billion in 2010, it continues to face problems, he said. “The policy of gas curtailment to fertiliser-makers is unjustified. The government has given us a commitment for uninterrupted supply, especially for the new plant.”

Expansion of Engro’s flagship fertiliser plant completed last year. The corporation can now produce 2.3 million tons of urea annually.

Mohammad, who was briefing journalists a day after the announcement of corporation’s financial results, said that Engro has no problem with increase in the price of gas that is used for making fertilisers. “The government must increase the price of fertiliser. We have been saying it for the last two years,” he said. “The agricultural products such as cotton, rice and wheat have seen a substantial increase in price. Farmers have the capacity to absorb rise in cost of urea.”

He, however, said that contractual obligations must not be breached once it comes to the additional capacity of 1.3 million tons, which the corporation has recently added. “For this project, we were offered gas at concessional rates for making the investment.”

The price of feedstock gas, which is used for making fertiliser, is subsidised by the government through a controversial method of making textile and other industries pay a higher price for the fuel. This has been a bone of contention for years.

“The government will be giving Rs37 billion in subsidy on urea in 2011,” he said. “There is no justification for this at all.”

On the other hand, curtailment of gas, which is basically a raw material for fertiliser, brings down production and leaves the manufacturers with no option but to raise prices to make up for the lost sales, he said.

He said the corporation plans to list Engro Foods, Engro Energy and Fertilisers at the stock exchange this year.

Mohammad said that work on Engro Energy’s venture into mining of coal at Tharparkar, Sindh, for power generation continues. “China is showing a lot of interest in the project. Financing won’t be an issue.”

The corporation will need between $300 million and $350 million for the Thar project by the end of 2012, he said.

“We have been cited as a heavily indebted group but if you look at the books closely we generate Rs35 cash for every Rs100 of debt. I think that gives us a lot of room to easily pay off the loans.”

Riaz Haq said...

Pakistan govt has distributed Rs 28.6 billion among flood victims, according to Daily Times:

ISLAMABAD: Government of Pakistan has distributed Rs 28.6 billion among 1.483 million flood-affected families through NADRA’s Watan Card — each card has Rs 20000 cash assistance.

Deputy Chairman NADRA, Tariq Malik stated this while briefing the UN delegation headed by Margareta Wahlstrom, Special representative of the Secretary General for Disaster Risk Reduction who visited NADRA Headquarters today for briefing on Flood Relief System.

Tariq Malik while elaborating the overall progress said that in Punjab, 608,824 flood-hit families received Rs 11.96 billion while in Sindh 558,997 families received Rs 10.11 billion. In Baluchistan

Rs 1.85 billion have been distributed among 102,945 families and Rs 3.8 billion were disbursed among 199,414 families in the province of Khyber Pakhtunkhwa. He said in AJK and Gilgit Baltistan

Rs 188,450,000 distributed among 10,173 families and Rs 61,626,000 given to 3,263 families respectively.

He said the selection of beneficiaries is one of the most contentious aspects of any post disaster cash transfer programs in various countries. “NADRA walked extra miles as our aim was to protect the most vulnerable among the flood victims like women household, widows, special persons and minorities,” he told.

He told 120,081 Watan Cards were given to the households headed by women folks in the remotest areas of Pakistan — and 11,746 Watan Cards were given to minorities notified by the provinces.

Emphasising on Grievances Redressal System, Tariq Malik explained that 3.2 million people visited Watan Card centers, 335,044 complaints were received and NADRA has verified that 167,063 were eligible of Watan Cards of which around 155,000 have been given Watan Cards.

Fifty percent (50%) of the complaints were not genuine as these included people who already had received Watan Cards or their family member had received Watan Card. “We are not closing complaints redressal system, and would like to entertain all complaints on case to case basis,” he added.

He urged the media, international donor agencies and NGOs to focus on facts and real data, not on anecdotes or stereotypes or politically motivated press reports aiming generalisation based on isolated incidents.

Neva Khan, Country Director Oxfam, Madhavi Malagoda ARIYABANDU, Regional Programme Officer, UN International Strategy for Disaster Reduction were among the members of delegation.

Riaz Haq said...

News about 2010-2011 budgets in South Asia:

The BBC is reporting that "the budget deficit has reduced to 5.1% of GDP this fiscal year, down from more than 6%. The plan is to cut this to 4.6% next year".

Pakistan's budget deficit for first six months of 2010-2011 stood at 2.9%, up from 2.7% last year, according to CNBC and Reuters.

KARACHI, Feb 28 (Reuters) - Pakistan's budget deficit for the first six months of the 2010/11 fiscal year (July-June) was 2.9 percent of gross domestic product, the Finance Ministry said on its Web site (www.finance.gov.pk) on Monday. This compared with a deficit of 2.7 percent in the same period last year. In the October-December quarter, the deficit eased to 1.3 percent from 1.6 percent in the preceding quarter. Analysts said the lower second-quarter deficit was largely due to payments by the United States for logistical support provided by Pakistan in the war against Islamist militants. In November 2010, Pakistan agreed with the International Monetary Fund (IMF) that it would keep the country's budget deficit at 4.7 percent for the 2010/11 fiscal year. However, analysts agree Pakistan will likely overshoot this figure. Some forecast the deficit to be around 8 percent, higher than the central bank's prediction of between 6.0 and 6.5 percent, if fiscal reforms are not implemented. The original target of 4 percent was revised following the devastating summer floods, which caused around $10 billion in damages.

Riaz Haq said...

The Obama administration has proposed $3.1 billion in the 2012 budget allocation for Pakistan, according to The Express Tribune:

The administration’s spending for Pakistan is broken into two parts, the “enduring core part” – meaning long-term assistance programs – and the Overseas Contingency Operations (OCO), an administration official said at a briefing on President Barack Obama’s budget proposals for the fiscal year 2012, beginning October 1, 2011.

As part of the long-term economic and security assistance, President Obama is seeking $1.9 billion in the year 2012. The amount will also cover the cost of American aid operations and diplomatic presence.

Of the $1.9 billion, around $1.5 billion is annual money to be allocated under the Kerry-Lugar-Berman five-year aid measure.

It also includes $350 million in foreign military financing programs, which is part of the five-year agreement between the two countries.

Under the Kerry-Lugar-Berman initiative, the US funds a number of programs including development of democracy and wide-ranging infrastructure projects to assist Pakistan’s economic progress.

On the OCO side of the budget, the administration has proposed $1.2 billion, out of which $146 million is for operational expenditure.

Under the OCO, $1.1 billion is to be devoted to the Pakistan Counterinsurgency Capability Fund (PCCF). The PCCF seeks to train Pakistani forces for a more effective fight against insurgents along the country’s western border with Afghanistan.

Riaz Haq said...

Pakistan could replace India as the biggest recipient of British bilateral aid, according to the Guardian newspaper:

Britain is to stop sending direct aid to Burundi and Niger, two of the world's poorest countries, the government announced as it unveiled plans to rebalance the £8.4bn international development budget.

The two African nations, which are ranked second and fourth respectively in a World Bank list of the world's poorest states, are among 16 countries that will no longer receive bilateral aid from Britain by 2016. Direct aid will also be halted to Lesotho which is ranked 28th on the World Bank list.

Burundi, a landlocked country in the unstable Great Lakes region of Africa, is still suffering from the consequences of the Hutu-Tutsi massacres in the 1990s when 200,000 of its citizens died. Niger, a landlocked country in west Africa, depends on foreign aid for half of the government's budget.

The cuts were outlined to MPs by Andrew Mitchell, the international development secretary, as he unveiled the conclusions of two reviews into Britain's bilateral and multilateral aid programmes. Cutting aid to the 16 countries would allow Britain to concentrate its resources on 27 countries which include Afghanistan, Pakistan and South Africa.
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Ethiopia will become the biggest recipient of bilateral aid over the next two years. Pakistan could become the biggest recipient of British aid within three years, with a major focus on education, British officials in Islamabad said, but only if the government reduces chronic corruption.

Just 56% of Pakistani children between five and nine years' old attend primary school, a rate that British officials want to boost to the world average of 87%. But the school system is chronically dysfunctional due to political interference, "ghost schools" and unqualified teachers. "It's an education emergency," said one official.

As well as reducing graft, British officials want to see Pakistan increase its tax collection, currrently at a disastrously low rate of nine per cent of GDP with many parliamentarians paying little tax. The Pakistani government has vowed to improve education spending from two per cent GDP to seven per cent.

British officials said they recognised that British aid was a "drop in the bucket" in a country of 180 million people, but hoped that a targeted aid programme could "catalyse change" in critical areas like education.

Direct financial transfers to the Pakistani exchequer, which amounted to £120 million over four years under the last aid programme, are likely to be scrapped, officials said.

Riaz Haq said...

Here's the Express Tribune on small increase in overall literacy led by rural female literacy:

ISLAMABAD: The quest for knowledge in rural areas, particularly in females, compensated for the declining trend of getting an education in cities, according to the Pakistan Labour Force survey.

In 2009-10 the literacy rate in Pakistan marginally increased to 57.7 per cent due to an increase in the literacy ratio of females in rural areas. During the preceding year the literacy rate was 57.4 per cent. The male literacy rate stood at 69.5 per cent while it was 45.2 per cent for females.

According to the official definition, the literacy rate is that percentage of the population ten years and above which is able to read and write in any language.

Though more than half of the rural population is illiterate, the ratio improved by over half a percentage point to 49.2 per cent by June 30, 2010 due to an increasing number of women and girls who can read and write. The female literacy ratio improved to 34.2 per cent, a progress of 0.8 per cent in a year. In rural areas, the 63.6 per cent male literacy rate improved by only 0.4 per cent in comparison. The literacy rate in urban areas marginally declined due to a dip in the number of men who qualify as literate. The urban literacy ratio decreased 0.1 per cent to 73.2 per cent, due to a fractional reduction in the male literacy rate. At present more than eight out of ten urban males are educated but the ratio is below that of 2008-09.

The provincial literacy rates also depict interesting trends. In Punjab and Khyber-Pakhtunkhwa, the number of educated people increased, while it decreased in Sindh. The figure remained stagnant in Balochistan at 51.5 per cent. Punjab turned out to be the most educated province, followed by Sindh, Balochistan and Khyber -Pakhtunkhwa.

In Sindh the percentage of educated people dropped by one per cent to 58.2 per cent in 2009-10. The declining ratios were witnessed across the divide, rural, urban, females and males. Contrary to that in Punjab the literacy rate increased to 59.6 per cent. Over half of the rural population is literate and the urban literacy ratio stood at almost three-fourth in the province.

In Khyber-Pakhtunkhwa the literacy rate increased to 50.9 per cent, a progress of almost one per cent. The rural literacy rate increased to 48.4 per cent but the urban literacy dipped by 0.4 per cent. The urban literacy rate increased while the rural literacy rate declined.

In terms of level of education, near four out of ten literate people are not even matriculates. Another one out of ten is below intermediate, the survey reveals. Only 4.7 per cent of the total literate population has cleared intermediate but not bachelor’s and just 4.3 per cent have a bachelor’s or above. Even today over four out of ten Pakistanis are illiterate according to official figures.

Riaz Haq said...

World Food Program Pakistan director says food prices too high in Pakistan, according to AFP:

GENEVA — Pakistan's government has pushed food prices too high for an impoverished population, as malnutrition levels rise despite the recovery of crops after devastating floods, a UN food relief official said Wednesday.

Wolfgang Herbinger, director for the World Food Programme (WFP) in Pakistan, said food crops especially wheat in the southern flood-hit plains were recovering fast with the prospect of decent crops over the coming weeks.

"The crop outlook is not bad but the food security situation remains difficult because prices remain so high," he told journalists one the sidelines of humanitarian meetings in Geneva.

"The government is the biggest buyer of wheat in Pakistan they are setting the farm gate price and they dominate market," Herbinger explained.

"That's why the wheat price in Pakistan didn't adjust when, for example, in 2009 and early 2010 the wheat price had gone back a lot, it stayed high to the detriment of local consumers."

Now ordinary consumers pay double the price for wheat compared to three years ago and the food security situation has "changed dramatically," the WFP official added.

Malnutrition levels in the southern province of Sindh have reached 21 to 23 percent, according to the agency.

"That is well above African standards. The emergency standard is 15 percent," the WFP official said.

A recent survey found that in some flood-hit areas 70 percent of people were taking out loans and even using them to pay for food.

Herbinger admitted that the WFP was "struggling a bit" to bring the message across to authorities.

"You may have the country full with food but people are too poor to buy it," he explained.

"We are working a lot with the Ministry of Agriculture to explain to the minister that it is not enough to have enough production in the country if people can't afford it."

"Maybe for political reasons he doesn't always understand it, that it's one thing to be nice to the farmers but if your consumers can't afford it then... there's something wrong with agricultural policy," Herbinger added.

Massive floods caused by monsoon rains in July and August 2010 killed thousands, destroyed 1.7 million homes and damaged 5.4 million acres of arable land, experts have said.

Riaz Haq said...

Here's Pakistan PPP govt's defense of high wheat prices in Pakistan, as reported by the BBC:

Lowering wheat prices would create food shortages in Pakistan and encourage smuggling, officials say, responding to criticism from the UN.

On Wednesday the UN's food relief agency said the government set prices too high and malnutrition was rising.

But an official at Pakistan's food ministry told the BBC farmers would simply switch to more lucrative crops if wheat prices went down.

Devastating floods across Pakistan in 2010 damaged acres of arable land.

Although crop yields in 2011 are projected to be healthy, prices are too high for an impoverished population, the director of the UN's World Food Programme told journalists on the sidelines of humanitarian meetings in Geneva on Wednesday.

"The crop outlook is not bad but the food security situation remains difficult because prices remain so high," Wolfgang Herbinger said.
Smuggling risk

Malnutrition levels in the southern province of Sindh had reached 21% to 23%, according to the WFP.
Continue reading the main story
“Start Quote

It is nearly impossible to stop smuggling across the Afghan border, which is extremely porous”

End Quote Food and Agriculture ministry spokesman

"That is well above African standards. The emergency standard is 15%," Mr Herbinger said.

But lowering prices would do little to help the situation, an official at the food and agriculture ministry, who wished to remain unnamed, said.

He also warned that much of the crop would end up in the hands of smugglers.

"Low farm-gate prices lead to lower acreage of wheat crop as farmers switch to other crops and it works as an incentive for smugglers seeking international prices in the neighbourhood.

"It is nearly impossible to stop smuggling across the Afghan border, which is extremely porous," he said.

So if prices are lowered, the official said, the risk is that they would eventually rise to even higher than the level they are currently set at.

In the 1990s and between 2007 and 2009 there were severe wheat shortages across Pakistan, leading to extremely high prices.

Pakistani officials also say that malnutrition in Sindh province is not a new phenomenon and is unrelated to the food supply.

"Government statistics show that food consumption has not gone down despite the doubling of food prices since 2007-08," Kaisar Bengali, advisor to Sindh's chief minister said.

A lack of public hygiene facilities and safe drinking water were more important factors in child nutrition, he said.

"These are neglected areas, and there has been hardly any development in the public health sector here in decades," Mr Bengali said.

Riaz Haq said...

Flood Emergency Cash Transfer Project, designed to support the Government of Pakistan’s Citizen’s Damage Compensation Program (CDCP) in providing cash transfers to more than 1 million flood-affected households, according to pkeconomist.com:

The project will also strengthen the management of the CDPC through effective grievance redressal mechanisms and establishing control and accountability measures to ensure efficient and transparent delivery of the support.

“The 2010 floods were a disaster of historic proportions that affected over 20 million people and created a massive recovery need,” said Rachid Benmessaoud, World Bank Country Director for Pakistan. “Households faced with income shocks often adopt coping strategies that are not beneficial over time, including reducing assets and consumption, increasing borrowing, and taking children out of school to work. Therefore, cash assistance to flood-affected households is essential to mitigate the adverse effects of income shocks besides addressing the issue of poverty and vulnerability. Importantly, the project will also assist in developing necessary capacities and systems to effectively handle the similar disasters in the future.”

Launched in September 2010, the CDCP provided around 1.4 million families with cash grants of PRs. 20,000 (approximately US$230) to cover their immediate needs. The next phase, supported by this project, will provide an additional payment of PRs. 40,000 (approximately US$460) to around 1.1 million most affected households, thereby reaching between 7.5 and 8.3 million people to rebuild their lives. To meet the total financing requirements for the CDCP, the World Bank has worked closely with other development partners, some of which (USAID and Italy) have already committed funds.

“International evidence suggests that cash grants allow the recipients the flexibility of choosing where to put their resources based on their specific conditions and priorities.” said Iftikhar Malik, Co-Project Team Leader. “Beneficiaries are expected to use these additional grants to not only cover basic consumption but to also recapitalize assets as well as recover their livelihoods.”

The World Bank is well placed to support the Government of Pakistan in extending and strengthening the CDCP due to its substantial international and regional experience in protecting the affected and vulnerable through post-disaster cash transfer programs. In addition to this operation, the Bank has assisted the Government in its flood response through financing the Post-Disaster Needs Assessment and making available US$300 million for fast-disbursing financing of critical flood-related imports and US$20 million for highway reconstruction.

The credit is from the International Development Association (IDA), the World Bank’s concessionary lending arm. US$81 million of the credit carries a 0.75% service charge, 10 years of grace period and a maturity of 35 years. The remaining US$44 million has the same terms plus a fixed interest charge of 3.2%.

Riaz Haq said...

Here are some excepts from an Op Ed by Pak industrialist Yousuf Shirazi of Atlas Group:


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Pakistan’s mineral resources – oil, gas and copper, much less gold – remain unexploited. Whatever the case, Pakistan is basically an agricultural economy. Before Partition, the area now comprising Pakistan had fed the entire India. Even now when the floods have affected the crops, Pakistan is exporting rice and wheat. And the cotton prices are so high that, together with wheat and rice prices – reinforced by global revival – it has fed the entire rural area, with unusual liquidity, so as to give a fillip to consumer demand seldom seen before!

Pakistan’s major exports consist of textile, rice, leather goods, sports goods, chemicals and carpets. More than 50 per cent of its export earnings still come from textiles – now yarn being in the forefront. Only if Pakistan focuses on agriculture in the right way can it replace the import with export economy. The current year is expected to record export of over $25 billion but, on the other hand, imports are also expected to exceed exports – $35 billion at the close of the year. The deficit finance – July-December FY10, $6.895 billion – is not any pride whatsoever. The existing situation can be remedied through exploration of mines and optimising agricultural growth and export
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In a situation like this, perhaps, the only course remains increased reliance on aid, loans and credit, which, in essence, has been worsening the economy. These loans and credits, in fact, help the economies of the developed world more than the economies of the developing countries. This is achieved through massive import – of machinery, raw materials, if not food – the PL480 of the USA – depriving the recipient countries of local investment, production and export. This has been leading to unemployment and poverty from which the developing countries traditionally suffer. The solution for the developing countries lies in reliance on education, healthcare and socio-economic infrastructure – more so in Pakistan.
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Socio-politico-economic harmony will depend, among others, on development finance through development finance institutions like PICIC and IDBP that provided long-term development finance. Now there is none. The commercial banks are doing it, but not adequately enough. It is not the job of commercial banks either. However, they are not only providing development finance of whatever worth, but all sorts of non-commercial banking – investment banking, leasing, to say nothing of asset management, and mutual funds. Jack of all trades, master of none. It is all at the cost of commercial banking, per se. The regulators may take note of it. The sooner this anomaly is rectified the better for the export orientation of the economy, and for the socio-politico-economic development of the country as a whole.

An immediately available solution is facilitating remittances, now roughly $1 billion per month and taxing the 57 per cent underground economy, under-invoicing and tax evasion, if not smuggling. The World Bank’s recent report claims this deprives the exchequer of over $500 billion annually. This will be equal to, if not, more than the aid, loans and credits which are always given at a high cost to the economy. Taxing the underground economy will reinforce localisation of investment, production and exports – glocalisation, creating employment opportunities, providing the roti, kapra aur makaan (bread, clothing and shelter) promised to the masses of people, not globalisation, which serves global interests. It will enable also much sought after access to the developed world based on outright merit.

Riaz Haq said...

Here's a NY Times report on Texas farmers planting more profitable cotton in stead of food crops:

“There’s a lot more money to be made in cotton right now,” said Ramon Vela, a farmer here in the Texas Panhandle, as he stood in a field where he grew wheat last year, its stubble now plowed under to make way for cotton. Around the first week of May, Mr. Vela, 37, will plant 1,100 acres of cotton, up from 210 acres a year ago. “The prices are the big thing,” he said. “That’s the driving force.”
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“It’s good for the farmer, but from a humanitarian perspective it’s kind of scary,” said Webb Wallace, executive director of the Cotton and Grain Producers of the Lower Rio Grande Valley. “Those people in poor countries that have a hard time affording food, they’re going to be even less able to afford it now.”

Myriad factors determine food prices. Ethanol demand has pushed up corn prices. Wheat prices rose last year when Russia banned exports after drought devastated its crop.

Farmers typically respond by increasing plantings of the most profitable crop. In the middle of the last decade, as food prices began to rise, cotton prices remained low, prompting farmers to switch from cotton to grains and other food crops. When corn prices jumped with ethanol demand in 2007, farmers grew much more corn.

This year, cotton prices are the highest they have been in years, luring farmers despite strong prices for other crops.

The United States Department of Agriculture predicted last month that southern farmers this spring would plant 12.8 million acres of upland cotton, the type that accounts for the vast majority of the crop. That is a 19 percent increase from last year, when farmers grew 10.8 million acres. It also predicted that the acreage for corn and wheat would grow, although the increases would be lower than they might have been without the competition from cotton. On Thursday, the department will release an updated forecast, based on a survey of farmers.

The effect of the cotton shift is expected to be magnified internationally, as farmers in other major cotton-producing countries, like Brazil, also respond to the high prices.

Cotton futures prices reached nearly $2.20 a pound this month on the ICE futures exchange in New York, up from $0.73 a pound last July. The price is expected to fall by harvest time, but farmers said they hoped to get close to $1 a pound.

In the United States, the economics of growing cotton vary according to many factors, including regional differences and whether or not the land is irrigated. Farmers in several southern states said that at a cotton price of about $1 a pound, their profit could be roughly $200 to $500 more per acre than they could earn growing corn or wheat. For 1,000 acres planted in cotton, that means an additional $200,000 to $500,000 profit.

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Mr. Patterson expects to plant 1,500 acres of cotton this year, up from 600 last year. He said the frenzy was so intense that even cattle ranchers were talking about growing cotton.

Farmers say they have no choice but to plant the crops that give them the best chance of making money. They face many uncertainties, and their profits can be wiped out by bad weather, rising costs for items like fertilizer, fuel or seed, or unstable crop prices, which can plummet as rapidly as they rise.

The National Cotton Council expects substantial increases in all cotton-growing states, including large jumps in North Carolina, Mississippi and Tennessee. But Texas is the nation’s biggest cotton producer, and will have by far the biggest increase in acreage.

Riaz Haq said...

Here's some UNCTAD data on cotton production and consumption in the world:

In 2007, cotton was grown in 90 countries. In 2006/07, the four main producing countries were China, India, the USA and Pakistan and accounted for approximately three quarters of world output. If we added Uzbekistan and Brasil, six countries would account for 83% of world cotton production. This concentration in cotton production, which appears to increase for several years, has to be put into perspective by considering the impact of domestic policy reforms in the largest cotton producing countries, as well as climatic and sanitary contingencies.
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The main cotton producing economies also account for a large part of consumption. According to ICAC data, China, the United States, India, and Pakistan as a whole have accounted for approximately more than 55% of global cotton consumption over the period 1980 to 2008. Their overall consumption has risen considerably in volume (see figure below). For example, consumption multiplied by 3 in China and by more than 3 in India. Pakistan has had the largest increase in volume (which multiplied by 6 between 1980 and 2008) in order to responde to export-driven demand for textiles.

Riaz Haq said...

Here are some excerpts from The Guardian Op Ed on Cameron's warning to Pakistan to raise tax revenues:

Corruption, tax dodging by rich individuals and domestic companies, and tax dodging by multinational businesses all result in a massive flow of "illicit capital" out of developing countries that exceeds the aid they receive from rich nations. Three policy solutions are needed to help reverse this trend and truly fulfil the spirit of Cameron's remarks.

First, revenue officials in developing countries need to be able to follow the money that their rich elites have stashed in tax havens. At present, countries have to conclude individual treaties with each country from which they want this kind of information, and can only do so if that country is willing. This is cumbersome and cannot serve the interests of low-income countries. The UK is one of over a dozen countries that recently ratified a multilateral convention that could provide the solution – but only if developing countries are supported to join, and if tax havens are compelled to participate. The G20 summit in France in November is the opportunity to make this happen.

Second, anti-corruption and tax justice campaigners – and indeed some revenue officials – want multinational companies to break down their financial reports on a country-by-country basis. This proposal is being considered right now by the European commission, and was raised by the chancellor, George Osborne, at a recent G20 summit.

But the devil will be in the detail. If companies have to declare tax payments by country, it will be much harder for corrupt officials to spirit the money away. But if other information such as profits and sales is also included in the breakdown, we could scrutinise the tax payments themselves, holding companies and governments to account for the tax dodging that multinational companies can get away with.

Third and finally, we need the global network of anti-tax avoidance laws to be fit for purpose. It's unfortunate that changes to the UK's "controlled foreign companies" rules in last month's budget will open the floodgates to tax avoidance by British companies overseas. This could cost developing countries £4bn in revenues, effectively wiping out the value of half the British aid budget. At the same time, developing countries keen to crack down on such avoidance are being forced to adopt international "transfer pricing" rules that make them leak like sieves.

It's within the power of the British government to equip developing countries like Pakistan with the information, the rules and the enforcement capacity they need to raise much more tax revenue.

Riaz Haq said...

In flood-stricken Pakistan, a good wheat harvest is expected, reports Food and Agriculture Organization (FAO):

Islamabad/Rome, 30 Mar 2011 -- A large-scale distribution by FAO of wheat seeds to the victims of last year’s floods in Pakistan is now ripe to yield enough food for half a million poor rural households.

With an average family size of eight, this translates into a harvest large enough to feed four million people for the next six months.

FAO spent $54 million of international donor funding buying and distributing quality wheat seeds as part of its emergency intervention that began last August. . Once the harvest is completed, this donation will have produced a crop worth almost $190 million in wheat flour, the main staple, at current local retail prices. “The investment made by donors has been quadrupled,” said Daniele Donati, Chief, FAO Emergency Operations Service. “Moreover, farmers will be able to save the seeds from this year’s harvest to plant again later this year.”

More than 18 million people in Pakistan were affected by last summer’s severe flooding, which caused extensive damage to housing, infrastructure and crops.

Farming nearly fully-funded

In responding to the immediate and critical challenges of the 2010 floods, FAO led the Agriculture Cluster, comprised over 200 organizations, reaching 1.4 million farming families across Pakistan.

FAO received $92 million of its $107 million appeal, which has enabled it to shore up the smallholder agricultural system in the four Pakistan provinces affected by the flooding. The donors were Australia, Belgium, Canada, CERF, the European Commission, IFAD, Italy, Sweden, the United Kingdom and the United States of America.

As well as supporting the “Rabi” wheat planting season, it is estimated that FAO saved the lives of almost a million livestock by supplying temporary shelter and enough de-worming tablets and dry animal feed for almost 290,000 families. Green fodder is now becoming available as the harsh Pakistan winter turns to Spring.

“The livestock interventions really paid off,” Donati said. “It costs ten times more to buy a new animal, which often represent a family’s lifetime savings”.

Canals cleared

FAO is overseeing a thousand cash-for-work schemes by which workers are paid to clear irrigation canals blocked with silt and flood debris.

One severely affected province not to have received much help is Sindh. This was because the fields remained waterlogged until well after the end of the Rabi planting season, and in some cases are still inundated. The UN Agency will shortly distribute quality rice seeds to almost 25 000 families in Sindh for the upcoming planning season, but over 700 000 families will require assistance over the coming months.

Recovery priorities

FAO, in partnership with the Government of Pakistan has identified recovery priorities for the next two years. These are increasing crop, livestock, fishery and agro-forestry production, improving diets and nutrition and boosting agriculture extension services to offer advice to landless and smallholder farmers.

“Pursuit of these core objectives will significantly reduce the vulnerability of the populations in question, improve food production and income generation, and increase affected communities’ resilience to future shocks,” said Donati. FAO expects its recovery programme to cost $94 million, enough to assist 430 000 families in 24 districts.

An Early Recovery Working Group, co-chaired by the Pakistan Government’s National Disaster Management Authority and the United Nations Development Programme, has been set up with eight sectors covered including one on Agriculture and Food Security, co-chaired by FAO, WFP and the Ministry of Food and Agriculture.

Riaz Haq said...

Pakistan's ministry of finance is projecting 4% growth in fiscal 2011-12, according to The News:

“We are looking at a growth rate of four percent for the next year because of a good services sector and on the hope of better farm output,” said a Finance Ministry official who did not want to be identified.

The figure compares with a 3.7 percent growth forecast by the Asian Development Bank (ADB) in its Outlook 2011 report released on Wednesday.

The ADB expects persistent energy problems and security issues will continue to check Pakistan’s growth in 2011/12, with surging inflation posing a further major risk.
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Last year, the worst-ever floods that hit the country inflicted $10 billion in losses, forcing officials to slash growth estimates in between 2.5-3 percent for the current year, down from an expected 4.5 percent.

The services sector, however, is likely to grow by four percent in the current year to June and there are signs that the farm sector is recovering from the flooding.
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Higher cotton, rice and sugar output is expected in the coming year, analysts said.

“We expect that 2011/12 will be much better than this year ... Our own (growth) forecast is close to 4.5 percent,” said Sayem Ali, an economist at the Standard Chartered Bank.

An official at the Planning Commission, which prepares growth targets, also spoke of likely four percent growth next year, but said that was contingent on continuing support from remittances from Pakistanis working abroad and on exports, which have grown by 20-25 percent during the first eight months of the current financial year.

However, the large-scale manufacturing sector, which dominates the overall industry making up 12.2 percent of Pakistan’s GDP, remains a major concern as it faces chronic energy shortages and high interest rates that discourage private sector borrowing.

The sector grew 1.03 percent up to January, against 2.34 percent during the corresponding period last year.

“Energy shortfalls are lowering real growth by at least two percentage points annually,” the ADB said in its report.

Improved prospects for Pakistan’s economy, however, will largely depend on the implementation of measures to address key problems such as inflation, the budget deficit and the need for transparent revenue policies, according to the ADB.

“Increasing prices are on the warning level, not just for Pakistan, but for the whole region,” said Rune Stroem, ADB’s Pakistan country director.

The ADB forecasts inflation in Pakistan will quicken to 16 percent in 2011, the highest in Asia. Revenue generation is another grey area.

The central bank chief said this week that quick steps were needed to broaden the tax base in Pakistan, which has one of the lowest tax-to-GDP ratios in the world, currently around 10 percent.

The IMF has not yet released the latest tranche of the $11 billion loan due in May last year because of the government’s inability to implement a reformed general sales tax, seen as a key to expanding the tax base.

The fiscal deficit, meanwhile, is expected in between 5.3 percent and 5.5 percent of the GDP in 2010/11, but could be higher if some external flows, including grants, are not received soon.

Stroem said that 5.5 percent deficit estimates seemed unrealistic and there are signals that these might slip even further.

Riaz Haq said...

Here's blog post from today's Dawn newspaper:

GLORIOUS countryside lies between Rahim Yar Khan and Bahawalpur. Travelling across six districts in Punjab, before a blazing summer sets in, I experienced endless fields of wheat waiting to turn golden, of freshly harvested mustard, acres of ripe sugarcane and sprawling mango orchards.

Far from the drudge and gloom of metropolitan Pakistan, economic privation, traffic snarls, extreme religion and the cricket World Cup agony, this is another Pakistan. Over a quarter of a century after the green revolution ended the rural economy is back in boom, this time on the back of rising prices. The feel-good factor is all around.
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Alongside the cash economy, the place is also brimming with ideas, and with an entrepreneurial spirit. A young man I meet at Rahim Yar Khan’s chamber of commerce has an IT degree and owns an ice cream distribution business spawning an elaborate cold chain across three districts. He tells me that sales are surging because rural society is transitioning to modern desserts which are now more affordable than traditional sweets like mithai and khoya.

Meanwhile, he’s toying with the bigger vision of an electronic marketplace for agricultural produce. Live connectivity to grain mandis and markets for fresh produce and milk will empower farmers to obtain prices online and through their cellphones. He wants to materialise this and wants tips. I give him my two cents worth: study similar models, write a concept paper, galvanise partners around it, put in seed money and get the venture to mezzanine level.

For now the agricultural economy is growing more in value than in volume. As it does, it pulls in a rising demand for inputs. Fertiliser and agrochemical companies, some listed on the stock exchange are making record profits. Still, few find time to complain about rising input prices. With a population of 400,000, Rahim Yar Khan sports showrooms displaying cars, motorcycles and generators, fast food outlets and even private healthcare clinics.

Even then, not all the cash would appear to go into consumption. Pakistan now ranks amongst the world’s top 10 markets for tractors. Alongside, and despite constrained credit to agriculture, farmers are investing in agricultural implements, irrigation channels and farm modernisation.
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“Simple”, he explains, “this year the ginners got together with the local utility company, Mepco. We’ve instituted a system whereby instead of intermittent hours of loadshedding we get it in one block of 12 hours. This way we can run the factory on one shift per day”. With that problem behind him he now wanted to move on; that is, to a pasteurised milk business.

As the green revolution tapered off, a poultry revolution began; in the late 1970s. Ever since, Pakistan has been gnawing away
at broiler chicken and there’s no turning back. Today a dairy revolution is sweeping Pakistan. As the world’s fifth largest milk producer, the country can only process three per cent of its milk production. Sitting in his factory office in Khanpur — one could have been in any plush office in a metropolis — we open his wireless notebook and download a pre-feasibility study for a milk pasteurising business from Smeda’s website. We glean through it, and at a Rs160m capital outlay it looks doable for him.
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In 2009, an NGO distributed young cattle on micro-credit to 1,000 small farmers and built an apex organisation to collect and market milk from these grass-roots. The Dutch consultant for the NGO informs me that a modern farmers’ cooperative model is now evolving. Such models have long been in vogue in Europe and indeed in several developing countries. Usually the extended supply chain ends at farmer-owned retail outlets — co-ops. Why hasn’t this concept gained traction in Pakistan?
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And so Pakistan prepares to harvest another bumper wheat crop in 2011.

Riaz Haq said...

Here's a Dawn-AFP story about a modest job recovery in Pakistan's textile sector with rising exports:

KARACHI: After a year of unemployment and wondering if his family would be better off if he died, Pakistani textile worker Murad Ali has got the spring back in his step.

One of thousands laid off by textile bosses last year, the father of four is now back at work and one of those to benefit from a surge in Pakistani exports in the current fiscal year, which ends on June 30.

Experts say rising global commodity prices, a government decision to prioritise power supply to industry and currency devaluation that has made Pakistani products more competitive, have fired an export boom.

Compared with the same period last year, the Trade Development Authority of Pakistan says textile exports such as silk rose 25.8 per cent and agricultural produce, such as basmati, rose 6.2 per cent from July to February 7, 2011.

The textiles sector is one of the key drivers of the Pakistani economy, accounting for 55 per cent of all exports and 38 per cent of the workforce, according to official figures.

Bosses have rehired staff who were laid off, but Ali is only getting a third of the salary as a skilled garment worker that he used to command.

“I’m earning less than last year. It is difficult to live a better life due to price rises, but I’m happy,” Ali said.

He has re-enrolled his sons at school but his wife will continue to work as a maid. Money is too tight for her to go back to being a housewife.

“The situation has drastically changed in the favour of the country’s economy,” said textile tycoon Mirza Ikhtiar Baig, who employs more than 2,000 workers and predicts exports will rise 10 per cent for the fiscal year 2010 to 2011.

“Now with demand for Pakistani products rising internationally we are employing more workers.

“Our exports are getting healthier because of an increase in international commodity prices and the government’s will to give top priority to the country’s economy,” said Baig, an advisor to Prime Minister Yousuf Raza Gilani.

The Asian Development Bank forecasts GDP growth for Pakistan of 2.5 per cent for fiscal year 2011 despite pressures from unprecedented floods in 2010, with a relatively modest rebound to 3.7 per cent for fiscal year 2012.
-------------
Pakistan suffers from a profound electricity crisis that restricts production to around 80 per cent of its needs — a situation that will only worsen as the temperatures crawl higher in the coming months.

The budget deficit has grown to 5.5 per cent of GDP, above a 4.9 per cent target for the current fiscal year to June 30.

To fund the shortfall, the government borrowed $4.4 billion from the central bank from July 1 to February 28, a move that worsened inflation, rather than raise taxes and cut spending as the IMF and World Bank would like.
---------
Mohammad Sohail, head of the Karachi-based Topline Securities research and brokerage house, said the export boom would contribute to economic recovery, yet warned the gains were minimal.

“It is very fragile because the fiscal deficit is much higher than the target of 5.3 per cent because of the government’s heavy borrowing from the central bank,” he said.
----------
“Furthermore, the overall security situation in Pakistan is very uncertain, which is making the foreigners and local investors wary all the time.” Independent economist A.B. Shahid said rising international oil prices had hit the country’s economy hard, adding $4 billion to the oil bill.

Pakistan could have benefited more from 8-9 per cent export growth, he said, by exporting cloth in its value-added forms rather than raw cotton and yarn.

While Ali is content with life, he is also wary of uncertainties ahead.

“Life has become too insecure. Everyone is ill at ease. Let’s just wait and see.” – AFP

Riaz Haq said...

Here's an IRIN story of a family in Muzaffargarh struggling to recover after the floods in 2010:

MUZAFFARGARH, 8 April 2011 (IRIN) - Eight months after floods forced Saleemullah Adeel and his family to abandon their home in Pakistan’s southern Punjab city of Muzaffargarh, the road to recovery has proved rough for this landless farmer.

The wheat he planted on 10 acres (four hectares) leased from a large landowner at an annual fee of US$118 per acre (0.4 hectares) is doing well, and Saleemullah hopes for a good crop because weather conditions so far have been good. Near his house, which is now partially repaired, there are neat rows of vegetables, and a few hens feed in the yard. But he has little else to be happy about.

“I bought wheat seed and fertilizer after selling the jewellery we had purchased for my elder daughter’s wedding, which was scheduled for this month,” Saleemullah told IRIN. “Now it has been postponed [yet] I have used up all my savings and my two sons, who worked on fish farms, have lost their jobs.”

The July-September 2010 floods destroyed hundreds of fish farms in the Muzaffargarh area, according to media reports, leaving many, like Saleemullah’s sons, out of work.

But Saleemullah’s problems do not end here. Since he did not own the land he farmed, he was not awarded compensation by the provincial government, which gave landowners seed and fertilizer. “The landlord we lease from claimed he needed [the seed and fertilizer] for his own lands,” he said.

Cotton crop destroyed

Other people, too, have suffered. “I have earned nothing for months because the cotton crop was destroyed, and factories which crush the cotton seed to extract oil did not employ us this time as they usually do,” said Ahsan Akhtar, 30, whose wife was not hired this year as a cotton-picker.

Across the country, people have continued to live with losses incurred during the floods, even as they attempt to recover, but this is proving tough. “My youngest child, aged six months, has had diarrhoea for nearly a month,” said Sanober Bibi, 25. “The health workers who used to visit early on after the floods no longer come, and the medicine given by the local midwife did him no good at all.” There is no clinic in their village.

On 6 April Neva Khan, country director of the UK Charity Oxfam, pointed fingers at the government, telling reporters that a delay on the part of the government to provide a “reconstruction strategy” had resulted in delays in urgent rebuilding and recovery work. In some cases this had “barely started even eight months after the disaster”, he said.

A government official refuted that claim. "The rehabilitation phase was started some months ago," Ahmed Kamal, spokesman for the National Disaster Management Authority, told IRIN. A Sindh government official, who preferred anonymity, said a "desperate lack of funds" was holding up recovery in the province, but "progress was slowly being made".

Riaz Haq said...

Here's a Dawn piece on rising rural income disparities from high commodity prices:

..Is the current spike in the commodity prices benefiting everyone living in the villages, particularly in Punjab and Sindh which together contribute more than 90 per cent to the country’s agricultural output and where more than two-thirds of the country’s population lives?

“Whereas a large chunk of this income has ended up with the agriculture elite, there are signs that some of it has trickled down to the small farmers as well,” according to Waheed. Others argue that the transfer of additional cash has widened income disparity in the rural society even if many small farmers have also benefited from the soaring crop prices because the “trickle-down” has been uneven and limited.
-------
Ashfaque Hasan Khan, dean and principal of the NUST Business School who served as a special finance secretary in Musharraf government, says the income disparity in the rural areas has widened as a result of the rising crop prices.

“Only 40 per cent of the rural population is engaged in the crop sector and a vast majority of them are small landholders. This means only a small portion of population in the rural areas has gained from the increasing crop prices,” he elaborates.

In Punjab, for example, less than half of the rural population is engaged in the crop sector. Some 90 per cent of it falls in the category of small farmers with landholdings up to 12.5 acres.--------

“An overwhelming majority of small farmers buys inputs on credit and, thus, is forced to pay a much higher price than those who pay cash for these inputs,” claims Mughal. “Even if they have cash their cost has gone up manifold, offsetting the gains of
higher crop prices.”

There are people who are of the view that smaller landholding have helped a more equitable distribution of additional incomes among the growers in Punjab compared to the farmers in Sindh where landholdings are very large.

Salman Shah, former finance minister, says the additional incomes generated by higher commodity prices have been distributed more evenly in Punjab compared to Sindh.
-----------
Shah is of the opinion that the landless labour in the villages has also benefitted from the new economic prosperity being experienced in rural areas and their wages have also gone up. But he says only a comprehensive study of the impact of commodity prices on the rural society could give answers to many questions.
--------
Many fear that the growing agricultural commodity prices may rob the farmers of the incentive to boost their productivity. Mughal says the rising prices and decreasing productivity is not good for the economy.

“Our productivity per acre has decreased significantly over the decades whereas India has successfully managed to substantially boost its crop output. The new wave of economic prosperity in the rural areas should not be allowed to take our focus off the need to boost productivity. That will be disastrous for the economy as well as people,” he warns.

While the soaring prices have brought a semblance of prosperity to the rural areas, it has added to woes of the urban population where poverty levels are rising and the quality of life suffering. The Consumer Price Index (CPI) has increased by 55 per cent over the last three years whereas salaries have not risen accordingly, according to Waheed.

“The urban population that relies on manufacturing growth and trading, or earns fixed salaries has generally experienced a deterioration in its standard of living, and is not happy about it. Large scale manufacturing growth has declined by about one per cent over the last three years whereas the wholesale trade has risen by a marginal four per cent,” he says, underlining the impact of rising price inflation on the urban consumers

Riaz Haq said...

Here's an interesting 2004 ADB assessment of Pakistan's rural economy:

....
Despite recent good macroeconomic performance, Pakistan continues to have high levels of poverty. Poverty estimates of 2000-2001, indicate that around one third of the population lives at or below the poverty line, with poverty being concentrated in rural areas. Available international literature indicates a strong and clear-cut relationship between agricultural growth and poverty reduction. The agricultural sector is a major determinant of the overall economic growth and well being in Pakistan, contributing 23 percent of total GDP; employing 42% of the total employed labor force; and accounting for nearly 9 percent of the country's export earnings. Thus, high agricultural growth is essential for significant poverty reduction in Pakistan.

However, in addition to the direct impact of agriculture growth on poverty reduction, there is also a much larger indirect effect through the linkages between agriculture and non-farm growth in rural areas. Non-farm growth is closely linked with agricultural growth since peasant farmers spend a large portion of their incremental income on locally produced non-agricultural goods thus generating employment and incomes in the adjoining areas. The increased demand for non-farm goods leads to a much larger increase in employment, which is a key vehicle for poverty reduction. Available information also points to the increasing importance of non-farm incomes for rural households. The five major sources of income in rural Pakistan are wages/salaries, transfer income, crop income, rental income and livestock income. Livestock is a particularly important source of income for the poor with a majority of poor households, especially the landless and small landowners, dependent on this sector.

In the light of increasingly limited income generating opportunities in the on-farm sector, poor households are increasingly turning to the non-farm sector as a key source of livelihood. In addition, there appears to be a higher incidence of vulnerability to falling into and remaining in poverty, among households which are dependent solely on agriculture. Rural areas that are well connected with the urban areas seem to be more prosperous, in part because the lack of employment opportunities in rural areas results either in labor reallocation or migration. In both cases, human capital plays a positive and significant role and the poorest of the poor neither possess the human capital nor have the resources to migrate. This vulnerable group needs special attention.

Pakistan's Poverty Reduction Strategy Paper outlines four pillars for accelerating growth and reducing poverty. Pillar One focuses on accelerating economic growth, pillar Two on improving governance and devolution, Pillar Three on investing in human capital, and Pillar Four on targeting the poor and vulnerable. Pillars One and Four focus on generating employment, especially in the rural areas, small and medium industries and micro-finance. There are also very strong linkages between income poverty and the other two PRSP Pillars. For example, access to justice, successful devolution, increasing the human capital of the poor, and ensuring effective safety nets are also central factors for increasing the incomes of poor people.
---
To increase incomes of poor households and build social capital, the ADB is funding a Micro-Finance Sector Development Program. As part of its objective to efficiently provide financial and social services to the poor, the ADB assisted with the establishment of the Khushali Bank, a public-private enterprise in partnership with NGOs, under this program. The ADB is also engaged in several rural development projects such as the Malakand, Federally Administered Tribal Areas, Bahawalpur, and Dera Ghazi Khan Rural Development Projects, to enhance household incomes, particularly for the smallholder and tenant farmers, and the landless.....

Riaz Haq said...

Here's a Wall St Journal report on World Well-being Gallup survey that puts Pakistanis ahead of Indians:

The results of the 2010 global wellbeing survey of 124 nations conducted by Gallup reveals that only about 21% of people consider themselves “thriving,” the highest level of wellbeing.

Around 1000 people over the age of 15 were asked whether in their lives they felt they were “thriving,” “struggling,” or “suffering,” measured on a scale from zero to 10. Anything seven or above was considered as thriving, according to the methodology used in the study.

India fared worse than average. Based on the findings, it ranked 71st in the list, with only 17% of respondents reported as thriving. (This was in line with the broader Asian average).

India’s neighbor Pakistan, despite its more volatile political and economic situation, ranked 40th, with 32% of the people describing themselves as thriving.

This category means more than just general wellbeing, and includes better overall health, measured in terms of fewer sick days, less stress or sadness, and more happiness and respect.

Alarmingly, in India 64% of people saw themselves as struggling. The survey describes people who fall into this category as being more stressed, more concerned about their economic wellbeing and less healthy, in terms of their lifestyle and eating habits.

The Danish lead the wellbeing list with 72% falling into the thriving category, while Chad ranked lowest, with only 1% describing themselves as such. Americans ranked average, with 59% of them thriving and only 3% suffering.

China, despite its impressive GDP figures, didn’t do that well, with only 12% of people describing themselves as thriving.

While there were gaps between developed and developing countries, a lot also depended on a country’s political situation and natural disasters, the survey shows. For instance, Haiti, where the 2010 earthquake claimed the lives of up to 250,000 people, those in the thriving range are only 2%.

Overall, the survey findings reveal how GDP figures alone are not sufficient to measure a country’s wellbeing. (This comes close to Gross National Happiness, which the Himalayan kingdom of Bhutan famously adopted in the 1970s.)

“As the uprisings in Tunisia and Egypt showed earlier this year, leaders should not rely on GDP alone as an indicator of how well their countries and their citizens are doing. Monitoring and improving behavioral economic measures of wellbeing are important to helping leaders better the lives of all their residents,” the survey reveals.

Consultant of psychiatry at New Delhi’s Moolchand Medcity, Dr. Jitendra Nagpal held a similar view. In an emailed response to India Real Time, Dr. Nagpal also agreed that nations whose people claim to be happy may or may not be economically sound. Dr. Nagpal added that happiness is more about the ability to do what you want to do, rather than fulfilling life’s basic needs.

Riaz Haq said...

Asian Development Bank is cautioning that rising food and fuel prices is threatening economic growth in Asia, according to the BBC:

Soaring food and fuel prices are threatening to derail growth in Asian economies, according to a report by the Asian Development Bank (ADB).

The bank has warned that if food and fuel prices continue to surge, economic growth in the region could be reduced by up to 1.5% this year.

According to the bank, domestic food prices have risen at an average of 10% in many Asian economies this year.

Oil prices have also surged because of the crisis in the Middle East.

The bank said that a combination of these two factors has been a major setback for growth in Asian economies.

Extreme poverty

While Asian economies have emerged strong from the global financial crisis, the rising cost of living has become a big concern in the region.

The ADB has warned that the recent surge in food price is threatening to push millions of Asians into extreme poverty.

According to the bank's study a 10% rise in domestic food prices may result in almost 64m people being pushed into extreme poverty.

According to the ADB's chief economist, Changyong Rhee, "for poor families in developing Asia, who already spend more than 60% of their income on food, higher prices further reduce their ability to pay for medical care and their children's education."

"Left unchecked, the food crisis will badly undermine recent gains in poverty reduction made in Asia." he added.
Export bans

The bank also warned that food prices will remain volatile in the short term.

It said that while there have been production shortfalls in some countries because of bad weather, prices have also been pushed up by other factors, such as the weakening US dollar and rising fuel costs.

This has resulted in many countries imposing export bans on their produce, a practise that is not helping the cause, according to the bank.

"To avert this looming crisis it is important for countries to refrain from imposing export bans on food items, while strengthening social safety nets," said Dr. Rhee.

"Efforts to stabilize food production should take centre stage, with greater investments in agricultural infrastructure to increase crop production and expand storage facilities,"

Dr Rhee added that these measures will ensure that food produce is not wasted, thus helping to keep prices in check.

Riaz Haq said...

Here are a few excerpts from Wall Street Journal story titled "India's Boom Bypasses Rural Poor":


The Mahatma Gandhi National Rural Employment Guarantee Scheme (NREGA), as the $9 billion program is known, is riddled with corruption, according to senior government officials. Less than half of the projects begun since 2006—including new roads and irrigation systems—have been completed. Workers say they're frequently not paid in full or forced to pay bribes to get jobs, and aren't learning any new skills that could improve their long-term prospects and break the cycle of poverty.

In Nakrasar, a collection of villages in the dusty western state of Rajasthan, 19 unfinished projects for catching rain and raising the water table are all there is to show for a year's worth of work and $77,000 in program funds. No major roads have been built, no new homes, schools or hospitals or any infrastructure to speak of.

At one site on a recent afternoon, around 200 workers sat idly around a bone-dry pit. "What's the big benefit?" said Gopal Ram Jat, a 40-year-old farmer in a white cotton head scarf. He says he has earned enough money through the program—about $200 in a year—to buy some extra food for his family, but not much else. "No public assets were made of any significance."

Scenes like this stand in stark contrast to India's image of a global capitalist powerhouse with surging growth and a liberalized economy. When it comes to combating rural poverty, the country looks more like a throwback to the India of old: a socialist-inspired state founded on Gandhian ideals of noble peasantry, self-sufficiency and a distaste for free enterprise.

Workers in the rural employment program aren't allowed to use machines, for example, and have to dig instead with pick axes and shovels. The idea is to create as many jobs as possible for unskilled workers. But in practice, say critics, it means no one learns new skills, only basic projects get completed and the poor stay poor—dependent on government checks.
----------
Others said the ban on mechanization limits the scope of projects to gravel roads and pits to capture water. Such programs last for only a couple of years and do little to improve village life. Balveer Singh Meena, a 31-year old farmer in the village of Mohanpura in northern Karauli, ekes out a living growing wheat and chickpeas. He eats a single Indian flat-bread known as roti and vegetables for every meal. By selling what little excess food they produce, Mr. Meena and his three brothers are able to make just over $400 per year, which must stretch to pay for an extended family of eight people.
-----------
But shortly after the program started in February 2006, workers complained that local leaders were docking pay and asking for money in return for job cards. The central government responded in 2008 by sending money directly to workers' bank accounts. But according to workers and auditors, the money takes so long to reach those accounts—up to 45 days—that workers are often forced to accept lesser cash payments from local leaders on the condition that they repay the money at the full amount.

Audits of the program in the southern state of Andhra Pradesh found that about $125 million, or about 5% of the $2.5 billion spent since 2006, has been misappropriated. Some 38,000 local officials were implicated, and almost 10,000 staff lost their jobs.

In one study of eastern Orissa state, only 60% of households said a member had done any of the work reported on their behalf. Earlier this month, the central government gave the green-light for the Central Bureau of Investigation, India's top federal criminal investigation body, to launch a probe into alleged misuse of program funds in Orissa....

Riaz Haq said...

Here's an AFP report on Pakistani tax dodgers:

ISLAMABAD — Pakistan is defying mounting Western pressure to end a giant tax dodge with fewer and fewer people contributing to government coffers, spelling dire consequences for a sagging economy.

Tax is taboo in Pakistan. Barely one percent of the population pays at all, as a corrupt bureaucracy safeguards entrenched interests and guards private wealth, but starves energy, health and education of desperately needed funds.

Less than 10 percent of GDP comes from tax revenue -- one of the lowest global rates and worse than in much of Africa, say economists.

Federal Board of Revenue (FBR) spokesman Asrar Rauf said 1.9 million people paid tax in 2010, less than the year before, despite 3.2 million being registered to pay -- itself a drop in the ocean of a population of 180 million.

As a result, Pakistan's fiscal deficit widened from 5.3 percent to 6.3 percent of GDP in 2010, the Asian Development Bank said this month, knocking 2011 growth figures to 2.5 percent and predictions for 2012 to 3.2 percent.
---------
This month visiting British Prime Minister David Cameron pressed the point home, saying aid increases were a hard sell when: "Too many of your richest people are getting away without paying much tax at all and that's not fair".
---------
The IMF last May halted a $11.3 billion assistance package over a lack of progress on reforms, principally on tax.

And despite a flurry of meetings, no new loan has been agreed in the run-up to the IMF and World Bank's Spring meetings.

An IMF review mission is due to visit on May 8. "Consensus is building, we have almost reached agreement (on reform)," one government official told AFP, but gave no details.
----------
What would really work, say analysts, would be scrapping exemptions that serve entrenched interests, such as a 50 percent tax discount on sugar and a gate on taxing agricultural income that largely exempts wealthy feudal landowners.

But stalemate and vested interests have made that impossible.

"There's talk of early elections. One has a brittle coalition. A lot of the reform areas that need to be dealt with have very well entrenched and powerful lobbies that are making the case against it," said a finance ministry official.

As it is, the tiny minority who contribute say they carry a disproportionate tax burden, for which they get nothing in return.

Pakistan suffers from an awful energy crisis, yet government spending on electricity subsidies last year reached just under one percent of GDP, health spending 0.5 percent and education two percent, said the finance ministry.

According to a 2009 study by the Pakistan Institute of Legislative Development and Transparency, the average member of parliament was worth $900,000 and the wealthiest $37 million.

Those figures stand against estimates that a quarter of the population lives below the poverty line and that GDP per capita stands at $2,400.

"No one trusts the government," says industrialist Mohammad Ishaq, former vice president of the chamber of commerce in the northwestern province of Khyber Pakhtunkhwa.

"Without social welfare and with this corruption, nobody is ready to pay tax... in return one gets nothing -- no health, education, social security."

Eunuchs have been appointed tax collectors in Karachi, the financial capital, on the understanding that a visit from the maligned transgender group would embarrass people into paying up.

But former finance minister Salman Shah said tax evasion was inevitable because of corruption within the FBR, which employs 23,000 people nationwide.

"There's a big mistrust of the tax authority itself. That's why a self-assessment scheme came in," said Shah.
.............

Riaz Haq said...

Australian wheat exports are set to face stiffer competition as Pakistan, which resumed exports after three years, pours grain from its new crop into the market and offers competitive prices to millers in Asia, the Middle East and Africa, according The Express Tribune:

Overseas shipments by Australia, the grain’s fourth largest exporter, have already suffered from the country’s strengthening currency, while a return of Black Sea cargoes, after last year’s drought, promises to worsen the situation.

“There is around $80 spread between the two origins, which makes it attractive for millers to take Pakistani wheat, even though Australian is of better quality,” said a Singapore-based grains trader.

Australian wheat sales have slowed in the past few weeks as a strengthening currency has lifted prices for overseas buyers, while Pakistan has sold some one-and-a-half million tons into the global market since it resumed overseas sales.

Pakistan is making inroads into Australia’s traditional strongholds of Indonesia and Malaysia, while striking deals with millers in Bangladesh, the United Arab Emirates and Tanzania at prices between $300 and $310 a ton, free on board. This compares to Australian prime wheat (APW) being offered around $380 a ton.



http://tribune.com.pk/story/165997/pakistani-wheat-to-dent-australias-exports/

Riaz Haq said...

Overview of Livestock, Dairy, Fisheries & Poultry Sectors in Pakistan:

1 Dairy Sector
With an estimated 33 billion litres of annual milk production from 50 million animals, managed by
over 8 million farming households, Pakistan is the 5th largest milk producing country in the world
Livestock sector contributed approximately 53.2 percent of the agriculture value added and 11.4
percent to national GDP during 2009 – 10
The milk economy in terms of value is over 27% of the total Agriculture sector
Additional potential of 3 billion litres of milk, with a growth rate faster than any other sector
Of the total 33 billion litres of milk produced, 71% is rural based and 29% is urban based
Of the total production, around 3% is processed and marketed through formal channels
40% Supply and Demand gap exists in Pakistan.

2 Livestock Sector
Livestock sector contributed approximately 53.2 percent of the agriculture value added and 11.4
percent to national GDP during 2009?10.
Gross value addition of livestock at current factor cost has increased from Rs. 1304.6 billion
(2008?09) to Rs. 1537.5 billion (2009?10) showing an increase of 17.8 percent as compared to the
previous year.
The population growth, increase in per capita income and export revenue is fuelling the demand for
livestock and livestock products.
Pakistan earned USD717 million from leather exports in FY09 and a meagre USD96 million from meat
exports.
Poultry sector is one of the organized and vibrant segments of agriculture industry of Pakistan.
This sector generates employment (direct/indirect) and income for about 1.5 million people.
Poultry meat contributes 23.8 percent of the total meat production in the country
The meat demand for Pakistan Domestic market is growing at a rate of 2.73% for Beef, 2.90 % for
mutton and 6.10 % for poultry.
This domestic demand is growing to meet the population growth, human need for protein and
calcium, migration of population from rural to urban and the fluctuating growth due to per capita rise
in income.
-------
3 Fisheries Sector

During the period July?March 2009?10 the total marine and inland fish production was estimated
952,735 Million tons out which 667,762 Million tons were marine production and the remaining catch
come from inland waters.
A number of sites have been earmarked on an area of 20,000 acres of land in Districts Thatta &
Badin along the coast.
Immense potential exists to start commercial scale fish/shrimp farming in Sindh.

4 Poultry Sector
Poultry is an important sub – sector of agriculture and has contributed enormously to food production by
playing a vital role in the domestic economy.
Poultry industry can broadly be divided into three
groups, viz. hatchery, poultry farming and feed sectors. This sector generates employment and income
for about 1.5 million people in Pakistan. Its contribution in agriculture growth is 4.81% and in Livestock
growth is 9.84%, whereas, the total poultry meat contributes to 23.8% of the total meat production in
the country.
Pakistan, with a population of 170 Million people, has gone through a sizeable growth in the production
of poultry meat and eggs. Per capita availability went up from 23 in 1991 to 46 eggs in 2009 and poultry
meat availability increased from 1.48kg to 2.88 kg during the same period. In our Country per capita
consumption of meat is only 7 KG and 60-65 eggs annually. Whereas developed world is consuming 41
KG meat and over 300 Eggs per capita per year. According to Industry sources there is capacity of 5,000
Environmental Control Houses in Pakistan and currently only 2,500 houses are working.
The total Poultry population in Pakistan is approximately 610 Million.

Riaz Haq said...

Here are a few excerpts from an Express Tribune story on Pakistan's growing meat exports:

Halal meat is also one of the fastest growing segments within the global food trade. Between 2001 and 2009, the global beef trade grew at an average of 10.4 per cent to reach just over $30 billion, according to data available from the UN Food and Agriculture Organisation (FAO). However, the market for halal beef imports in the Middle East and Southeast Asia alone grew by over 18.2 per cent to reach just under $2 billion a year during that same period.

Pakistan’s market share within this rapidly growing market is a paltry 2.9 per cent. However, Pakistani exporters seem to be determined to make up for lost time. In the six years ending in 2009, Pakistani red meat exports have risen by an average of 68.6 per cent a year, though admittedly from a very low base.

Yet with the advent of more and more new players, and with surprisingly robust support from the government, Pakistan is on the verge of becoming one of the largest players in the meat trade, at least within the Middle East and Southeast Asia.

Perhaps the single biggest advantage that Pakistan has is proximity. The country is closer to the Middle East than any of its biggest rivals in the market. The three countries with the largest market shares are Australia, Brazil and India, each of which has considerably higher shipping costs to these export markets compared to Pakistan.
-----------
“The Brazilian animal is exactly the same as most of our breeds of cattle. The quality of meat is also the same. The only difference is their ability to market their meat better than us,” said Namazi. He argues that Pakistan can easily displace Brazil as the Middle East’s leading meat supplier.

Iran, in particular, seems to be keen for Pakistani beef. The Iranian government has invested 50 per cent of the capital in the Lahore Meat Company, a dedicated abattoir that will export meat to Iran.

Australian beef, with a powerful branding effort and a larger source animal, has a specific niche market that industry experts believe will be difficult for Pakistan to compete with in the medium term.

India, the one country that could completely destroy Pakistan’s potential in the meat trade, has placed itself outside the global beef market after a 2005 Indian Supreme Court ruling that upheld a ban on cow slaughter as constitutional.

Indian exporters only sell carabeef – meat from buffalo – which is considered inferior and commands lower prices and margins. Nevertheless, Indian exporters dominate the market in Malaysia for the lower end of beef, while Australians command the higher end.

“Malaysia is ripe for a middle-market meat supplier from Pakistan,” said another expert in the meat business. Malaysia has had a free-trade agreement with Pakistan since 2007.

Several companies from Pakistan have entered the red meat export business and even more are in the process of entering the market. The oldest and one of the most successful of these is PK Livestock, a Karachi-based abattoir which has been exporting red meat to the Middle East for over two decades.

Zenith, a Lahore-based exporter, became the first Pakistani company to sell beef to Malaysia, after the Malaysian government relaxed its regulatory requirements for Pakistani exporters.

Others, such as OMC and the Al Shaheer Corporation, have also successfully begun exporting to the Middle East and are aggressively seeking regulatory approvals for markets further afield in Southeast Asia.

Pakistan’s total meat exports may come close to $100 million in 2011 and could surpass the $500 million mark in about five years, according to projections by ASI Partners.
------
Despite having the eighth largest herd of cattle and the third largest herd of goats in the world, Pakistan’s animal population is very scattered, which makes procurement of the animals for the abattoir expensive...

Riaz Haq said...

Oxfam is warning that food prices will more than double by 2030, according to BBC:

The prices of staple foods will more than double in 20 years unless world leaders take action to reform the global food system, Oxfam has warned.

By 2030, the average cost of key crops will increase by between 120% and 180%, the charity forecasts.

Half of that increase will be caused by climate change, Oxfam predicts, in its report Growing a Better Future.

It calls on world leaders to improve regulation of food markets and invest in a global climate fund.

"The food system must be overhauled if we are to overcome the increasingly pressing challenges of climate change, spiralling food prices and the scarcity of land, water and energy," said Barbara Stocking, Oxfam's chief executive.
Women and children

In its report, Oxfam highlights four "food insecurity hotspots", areas which are already struggling to feed their citizens.

* in Guatemala, 865,000 people are at risk of food insecurity, due to a lack of state investment in smallholder farmers, who are highly dependent on imported food, the charity says.
* in India, people spend more than twice the proportion of their income on food than UK residents - paying the equivalent of £10 for a litre of milk and £6 for a kilo of rice.
* in Azerbaijan, wheat production fell 33% last year due to poor weather, forcing the country to import grains from Russia and Kazakhstan. Food prices were 20% higher in December 2010 than the same month in 2009.
* in East Africa, eight million people currently face chronic food shortages due to drought, with women and children among the hardest hit.

The World Bank has also warned that rising food prices are pushing millions of people into extreme poverty.

In April, it said food prices were 36% above levels of a year ago, driven by problems in the Middle East and North Africa.

Oxfam wants nations to agree new rules to govern food markets, to ensure the poor do not go hungry.

It said world leaders must:

* increase transparency in commodities markets and regulate futures markets
* scale up food reserves
* end policies promoting biofuels
* invest in smallholder farmers, especially women

"We are sleepwalking towards an avoidable age of crisis," said Ms Stocking.

"One in seven people on the planet go hungry every day despite the fact that the world is capable of feeding everyone."

Among the many factors driving rising food prices in the coming decades, Oxfam predicts that climate change will have the most serious impact.

Ahead of the UN climate summit in South Africa in December, it calls on world leaders to launch a global climate fund, "so that people can protect themselves from the impacts of climate change and are better equipped to grow the food they need".

Riaz Haq said...

Here's a report on Pakistan trying to collect taxes from middlemen (arti) on their profits:

The government has imposed a 10 per cent advance tax on commission, or brokerage fee, earned by the agents of cultivators or farmers and a withholding tax at a rate of 1.5 per cent on the sale of cotton seed, rice and edible oils.

According to new taxation measures announced by the government on Saturday, the new taxes will not be applicable to growers who sell their produce, a circular of the Federal Board of Revenue (FBR) said.

The circular stated that the withholding tax on sale/purchase of seed cotton will be deducted by withholding agents.

“The withholding agent shall not deduct withholding tax on purchase of agriculture produce which is directly sold by a grower of the produce,” the circular added.

The 1.5 per cent withholding tax is being levied on profits earned by the middlemen in the business of buying produce and selling it to the markets at higher rates.

To ensure that the withholding tax is collected, the FBR has directed that the buying agent will have to make three copies of the certificate and give one to the grower, submit the second copy in office of tax commissioner of Inland Revenue and keep the third copy for own record.._

The FBR has also issued a format for the farmers, describing their sale of sugarcane, wheat, rice or cotton to the buyer, which also explains the details of the agricultural land the produce belongs to and the date of sale.

While the circular also states that “in case sale of seed cotton or other agriculture produce is made by a grower/cultivator through a commission agent, then advance tax is collectible under section 123 of the Ordinance at rate of 10 per cent of the gross commission income of the commission agent”.

However, the farmers have rejected the new initiative of the FBR and the farmers’ associations have come up with plans to organise a demonstration in Multan on April 5.

Agriculturists have been accusing the government of adopting policies that would only hurt the small- and mid-level farmers and these measures are being taken to protect the large land owners who should be paying income tax on agriculture.

Calling the new measures as indirect tax on the agricultural sector, the President of Pakistan Agriculture Forum Ibrahim Mughal talking to Dawn said the government was bent upon destroying all the productive sectors and after imposing 17 per cent General Sales Tax on agriculture inputs including pesticides, fertiliser and tractors through presidential ordinance on March 15, 2011, the new move will have more serious impact on the overall agriculture economy.

Mr Mughal said that new measures would affect the overall agricultural sector and its productivity which would reverse economic cycle for the small and mid-level growers.

“In March government imposed over Rs80 billion taxes on agriculture sector in form of GST and advance taxes,” he said adding that around 80,000 tractors are being purchased by the growers per annum and after the imposition of 17 per cent sales tax, they will have to pay a total of Rs8 billion annually more than the earlier price.

Riaz Haq said...

Here's the Wall Street Journal report on Pakistan's 2011-12 budget:

..Finance Minister Abdul Hafeez Shaikh forecast a budget deficit of 4%, down from 6% in the current fiscal year, with economic growth rising to 4.2% versus 2.5%. In the most noteworthy new measure, Mr. Shaikh said the government was ending sales-tax exemptions on about 500 items, which will bring in fresh revenues of about 200 billion Pakistani rupees.

But Mr. Sheikh at the same time reduced the general sales tax to 16% from 17% and failed to bring in bold new measures to increase the state's haul of income tax from the country's wealthiest citizens.

"This is a business-as-usual budget. I was expecting it to be a reformist budget," said Ashfaque Khan, dean of the National University of Sciences and Technology Business School in Islamabad.
----
U.S. Secretary of State Hillary Clinton, urged by the IMF, has publicly called on Pakistan in the past year to raise taxes on its richest citizens. The IMF itself has since last year withheld the disbursement of $3.5 billion in funding for Pakistan—the final tranche in a $11.3 billion loan package—due to failures to significantly raise taxes. The IMF has urged Pakistan to reform its sales tax to include services but this hasn't happened.

The World Bank and the Asian Development Bank also have suspended budget-support funding which amounts to about $1 billion.

Mr. Shaikh failed to announce announce any new measures to tax agricultural income, which remains exempt. The government says the issue falls under the purview of provincial governments. Many of Pakistan's richest people are feudal landlords who made their fortunes from agriculture.

Mr. Shaikh, who was booed by the opposition, which at moments almost drowned out the delivery of his budget speech, said the government had identified 2.3 million wealthy citizens who currently pay no tax and whom it will pursue. He gave no further details.
----
To fund its gaping budget deficit, the state has in the past year increasingly relied on borrowing from the central bank, essentially printing money and stoking inflation to 13%. Mr. Shaikh said the government had recently cut back on borrowing from the central bank and would aim to get inflation back to single digits.
-----
By borrowing so heavily from its own banking system, the government has choked off the supply of credit to private businesses. Foreign investors—already nervous because of the precarious security situation in Pakistan—have largely shunned the country.

That has stunted economic growth, estimated at 2.5% for the year ending June 30, which is insufficient to create enough jobs for the two million new job seekers coming onto the market each year. The IMF says the country needs 8% annual economic growth to create enough work. India's economy, by comparison, in the year ended March 31 grew 8.5%.

For now, Pakistan is unlikely to plunge back into a balance-of-payments crisis of the kind that forced it to call in the IMF in November 2008. That's because exports are doing well, fueled by high global agriculture prices for crops like cotton. The country is running a small current-account surplus, compared to its usual deficit. The currency, the Pakistani rupee, has been stable for the past few months and Pakistan's foreign-exchange reserves are about $14 billion, or enough to cover four months of imports.

Still, oil-price rises this year is likely to increase Pakistan's import costs in the months ahead, which could send the current-account back into deficit. The poor state of government finances, if unchecked, could further undermine foreign confidence in months ahead, donors and analysts say.


http://online.wsj.com/article/SB10001424052702304563104576363432170384892.html

Riaz Haq said...

Here's Frontier Post on Pakistan's "dismal" economic performance in 2010-11:

The latest Economic Survey of Pakistan, as released by Finance Minister Dr Abdul Hafeez Sheikh at a news conference on Thursday, has portrayed a dismal picture of the performance of sectors key to the national economy; failing to meet most of the targets set for 2010-11, including the vital Gross Domestic Product growth that was set to achieve a target of 4.5 per cent and grew only 2.4 per cent in real terms during the outgoing fiscal. As for the budgetary deficit, this may also swell from an estimate of 5.3 per cent to around 6 per cent despite claims of macroeconomic development and “putting the economy back on track”. One significant portrayal is the rising inflationary trend that now stands at 14.1 per cent and food inflation is now touching a whooping 18.4 per cent despite bumper wheat and rice crops. This factor has sent the middle classes and the poor reeling under escalating cost of living making their life miserable. The fact that more inflation is coming from hike in food prices is detrimental to poverty alleviation efforts. The poor GDP growth mainly contributed by services sector (53.3 per cent), agricultural sector (25.8 per cent) and industrial sector (20.9 per cent), is because agriculture gained only by 1.2 per cent and manufacturing sector by 1.71 per cent.There seems a little improvement in collection revenues by 1.71 per cent. The government collected a revenue amounting to Rs1026.5 billion in full fiscal of 2009-10 and this amount has now posted an encouraging Rs1156 billion up to March 2011. Similarly, there is no addition to foreign debt that stands at $55.9 billion as in the previous financial year. But debt servicing has cost higher this fiscal — $6.94 billion as against $5.78 billion in 2009-10. Remittances from abroad also rose to $9.1 billion as against $7.3 billion in the previous fiscal. So is the case of foreign exchange reserves which showed a ceiling of $17.1 billion against $15.04 billion in 2009-10. However, for obvious reason of ongoing terrorist attacks, foreign direct investments have come down $1.49 billion as against $1.6 billion the previous fiscal. But it is not understandable how foreign direct investment was higher than the outgoing fiscal when the dangers of the war on terror and uncertain internal security were no different from the previous financial year. There is no explanation to this situation in the latest Economic Survey of Pakistan. One conspicuous data missing from the document was that of poverty. The finance minister defended the absence of how many more people have slipped down the poverty line (estimated on the basis of an income of less than one US dollar a day) during 2010-11 pleading that the poverty survey was still in progress (understandably for the use of disbursement of cash under the Benazir Income Support Programme) and will be issued as and when completed. In fact such a data to portray the extent of abject and absolute poverty in the country has not been made available and, obviously, no poverty survey has been in hand for six years. However, poverty was recorded at 35.4 per cent in 2000-01 and the Musharraf’s dictatorial regime claimed five years later that it had come down to 22.3 per cent. All factors like constantly rising prices of food and other essential commodities and utility bills owing to frequent raise in power tariff and prices of petroleum products, besides other socio-economic aspects, some more millions must have found themselves reeling under the poverty line.The survey tells a story of economic failures and not meeting most of the targets for the fiscal 2010-11. Even a tight-fisted fiscal discipline, forced by the State Bank of Pakistan, failed to prevent widening deficit and mounting inflation that ultimately shrank capital formation substantially. ....

Riaz Haq said...

Here are some excerpts from an Op Ed in The Hindu on growing disconnect between mass media and mass reality:

•The mass reality in India (which has over 70 per cent of its people living in the rural areas), is that rural India is in the midst of the worst agrarian crisis in four decades. Millions of livelihoods in the rural areas have been damaged or destroyed in the last 15 years as a result of this crisis, because of the predatory commercialisation of the countryside and the reduction of all human values to exchange value. As a result, lakhs of farmers have committed suicide and millions of people have migrated, and are migrating, from the rural areas to the cities and towns in search of jobs that are not there. They have moved towards a status that is neither that of a ‘worker' nor that of a ‘farmer.' Many of them end up as domestic labourers, or even criminals. We have been pushed towards corporate farming, a process in which farming is taken out of the hands of the farmers and put in the hands of corporates. This process is not being achieved with guns, tanks, bulldozers or lathis. It is done by making farming unviable for the millions of small family farm-holders, due to the high cost of inputs such as seed, fertilizer and power, and uneconomical prices.
•India was ranked fourth in the list of countries with the most number of dollar billionaires, but 126th in human development. This means it is better to be a poor person in Bolivia (the poorest nation in South America) or Guatemala or Gabon rather than in India. Here, some 83.6 crore people (of a total of 110-120 crore) in India survive on less than Rs.20 a day.
•Eight Indian States in India are economically poorer than African states, said a recent Oxford University study. Life expectancy in India is lower than in Bolivia, Kazakhstan and Mongolia.
•According to the National Sample Survey Organisation, the average monthly per capita expenditure of the Indian farm household is Rs.503. Of that, some 55 per cent is spent on food, 18 per cent on fuel, clothing and footwear, leaving precious little to be spent on education or health.
•A report of the Food and Agriculture Organisation of the United Nations shows that between 1995-97 and 1999-2001, India added more newly hungry millions than the rest of the world taken together. The average rural family is consuming 100 kg less of food than it was consuming earlier. Indebtedness has doubled in the past decade. Cultivation costs have increased exorbitantly and farming incomes have collapsed, leading to wide-scale suicides by farmers.
•While there were 512 accredited journalists covering the Lakme India Fashion Week event, there were only six journalists to cover farmer suicides in Vidharbha. In that Fashion Week programme, the models were displaying cotton garments, while the men and women who grew that cotton were killing themselves at a distance of an hour's flight from Nagpur in the Vidharbha region. Nobody told that story except one or two journalists, locally.
Is this a responsible way for the Indian media to function? Should the media turn a Nelson's eye to the harsh economic realities facing over 75 per cent of our people, and concentrate on some ‘Potemkin villages' where all is glamour and show business? Are not the Indian media behaving much like Queen Marie Antoinette, who famously said that if people had no bread, they should eat cake.
No doubt, sometimes the media mention farmers' suicides, the rise in the price of essential commodities and so on, but such coverage is at most 5 to 10 per cent of the total. The bulk of the coverage goes to showing cricket, the life of film stars, pop music, fashion parades, astrology…

http://www.hindu.com/2011/06/04/stories/2011060455071000.htm

Riaz Haq said...

Here's the intro to an interview of Smita Narula, faculty director of the Center for Human Rights and Global Justice at New York University Law School, co-author of the report, "Every Thirty Minutes: Farmer Suicides, Human Rights and the Agrarian Crisis in India" as published by Democracy Now on Indian farmers plight:

A quarter of a million Indian farmers have committed suicide in the last 16 years—an average of one suicide every 30 minutes. The crisis has ballooned with economic liberalization that has removed agricultural subsidies and opened Indian agriculture to the global market. Small farmers are often trapped in a cycle of insurmountable debt, leading many to take their lives out of sheer desperation. We speak with Smita Narula of the Center for Human Rights and Global Justice at New York University Law School, co-author of a new report on farmer suicides in India.
---
SMITA NARULA: Good morning.

AMY GOODMAN: Talk about this report that you are just releasing today.

SMITA NARULA: Our major finding for this report is that all the issues that you just described are major human rights issues. And what we’re faced with in India is a human rights crisis of epic proportions. The crisis affects the human rights of Indian farmers and their family members in extremely profound ways. We found that their rights to life, to water, food and adequate standard of living, and their right to an effective remedy, is extremely affected by this crisis. Additionally, the government has hard human rights legal obligations to respond to the crisis, but we’ve found that it has failed, by and large, to take any effective measures to address the suicides that are taking place.

AMY GOODMAN: I mean, this number is unbelievable. Thirty—every 30 minutes, an Indian farmer commits suicide?

SMITA NARULA: And that’s been going on for years and years. And what these intense numbers don’t reveal are two things. One is that the numbers themselves are failing to capture the enormity of the problem. In what we call a failure of information on the part of the Indian government, entire categories of farmers are completely left out of the purview of farm suicide statistics, because they don’t formally own title to land. This includes women farmers, Dalit, or so-called lower caste farmers, as well as Adivasi, or tribal community farmers. In addition, the government’s programs and the relief programs that they’ve offered fail to capture not only this broad category, but also fail to provide timely debt relief and compensation or address broader structural issues that are leading to these suicides in the country....

http://www.democracynow.org/2011/5/11/every_30_minutes_crushed_by_debt

http://www.chrgj.org/publications/docs/every30min.pdf

Riaz Haq said...

Pakistan harvests bumper crop of wheat in spite of floods, reports Dawn:

ISLAMABAD: Pakistan is expected to produce at least 25 million tonnes of wheat in its 2010/11 crop, Finance Minister Hafiz Shaikh said on Friday, higher than the initial estimate.

“We are expecting that our wheat crop this year will cross 25 million tonnes,” he told reporters.

Industry officials had earlier feared the output would fall to 23.5 million tonnes against a target 25 million tonnes, after a decline in the area under wheat cultivation because of massive floods in 2010 and fertiliser shortages.

A food ministry official said good output was expected because of increased fertility in wheat-growing areas after the floods.

Pakistan produced a bumper crop of 23.8 million tonnes of wheat last year. The country consumes about 22 million tonnes a year. Harvesting of the 2010/11 crop is underway.

Asia’s third-largest wheat producer, Pakistan resumed wheat exports in January for the first time in three years after the government lifted a ban in December.

The three-year ban was lifted when the 2009/10 crop and carryover from the previous stocks led to market surplus.

Traders earlier hoped to export up to three million tones of wheat this year, but the quantity may now exceed that following new wheat output estimates.

The country had already exported or contracted to sell about 1.5 million tonnes of wheat so far.


http://www.dawn.com/2011/04/08/pakistan-sees-at-least-25-mln-t-wheat-from-201011-crop.html

Riaz Haq said...

Agriculturists expect substantial crop growth in financial year 2011/12 because of timely availability of water, according to The News:

General Secretary Sindh Abadgar Board, Syed Mehmood Nawaz Shah, told The News on Thursday that contrary to outgoing financial year, all crops are likely to record bumper output in 2011-2012 thanks to timely and sufficient availability of water.

He said that the problem is management of the upcoming bumper crops and they fear decline in prices as prices of cotton have gone down in the international market.

Pakistan Central Cotton Committee has set a target of 15 million bales this year. Cotton has a share of 6.9 percent in agriculture and 1.4 percent in GDP.

In 2010/11, major crops declined by four percent and farm sector recorded a modest growth of 1.2 percent.

Cotton and rice production remained low because of floods and rain, but wheat and sugarcane recorded growth, which saved the agriculture sector from negative growth.

Economic Survey of Pakistan 2010-11 said cotton was cultivated on an area of 2,689 thousand hectares, 13.4 percent less than last year (3,106 thousand hectares). The production is estimated at 11.5 million bales, lower by 11.3 percent over the last year’s production of 12.9 million bales and 17.9 percent less than the target of 14 million bales.

The reasons for decrease in production is loss in area under cultivation due to floods, rains, widespread attack of Cotton Leaf Curl Virus (CLCV) and sucking pest in core and non-core area, shortage of water due to canal closure during flood.

Shah said that CLCV attacked cotton in Punjab in the end of June, so this year they have sown early crop, whose results are still not known.

Sugarcane was cultivated on an area of 988,000 hectares, 4.8 percent higher than last year’s level of 943,000 hectares.

Sugarcane production for the year 2010-11 is estimated at 55.3 million tons as against production of 49.3 million tons last year, a rise of 12 percent.

Sugarcane is a major raw material for the production of white sugar and gur and is also a cash crop. Its share in value-added sector of agriculture and GDP is 3.6 percent and 0.8 percent, respectively.

Sources say that better market prices and timely payments by sugar mills encouraged farmers to grow more crop.

Area sown for rice is estimated at 2,365,000 hectares, 17.9 percent less than last year (2,883,000 hectares).

Rice has a share of 4.4 percent in agriculture and 0.9 percent in GDP. Pakistan grows high quality rice to meet both domestic demand and exports.

Rice production is likely to decline by 26 percent to 5 million tons in 2010-11 from 6.8 million tons last year, said a market source.

Rice export from Pakistan would be 2.6 million tons in FY2010-11 as compared with 3.8 million tons in 2009-10.

Rice productivity in Pakistan increased from the 1960s to the 1990s. Since then, it has seen a fall of about one percent per year. Therefore, it could not keep up the pace with growing demand, Ahmad Jawad, CEO of Harvest Trading told The News.

Major reasons for fall in rice production were floods and low market prices last year. Floods attacked mostly paddy growing areas in Sindh.

Area and production target of wheat for 2010-11 had been set at 9,045,000 hectares and 25 million tons, respectively. Wheat was cultivated on 8,805,000 hectares, showing a decrease of 3.6 percent over last year’s area of 9,132,000 hectares. However, a bumper wheat crop of 24.2 million tons has been estimated with 3.9 percent increase over the last year’s crop of 23.3 million tons.

Production of wheat increased due to timely fertiliser use and rainfall during pre-harvesting period.

Wheat is the main staple food for most of the population and largest grain source of the country. It contributes 13.1 percent to the value-added sector of agriculture and 2.7 percent to GDP.

Riaz Haq said...

Pak Suzuki Motors (PSMC) to gain from Punjab govt's yellow cab scheme, according to The News:

KARACHI: Pak Suzuki Motor Company (PSMC) stands to gain from the Yellow Cab Scheme announced by the government of Punjab in its budget for 2011/12, analysts said.

The provincial government has announced that a grant of Rs4.50 billion has been allocated for the scheme, which will partly finance 20,000 vehicles.

Contrary to the yellow cab scheme, the Nawaz Sharif government introduced in 1992/93, this scheme relies on locally-made vehicles.

‘Mehran’ and ‘Bolan’, the two most popular makes of Pak Suzuki, have been short-listed for the scheme.

The analysts said the ultimate beneficiary will be the PSMC, which has been suffering from appreciating yen, relaxation in import policy and production constraints since a tsunami-hit Japan.

Gross profit margin of the company has squeezed to mere two percent in 2010, which was around four percent a year back, they added.

Details of the scheme are yet to be unveiled, but it is expected that the vehicles would be 50 percent financed by the government of Punjab, while the buyer would have to pay the rest.

There are concerns of possible lack of transparency in financing.

Besides, there is a lack of clarity about the time period over which the scheme would be spread.

Furqan Punjani, an analyst at the Topline Research, said that there are possibilities that out of 20,000 only 12,000 to 15,000 units will go in the said scheme and the rest might fall victim to corruption.

An analyst at Arif Habib Research said that it is believed that PSMC’s car volumes would spike by nine percent and 16 percent in CY11E and CY12F.

Consequently, the earning pershare (EPS) of the company would improve by 75 percent and 116 percent in CY11E and CY12F, respectively, he said.


http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=53955&Cat=3&dt=6/23/2011

Riaz Haq said...

Some 5,800 peasants in Sindh province are set to receive farmland previously designated as government-owned flood runoff. By the end of March, some 92,000 acres will be allotted to women only, according to Christian Science Monitor:

.....When the fields are cleared, Nimat Khatoon, a 50-something peasant farmer who has worked for the wealthy owner of these fields since her childhood has something worth the wait: a four-acre slice of land to call her own.

"It's something I couldn't dream of seeing in my lifetime. We're so happy," she says with a toothy grin, as her children play around her home made of wooden slats and a thatched roof.

Ms. Khatoon is one of some 5,800 peasants in the province of Sindh to receive farmland, previously designated as government-owned flood runoff, from the provincial government over the past two years. A total of 95,000 acres has already been doled out, and in March another 92,000 acres are to be allotted to women only.

The land allocations could help break the cycle of debt accrued by landless peasants, and serve as a jump-start to those whose livelihood was threatened even after the floods receded.

"Land is the main source of wealth in rural Pakistan," explains Amil Khan, a spokesman for the charity Oxfam, which is assisting the government with the project. "If you have no land you don't have a stake in the system."
Cycle of debt

Indeed, seeds and fertilizers are provided by landlords to tenants who are then forced into high interest rates when repaying their debt. What's more, it has become the norm for landless farmers to receive far less than half the profit from the crops, and use most of that to begin paying their never-ending debt.

The government of Sindh – a province home to Pakistan's biggest landlords – embarked on this project in an effort to redress this widening imbalance. But it has taken on a special significance after the 2010 floods, which destroyed 2 million hectares of crops, pushing landless tenants deeper into debt.
------------
Khatoon's family still owes some 40,000 rupees ($470) to the landlord her family has worked under for generations – a princely sum, which could still take another year to clear – though thanks to her newly acquired land, she's hopeful that for the first time ever, the cycle of debt won't begin afresh next year.
After the floods

It's a rare piece of good news to come out of Pakistan after the floods. According to the United Nations World Food Program, hundreds of thousands of flood victims are still living in temporary camps or shelters, while analysts warn of Middle-East style unrest if food inflation, which has soared to some 64 percent in the past three years, continues to rise as the government prints money to finance its deficits.
------
Food insecurity continues, she explains, because "the livelihoods of the lowest strata are not being addressed. First, they are still beholden to debt cycles." Second, the low-interest loans from the government favor large landowners, she explains, because small-scale farmers usually don't use the banking system.

Dr. Habib says these policies came about because of the influence of feudal landowners in Pakistan's parliament, who have held sway since the country gained independence from Britain in 1947. But the move away from that to the new program is a key step toward undercutting that influence.

The Sindh government initiative distributes high-risk government land that runs alongside rivers and tributaries. This land was previously designated as government-owned flood runoff, but was used by local landlords. Rich landlords have struck back by filing legal challenges via local peasants in their employ, to wrest back land that was in their de facto control.

Riaz Haq said...

Hedge funds are behind "land grabs" in Africa to boost their profits in the food and biofuel sectors, a US think-tank says, and BBC reports:

In a report, the Oakland Institute said hedge funds and other foreign firms had acquired large swathes of African land, often without proper contracts.

It said the acquisitions had displaced millions of small farmers.

Foreign firms farm the land to consolidate their hold over global food markets, the report said.

They also use land to "make room" for export commodities such as biofuels and cut flowers.

"This is creating insecurity in the global food system that could be a much bigger threat than terrorism," the report said.

The Oakland Institute said it released its findings after studying land deals in Ethiopia, Tanzania, South Sudan, Sierra Leone, Mali and Mozambique.

'Risky manoeuvre'

It said hedge funds and other speculators had, in 2009 alone, bought or leased nearly 60m hectares of land in Africa - an area the size of France.

"The same financial firms that drove us into a global recession by inflating the real estate bubble through risky financial manoeuvres are now doing the same with the world's food supply," the report said.

It added that some firms obtained land after deals with gullible traditional leaders or corrupt government officials.

"The research exposed investors who said it is easy to make a deal - that they could usually get what they wanted in exchange for giving a poor tribal chief a bottle of Johnnie Walker [whisky]," said Anuradha Mittal, executive director of the Oakland Institute.

"When these investors promise progress and jobs to local chiefs it sounds great, but they don't deliver."

The report said the contracts also gave investors a range of incentives, from unlimited water rights to tax waivers.

"No-one should believe that these investors are there to feed starving Africans.

"These deals only lead to dollars in the pockets of corrupt leaders and foreign investors," said Obang Metho of Solidarity Movement for New Ethiopia, a US-based campaign group.

However, not all companies named in the report accept that their motives are as suggested and they dismiss claims that their presence in Africa is harmful.

One company, EmVest Asset Management, strongly denied that it was involved in exploitative or illegal practices.

"There are no shady deals. We acquire all land in terms of legal tender," EmVest's Africa director Anthony Poorter told the BBC.

He said that in Mozambique the company's employees earned salaries 40% higher than the minimum wage.

The company was also involved in development projects such as the supply of clean water to rural communities.

"They are extremely happy with us," Mr Poorter said.


http://www.bbc.co.uk/news/world-africa-13688683

Riaz Haq said...

State Bank tells Pakistan govt to reduce bank borrowing, according to The Nation:

KARACHI - The State Bank of Pakistan (SBP) has stated that the size of the fiscal deficit cannot be reduced unless the government controls excessive borrowing from the central bank, along with fully implementing fiscal reforms, according to State Bank’s Third Quarterly Report on the State of Pakistan’s Economy for FY11 released Monday.
“Desirable revenue generating measures - broadening of the tax base, improving documentation of the economic system, gradual elimination of un-targeted subsidies and curtailment of quasi-fiscal operations are necessary to contain the fiscal deficit to below 4.5 per cent of GDP in FY12”, said the report.
“These efforts need to be accompanied with better debt management to increase the tenor of domestic debt and lower risks associated with debt re-pricing and rollover,” it added.
The report predicted these initiatives will also protect the external account position and rebuild confidence of the private sector and the country’s international development partners. More importantly, this will help in reducing inflation and the crowding out of private sector credit, thereby facilitating investment, growth and employment opportunities.
The SBP report further said the impact of the widening fiscal deficit is clearly visible in the sharply rising domestic debt. The outstanding government domestic debt reached Rs 5,594 billion (31.8 per cent of estimated GDP) which is more than double the stock at end-June 2007, the report said and added that this sharp growth in debt stock is fueling concerns about macro stability and monetary management.
The report showed optimism about the next cotton crop for several reasons: (a) higher cotton prices during FY10 encouraged farmers to increase acreage for the next crop; (b) there is a shift towards more productive (and disease resistive) BT cotton seeds; and (c) water availability is expected to improve over last year. Rising fertilizer prices are the key downside risk at the moment.
According to the report, the government has set the wheat procurement target at 6.57 million tones, which is lower than the target for the previous year. However, the government may come under pressure to exceed this target since the market price of wheat is considerably lower than its support price while banks appear to be willing to finance the additional procurement. This could feed the circular debt problem and also crowd out the private sector at the margin.
“While energy shortages continue to impact a number of industries, some sectors could face new challenges. For example, the disruption in the global supply of auto parts from Japan may impact some manufacturers in Pakistan. In addition, auto manufacturers will face stiff competition from imported cars as the government has increased the age limit for used imported vehicles from 3 to 5 years,” it commented.


http://nation.com.pk/pakistan-news-newspaper-daily-english-online/Politics/05-Jul-2011/SBP-asks-govt-to-contain-borrowing

Riaz Haq said...

Here's an OXFAM report about land for landless peasant women in Pakistan:

Oxfam Media Officer, Caroline Gluck, is currently travelling in Sindh district in Pakistan. She sends us this blog from there:

Mother of five, Sodhi Solangi, can’t stop smiling as she shows me her new eight acre plot of land. Cotton crops are growing and, a little further away, building work is almost finished on a large new house overlooking the fields where her family will soon settle.

Just a few years ago, 42 year old Sodhi, who lives in Ramzan Village, Umerkot district, in Sindh, Pakistan, was landless. She and her husband used to work on others’ lands, earning a share of the crops as payment. Daily life was a struggle.

“We often had problems”, Sodhi recalled. “Sometimes we had money, sometimes not. It was very hard for us. We’d spend all our days working on someone else’s farm and our children would be at home.

“We wore torn clothes. But now things are very different. When you like something, you can go out and buy it. Before, we would have to ask the landlord to give us money if we wanted anything, but now we have money in our hands and we can buy things whenever we want.”

“Now we have our own land and are working on our own land. It feels so good when we work there. When we used to work for others, we would have to drag ourselves there.”

Her family’s luck changed when Sodhi was awarded eight acres of land, under a programme run by Sindh’s provincial government, which in 2008 began redistributing swathes of state-held land to landless women peasants. The landmark scheme was an attempt to lift more people out of poverty in the province, where more than two-thirds of the population work the land, but where bonded labour is still widely practiced and most land is still held by wealthy and political influential elites.

Sohdi and her family grew wheat and cotton on their new land. And they managed to earn enough profit to buy another eight acres.

“We were so happy when we go our land. Now, things are so different”, said Sodhi. “Whenever we want to eat anything, we can just buy it. Before, we used to eat dal and potatoes. Now we can buy all sorts of things – mangos, even chicken.”

“Everyday, we have a lot of food. It’s like a festival of food for us every time!” she said, laughing.

Meat is an unaffordable luxury for most poor farming families – and one telling sign of just how much Sodhi’s life has turned around.

Her neighbours and relatives jokingly call her “lady landowner” and many told me they planned to apply for land during the next phase of the redistribution scheme.

But Sodhi is one of the lucky ones. Her land, though parched and lacking proper irrigation, is still cultivable; and, unlike many women, Sodhi didn’t face legal claims disputing her right to the land from wealthy landowners or others living nearby.
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“The landlord sent officials to threaten the women here saying : ‘We will destroy your homes and take your tractors. ‘ He also threatened to send the police to our home”, said Shareefa Gulfazar, who is in her fifties, and was awarded 4.5 acres of land.

Her daughter, Dadli Kehar, who was awarded 3 acres of land, fears they are being tricked out of what is rightfully theirs. With the help of Oxfam’s partner Participatory Development Initiatives (PDI), both women plan to fight through the courts for what they believe is their right to the land.
----
Despite the threats and the likelihood of a lengthy legal battle, Shareefa and Dadli intend to fight for their land. They know that having their own land can empower them as well as help to feed their families and ensure they have a better future.


http://www.oxfamblogs.org/southasia/?p=1088

Riaz Haq said...

Here's a piece by Prof Roy Prosterman of the Rural Development Institute on land distribution in Pakistan:

Pakistan’s land-tenure problems are more severe and have been more persistently ignored than nearly any others found on the planet. Though last year’s flood altered Pakistan’s landscape, it did not alter the fact that the vast majority of land in Pakistan is owned by a very small number of landlords – chiefly by 300 families of “feudals” who have ruled the Pakistani countryside for generations.

Their workers make up nearly half of the rural population, own no land, and toil as sharecroppers, day laborers, or under debt bondage. For generations, the only land most of them have been able to call their own is the plot for their grave.

These landless poor have no meaningful stake in rural society and it is often the Taliban who step in to use the poor’s grievances as grounds for recruitment.

For the poor, owning at least some land of one’s own is a lifeline to survival – a basic source of nutrition, income, status, and security. Grossly mistreated by landowners, the landless poor in country after country have supported severe civil unrest and outright revolution.

But solutions exist. In neighboring India, a number of individual states are now granting cost-free ownership of house-and-garden plots of about a tenth of an acre (slightly bigger than a tennis court) to the landless poor. Last year, India’s central government, eager to make further progress on the issue of landlessness and to undermine a persisting Marxist rebel movement, pledged $200 million to help buy lands – earmarked to become another 2 million micro-plots – at market price.

In Pakistan itself, Sindh Province has distributed 43,000 acres of government-owned land since 2008, mostly to poor rural women. That distribution has been of much larger plots (about 10 acres), but the same quantity of land could reach more than 400,000 landless families using the smaller house-and-garden plot model. Indeed, Punjab Province, Pakistan’s most populous, is now distributing one-quarter-acre plots to an initial 1,500 landless families, using government land.

The house-and-garden small-plot model reduces the amount of land required, allowing the government to acquire the land voluntarily, at market price, or use underutilized public land.

Huge amounts of assistance are now flowing into Pakistan from the world community. Islamabad and the provinces, with the support of the international community, should embrace giving micro-plots to the landless to ensure that the laborers who didn’t drown in their landlord’s fields are afforded a chance to build better lives for themselves, creating greater stability in Pakistan, and in turn furthering global security

Riaz Haq said...

Here's a report by Oxfam's Caroline Gluck posted on Reliefweb:

Pakistan did not carry out essential land reforms soon after independence. As a result, critics say, Pakistan's agricultural and rural sectors are characterised by highly feudal relationships which keep many in abject poverty, including bonded labour. It's estimated that more than 60% of farmers in Sindh are landless, while vast tracts of farmland are still owned by small wealthy elites who wield huge political and social influence.

Sindh's land distribution programme is a bold step forward. For the first time in Pakistan as well as South Asia, state land is being specifically distributed to landless women peasants, in an attempt to begin reducing poverty and bringing about much wider social changes in rural areas.

"It's very important for me to get land"

When I visited the packed kutchari, or open hearing, it was bustling with activity. Many women and their families had traveled in vans organised by Participatory Development Initiatives (PDI), a local partner supported by Oxfam, to ensure as many deserving women as possible had the chance to register for land. PDI staff were also on hand to help those unable to read and write to fill out land application forms; and for weeks earlier had carried out awareness campaigns about the land distribution programme, including using local radio broadcasts.

"It's very important for me to get land," said mother of four, Janat, who currently farms on four acres of land belonging to her landlord. Her family only receive a quarter of the crops they cultivate - the landlord takes the rest.

"We want land of our own to pass on to our children; to have our own house and not live with threats or the fear of having to move. A landlord can ask us to leave at any time," she explained.

Another lady, Sakina, who traveled with her six-year-old son, chipped in. "Security is a priority for us. If we own land, we will have a safe house; no corrupt people can snatch our crops from us... There are always threats from influential people who can take the land from us."

----

The second phase of distribution is now solely targeting landless women. It hopes to iron out many of the flaws in the original process, as well as offering women longer-term packages of agricultural support including providing seeds, fertilisers, pesticides and technical help.

Faisal Ahmed Uqaili, co-ordinator of Sindh government's Land Distribution Programme, acknowledges that about 50% of the original land allocated had proved problematic. But he says that lessons have been learnt and around 80% of cases have been settled. Officials were also under strict orders to ensure greater transparency, he says, to stop nepotism and corruption. There had been cases reported of officials trying to sell application papers to the women, or grant land to people favoured by influential political leaders.

"You need to say the glass is half full instead of half-empty," Faisal told me. "When you meet these success stories, women are now making a livelihood for their husbands and families. There is a marked difference. If change is coming in the life of the people for this allotted land and for a fairly large percentage of people, then it's the start of success."

Mother-of-seven Beebul Hassan's face lights up as she holds up a slip of paper with a signature showing that she's been successful in her application. She is now the proud owner of four acres of land.


http://reliefweb.int/node/357648

Riaz Haq said...

Here's Daily Times report on Benazir Income Support Program (BISP) in Pakistan:

The Benazir Income Support Programme (BISP) is ready to share its experiences with the world, especially with the poverty stricken Asian nations, so that the menace of poverty can be eradicated from the region and the goal of mutual growth and prosperity can be achieved, BISP Chairperson Farzana Raja ssaid on Thursday. She stated this while speaking to Asian Development Bank (ADB) Executive Director Siraj Shamas ud Din, who called on her at the BISP Secretariat in Islamabad.

Farzana also apprised the ADB Executive Director of the various components of BISP and the progress made by the programme in the last three years. According to her, the activities of BISP have helped to bring about positive economic changes in the lives of its beneficiaries. She told the visiting ADB official that BISP had launched various strategies which provide interest free micro financing, demand driven vocational and technical training, along with a Life Insurance Scheme, which helps families become self-reliant.

Farzana Raja also informed the ADB executive director of an initiative by BISP for increasing school enrolment in the poverty-hit areas of the country, using a system known as the Conditional Cash Transfer. This would provide free education to the children of beneficiary families, thus helping to bring out a positive social change within the country.

The ADB executive director appreciated the efforts of BISP regarding poverty alleviation and was of the view that ADB’s current assistance to BISP, amounting to $150 million, was being properly utilised by the programme.

Shamas ud Din informed Farzana that various countries in the region were interested in observing the methods and procedures adopted by BISP so that they could implement similar social safety nets for the eradication of poverty. Farzana agreed to share BISP’s expertise and support with such countries of the region as may be recommended by the ADB. Shamas ud Din also called the Scorecard Survey being carried out by BISP throughout Pakistan to identify deserving beneficiaries a remarkable achievement.


http://www.dailytimes.com.pk/default.asp?page=2011\07\08\story_8-7-2011_pg7_24

Riaz Haq said...

Here's an assessment by Haris Guzdar and Julian Quan of link between landlessness and rural poverty in Pakistan:

Landlessness consistently comes up as one of the most important correlates of income poverty in statistical and econometric analyses of poverty-related data in Pakistan. The World Bank’s Pakistan Poverty Assessment used data from the Pakistan Integrated Household Survey (PIHS) 1998-99 to show that the head-count ratio of
poverty among the rural landless was 40.3 per cent, while for those owning land it was 28.9 per cent. Even the owners of marginal holdings of less than one acre had a head-count ratio of 31.8 per cent – or 8.5 per cent points lower than that of the
landless.20 These findings are corroborated by the Participatory Poverty Assessment which identifies land ownership and access to land as being among the primary determinants of rural poverty.21 Besides its direct impact on agricultural livelihoods, the distribution of land ownership in Pakistan also had broader economic, social and political implications for poverty. The existence of monopolistic landlords was thought to be associated with the creation of monopolistic conditions in other markets – such as those for credit, water, inputs and outputs – and thus created uneven conditions. Furthermore, locally
monopolistic landlords were thought to adversely affect the quality of governance of
public institutions, including mechanisms for political accountability.


http://www.rspn.org/publications/Microsoft%20Word%20-%20Access%20to%20Land%20&%20Poverty%20Reduction%20in%20South%20East%20Asia.pdf

Riaz Haq said...

Here's a BBC report of how inflation is hurting Indians and Pakistanis:

Inflation is the price that ordinary Asians are paying for high growth rates.

For the less well-off, who spend their money on food and fuel, the story is even worse. The rise in their household expenses at the moment is usually higher than headline inflation rates.

According to the International Monetary Fund, last year consumer prices rose 13.2% in India, 11.7% in Pakistan and 9.2% in Vietnam. Other Asian nations coped better but the average for developing Asia was 6% - compared to a 1.6% average rise in prices in advanced economies.

The speed at which prices are shooting up means that unless people find ways to save and invest effectively, they in fact get much poorer - even if Asia is getting richer.
---
The world is jealous of Asia's sky-high growth rates, but for ordinary people the price of success is corrosive inflation which could eat away their savings.

"From outside it looks good," says Manasi Pawar. "We're staying in a big house, paying so much in rent and our kids are going to great schools."

Manasi, a qualified software worker in hi-tech Hyderabad in India, recently became a full-time mother. Her husband also works in the IT industry.

The couple epitomise the emergence of a well-to-do middle class in Asian countries - except there's one significant snag.

"We were actually losing money," says Manasi.

The couple recently woke up to the fact that inflation rates of nearly 9% meant that their savings were actually disappearing in front of their eyes.

"We were sitting on a bunch of cash but we didn't know where to put it, and it's important that we don't let it lie there in the bank - because a bank doesn't give an interest rate that even matches the inflation rate," she says.
----
The poorest people in society, who spend disproportionately more on food, are hit most savagely of all.

But there is a way to fight back against inflation: to save, and to put some of that money in a part of the economy that rises along with inflation.

For most people, that means investing in shares or equities. "The only way you can make money long-term is through an equity linked product," says Ms Halan.

Money in the bank in India may only earn 3% or 4% - which in fact means you are losing money. But equity linked funds in this exploding economy have risen much faster, sometimes as high as 25%.


http://www.bbc.co.uk/news/business-13959235

Riaz Haq said...

Here's a recent Washington Post story on slowdown in India:

....In developments that parallel events in the other Asian powerhouse, neighboring China, rising prices have forced the government to steadily tighten monetary policy. Interest rates rose for the 10th time in 16 months last week.

But business leaders are unhappy. They say the medicine could be making the economic situation worse.

Much of the inflation in India is a function of higher oil and food prices, factors that respond poorly, if at all, to higher interest rates. Instead of depending on the central bank, the government needs to push through the kind of agricultural reforms and investment it has been talking about for years, analysts say.

“Government policy should be focused on improving agricultural productivity, but because that isn’t happening, the burden is falling more and more on monetary policy,” said Sanjay Mathur, Royal Bank of Scotland’s Asia emerging markets economist in Singapore. “Consequently, a number of sectors that shouldn’t be getting hurt are getting hurt.”

That means growth could fall back toward 7 percent, some economists warn, still faster than that of any major economy except China but below what India could achieve — and needs, if it is to pull hundreds of millions of people out of poverty.

“There is no point substituting one bad policy with another bad policy,” said Surjit Bhalla, chairman of Oxus Investments. “When the patient is down, don’t give him another kick in the pants.”

In the early 1990s, India’s government pushed through a series of economic reforms that unshackled the private sector and laid the foundation for two decades of strong growth. With that growth has come rising incomes, an expanding middle class and changing eating patterns. No longer dependent solely on rice, lentils and grains, Indians are demanding more vegetables, fruit, eggs, meat and fish.

Local agriculture has not kept pace. Farmers grow the wrong mix of crops, and about 40 percent of production is wasted before it reaches market because of inadequate distribution, warehousing and cold-storage systems.

Add to the mix a rural employment scheme that has boosted the incomes and appetites of India’s poorest, and a demographic bulge in hungry 15- to 24-year-olds, and it is little surprise that food prices are rising steadily year by year.

That in turn has pushed up wages, while production of raw materials such as coal, ores and cotton is also struggling to keep up with rising demand. Inflation hit 9.1 percent in May, and the central bank says it is expected to remain high through at least September.

To get food prices down, the government needs to promote horticulture and revolutionalize agricultural marketing and distribution, economists say. Allowing foreign companies such as Wal-Mart to set up supermarkets in India and invest in cold-storage facilities, a long-promised but still undelivered policy goal, would also help, they say.
------------
The Organization for Economic Cooperation and Development last week underlined the need for a new set of reforms in India to bolster growth, and no one in the finance or planning ministries seemed to disagree. The problem is getting it done.
----------
Higher interest rates are choking much-needed investment, which was almost flat in the first quarter of this year and grew just 4.1 percent year over year, as overall economic growth slipped to 7.8 percent.

The stock market is sliding — shares are down more than 14 percent this year, making India the worst-performing market in Asia. That in turn makes it more difficult for companies to raise the capital they need to invest.

----

http://www.washingtonpost.com/business/indian-economy-starts-to-slow-down/2011/06/23/AGvjUBiH_story.html

Riaz Haq said...

Here's a Forbes story blaming drought as the main cause of an Indian farmer committing suicide every 30 minutes:

Bt cotton seeds are genetically modified to produce an insecticide that kills Bollworm, a common cotton pest in India. In 2002, the government of India allowed Monsanto to start selling Bt cotton to farmers in India. In the years since, Bt cotton has pervaded cotton farming in India.

As CHRGJ sees it, the problem is this:

Farmers take out loans to purchase the [Bt cotton] seeds, but when the crop fails due to lack of access to water, they often fall into debt. Many kill themselves by consuming the very pesticide they went into debt to purchase.

Bt cotton bears at least partially blame for these tragedies, according to CHRGJ, because it is more water intensive than other cotton seeds. The report cites studies showing that “Bt cotton performs better under irrigated conditions.”

In 2006, the Indian Institute of Management in Ahmedabad, India evaluated the performance of Bt cotton in India based on a survey of Bt cotton farmers and agricultural data. The final study concluded that the yields obtained with irrigation are typically higher than those without irrigation, but that:

in all cases, the yields of Bt cotton are higher than the yields of Non-Bt cotton . . . The results indicate a sizeable impact of Bt cotton on the yield and value of output under both irrigated and unirrigated conditions.

This finding is corroborated by the U.S. Department of Agriculture’s Long-term Agricultural Projections for last year, which described the impact Bt cotton has had on cotton yields in India:

Improved cotton yields in India, largely due to the adoption of hybrid cotton containing the Bt gene, have raised India’s production and exports in recent years. Yield growth is projected to continue as the area planted to hybrid cotton expands and cultivation practices improve. The increase in cotton output is expected to enable India to increase domestic textile production and exports. Its export volume has already surpassed those of Sub-Saharan Africa and Central Asia, and it is expected to maintain this rank throughout the forecast period.

In any event, it should not come as a huge surprise to most cotton farmers that access to water is essential to crop performance. Cotton is an especially thirsty plant. It can take more than 25,000 liters of water to produce a single kilogram of cotton. To put this in perspective, it takes only 500 liters of water to produce a kilogram of potatoes.


http://www.forbes.com/sites/williampentland/2011/05/18/every-30-minutes-an-indian-farmer-commits-suicide-biotech-is-not-to-blame/2/

Riaz Haq said...

Here's a wired.com report on 250,000 farmer suicides in India since 1997:

Jaideep Hardikar of the Telegraph in Kolkata described what happens when an agricultural economy crashes. For 10 years, he has been covering an agrarian crisis in India, the aftermath of the 1960s Green Revolution and its 1980s collapse. He was tipped into the story by chance, being randomly assigned to report on the 1998 suicide of a cotton farmer who despaired of ever climbing out of debt. Before he finished the story, four other farmers in the same village also killed themselves by drinking pesticide.

Sometimes the men left notes. Often they did not, leaving their widows to discover they had been impoverished by a descending spiral of borrowing to plant, being unable to pay the loans back, and borrowing further to cover the first round of debt. Since 1997, the Indian government now estimates, 250,000 farmers have killed themselves, and more than 350,000 — the heads of households that add up to 2 million people — are in acute financial trouble. (Here’s a recent story of Jaideep’s on the continuing problem.)


http://www.wired.com/wiredscience/2011/07/peril-hungry-future/

Riaz Haq said...

India's main planning body has said half a dollar a day is "adequate" for a villager to spend on food, education and health, according to the BBC:

Critics say that the amount fixed by the Planning Commission is extremely low and aimed at "artificially" reducing the number of poor who are entitled to state benefits.

There are various estimates on the exact number of poor in India.

Officially, 37% of India's 1.21bn people live below the poverty line.

But one estimate suggests the true figure could be as high as 77%.

The Planning Commission has told India's Supreme Court that an individual income of 25 rupees (52 cents) a day would help provide for adequate "private expenditure on food, education and health" in the villages.

In the cities, it said, individual earnings of 32 rupees a day (66 cents) were adequate.

The Planning Commission was responding to a direction from the court to update its poverty line figures to reflect rising prices.

India has been struggling to contain inflation which is at a 13-month high of 9.78%.

Many experts have said the income limit to define the poor was too low.

"This extremely low estimated expenditure is aimed at artificially reducing the number of persons below the poverty line and thus reduce government expenditure on the poor," well-known social activist Aruna Roy told The Hindu newspaper.

The Planning Commission also told the court that 360 million Indians are now being supplied with subsidised food and cooking fuel through the network of state-owned shops.

A World Bank report in May said attempts by the Indian government to combat poverty were not working.

It said aid programmes were beset by corruption, bad administration and under-payments.

http://www.bbc.co.uk/news/world-south-asia-14998248

Riaz Haq said...

Here's a piece by Soutik Biswas of the BBC on India's "distress migration":

Are millions of Indians being forced to leave their villages for cities and towns because there aren't enough jobs at home and farm incomes are drying up? Is this "distress migration" unprecedented in India's history?

Award-winning journalist P Sainath thinks so. Examining the latest census data, he finds that India's urban population has risen more (91 million more than in the 2001 census) than the rural population (90.6 million more than in the 2001 census). Nearly half the people in states like Tamil Nadu already live in urban settlements.

The last time, writes Mr Sainath, the rise in India's urban population exceeded the rise of the rural population was 90 years ago and reflected in the 1921 census. The decline in rural population then could be possibly linked to the 1918 flu pandemic that killed several million people.

This time around, Mr Sainath says, the increase in migration is driven by the "collapse of millions of livelihoods in agriculture and its related occupations". He writes that massive migrations "have gone hand-in-hand with a deepening agrarian crisis": more than 240,000 farmers, mostly broken by debt, committed suicide in India between 1995 and 2009.
'Despair-driven'

Mr Sainath has spent a lifetime reporting on distressed farmers and how the poor live in India. He admits that the census is not equipped to examine the complexity of migration in India. In a fast urbanising country, rising migration from villages to cities and towns is natural. Also, newer "urban areas" are being added all the time. The big picture is also not strikingly unusual. According to the census, 31.16% of Indians live in urban areas, up from 27.81% in 2001 - a rate which is actually significantly lower than the rate in many developing countries with similar income levels.

But, argues Mr Sainath, these "natural" factors which triggered migration from villages to cities have been valid in the earlier decades too when additions to the village population actually outstripped those to the cities. So why is the last decade throwing up a radically different result?...
----------
There may be other pressing questions to ponder. How does India cope with its increasing urban population? Its cities are choking under power cuts, scarcity of water and polluted air. Also the increase of new urban settlements with poor amenities and limited access to jobs could easily lead to massive social unrest among the migrants in the new "cities". Which could actually end up wrecking India's cities faster than its villages.


http://www.bbc.co.uk/news/world-south-asia-15056418

Riaz Haq said...

Here's a Bloomberg report on rising consumer spending and growing FMCG sector in Pakistan:

...“The rural push is aimed at the boisterous youth in these areas, who have bountiful cash and resources to increase purchases,” Shazia Syed, vice president for customer development at Unilever Pakistan Ltd., said in an interview. “Rural growth is more than double that of national sales.”
--------------
Nestle Pakistan Ltd., which is spending 300 million Swiss francs ($330 million) to double dairy output in four years, boosted sales 29 percent to 33 billion rupees ($377 million) in the six months through June.

“We have been focusing on rural areas very strongly,” Ian Donald, managing director of Nestle’s Pakistan unit, said in an interview in Lahore. “Our observation is that Pakistan’s rural economy is doing better than urban areas.”

The parent, based in Vevey, Switzerland, aims to get 45 percent of revenue from emerging markets by 2020.
---------------
Haji Mirbar, who grows cotton on a 5-acre farm with his four brothers, said his family’s income grew fivefold in the year through June, allowing him to buy branded products. He uses Unilever’s Lifebuoy for his open-air baths under a hand pump, instead of the handmade soap he used before.
------------
Sales for the Pakistan unit of Unilever rose 15 percent to 24.8 billion rupees in the first half. Colgate-Palmolive Pakistan Ltd.’s sales increased 29 percent in the six months through June to 7.6 billion rupees, according to data compiled by Bloomberg.
-----------
Unilever is pushing beauty products in the countryside through a program called “Guddi Baji,” an Urdu phrase that literally means “doll sister.” It employs “beauty specialists who understand rural women,” providing them with vans filled with samples and equipment, Syed said. Women in villages are also employed as sales representatives, because “rural is the growth engine” for Unilever in Pakistan, she said.

While the bulk of spending for rural families goes to food, about 20 percent “is spent on looking beautiful and buying expensive clothes,” Syed said.

Colgate-Palmolive, the world’s largest toothpaste maker, aims to address a “huge gap” in sales outside Pakistan’s cities by more than tripling the number of villages where its products, such as Palmolive soap, are sold, from the current 5,000, said Syed Wasif Ali, rural operations manager at the local unit.
--------------
Unilever plans to increase the number of villages where its products are sold to almost half of the total 34,000 within three years. Its merchandise, including Dove shampoo, Surf detergent and Brooke Bond Supreme tea, is available in about 11,000 villages now.
-------------
Pakistan, Asia’s third-largest wheat grower, in 2008 increased wheat prices by more than 50 percent as Prime Minister Yousuf Raza Gilani sought to boost production of the staple.

“The injection of purchasing power in the rural sector has been unprecedented,” said Sherani, who added that local prices for rice and sugarcane have also risen.
----------
Increasing consumption in rural areas is forecast to drive economic growth in the South Asian country of 177 million people, according to government estimates.

Higher crop prices boosted farmers’ incomes in Pakistan by 342 billion rupees in the 12 months through June, according to a government economic survey. That was higher than the gain of 329 billion rupees in the preceding eight years.
-------------
Telenor Pakistan (Pvt) Ltd. is also expanding in Pakistan’s rural areas, which already contribute 60 percent of sales, said Anjum Nida Rahman, corporate communications director for the local unit of the Nordic region’s largest phone company.

Riaz Haq said...

Here's a Pakistan Today report on motorcycle manufacturing in Pakistan:

Karachi - To effectively cope with domestic market of over 1.5 million units and after successful launch of their products in global markets, the local motorcycle producers are now planning a further investment of $100-150 million in their existing units.
The motorcycle industry analysts have pointed out that despite numerous hiccups faced by the economy in recent years, growth in motorcycle production has been robust at 15 per cent. “A decade back, the total motorcycle production in Pakistan was around 100,000 units, now the largest player alone is rolling out half a million units while total production of two wheelers has crossed 1.5 million. They said that the encouraging aspect in this regard is that industry is on the path to sustained growth. The local demand for motorcycles is likely to exceed 2 million units within a year or two,” they added.
“The global response to our quality motorcycles indicate a sustained and healthy growth in exports as well” they opined, adding that in fact, the industry experts are seeing themselves as the largest exporters in the engineering sector. A sustained growth is only possible due to regular investment and up-gradation of technology in the motorcycle industry. “The growth we see in motorcycle production would not have been possible without investment”, they added.
In this regard, Fahad Iqbal CEO, HKF Engineering, makers of Ravi motorcycles said that the industry now has to fulfill the growing demand in both domestic and global markets and for this, it needs to invest over $100 million in the next couple of years to keep abreast with market needs and demands. He said that all the motorbike producers having production of 50,000 units or above are now planning to expand their capacities to cope up with the market demands.
“There are almost a dozen players that have achieved this production level” he said, adding that even if each of them invests $10-15 million, the total investment would cross $150 million. These units have been regularly making investments to increase their market share but now they have reached a level where they have to invest in high-tech parts to ensure that instead of having 90 per cent local components, Pakistani bikes are produced by 100 per cent local parts, he added.
Market analysts urged that in such an encouraging situation, the government should refrain from taking steps that might jeopardise this investment. He said that an investment of $150 million by local players without any government concession is better than vying for similar investment over a period of 10 years from a foreign company. The current players, from Italy, China and Japan, are also in various stages of developing new models in the 100-150 cc range with the latest technology, he said. However, he added, they were not offered any relief even on imports of the environmentally friendly Euro 2 components, which have already been introduced in local bike production.
“Capacities exist in the country in areas like sheet metal parts and there is a huge investment need in areas such as die casting for parts like crank cases and crank covers, electronic parts such as CDI units, engine parts like ACG, clutch, pistons, shock absorbers (cushions), plastic parts such as emblems” said Arshad Awan CEO General Engineering and added that even capacity enhancement and thus investment will be needed in low-tech parts like head lights, tail lights etc.


http://www.pakistantoday.com.pk/2011/08/bike-manufacturers-plan-heavy-investment/

Riaz Haq said...

Here's a NY Times story about soil renewal for agriculture in Pakistan:

LAHORE, PAKISTAN — In the Pakistani village of Sharbaga, about 130 kilometers from Lahore, a 70-year-old farmer named Mohammed Ali and his wife plant rice seedlings in a wide field. They stand ankle-deep in muddy water holding thin green leaves that they deftly press into the ground. It is hard work under a blazing sun, but this seemingly mundane task is a significant development that can help rural Pakistanis improve their lives.

Just a few years ago, this rice paddy and most of the surrounding fields in this village of 5,000 were barren. For decades the land has lain fallow because it is saline from poor groundwater.

In 2006, the government of the state of Punjab, traditionally Pakistan’s breadbasket, and the United Nations Development Program started an agriculture project to rehabilitate saline farmland by treating it with gypsum. The Punjab government pays for two-thirds of the project’s six-year, $17 million budget, while the U.N. program pays for the rest.

Nearly six million hectares, or about 15 million acres, across Pakistan, including 2.3 million hectares in Punjab, are barren because of salinity and water logging. Gypsum’s calcium composition can neutralize saline soil. Within a season of applying the white powder, farmers like Mr. Ali had transformed a long-degraded land into a field that yielded bountiful crops of rice and wheat.

Forty-three percent of Pakistan’s population of 170 million depends on agriculture for their livelihood and two-thirds of the country’s citizens live in rural areas. Projects that help improve the lives of people on the ground are critical to creating stability in Pakistan, and yet these are often overlooked.

Sustainable agricultural growth is a “necessary condition for rural growth, employment generation, poverty reduction and social stability,” said a 2009 report on Pakistan’s agricultural potential by Weidemann Associates, an economic development consulting firm near Washington. The report was prepared for the U.S. Agency for International Development in Pakistan.

The biosaline project in Punjab has already helped lift 50,000 households out of poverty by raising incomes. From 2007 to 2010, the increase of rice and wheat production on rehabilitated land totaled 417,016 tons, worth $122 million.

Dozens of enthusiastic farmers who gathered to meet a visitor to Sharbaga this past summer were unequivocal about how the agriculture project had improved their lives. Before the project, there were few ways to make money in the village aside from sporadic manual labor. Farmers owned small parcels of largely infertile land, and most of the men migrated to cities for work in factories or as temporary laborers.

Now, all the men said their farming incomes had double or tripled, to as much as $230 a month, compared with the $90 or less that they could earn working in a factory, and migration to the cities is declining.
---------
Reviving agriculture has been life-changing for many rural Pakistanis. Zeba Bibi, who also cultivates a garden in Liliani village, wants to know how she can make her mango trees healthier and more productive. She aspires to one day buy a tractor with extra income from crops grown on her family’s desalinated land. “We are looking forward to a better life,” she said.


http://www.nytimes.com/2011/11/17/business/energy-environment/soil-renewal-puts-pakistans-poor-on-stronger-ground.html

Riaz Haq said...

Here's Business Recorder report on Pakistan's exporters' participation in an Abu Dhabi exhibit:

Pakistan makes foray at SIAL Middle East to explore the Gulf food market and boost exports by attracting local and regional players participating in the region's premier food fair, which opened Tuesday at the Abu Dhabi National Exhibition Centre.

Seven Pakistani firms attending the three-day event for the first time displayed their range of products at the Pakistan pavilion.

They will meet local food importers and regional players to explore the market, which is expected to cross $50 billion by 2020.

"Pakistan has emerged as an important player of food supplies to the UAE and Gulf region particularly in rice, meat, poultry, seafood, fruits, vegetables and spices. We hope SIAL Middle East will facilitate our exhibitors both in product and geographic diversifications," Pakistan Ambassador to UAE Jamil Ahmed Khan told Khaleej Times.

The second edition of SIAL Middle East welcomed 12,000 trade visitors with exhibitor line-up of more than 500 food, beverages, equipment manufacturers, suppliers.

Argentina, China, Italy, Iran, France, Pakistan, South Korea, Taiwan, Thailand, Turkey, Tunisia, UAE, UK and US also set up pavilions to exhibit their products to make inroads in the region striving to ensure food security amid rising inflation across the globe.

According to a new research, Gulf Cooperation Council (GCC) states will spend $53.1 billion by 2020 on food imports to feed growing population.

The region, spent $25.8 billion on food imports last year, depending heavily on imports of agriculture and food products.

Food consumption in GCC is expected to rise at the rate of 4.6 per cent annually between 2011-15 and reach 51.5 million tonnes per year during this period.

Pakistan's exports of food products to GCC region stand at $1 billion and UAE shares around 50 per cent of the total bill.

Appreciating premier event, Pakistan Ambassador said SIAL food fair has become a truly international brand.

"It’s a great pleasure to be part of this food event for first time. We welcome valued visitors to the Pakistan pavilion who will have a chance to meet with our leading food suppliers at this dedicated business platform in the thriving region of the Middle East."

Pakistani exhibitors displayed rice, juices, assorted pickles, edible oil, fresh fruits, vegetables, assorted syrups, wheat flour and flour products among others.

According to Pakistan Embassy officials, Pakistan has the potential to double its food export to the UAE by adding value to its products.

"Our average unit price of food exported items is comparatively less than most of the competing countries, but we need to do value addition by establishing brands in the region," an official said.


http://www.brecorder.com/pakistan/business-a-economy/36142-seven-pakistani-firms-explore-food-market-in-gulf-.html

Riaz Haq said...

Here's a Businessweek report on IMF's assessment of Pakistan's economy:

Pakistan faces a “challenging” economic outlook and should seek to contain its deficit while adopting a cautious monetary policy, the International Monetary Fund said after an annual review of the country’s policies.

Economic growth is expected to reach about 3.5 percent for the fiscal year started July 1 and inflation is forecast to slow down, the Washington-based IMF said in a press release today.

Still, “the external current account balance is projected to return to a deficit, and global risk aversion and security concerns may limit capital inflows,” the IMF mission said. Beyond fiscal and monetary policies, “a responsive exchange rate would reduce vulnerabilities, contain inflation and protect Pakistan’s international reserve,” the fund said.

An $11.3 billion loan program to Pakistan expired in September with no payments disbursed since May 2010 because the country didn’t meet the conditions attached to it.

The IMF mission and Pakistani authorities, who met in Dubai and Islamabad Nov. 9-19, also discussed policies for the medium term, including changes to the tax system and in the energy sector.

A detailed report of Pakistan’s economy will be examined by the IMF board in late January, the mission said.


http://www.bloomberg.com/news/2011-11-22/pakistan-faces-challenging-outlook-may-grow-3-5-imf-says.html#

Riaz Haq said...

Here are some excerpts from Forbes cover story (Dec 19, 2011) on venture money for Pak entrepreneurs:

Novogratz plays the role of auditor because, as CEO and founder of the Acumen Fund, helping people starts with financial due diligence. In April Acumen sank $1.9 million into the bank (National Rural Support Programme Bank in Pakistan) in exchange for an 18% stake, one small investment in a decadelong experiment in charitable giving. Instead of shoveling aid dollars to causes or governments that give away life-­sustaining goods and services, Acumen espouses investing money wisely in small-time entrepreneurs in the developing world who strive to solve problems, from mosquito netting to bottled water to affordable housing. It’s a new twist on the old adage about teaching a man to fish, except that Novogratz wants to build an entire fish market.
------------
Acumen has given Pakistani farmers the ability to access cash at credit card rates, versus the loan shark terms of before—a staggering 125,000 clients have tapped the bank for $30 million in new credit this year. Novogratz’s infusion has also allowed the bank to take deposits for the first time, introducing the idea of savings, and 6% interest rates, to a community that has been locked in poverty for centuries. Since April 10,000 farmers have deposited $7 million in the bank, which of course has resulted in yet more loans.
----------
Weeks later Novogratz fortuitously got two anonymous gifts of $500,000 each and took her first trip to Pakistan in January 2002. Acumen has since invested $13 million there in 12 businesses: Ansaar Management Co. (affordable housing), Kashf Foundation (microlending to women) and Micro Drip (agricultural irrigation), among them. She has also collected $2.7 million from 40 Pakistani donors and traveled to that country 20 times, turning one of the most volatile, anti-American populations into a vibrant experiment in alleviating poverty.
-------------
That’s why I find myself in a rural village 10 miles outside the city of Lahore, Pakistan’s second-largest city. Novogratz has come to check on another investment—and to collect the precious data she hopes to use in new fundraising. Here on 20 acres, Saiban, a nonprofit developer, has built homes for an eventual 450 Pakistani families, most of whom earn $2 to $4 a day. The $4,000 units are 85% occupied. You see the occasional motorcycle parked in front, where a few women mill about, talking or hanging laundry.
-----------
These aren’t the answers Novogratz is fishing for. She wants to hear examples of people using their homes as collateral to get college loans for their children or amassing a better dowry for their daughters so they can marry into a more prosperous family. She wraps up the meeting. “So, the next time I come, you’re going to have some good metrics for me? ’Cause this is my challenge for the world.” Someone says, “Inshallah [God willing].”

Novogratz smiles, but shakes her head: “Not inshallah. We’re going to do it!”
....


http://www.forbes.com/sites/helencoster/2011/11/30/novogratz/4/

Riaz Haq said...

Quality seeds essential for agriculture development, reports APP:

Supply of good quality seed is the base of sustainable and developing economy. "For improving the seed quality Pakistan Agricultural Research Council (PARC) Scientists are making appreciable efforts in agriculture research sector", Dr Iftikhar Ahmad, Chairman, PARC said while speaking in a meeting here on Tuesday.
The meeting on "Review of Variety Release and Seed Production System in Pakistan" was jointly organized by PARC and International Center for Agricultural Research in the Dry Areas (ICARDA). The PARC Chairman further elaborated that seed supplied to farmer is an important measure for achieving enhanced agricultural production. "Due to lack of awareness and information about quality seed we are unable to achieve required productivity, and the bad quality seed has the potential to threaten food security for whole country", he added.
Foreign delegate from ICARDA, US Department of Agriculture (USDA), and International Maize and Wheat Improvement Center (CIMMYT) were present on the occasion. Provincial presentation under the guidance of Secretary Agriculture, Government of Punjab, Arif Nadeem and heads of other agricultural institutes from Sindh, Balochistan, and Kheyber Pakhtoonkhwa graced the occasion.
Dr Iftikhar Ahmed, who chaired the meeting emphasized on improved varieties for quality seed that are basic requirements for enhancing the agriculture productive as well as in livestock sector.
He said that seed certified Cooperation Department also established in Khyber Pakhtunkhwa, Sindh, Balutistan, Baluchistan as in functioning Punjab province for betterment of farmers and also launched a campaign for awareness of quality seed.
During a roundtable meeting of which 30 members participated from across the country discussed current challenges that are being faced to the seed sector.
The members of the meeting special focused on accelerating the transfer of new improved varieties to farmers. The meeting was a follow-up of a three-week mission sponsored by ICARDA during which seed specialist Dr Mishael Turner had wide-ranging consultations with both public institutions and private companies.
He was of the view that the threat posed by epidemics of rust diseases of wheat had raised awareness about the need to move new improved resistant varieties rapidly from research institutes to farmers through the variety release system.
These concerns enabled ICARDA to secure funding from USAID to compare variety release procedures in different countries.
Discussion among the participants covered many issues affecting plant breeding and the seed industry in Pakistan and provided an open exchange of opinions among the stakeholders. Key themes that emerged from the meeting included the need to strengthen public private partnerships and the ways to improve capacity building for all partners of the seed sector.
There was an agreement among the participants that the new Ministry of National Food Security and Research should take up these issues as soon as possible.


http://nation.com.pk/pakistan-news-newspaper-daily-english-online/Business/14-Dec-2011/Quality-seed-vital-for-agri-development

Riaz Haq said...

Here's Punjab CM pitching his province's potential as the food basket to the world, reported by Daily Times:

Pakistan is as an emerging country of fully traceable products for the world to meet food supply demand of increasing global population.
Chief Minister, Punjab, Muhammad Shahbaz Sharif at a meeting with EU ambassadors said Punjab government has diverted substantial resources to develop science-based, vibrant and internationally linked agriculture sector that could not only meet the food security challenges but also compete in domestic as well as in international markets.
Punjab Government has entered into certification regime to produce fully traceable agricultural and livestock products to reach high-end markets of the developed world and to enhance export upto $2 billion annually, he added.
He said Pakistan has the potential to become 10th largest economy of the world after Germany. He apprised the distinguished envoys Punjab government has allocated Rs 2.024 billion for a mega project to improve supply chain of selected agricultural and livestock products for improving quality and introducing traceability as per international market standards and requirements.
He said participation of Punjab in the forthcoming International Green Week (IGW), Berlin Germany would be an excellent opportunity to showcase traceable agricultural and livestock products from Punjab and to project Pakistan.
He said display of traceable agricultural and livestock products at IGW would open the doors of high-end markets of the world leading towards generation of tremendous business opportunities for Punjab, Pakistan.
He said Punjab government was benefiting from Star Farm and Metro to enhance capacity of our producers, suppliers and traders to boost exports.
Ambassadors from 18 European Union countries including Lars-Gunnar Wigemark, EU ambassador to Pakistan were present in the meeting.
Lars-Gunnar said Punjab has tremendous potential in agriculture and livestock sectors to get its due share in global trade of food products. He lauded Punjab government for adopting techniques and standards required for food safety and quality, and linking its traceable agricultural products to the global markets.
Arif Nadeem, Secretary Agriculture said 15-20 fully traceable fruits, vegetables, rice and meat products would be showcased at IGW for which capacity of about 25 exhibitors has been built for compliance of Global GAP and International Featured Specifications (IFS) by Star Farm.
He told METRO would organise Pakistan week in their chains in Berlin, parallel to the IGW event, therefore, fresh produce to be brought in Germany would not only be displayed and sold at the event but also at the Metro stores/chains in Berlin.
He said a vendor selected for the event has prepared thematic design of Pakistan pavilion, which contains Business to Business (B2B) and Business to Consumer (B2C) areas for display of products.
The concept, ‘farm to fork’ will be demonstrated through cooked dishes of traceable products as well at the
occasion, he added.
Rizwan Khan, Vice Chairman, Punjab Board of Investment and Trade highlighted the significance of International Green Week scheduled for January 20-29, 2012 at Berlin, Germany and briefed about aesthetics and media coverage of the event, embassy coordination and back end support in terms of product development.
The diplomats of EU Countries and others expressed satisfaction on the level of preparedness of Punjab government for participation in the forthcoming IGW, Germany.


http://www.dailytimes.com.pk/default.asp?page=2011\12\18\story_18-12-2011_pg5_7

Riaz Haq said...

Here's a story in The Nation on high wheat prices hurting exports:

LAHORE – Pakistan is likely to spoil its surplus wheat owing to its high price as compared to the international market and substandard storage system, losing an opportunity to earn millions of dollars through its export.
Experts feared that fresh imminent increase in the wheat support price will halt export of wheat and its products. At present, 5.5 million tons of wheat was lying in stores and open places with public sector departments while our requirement for next few months was only two million tons. They said 1.4 million tons of wheat was present only in Punjab and added that one of the prime reasons of piling up of this wheat stock was high prices.
Former chairman of the Flour Mills Association, Asim Raza Ahmed, while talking to The Nation, claimed that wheat prices were already high in Pakistan as compared to other countries. Supporting his claim, he said Russia had sold wheat to Egypt and Iraq at the rate of $220 to $250 dollars per ton which in Pak rupees is Rs 22,000 per ton compared to Pakistani wheat price of Rs 23,750 per ton. He said that wheat was playing an important role in agriculture of Pakistan. Pakistan is not only self-reliant in this crop from the last three years but also exporting wheat. Pakistan exported 1.7 million tons of wheat and 1.3 million tons of wheat products this year and was competing on this front with Russia, Turkey, Australia, India and America. Some experts were of the view that the government’s poor measures for utilizing bumper wheat crops may cause it billions of rupees losses again because of substandard ways of stocking of the commodity in packing material, which is not recommended by the experts.
The upcoming wheat harvesting season will be overwhelmingly tremendous as the government increased the wheat support prices to Rs 1,050 per maund for encouraging the production of the commodity. But it will also be harmful for the growers, as they will fail to dispose of their commodity due to high rates.
The country is expected to harvest more than 25 million tons of wheat in the next season as against the national requirement of 21 to 22 million tons, leaving surplus of about 3 to 4 million tons of wheat for export market, which should be exported to earn precious foreign exchange for the country.


http://nation.com.pk/pakistan-news-newspaper-daily-english-online/Business/18-Dec-2011/Surplus-wheat--export-in-jeopardy

Riaz Haq said...

Pakistan to support declining cotton prices, according to Bloomberg:

Dec. 19 (Bloomberg) -- Pakistan, the fourth-largest grower of cotton, may buy as much as one million bales through state- run Trading Corp. to support prices, the spokesman for the country’s ginners’ group said today.

“Our group is meeting the prime minister today to settle the details of the deal,” Arshad Islam, spokesman for Pakistan Cotton Ginners Association, said in a phone interview from Karachi. “We are expecting to sell one million bales and above. The last time the government bought from us was in 2005, when they bought 1.6 million bales.”

Cotton prices in Pakistan have declined 42 percent in the financial year started July 1, tracking weak international rates as demand from China waned and global production rose. Cotton in New York has tumbled 59 percent since reaching a record $2.197 per pound on March 7.

Pakistan is hoping to grow 12.7 million bales in the year that began July 1 on better yields, the association said on Dec. 13. This is higher than the 12.2 million bales estimated by the government in October. A bale in Pakistan weighs 170 kilograms (375 pounds).


http://www.businessweek.com/news/2011-12-19/pakistan-may-buy-1-million-bales-of-cotton-to-support-prices.html

Riaz Haq said...

Pakistan's food exports are surging, reports PPI:

ISLAMABAD, (Asia Pulse) - Pakistan's exports of food commodities surged by 22.73 percent during the first five months of the current fiscal year to reach at $1.514 billion, Federal Bureau of Statistics (FBS) reported.
The overall food exports were recorded at 1.514 billion during July-November (2011-12) as compared to the exports of $1.233 billion during July-November (2010-11), according to FBS figures issued.

The food products that contributed to positive growth included fish and fish preparations, exports of which increased from $106.742 million last year to $125.959 million during the first five months of this year, showing an increase of 15.83 per cent.

Exports of fruits also increased by 13.94 per cent from $77.753 million to $88.595 during the period under reviews, showing positive growth of 13.94 per cent, the data revealed.

Exports of vegetables and tobacco increased by 28.47 percent and 27.62 per cent respectively during the period under review.

During the month of November 2011, the food exports witnessed negative growth of 25.85 per cent and 6.93 per cent when compared to the exports of October 2011 and November 2010 respectively.

The overall food exports during November 2011 were recorded at $223.360 million against the exports of $301.246 million in October 2011 and $239.984 million in November 2010, the data revealed.


http://www.lankabusinessonline.com/fullstory.php?nid=152011880

Riaz Haq said...

Here's Dr. Ataur Rahman's Op Ed in The News on building Pakistan's knowledge economy:

Agriculture represents the backbone of our economy. It can serve as a launching pad for transition to a knowledge economy, as it has a huge potential for revenue generation. But that can happen only if agricultural practices are carried out on scientific lines and use of technology maximised. The four major crops of Pakistan are wheat, rice, cotton and sugarcane. They contribute about 37 percent of the total agricultural income and about nine percent to the GDP of Pakistan.
-----------
Wheat is the most important crop of Pakistan, with the largest acreage. It contributes about three percent to the GDP. The national average yield is about 2.7 tons per hectare, whereas in Egypt the yields are 6.44 tons per hectare and in European countries such as France, Germany and the United Kingdom they are above seven tons per hectare. We presently produce about Rs220 billion worth of wheat. If we can boost our yields to match those of Egypt, it can generate another Rs350 billion, allowing us to systematically pay off the national debt and make available funding for health and education.

However, the government has been reluctant to invest in research, water reservoirs and dams and extension services so that the country continues to suffer. Some progressive farmers in irrigated areas have been able to obtain yields of 6-8 tons per hectare but they are very much a minority. In rain-fed areas the yields are normally between 0.5 tons to 1.3 tons per hectare, depending on the region and amount of rainfall. In irrigated areas the yields are normally higher, in the range of 2.5 tons to 3.0 tons per hectare. Improved semi-dwarf cultivars that are available in Pakistan can afford a yield of wheat between 6-8 tons per hectare. It is possible to increase the yields substantially with better extension services, judicious use of fertilisers and pesticides, and greater access of water from storage reservoirs and dams that need to be constructed.

Cotton represents an important fibre crop of Pakistan that generates about Rs250 billion to the national economy, and contributing about two percent to the national GDP. Pakistan is the fourth-largest producer of cotton in the world, but it is ranked at 10th in the world in terms of yields. The use of plant biotechnology can help to develop better cotton varieties. Bt cotton produces a pesticide internally and safeguards the plant against chewing insects. The yields of Pakistani seed cotton and cotton fibre are both about half those of China. A doubling of cotton yields is doable and it can add another Rs250 billion to the national economy.

---------

The failed system of democracy in Pakistan is strongly supported by Western governments. It serves Western interests as it leads to docile and submissive leaders who serve their foreign masters loyally. The stranglehold of the feudal system thrives with no priority given to education. More than parliamentarians have forged degrees and the degrees of another 250 are suspect. The Supreme Court decision of verification of their degrees is flouted and ignored by the Election Commission. The bigger the crook, the more respect he is given by the government and the biggest crooks are conferred the highest civil awards. The economy has nosedived and we are today ranked among the bottom six countries of the world in terms of our expenditure on education.


http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=83815&Cat=9

Riaz Haq said...

Pakistan produces 13.67 million tones of fruits and vegetables per annum, according to Online News:

An official told Online on Tuesday out of which about 25 per cent goes waste, between farms to consumers, while only 4 per cent is exported at far 41 per cent lower price compared to world average price.

The horticulture sector contributes about 12 per cent to the national agricultural Gross Domestic Product (GDP) and holds great potential for increasing export of quality horticultural produce, and offering multiple employment opportunities throughout the supply chain, he added.

The official said, “However, its growth & profitability is restrained mainly by lack of proper post harvest management and transport infrastructure. Improving post harvest management infrastructure (grading, packing, storage and transport/cold-chain) will help reduce high post harvest losses, increase production surplus along with improving shelf life and quality of fresh produce, which will help to stabilize prices in domestic markets as well as to substantially boost export to highly lucrative and competitive international markets.”

It is pertinent to mention here that Ministry of Commerce had decided to establish a “Cool Chain System” under “National Trade Corridor Improvement Project”. The Cool Chain project is bound act as a backbone for the development of supply chain infrastructure for horticulture produce.

http://www.onlinenews.com.pk/details.php?id=187430

Riaz Haq said...

Pakistan to irradiate mangoes exported to US, reports The News:

Pakistan will obtain a US irradiation unit for the treatment of mango in a bid to boost the fruit’s export, Chief Executive Officer Harvest Trading, Ahmad Jawad, said on Tuesday.

Irradiation is a process to preserve food items by using radiations. Presently, the fruit has first to be transported to Lowa city in the United States for the treatment, Jawad said.

Growers and exporters of mango on Tuesday called for evolving a marketing strategy involving Pakistan Horticulture Development and Export Company (PHDEC) to capture new markets.

“The United States is one of the biggest importers of mangoes produced globally with a share of almost 44 percent and Pakistan has great potential for boosting its to that country”, Jawad said.

He said that Pakistani mangoes are famous world over for their sweet flavour with more than 40 different varieties, it is the world’s sixth largest producer. But unfortunately less than only five percent of the cultivated crop is exported, he added.

Jawad said that currently, the Middle East was importing 65 percent of the total produce and it can be enhanced by extended efforts and facilities to the growers.

The Harvest Trading has also been in touch with the private sector in South America to set up relationships and persuade their embassies to let them import Pakistani mangoes, he added.

On the other hand Indian mango exporters are losing ground to their Pakistani counterparts in the US market. The exports of this exotic fruit from India, which started in 2007 is seeing a continuous decline over past three years, he added.

Data shows export of mangoes from India to US declined by 13.4 percent in 2009-10 at 175.40 tons from 202.64 tons in 2008-09. In 2010-11, export saw a steeper decline of 22.1 percent at 136.70 tons.


http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=85623&Cat=3

Riaz Haq said...

Here's a News story on Pakistan missing kinnow orange export target:

Pakistan’s kinnow export target of 300 million tons for this year seems difficult to achieve due to the hurdles created by the customs authorities, an exporter said on Thursday.

The Co-chairman of All Pakistan Fruit and Vegetable Exporters, Importers and Merchants Association (PFVA) told The News that exporters suffered a loss of $10 million on export of kinnow, as shipments were delayed because of complete checking of consignments. “In many consignments planes left and cargo was not taken,” he said.

CEO Harvest Tradings Ahmad Jawad said Japan may be good market for Pakistan kinnow in the coming years if Pakistan Horticulture Development and Export Company (PHDEC) and Ministry of Commerce make serious efforts to explore this market as we did in mangoes last year. “The planners need to realise that there are certain areas where the private sector cannot help exports grow,” he said.

The import of citrus in Japan has doubled in 2010/11 due to decline in local production Jawad said quoting a report of the US Department of Agriculture (USDA). The US and Australian citrus import to Japan has increased substantially during the period.

The import of fresh produce in Japan increased to 21,406 tons for the 12 months to September 2011, up from 10,797 tons for the same period a year before, the USDA Global Agricultural Information Network (GAIN) report said.

The US accounted for the majority of the increased volume, with a 93 per cent jump to 17,650 tons giving it a market share of 82 per cent.

Matching with Japan’s new role as Australia’s largest citrus export market, Australian imports jumped 136 percent to 2,276 tons. New Zealand, Chilean and Taiwanese imports also grew over the period.

Japan’s citrus imports are expected to decline by about 12 percent to 19,000 tons in 2011/12, the report added, because of Japanese Mikan production bouncing back.

“On the other hand Pakistan’s export target for kinnow set at 300,000 tons this year is becoming harder to meet as the season unfolds due to unlimited blunders,” he said.

The CEO Harvest Tradings further emphasized that starting with Pakistan’s image building the trade or counsellors should work as marketing managers fully knowing about the market demand there and about the quality of products and selling tactics by Pakistan’s competitors.

They should be very much in touch with the business communities there, exchange business data and information, provide businessmen at both ends with proper consultation meant to increase bilateral trade and investment, help resolve trade disputes between entrepreneurs of Pakistan and any other country.


http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=86002&Cat=3

Riaz Haq said...

Here's a market research report on Pakistan's agriculture sector:

Pakistan Agribusiness service provides proprietary medium term price forecasts for key commodities, including corn, wheat, rice, sugar, cocoa, coffee, soy and milk; in addition to newly-researched competitive intelligence on leading agribusiness producers, traders and suppliers; in-depth analysis of latest industry developments; and essential industry context on Pakistan's agribusiness service.

Pakistan's agricultural output has steadily declined in its contribution to GDP in the past decade, down from 24.0% in 2000/01 to 20.9% in 2010/11. That said, the sector still employs the largest number of workers in the population and we expect the industry to remain a government priority as the country deals with issues of food security and the vulnerability to natural disasters. Over the long term, we foresee the dairy, poultry and wheat industries as benefiting the most from increased investment.

However, despite the existing network of irrigation systems across the country, we believe that significant improvements in infrastructure and better supply chains will have to be implemented in order for the country to reap the full benefits of its fertile soil.

Key Trends

- Rice production out to 2015/16: 7.5% to 7.3mn tonnes. We expect the country to increase its share in the basmati rice trade as production expands over our forecast period.
- Wheat consumption out to 2016: 14.2% to 25.3mn tonnes. Consumption growth will be driven by rising incomes and population growth, as well as increased access to good-quality milk.
- Sugar production out to 2015/16: 35.1% to 4.8mn tonnes. Large-scale consumers such as confectioners, candy makers and soft drink manufacturers account for about 60% of the total sugar demand and will be the main drivers of growth.
- 2012 Real GDP Growth: 3.8% (up from 2.4% y-o-y in 2011; forecast to average 3.7% from 2011 to 2016).
- Consumer Price Inflation: 11.2% average in 2012 (down from 13.7% in 2011).
- Central Bank Policy Rate: 12.0% (lower than 14.0% in 2011)
----------
South Asia rice exporters should benefit the most from the recent rice trade disruptions out of Thailand. So far, traders report that more than 100,000 tonnes of rice for export have been stalled as a result of the country's worst flooding in decades. Some sources estimate that this could rise to more than 300,000 tonnes. Given these developments, the spotlight has now turned to South Asia to meet demand for the grain in the near term.

Despite the recent floods, which destroyed approximately 20-30% of the sugarcane crop in the Sindh region, we forecast 2011/12 sugar output from Pakistan at 4.1mn tonnes, 2.5% up from our previous estimates. This is largely due to an overall 5-8% increase in sugarcane yields, area harvested and favourable monsoon rains during the growing season. Sugar crushing is estimated at 82% and sugar recovery at 8.8%. According to provincial reports, higher sugar prices farmers received last year, coupled with strong demand from the industrial sector, have boosted planting in the provinces of Punjab, Sindh and Khyber Pakhtunkhawah.


http://www.researchandmarkets.com/research/b503cb/pakistan_agribusin

Riaz Haq said...

Former British foreign secretary David Miliband joins Pakistan private equity fund as advisor, according to Express Tribune:

In what appears to be a coup for the fledgling Pakistani private equity industry, Indus Basin Holdings has managed to get Britain’s former foreign secretary David Miliband on board as a senior adviser.

“We are delighted to be able to bring on board the expertise of Miliband who knows the region and its challenges well,” said Indus Basin founder and CEO Aamer Sarfraz, according to a press release issued by Miliband’s office. “He shares our conviction that investment in Pakistan’s agricultural sector can have substantial long-term impact on the country’s poorest farming communities.”

“I am delighted to be advising Indus Basin Holding, a company that is investing in Pakistan’s future at a time of such fundamental importance,” said Miliband in a press statement. “I care deeply about Pakistan, the development of its economy and its future in the wider region. IBH is committed to developing an agricultural sector which has huge potential, but currently lacks investment. I look forward to working with IBH in building support and investment in Pakistan’s agricultural capacity and productivity.”

Officials at the company say they had been trying for the past year and a half to secure the contract with Miliband, who served as Britain’s foreign secretary between 2007 and 2010. He also served as Britain’s secretary of state for the environment, food and rural affairs previously.
-----------
Indus Basin Holdings is only a relatively recent entrant into Pakistan’s nascent private equity and venture capital space but already began to attract a lot of attention for the kinds of big-name investors it was able to attract in its fund, which is focused on capitalising on opportunities presented by raising productivity levels in Pakistani agriculture.

The company’s investors include Tim Draper, the famous American venture capitalist known for being an early investor in Skype and Hotmail, and Baron Lorne Thyssen-Bornemisza, a Swiss aristocrat whose family owns the ThyssenKrupp, a German technology conglomerate with over 670 subsidiaries and 200,000 employees worldwide.

Indus Basin’s investments currently include Agroventures, a Faisalabad-based breakfast cereal manufacturer, and Rice Partners, a company that is focused on contract farming and marketing Pakistani rice directly to North American and European retailers.


http://tribune.com.pk/story/324941/high-connections-david-miliband-joins-pakistani-private-equity-firm/

Riaz Haq said...

Here's a Daily Times story on Pakistani Punjab's participation at an Ag exhibit in Germany:

Diplomats, international economic experts and investors in Berlin, Germany have termed the exhibition of agriculture items of Pakistan in Berlin as a great success of Punjab and Pakistan. As many as 21 different products and agriculture items have been displayed in the exhibition by Pakistani farmers and industrialists.

Addressing a function held in connection with the exhibition, Punjab Chief Minister Shahbaz Sharif said that he was thankful to political leadership and senior officials of Germany for the warm welcome extended to him and his entourage.

A large number of European investors, diplomats, Pakistani citizens and farmers attended the function. The chief minister expressed the confidence that his visit would help promote export of agriculture items of Pakistan and strengthening of Pak-German relations. He praised that the hospitality extended by German government and said he would always remember the people there.

Former MPA Chaudhry Arshad Jutt, who was also a member of the delegation, apprised the audience that the exhibition was the result of the chief minister and his colleagues’ efforts. He said that the chief minister and his colleagues paid all expenses from their own pockets for participating in it. Agriculture Secretary Arif Nadeem said that the Punjab government had allocated Rs 2 billion for promoting export of agriculture items to foreign countries. He said that due to the steps taken for this purpose, now farmers had to pay only 30 percent whereas the remaining 70 percent expenses would be borne by Punjab government.

The Livestock secretary said that besides export of high quality meat to European countries and setting up of modern slaughterhouses in Punjab, production of livestock was also being increased. Punjab Investment Board Vice Chairman Muftah Ismael said that Punjab government had sent teams to various countries for the promotion of exports.

Earlier, the chief minister and his team attended a reception arranged by the head of multinational company Metro. Shahbaz said that he and his government were thankful of the Metro International for the assistance provided for the exhibition of agriculture items in Germany.

Expressing his views regarding exhibition, Metro International chairman said that the chief minister and his government had taken a bold initiative through this exhibition. Dr Andreas Kohler, member parliament and president chamber of law, said that this exhibition would play an important role in dispelling the impression of extremism and terrorism about Pakistan existing in the western world. He said that Germany was ready for extending all kind of cooperation to Punjab in arranging more such exhibitions.

Shahbaz also visited a modern slaughterhouse in East Berlin. He evinced keen interest in various sections of the slaughterhouse. He said that similar slaughterhouses were being set up in Punjab for increasing the production and export of meat. The chief minister further said that like fruit and vegetables, Punjab government is also taking extraordinary measures for promotion of livestock.


http://www.dailytimes.com.pk/default.asp?page=2012\01\23\story_23-1-2012_pg7_23

Riaz Haq said...

Here's an Express Tribune report on Psakistan's fruits and vegetables exported to Sri Lanka:

A Pakistan trade delegation, visiting Sri Lanka these days, has proposed setting up a body under the title Horticulture Export Marketing Access with the objective of facilitating export of agricultural produce to Sri Lankan markets.

The proposal was floated by the leader of the six-member delegation, Faqir Nusrat Husain, at a ceremony held in Colombo.

The delegation, sponsored by the Trade Development Authority of Pakistan, is on a week-long visit aimed at exploring ways and means to enhance bilateral trade in fruits and vegetables, flowers and other agricultural produce.

Team members include prominent agriculturalists from across the country, who have specialised in production and export of various fruits and vegetables including guava, chikoo, mango, citrus, berry, potato, dry fruits, gur, tobacco (cigar) and fresh and dry dates.

Faqir Husain told Sri Lankan agriculturalists that Pakistan’s fruits and vegetables had good quality and were also cheaper, adding Pakistan provided an ideal alternative to Sri Lanka, which imported these items from far-off countries.

Eager to reap maximum benefits from the free trade agreement (FTA) with Sri Lanka, the delegation also planned to explore opportunities in the tea industry. In this regard, it will visit Kandy to interact with the local chamber of commerce and the Tea Research Board. It will also visit tea factories and spice gardens.

The team members plan to hold meetings with Sri Lankan fruit and dry fruit importers as well as other stakeholders to explore possibilities of enhancing bilateral trade.

Sri Lanka, which imported $300 million worth of agriculture produce from Pakistan last year, was the first country to sign an FTA with Pakistan. Since the agreement came into effect in June 2005, bilateral trade has strengthened and Pakistan is the second largest trade partner of Sri Lanka in the South Asian region.


http://tribune.com.pk/story/328188/pakistan-proposes-export-facilitating-body/

Riaz Haq said...

"As the green revolution tapered off, a poultry revolution began; in the late 1970s. Ever since, Pakistan has been gnawing away at broiler chicken and there’s no turning back", wrote Punjab's director general of board of investments in a recent Op Ed in Dawn.

In 2011/12 K&N’s expects to produce 80 million layer and broiler chicks, reports thepoultrysite.com.

In the 1960’s and 1970’s, obtaining safe, reliable sources of poultry feed was an insurmountable challenge in Pakistan. This led Khalil to set up his own feed mill to produce feed for K&N’s operations at Karachi in 1971. With the growing need of feed for the integrated production operations in Central Punjab province and Northern areas of the country, a feed mill established by a multi-national company at Lahore, was acquired by K&N’s to take advantage of low-cost feed ingredients available in the Central part of Pakistan.

The growth of commercial poultry production through the decades changed the mindset of consumers towards farm raised broilers and eggs, helped by lower prices and greater availability. Today, Desi chicken and eggs are produced in lower volumes and considered more of a delicacy.

Yet the strength of the live/wet chicken market culture, the negligible overheads of roadside sales – a butcher’s knife costs less than US$1 – and the reassurance of Halal slaughter remain significant influences slowing the uptake of processing, says Adil Sattar.

Practical problems, particularly the limited availability of cool chain facilities and frequent power breakdowns, have to be overcome with production and distribution of processed products inevitably involving high overheads.

"Earlier, within our industry, poultry processing was considered a non-viable poultry business activity as many firms had tried but ended up closing down their operations," says Adil. "At K&N’s, we endeavoured to develop the market, and other companies are now looking to start processing operations."

Today, chicken is the most popular protein source in Pakistan, primarily through the industry’s growth and success leading to lower cost and widespread availability, with per-capita consumption about 7kg (15.4lb) per year. The tradition is to eat chicken at home, always skinless cooked in curries, with rice or barbecued.

Restaurants offer local cuisine including a variety of curries, barbecue dishes and different types of rice, with a number of upmarket cafes and restaurants serving western cuisine and many of the international fast food caterers such as McDonald’s, KFC, Pizza Hut, Nando’s, Hardees and Subway also present.

Riaz Haq said...

Here's a News report on meat consumption in Pakistan:

The consumption of poultry meat increased by 239 percent in 11 years from 322 million tons in 1999/2000 to 767 million tons in 2010/11, but it is still only 0.7 percent of the global poultry production, experts said on Monday.

At a seminar organised by Big Bird to commemorate its 20 years association with the global poultry giant Hubbard pioneer of poultry in Pakistan Dr Yaqoob Bhatti in his paper revealed that the value of poultry infrastructure exceeds Rs300 billion and annual turnover of commercial poultry is Rs40 billion.

With 105 hatcheries, the annual broiler chick production is 820 million, he said, adding that the commercial egg production is 8.690 billion per annum in addition to 3.742 million production of rural eggs.

Pakistan Poultry Association former chairman Abdul Basit said that poultry is the cheapest source of animal protein not only in Pakistan, but the world over. The average daily animal protein consumption in Pakistan is only 17 grams per capita, while the average minimum requirement is 27 grams, he said.

There is a dire need to increase poultry production in the country that has largely grown without helpful government policies or facilitation, said Basit. The industry, for instance, has since long been demanding the government to disallow poultry farm clusters through a law as chicken farms at least 1.5km apart greatly reduce the risk of spread of diseases among various poultry flocks, he said.

He said his concern has to relocate its very large chicken farms each time when place was surrounded with many other farms too close to his farms. He said he has shifted his major high quality grand parent farms to Thar deserts. Dr Mustafa Kamal said that the consumption of mutton has declined rapidly, while that of beef and poultry has increased.

The share of poultry meat increased from 16.4 percent to 24.3 percent, he said, adding that the consumption of mutton declined from 0.649 million tons to 0.616 million tons, showing a fall of 20 percent in total meat consumption share.

Still, he said, Pakistan as a meat eating country produces around 50 percent broiler chickens of those produced in India, which has seven times human population and has a good chance to develop Grand Parent breeding operations, which has an existing capacity of producing eight million parent stocks for domestic as well as for export purposes.

Olvier Behaghel of Hubbard France said that Pakistani poultry improved efficiencies rapidly during the last 20 year that has helped it control the cost. Maturing time of a broiler has reduced during this period from four days to 46 days and from 38 days to 40 days, he said.

The weight gain of the chick at the time of maturity has increased from 1.5-1.7kg to 1.9 to 2kg and feed consumption by the time of maturity has declined from 2.2-2.5kg to 1.7-1.9kg. “Pakistan, he said, is gradually reaching global and Hubbard standards in chicken health, morality and efficiency in productive processes.

http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=70726&Cat=3

Riaz Haq said...

Here are excerpts of Express Tribune story on Nestle Pakistan's record revenue and profits:

Even as the economy continues to grow sluggishly, Nestle Pakistan announced another year of record breaking profits, which grew by 13.5% to reach Rs4.7 billion – or about Rs102.94 per share – on the back of a 26% increase in revenues, which reached Rs64.8 billion.
----------
Managing Director Ian Donald – a South African national who has been with the global parent company for 40 years – believes the key for Nestle to grow in Pakistan is primarily by growing the packaged foods market.

“Take the example of yoghurt. We are 80% of the market when it comes to packaged yoghurt. But that packaged segment is only 2% of the total market,” he said in an interview with The Express Tribune. “So it doesn’t really matter what our market share is. We need to grow the whole packaged segment.”

A key constraint to growing that segment, however, seems to be the limited purchasing power of the ordinary Pakistani consumer. “Our single biggest challenge is how to get the right quality product to the consumer at a price that they can afford,” said Donald.

Over the past year, inflation has not helped matters. While Nestle’s global food portfolio is highly diversified, in Pakistan it focuses heavily on milk and dairy products. As milk prices continue to rise by more than 20% a year, the company has not been able to pass on the entirety of that effect to its customers. This is at least partially reflected in its gross profit margins, which shrank by 1.2% to 25.8% in 2011. Energy costs have continued to go up as well. Nonetheless, the company was able to grow the volume of products sold by a healthy 12%.
-----------
“We have a lean mindset,” said Giuseppe Bonanno, the company’s head of finance and control in Pakistan. The company’s operating costs are certainly lower than most of its competitors. For instance, Nestle’s logistics costs are about 12% of revenues, compared to between 18% and 19% for both Unilever Pakistan and Engro Foods, two of its biggest competitors. Part of the advantage is economies of scale: Nestle about as big as both of its rivals combined. But part of it, said Donald, is that the company invests heavily in its infrastructure. In 2011, the company invested about Rs8.9 billion in building up its capacity.

Nestle already has a gigantic infrastructure in Pakistan. The company collects milk from over 190,000 farmers spread out over an area of about 145,000 square kilometers.

Another part of its growth strategy seems to be augmenting and developing its existing brands rather than adding newer brands to its line-up in Pakistan. “We cannot afford to invest in too many brands because we cannot grow all of them,” said Donald.

However, the company has introduced brands such as Nido Bunyad, which is a powdered milk product targeted to the rural consumer at a price that is competitive with non-packaged milk.

The rural economy seems to be a key market for Nestle. “It seems to us that the rural economy is growing faster than the urban economy. However, we are also consciously driving growth in the rural markets,” said Donald.

The company identifies its fastest growing markets as Peshawar, Multan and areas that it describes as “peri-urban”, areas that lie on the outskirts of most large cities and form a part of its metropolitan area.

Nestle’s growth in Pakistan has been a mixture of both organic as well as through acquisitions. When asked about whether Nestle might pursue acquisitions in the future, Donald replied: “We are always open to considering opportunities.”

As part of its plan over the next three years, the company will spend about 320 million Swiss Francs in growing its presence in Pakistan.


http://tribune.com.pk/story/333671/despite-stellar-earnings-nestle-pakistan-aspires-for-better-results/

Riaz Haq said...

Here's a News report on US presence at the Karachi Agri Expo 2012:

The US Ambassador Cameron P Munter on Saturday said that the United States is committed to the development of Pakistan’s agricultural sector.

The United States is working with government and private sector authorities to improve productivity and food security, and to increase farmers’ incomes and stimulate overall economic growth, he said speaking at the Dawn Pakistan Agri-Expo.

“This event highlights the collaborative efforts in agriculture between our countries that spans more than five decades and continues today,” the US envoy said.

The expo, a two-day national agricultural exposition supported by the U.S. Department of Agriculture (USDA) and the United States Agency for International Development (USAID), showcases new agricultural farming technologies, products, and development programs.

The US Ambassador Cameron P Munter, Karachi Consul General William Martin, and the US Embassy Agricultural Counsellor Todd Drennan highlighted US-Pakistan agricultural cooperation during a visit today to the Dawn Pakistan Agri-Expo.

Ambassador Munter and Consul General Martin toured the USA Pavilion, where they met with companies that are implementing USDA- and USAID-funded programmes and are importing US agricultural products.

The USA Pavilion, under the theme of ‘Linking US Agriculture to the World’ highlights US-Pakistan institutional linkages and partnerships, which are introducing new technologies, farm equipment, and farming practices to the Pakistani agricultural sector.

The exposition, taking place in Karachi on February 11 and 12 and in Lahore on February 17 and 18, brings together exhibitors and participants from across Pakistan and the world from various business sectors involved with agriculture production and distribution.


http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=92246&Cat=3

Riaz Haq said...

Here's Part 1 of National Geographic story about Pakistan's heartland of Punjab:

The fertile alluvium deposited by the mighty Indus river and its tributaries in Pakistan have given the country’s demographic heartland of Punjab an agrarian edge. Yet, errant canal planning and over-pumping from tube-wells have degraded vast tracts of land. Salinity and water-logging afflicts around 6.3 million hectares of land and an additional 4,000 hectare of land gets affected every year (estimates from University of Agriculture, Faisalabad, Pakistan, November 2011). Climate change and conflicts over hydroelectric impoundment infrastructure have also made the arable lands of the country further vulnerable to flooding, as we saw in the epic floods of 2010 when an estimated 20 million people were displaced.

Amidst all these challenges to the farming economy of the country, there are glimmers of hope that Pakistan’s elite are trying to reconnect with the land in sincere and innovative ways. During my last trip to Lahore – the capital of Punjab province and Pakistan’s second-largest city (after Karachi), I was heartened to see urbanites retreating to farms in the surrounding countryside. Previously such farms were merely ornamental playgrounds of wealthy families but now there is a growing interest in these ranks to reconnect with the earth for societal good.

Zacky Farms, just outside Lahore, is the brainchild of Zafar Khan, a Caltech-educated software engineer who runs one of the most successful information technology companies in Pakistan named Sofizar. What started off as a recreational venture is now a side-business supplying sustainably produced organic milk, vegetables and meat to nearby Lahore suburbs. The farm is modeled on a cyclical model of minimal wastes and multiple product usage. The cows are fed pesticide-free oats, clover and grass and their manure is used to fuela biogas plant which runs the dairy facility. In an era of electricity load-shedding, such an alternative source of energy at a local industrial scale is immensely valuable to replicate as a development path. The residue of the biogas is used to fertigate the fodder fields and vegetable tunnels, which along with green manuring obviates the use of fertilizers. Free-range chickens grace the fields and there is even a fish farm on site. Zafar and his Ukrainian-born wife are committed to sharing their experiences with other farming entrepreneurs in the country.

Further south in a more rural and remote part of Punjab, famed writer and erstwhile lawyer, Daniyal Mueenudin, maintains a mid-size farm which is exemplifying other kinds of innovations. The farm does not boast ecological farming practices, apart from tunnel farming that can help with land conservation and humidity control. However, Daniyal has changed the social landscape of his area through implementing a “living wage” for all his employees. Noting the high level of inequality in Pakistan’s hinterland, the Yale-educated former director of the university’s Lowenstein Human Rights Clinic, is practicing what he preached. He also owns a farm in Wisconsin and could have a comfortable life in the States but his social obligations keep him ensconced in Pakistan for most of the year....


http://newswatch.nationalgeographic.com/2012/02/23/farming-pakistan/

Riaz Haq said...

Here's Part 2 of National Geographic story about Pakistan's heartland of Punjab:

....Further south in a more rural and remote part of Punjab, famed writer and erstwhile lawyer, Daniyal Mueenudin, maintains a mid-size farm which is exemplifying other kinds of innovations. The farm does not boast ecological farming practices, apart from tunnel farming that can help with land conservation and humidity control. However, Daniyal has changed the social landscape of his area through implementing a “living wage” for all his employees. Noting the high level of inequality in Pakistan’s hinterland, the Yale-educated former director of the university’s Lowenstein Human Rights Clinic, is practicing what he preached. He also owns a farm in Wisconsin and could have a comfortable life in the States but his social obligations keep him ensconced in Pakistan for most of the year.

Raising the wage several-fold for works and farm manager, and also offering bonus incentives for performance, has led to positive competition that can help to erode the feudal levels of income disparity which exist in this part of Pakistan. At the same time, Daniyal is also committed to providing new livelihood paths for the agrarian workers as automation reduces farm employment in some areas. He has has fully funded a school and provided a merit-based scholarship for advanced degrees to students from the nearby village. One of the children from this school (the first in his family to even go to school) is now making his way through medical school in Lahore!

Zafar and Daniyal’s stories of commitment to constructive farming for social and ecological good may appear to be outliers but they are catching on and provide hope to a country which is all too often shadowed by despair. In the suburbs of Islamabad, tax incentives and planning rules to encourage farming by urbanites are leading to a growing culture of reconnecting with the land in residential farms. In rural areas, the disaster caused by the floods of 2010 brought forth numerous aid agencies with new ideas for sustainable farming. The Pakistani diaspora, often known in the West for professions ranging from taxi-driving to engineering, may well find opportunities for reconnecting to their land in far more literal ways. With growing commitment from land-owners it just might be possible to use the existential shock of recent natural disasters that have befallen the country into a proverbial opportunity for positive change.


http://newswatch.nationalgeographic.com/2012/02/23/farming-pakistan/

Riaz Haq said...

Here's an interesting idea proposed by BioNitrogen Inc, a Florida start-up, to make inexpensive fertilizer in South Asia:

In what may become a precursor of things to come in the Urea Fertilizer Industry, local fertilizer manufacturing plants in Pakistan were forced to shut last year for over six months. These shutdowns resulted in critical shortages of fertilizer which subsequently sent the costs of fertilizer rising one-hundred forty one (141) per cent in just 2 years. Industry officials sighted the country's gas load management plan as a key component of the shutdowns. The urea production shutdowns were the result of natural gas shortages which severely hampered the manufacturing of urea thus dealing a severe blow to Country's Agriculture Sector which many believe is the backbone of the entire economy.(2) In neighboring India, there are discussions that Urea prices will be linked directly to gas prices which would increase pressure on the farmers of India to maintain economic stability in the face of rising fertilizer prices.(3)

Industry data and global production data charts for nitrogen based urea fertilizer, often correlate the price of nitrogen fertilizers is directly related to the price of natural gas (methane).(4) (5) Manufacturing one (1) ton of anhydrous ammonia fertilizer requires 33,500 cubic feet of natural gas. In other words, natural gas is used to produce fertilizer which is used to grow crops. This relationship also has a direct impact on not just the agriculture economies of the world, but also the production of wheat, the main food staple in many countries throughout the world, which also plays a strong role in producing the feed for millions of livestock in not just Pakistan but Countries around the world.

What interests Dr. Terry R. Collins, the CEO of BioNitrogen, is the news accounts coming out of Pakistan often state for the record "It is a matter of fact that there is no alternative of gas for urea manufacturers as urea manufacturing process cannot be completed without gas supply." Dr. Collins offers this perspective, "There is in fact a viable alternative to using natural gas to produce to nitrogen based urea. BioNitrogen has developed a patent-pending process which specializes in the conversion of renewable agricultural waste biomass into urea fertilizer. Our small-format production facilities are designed for implementation in local farm communities, close to their required feedstock and abundant biomass."

Adds Dr. Mario Beruvides, BioNitrogen's CTO, "BioNitrogen is excited about introducing ourselves to the world as an extremely cost-effective and ecologically friendly alternative for producing extremely high quality nitrogen based urea fertilizer. If Pakistan were using our production methods and facilities, there likely would have been no closures in their country and no economic impact. This is part of BioNitrogen's corporate mandates of not only producing urea fertilizer, but we're absolutely committed to protecting the environment and contributing to local economic development while helping to feed to our planet."

As he continued to reflect on the events in India and Pakistan, Dr. Collins concluded, "Compared to traditional urea manufacturing facilities that use natural gas as a feedstock, our BioNitrogen plants will be much smaller and can be constructed and brought online for production much more quickly. ...


http://www.marketwatch.com/story/bionitrogen-corp-pakistans-urea-fertilizer-production-issues-may-be-a-global-precursor-of-the-future-2012-02-27-71130?reflink=MW_news_stmp

Riaz Haq said...

Here's some info on Nestle's rural entrepreneurship program in Pakistan:

The Small Entrepreneur Development Project was launched in March 2009 from a partnership between Nestlé Pakistan Ltd. (as implementing partner) and the Swiss Agency for Development and Cooperation (SDC) which has co-funded the project. Its aim is to contribute to the improvement of economic opportunities, income generation and food security in rural areas of the country. Livestock and dairy farmers are provided with training and assistance to both enhance their skills as small entrepreneurs and improve their market linkages. Training is provided through the Nestlé Agricultural Services in the location of training farms specially dedicated to the project.





Current dairy farming constraints


The livestock and dairy sector represent 11% of Pakistan's GDP. There are 10 million farming families and 50 million cattle heads in Pakistan, out of which 7 million farming families (approx 35 million people) live in the Punjab Province. Many of them are landless farmers.



The lack of sustainability of dairy farming in Punjab is due to the lack of training and skills, poor infrastructure, poor breeds, lack of good fodder management, lack of support mechanisms for the farmers, lack of financial services and expertise in running small enterprises.



It is then no surprise that there are no commercial dairy farms or formal dairy farming structures in Pakistan. The majority of these farmers are domestic dairy farmers with only 2 to 3 cows or buffalos.



All this amounts to poverty driven farmers, no socio-economic growth in the dairy sector, poor living conditions and very low social standing, particularly for women. 48% of the farmers are women. As part of their domestic chores, they care for the livestock but are not socially acknowledged for these services and are kept out of the decision making processes. Hence there is a strong need to initiate a development programme targeted specifically at the women which the Nestlé-UNDP Partnership Programme tackles with great success (see specific project description).



While the demand for milk and meat is growing by 5%, the actual supply increase represents less than 2% per annum. There is a large potential for farmers to play a positive role in the development of the dairy sector in Pakistan's economy. Regretfully, very few initiatives provide farmers with livestock and dairy training at the grass root level which could strongly link rural development to economic growth....
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Nestlé Pakistan has established the training facility over 103 acres of leased land as an investment for the development of the dairy sector and to work towards sustainable farming and an improved rural economy - benefiting the farmers through increased prosperity and food security. Furthermore, this win-win community development model is designed to sustain itself in the following manner: Institutional linkages with the Government departments and financial institutions once established will sustain beyond the life of the project; capacities of the farmers once built shall yield economic benefits and further contribute to generate employment; training modules developed and tested by Nestlé Agri-Services will continue to be used beyond the life of the project.


http://www.community.nestle.com/rural-development/asia/pakistan/Pages/small-entrepreneur-development-project.aspx

Riaz Haq said...

Here's a Businessweek story on Fatima Fertilizer investing
in Africa:

Fatima Fertilizer Co. (FATIMA), Pakistan’s third-biggest maker of the farming ingredient, plans to build a new factory in Africa at an investment of about $1 billion to tap international markets.

The company expects to finalize plans this year to set up the factory, Fawad Ahmed Mukhtar, chief executive officer, said in a telephone interview from his Lahore head office. The fertilizer maker may consider forging a partnership by investing $200 million, he said, without elaboration.

Fatima registered its American Depositary Receipts in New York in March 2011 to raise its profile and expand overseas, aiming to overcome a chronic gas shortage at home. Pakistani fertilizer makers including Engro Fertilizer Ltd. and Fauji Fertilizer Co. get as much as 50 percent less gas than they need to run their factories, curbing production, according to Foundation Securities Pvt. in Karachi.

Fatima’s planned Africa factory may have a capacity to produce more than 1 million tons of fertilizer because the company expects to get “the best gas rates,” Mukhtar said.

“Besides local sales, we are also looking to export from there to Pakistan, Brazil and the markets in Africa,” Mukhtar said yesterday. To set up the plant Fatima is considering countries including Nigeria, Algeria, Tanzania and Mozambique, where there is “enough gas, which means that they will offer us good rates and good terms,” he said.

Fatima rose 1.6 percent to 24.90 rupees at the close in Karachi yesterday. The stock has almost doubled in the past 12 months, compared with a 10 percent gain for the Karachi Stock Exchange 100 Index.
Diversifying Risks

Companies in Pakistan including Lucky Cement Ltd., the nation’s biggest producer of the building material, are expanding overseas to cut dependence on their home market. Lucky will begin construction of a cement factory in Congo by June through a joint venture.

Expanding overseas will help companies including Fatima to diversify risks, according to Taha Khan Javed, manager research at Foundation Securities.

“Pakistan is facing a severe shortage of gas, so that takes away the feasibility to establish a plant here,” said Javed. “From Africa they can export anywhere in the world.”

The company will rely on a mix of its own cash, bank loans and investment from partners to fund the new plant, Mukhtar said. Fatima posted a net income of 4.12 billion rupees ($45 million) in the year ended Dec. 31, the first annual profit in four years after it started commercial operations in July.

The Danish Industrialisation Fund for Developing Countries and Haldor Topsoe AS, a Denmark-based maker of catalysts, have agreed to partner Fatima and will also help arrange funds, Mukhtar said, without specifying if they will collaborate on the African factory.
ADR Trading

“We are looking at projects internationally for setting up new plants and starting production in two to three years,” said Mukhtar. Depending on the “opportunity at hand,” Fatima may set up more than one plant overseas, he said.

Fatima Fertilizer’s ADR, each representing 50 local shares, may begin trading in the over-the-counter market in New York by June, Mukhtar said. Bank of America Corp. is the market maker, Bank of New York Mellon Corp. is the depositary, and Standard Chartered Plc is the custodian bank, he said.


http://www.businessweek.com/news/2012-03-13/fatima-fertilizer-plans-1-billion-africa-plant-to-grow-overseas

Riaz Haq said...

eFinancal News reports that commodities spot market is planned for Lahore, Pakistan:

According to local media reports, the managing director for the Lahore Stock Exchange, Aftab Chaudhry, has announced that the exchange will look to set up a spot trading platform to enable farmers in Punjab to access better prices and allow banks to provide post-harvest financing to them.

Local regulator, the Securities and Exchange Commission of Pakistan, is already considering an application to establish a spot trading platform. Chaudhry said that if approval is not granted soon, the exchange would take matters into its own hands by establishing its own spot market using regulations governing co-operatives.

Chaudhry was reported to have described its own current spot commodity market as "opaque" with the pricing process dominated by middlemen.

A regulated spot market would allow farmers to access the best prices and also enable banks to lend more easily to them during the off-season once they have guarantees that the prices are an accurate reflection of the market.

Chaudhry said that the exchange is in advanced talks with many potential partners to establish the spot exchange by the end of 2012. The aim is to provide a trading system that combines both exchange technology and a mobile payment system using Singapore's Utiba system.

Utiba is currently used in more than 30 countries offering mobile payments and trading. Its mobile platform currently supports 500 million subscribers and processes over 12 billion transactions per year.

Agriculture is a key export for Pakistan, accounting for 21% of the GDP and 80% of the country’s total export earnings, with Punjab accounting for 29% of Pakistan's exports, according to figures compiled by the Punjab regional government. The main crops are cotton, wheat, rice, sugarcane and maize.

Pakistan already has a mercantile exchange, where futures are traded. Set up in 2007, the Pakistan Mercantile Exchange is licensed and regulated by the Securities and Exchange Commission and was the first technology driven, web-based commodity exchange in Pakistan. It has a 100% institutional shareholding.


http://www.efinancialnews.com/story/2012-03-20/commodity-spot-market-lahore-pakistan?mod=sectionheadlines-home-TT

Riaz Haq said...

Here's a Fiber2Fashion report on Pakistan's bumper cotton crop:

With around 14,548,845 bales already reaching the ginneries by March 15, Pakistan’s cotton output for the current season is expected to surpass record 15 million bales, according to Pakistan Cotton Ginners Association (PCGA).

PCGA Chairman Amanullah Qureshi said the country’s cotton output for next season is pegged at 17 million bales.

He reiterated the need for formulation of National Cotton Policy in consultation with all the industry stakeholders including ginners and growers, so as to protect their interests.

Mr. Qureshi said the Government should develop a mechanism to stabilise the cotton prices, instead of leaving the farmers and ginners at the mercy of textile mill owners.

He claimed that all production estimates presented by Governmental agencies and departments have proved to be incorrect, while those by PCGA have proved right.

He also called upon the Government to approve a bailout package for cotton cultivators who suffered a loss of over Rs. 225 billion due to textile millers lobby.

The PCGA Chairman urged the Government to direct the Trading Corporation of Pakistan (TCP) to buy a minimum 0.7 million bales of unsold cotton from ginners.


http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=109146

Riaz Haq said...

Here's an APP report on Pak food exports so far this fiscal year:

The exports of fish and fish preparations surged by 14.69 percent during the first eight months of current fiscal year (2011-12) against the corresponding period of last year.



The exports of fish and fish preparations were recorded at $195.284 million during July-February (2011-12) as against the exports of $170.274 million during July-February (2010-11), according to data of Pakistan Bureau of Statistics (PBS).



However, in terms of quantity, the fish exports witnessed nominal increase of 0.34 percent by going up from 74,265 metric tons to 74,518 metric tons.



On month-on-month basis, the seafood exports also witnessed positive growth of 13.88 percent during February 2012 when compared

to the same month of last year.



The fish exports during February 2012 were recorded at $21 million against the exports of $18.441 million during February 2011.



However, as compared to the exports of $21.401 million recorded during January 2012, the exports during February witnessed negative growth of 1.35 percent, the data revealed.



In terms of quantity, the fish exports increased by 5.57 percent in February 2012 when compared to the exports of February 2011, however decreased by 2.62 percent when compared to the exports

of January 2012.



The overall food exports from the country witnessed nominal increase of 0.59 percent during the first eight months by going up from $2.601 billion during July-February (2010-11) to $2.616 billion in July-February (2011-12).



The major food products that witnessed positive growth in exports included.



The food products that witnessed increase in exports during the period under review included rice (other than basmati), exports of which increased by 2.91 percent, fruits (15.02%), leguminous vegetables (1,315%), tobacco (37.85%), oil, seeds, nuts and kernels (59.84%), meat and meat preparation (16.46%) and other food products

(45.80%).



The commodities that witnessed negative growth in exports included basmati rice (17.78%), vegetables (36.69%), wheat (53.22%) and spices (1.49%).



The overall exports from the country during the period under review witnessed negative growth of 0.48 percent by going down from $15.263 billion to $15.189 billion.



Imports into the country, during the period, increased by 16.36 percent by going up from $25.600 billion to $29.788 billion.



Based on the figures, the trade deficit during the first eight months of the current fiscal year was recorded at $14.599 billion, against the deficit of $10.337 billion last year, showing an increase of 41.23 percent.


http://www.thenews.com.pk/article-42262-Pakistan-seafood-exports-surge-by-15pc-in-8-months

Riaz Haq said...

Here's a Pak Observer report on Pak fishing industry exports:

Karachi—Holland’s Ambassador to Pakistan Mr Gajus Scheltema disclosed that a powerful lobby of international fish exporters was strongly opposing the exports of fish from Pakistan to the European Union countries. Talking to mediamen in Karachi he said that the international fish exporters lobby was actively involved in creating obstacles in the way of Pakistan’s fish exports to EU nations.

When asked to name the lobby, the Dutch Ambassador said that the leading international exporters do not want to see fish exports from Pakistan. He, however, that Netherland was assisting the Balochistan government to develop Pasni Port and Fish Harbour that would help Pakistan to enhance fish exports to European Union countries. He pointed out that a firm, engaged in the exports of fish, had demanded license to export fish from Pasni to EU.

Mr Scheltema pointed out that the government of Japan had provided a grant of Rs800 million for the rehabilitation of Pasni Fish Harbour in Balochistan. Holland is engaged in rehabilitation of the harbour so that it meets the required international standards to export fish to EU and other countries in the world.

He said that the Japanese grant would be utilised for the procurement of a dredger; maintenance and dredging of the harbour; and extension and improvement of the breakwater.

Holland’s Ambassador further stated that his country could invest in agriculture, dairy and livestock in Pakistan. He said that Holland is one of the leading producers and exporters of dairy and livestock products in the world. He said that Holland and Pakistan should explore the agriculture, dairy and livestock sectors for mutual investment. Some Dutch companies are willing to explore avenues of investment in these areas in Pakistan and the companies could export agriculture, dairy and livestock products to European Union.

He said that Holland was keen to enhance trade with Pakistan and also supporting Pakistani business people who seek to export to the Netherlands. Scheltema said that their ‘Centre for Promotion of Imports from Developing Countries’ waseducating Pakistani exporters for improvement of their products to export level quality.

He said that Pakistan has a huge potential in agriculture and food processing sector and Holland is planning to invest in these sectors. He also pointed some trade hurdles in importing of cows and cattle from Netherlands to Pakistan.

He further said that Holland was willing to help government of Pakistan in promoting the wind energy in the country. He said that he had recently met the Federal Minister for Water and Power Syed Naveed Qamar and apprised him of the Dutch companies interest in developing wind energy projects in Pakistan.

Mr Scheltema said that Holland had strongly supported Pakistan in getting the GPS+ facility from the European Union that would help this country to enhance its textile exports share to EU markets. He said Holland was enjoying very cordial relationship with Pakistan and he was making efforts to strengthen the bilateral ties between the two countries. Holland plans to earmark 30 million euros for clean drinking projects in urban cities and some other water-related projects in Pakistan, he said. He said Holland had already worked in various water sector projects and keen to invest in water management, flood control, clean drinking water, waste water treatment and de-silting projects.


http://pakobserver.net/detailnews.asp?id=147970

Riaz Haq said...

Here's Khaleej Times on Pakistani food brands in UAE:

Pakistani food companies made inroads to the UAE market at the Gulfood exhibition in February. The major groups held fruitful meetings at the exhibition and they will start launching their products from June onward, according to industry insiders.

K&N’s Foods (private) Limited, a leading name in poultry and meat products in Pakistan, is expected to market its products in the UAE by June. Brands in 
edible oil like Sufi Cooking Oil and Habib Oil, leading herbal trademark Qarshi and confectionery products leader Hilal, among others are also planning to enter the UAE food market this year.

“We are in talks with some leading groups and distributors to launch our brand in the UAE and we are confident to market our products by June,” Atiq R. Siddiqui, K&N’s head of exports, told Khaleej Times.

K&N’s Foods, which started its operation in 1964, is the first international brand in recent years, which has given permission to export frozen items to the UAE. The brand is considered a beacon for Pakistan’s poultry industry and its halal processed chicken, ready-to-cook and fully-cooked products are popular among domestic consumers.

“We have established the brand in Pakistan and now the company is ready to make a foray into the international market. The UAE will be the first international and regional market for K&N’s products,” Siddiqui said.

In reply to a question, he said Gulfood is a premier event for food industry. It is considered a good opportunity to interact with stakeholders to promote the brand and explore new business opportunities, he said.

“We showcased our products at Gulfood and received a good response from local businesses. We are in discussion with some leading names to launch our brand in the UAE market,” he said.

As many as 23 Pakistani companies in the food business attended the Gulfood exhibition in Dubai this year and displayed their full range of products in Pakistan pavilion. The exhibitors had fruitful meetings with the local importers and indenters and most of them are optimistic to launch their products at competitive price in the Gulf markets.
------------
Pasha said the volume of Pak exports to the UAE touched $1.8 billion in 2011 out of which food group exports were to the tune of $500 million. “There is, however enough room to expand keeping in view the UAE’s global food imports of more than $7 billion annually,” he said.

In reply to a question, he said some projects in food business are in the pipeline that will further strengthen the bilateral trade relations. “There are a few joint ventures ranging from farmland acquisition to joint production of commodities, fruits and vegetables and building of state-of-the-art food silos are in the pipeline,” Pasha said.

Asif Jabbar, director and group chief executive of Alif Investments, welcomed the entry of Pak brands into the UAE market.

“We have successfully launched many Pakistani brands including the Junaid Jamshed and Meat One. It is good to see that more Pakistani brands in food business are set to enter the local market,” he said and cautioned the new entrants about the stiff competition in the local market.

“The marketing of a new brand in the UAE is not an easy job amid competition from international and regional brands. One should be aware of marketing cost and other expenses in an international commercial city like Dubai to find place in the competitive market,” Jabbar concluded.


http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/business/2012/April/business_April110.xml&section=business

Riaz Haq said...

Here's a BR report on State Bank of Pakistan's ag loans target for the year:

The State Bank of Pakistan has set Rs 285 billion target for disbursement of agriculture loan among small farmers for current fiscal year.

Director Development Finance of SBP Karachi, Dr Muhammad Saleem said this while addressing "Agricultural & Industrial Awareness Convention-2012" here on Tuesday.

Khyber Pakhtunkhawa Higher Education Minister Qazi Muhammad Asad Khan participated as chief guest in the convention organised by the State Bank, Rawalpindi in collaboration with commercial banks and insurance companies.

More than 120 stalls of handicrafts, clothing agriculture equipment, handmade beautiful jewellers, banking products and food, etc, were set up by women from various organisations and banks to promote rural culture and potential of trade in these areas.

Horse dancing and culture displays made this event more beautiful.

More than 1500 people including students, farmers and women participated in the convention.

Chief Manager State Bank Akhtar Raza, Group Head of United Bank Ltd (UBL) Jameel Ahmed, Vice Chancellor Hazara University Haripur, Professor Dr Sahawat and others were also present on the occasion.

Dr Muhammad Saleem said the SBP had set Rs 270 billion agriculture loans target for small farmers in the previous financial year while actually Rs 260 billion loan was distributed among farmers.

He said that agri loan is being given to farmers through one-window operation.

He said farmers could give better output if banks provide them loan in time on easy instalments.

"Agriculture is backbones of our economy and its share in Gross Domestic Product (GDP) is 21 percent.

Livelihood of 47 percent people is directly or indirectly is linked with agriculture sector.

The SBP is playing pivotal role in progress of agriculture sector by providing loans especially to small farmers," he said.

Dr Muhammad Saleem said the SBP formulates policy in consultation with all the stakeholders including farmers.

The SBP changes its policy with passage of time by keeping the necessities of farmers in view.

Addressing the convention, Khyber Pakhtunkhawa Higher Education Minister Qazi Muhammad Asad Khan said land of Haripur is fertile and the farmers of this area can give maximum production if they were given some financial support for seed, fertiliser and tractor and other inputs necessary for increasing production.

He urged the SBP to set up its branch in Haripur for promotion of small industries and agriculture sector.

About the Haripur University, He said Haripur has also become a part of the community of 120 universities.

"The government should increase budget for education to 4% of GDP.

The quality of education can only be improved by increasing the budget for this sector.

Group head of UBL, Jameel Ahmed said the State Bank has good legal framework and governance in the region.

The employees of the Bank are servants of people.

"It is your money and used to benefit you," he added.

Vice Chancellor Hazara University Haripur, Professor Dr Sahawat said knowledge-based economy and use of latest technology is of vital importance for progress of agriculture sector.


http://www.brecorder.com/agriculture-a-allied/183/1175388/

Riaz Haq said...

Here's a Zee News report on crop yields in South Asia:

Productivity of major food crops such as wheat, rice, maize and pulses in India is almost half of that in neighbouring China, according to a data.

In fact, yield of staple grains like maize and pulses in India is even less than that of countries like Pakistan, Bangladesh, Nepal and Myanmar, the data presented in Parliament by Agriculture Minister Sharad Pawar last week said.

The productivity of rice in India is 3,264 kg per hectare, while in China it is 6,548 kg a hectare, the data compiled by UN's agriculture body FAO for the year 2010 said.

It is also high in Bangladesh at 4,182 kg/hectare and Myanmar at 4,123 kg per hectare.

China also tops the list in wheat with yields of 4,748 kg per hectare, whereas for India it stands at 3,264 kg a hectare.

India stands at the bottom in terms of maize and pulses productivity compared to China, Pakistan, Bangladesh, Nepal, Sri Lanka and Myanmar.

Bangladesh leads the tally in terms of maize yields with 5,837 kg per hectare, followed by China at 5,459 kg a hectare, Myanmar 3,636 kg/hectare, Pakistan 3,558 kg per hectare, Nepal 2,118 kg every hectare, Sri Lanka 2,806 kg a hectare and in India it is 1,958 kg/hectare.

In pulses, China tops the list with 1,567 kg per hectare followed by Myanmar at 1,114 kg a hectare, Bangladesh at 871 kg/hectare, Nepal 791 kg per hectare, Pakistan 762 kg every hectare, while in India it stands at 694 kg per hectare.

Pawar said that productivity depends on factors like rainfall, extent of inputs such as fertiliser, micro-nutrients, seed replacement rate, duration of crop, extent of area sown under any crop and the nature of lands used for cultivation.

To enhance the agricultural production, the government is working on frontier areas of research like marker assisted selection, stem cell research, nanotechnology, cloning genome resource conservation, Pawar said.

The National Institute of Abiotic Research Management has been established in Maharashtra to address issues related to impending climate change, he added.

That apart, the National Institute of Biotic Stress Management and Indian Institute of Agricultural Biotechnology are in the pipeline for undertaking high quality research, the minister added.


http://zeenews.india.com/business/news/economy/major-crop-productivity-in-india-just-half-of-that-in-china_44529.html

Riaz Haq said...

Here's a Reuters' report on rice exports from India & Pakistan stabilizing prices:

A rebound in rice supply from India and Pakistan this year will calm fears over food inflation faced by poor nations as cheaper grain from the South Asian neighbours corners a third of the global market.

South Asia’s ample grain stocks will help it undercut key traditional suppliers, as a populist scheme in Thailand prices its grain out of competition and high export floor prices in Vietnam deter some buyers.

India is likely to emerge as the world’s second largest rice exporter in 2012, selling around 7 million tonnes, while Pakistan’s shipments are expected to bounce back to about 4 million tonnes amid the high prices of rival Thailand.

“Indian rice supplies will act as a price stabilisation factor against high global food inflation,” said Tajinder Narang, advisor at a New Delhi-based trading company Emmsons International.

Global food prices rose in March for a third straight month with more hikes to come, the UN’s Food and Agriculture Organisation (FAO) said last week, with higher prices of oilseeds and grains contributing to the rise.

The FAO index, which measures monthly price changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 215.9 points in March, up from 215.4 points in February.

Although the index level is below its Feb. 2011 peak of 237.9, it still exceeds the level during the 2007-08 food price crises that triggered global alarm.

After benchmark Thai white rice prices climbed to a record above $1,050 a tonne in May 2008, several nations, including India, put a ban on exports.

That left buyers scrambling for supplies, unleashing concerns over food inflation and the threat of unrest in poor nations in Africa and Asia. But high stock levels in India and Pakistan could help avert a replay this year.
---------
India’s exports this year are expected to jump 50 per cent from last year’s shipments of 4.6 million tonnes, according to data from the US Department of Agriculture. India had exported 2.2 million tonnes in 2010.

Neighbouring Pakistan, which is expected to ship 3.8 million to 4.0 million tonnes in 2012, or an increase of at least 19 percent from 3.2 million last year, is cracking new markets with the sale of 200,000 tonnes to China and unconfirmed exports to the Philippines through unofficial channels.

“When we got a setback from Iran, our exporters looked elsewhere and that has led to diversification,” said Javed Agha, chairman of the Rice Exporters Association of Pakistan, referring to the impact of tightening Western sanctions over Iran’s nuclear programme.

In Thailand, prices have spiked due to a government intervention scheme due to run until the end of June, that is paying farmers 15,000 baht for a tonne of paddy, lifting Thai rice export prices to $500-$560 per tonne....


http://dawn.com/2012/04/11/india-pakistan-rice-supplies-to-ease-agflation-fears-wa/

Riaz Haq said...

Here's a PakistanToday report on SBP's efforts to increase funding of agriculture and financial literacy among farmers:

Presiding over a one-day ‘Farmers’ Financial Literacy & Awareness Program on Agricultural Financing,’ which was jointly organized by State Bank and Habib Bank Ltd. today at NRSP Training Center, Bahawalpur, he said the agriculture sector has a key role in country’s economy and stressed the need for making necessary finances available to farmers for multiple cropping activities. He outlined SBP’s efforts for creating awareness amongst the farming community and developing capacity of commercial banks through its various training and awareness programmes.
--------------------
Dr. Saeed Ahmed, Head, Agricultural Credit and Microfinance Department, SBP said the programme is aimed at creating awareness among the farming community about agriculture financing products & services offered by banks, money management techniques and lending procedures, documentations, etc. Besides, it would also develop capacity of agriculture field officers of banks in agri. financing and synergize the efforts of all stakeholders including policy makers, executing agencies, service providers & farming community to improve access to agricultural credit, he said, adding that SBP’s promotional initiatives and policy interventions have translated into around 200 percent increase in the flow of credit to the agriculture sector from Rs. 137.4 billion in 2005-06 to Rs. 263 billion in 2010-11.
However, he pointed out, despite this encouraging growth, the disbursement to the agriculture sector was around 40% of the total estimated credit requirements. ‘SBP has planned to increase the disbursement to 70-80 percent during the next five years covering 3.3 million borrowers by adopting a multipronged strategy,’ he added.
The inaugural session was followed by a technical session for the agricultural credit staff of banks in which senior officials of SBP and HBL made detailed presentations on dynamics of agriculture finance and related policies. The purpose of this session was to train the agriculture finance officials of banks enabling them to conduct farmers’ financial literacy programs at their end and to share the best practices in agriculture lending with the participants.


http://www.pakistantoday.com.pk/2012/04/12/news/profit/agriculture-can-farm-out-economy/

Riaz Haq said...

Here's a News report on rising sales of cars, motorcycles and tractors in Pakistan:

Sales of automobiles in the first nine months (July-March) of the current fiscal year increased 15 percent to 128,576 units, compared to 111,852 units same period last year, according to the data released by the Pakistan Automotive Manufacturers Association (PAMA).



According to the data, in the third quarter (Jan.-March) of this year, automobile sales increased 7 percent to 46,632 units from 43,753 units in the correspondent quarter last year. When compared with the second quarter of this year, sales in the third quarter showed an impressive growth of 22 percent.



Pak Suzuki Motor Company (PSMC) continued to depict strong sales showing a growth of 32 percent in the July-March period to 81,360 units compared with 61,693 units in the same period last year. Analysts attribute strong growth to the yellow cab scheme announced by the Punjab government. In March 2012 alone, PSMC sales stood at 11,198 units, up 16 percent from same month last year and 12 percent from February 2012.



On the other hand, Indus Motor Company sales growth remained subdued during the period under review. The company sold a total of 38,858 units compared to 37,259 units in the same period last year, up by 4 percent. In the third quarter, the company sold 14,792 units against 14,851 units in the same period last year.



Samina Kanji, an analyst at BMA Research, a 15 percent year-on-year growth in auto sales is primarily due to the yellow cab scheme of the Punjab government. On the other hand, motorcycles and three wheelers sales increased on month-on-month basis and sales in March stood at 70,671 units as compared to 65,011 an increase of 5,660 units, the data showed. Total sales of farm tractors decline to 6,229 units as compared to previous month sales of 8,906 units. Sales of trucks and buses sales in March stood at 379 units as compared to 304 units in February 2012.


http://www.thenews.com.pk/Todays-News-3-102452-Auto-sales-show-15pc-growth-in-nine-months

Riaz Haq said...

Here's an AP report on Benazir Income Support program in Pakistan:

Clutching photocopied ID cards in bony fingers, a roomful of Pakistan's poorest women sit on gray plastic chairs and wait in silence for something many have never experienced: a little bit of help from the government.

It comes in the form of a debit card that is topped up with the equivalent of $30 every three months, enough to put an extra daily meal on the table, buy a school uniform or pay for medical treatment in a country where soaring food and fuel costs are hurting millions who already live hand-to-mouth.

The program is something of a success story for a government widely seen as corrupt and inefficient, as well as for international donors that help implement and fund it. But the very need for the scheme highlights the poverty stalking a country whose stability is seen as key to the fight against Islamist extremism.

Other cash-transfer programs in Pakistan have been plagued by graft and allegations that only supporters of the party in power received the funds. Many feared this program, named after Benazir Bhutto, the late wife of President Asif Ali Zardari, would go the same way.

But that hasn't happened, at least not significantly. The Benazir Income Support Programme is modeled on similar efforts in Africa and South America, part of a quiet revolution in the way countries and development agencies are helping the poor. Initial concerns that recipients would fritter away the money have proven unfounded, and giving cash is now accepted as a vital and cost-effective aid tool.

"I spend the money on my kids, what else would I do?" said Rifat Parveen, a mother of five who sometimes has to serve only bread and boiled chili peppers for the evening meal. "Even if a poor person gets 10 rupees (5 cents), he or she will be grateful."

When a woman is called, she goes to a room where her identity is checked against an electronic database and her thumb print taken electronically. A bank employee then gives her the card — and a crash course in how to use it — before she returns to her village.

As they do elsewhere in the world, women in Pakistan must receive the money on behalf of their families because research shows they spend it more responsibly than men do. They must also first obtain a valid identity card to be eligible. Both requirements have been credited with pushing women, discriminated against in Pakistan, a little into the mainstream.


http://www.foxnews.com/world/2012/04/17/in-pakistan-welfare-scheme-shows-signs-success/

Riaz Haq said...

Telenor to offer agri info to farers via its wireless telephone network, reports newstribe:

Telenor Pakistan, in partnership with the Government of Khyber-Pakhtunkhwa, will provide agriculture and livestock information to farmers in the province.

In addition, farmers will be offered the Easypaisa platform to trade in agricultural commodities. Information will be provided via push SMS, voice recordings and small community gatherings.

The aim is to benefit farmers — especially small farmers — by providing them relevant and timely information, and the ability to carry out related mobile transactions on their handsets. All information will be provided by the Government of Khyber-Pakhtunkhawa while Telenor Pakistan will act as the distribution channel of the information. A pilot project will initially be run in Mardan district.

To mark the occasion an MoU signing ceremony was arranged at a local hotel. Arbab Muhammad Ayub Jan, Minister for Agriculture, Khyber Pakhtunkhwa was the chief guest. The MoU was signed by Roar Bjaerum, Vice President Financial Services, Telenor Pakistan and Arbab Muhammad Ayub Jan, Minister for Agriculture, Khyber-Pakhtunkhwa.

Roar Bjaerum, in his comments, highlighted the benefits the project will bring to the farmers of the province. “We will provide farmers the information they need to grow better crops and to raise hardy livestock. By doing so, we want to help them make more informed decisions when it comes to agriculture and livestock planning and trading. This way we hope to contribute toward alleviating poverty and empowering farmers economically. We will also offer mobile branchless banking solutions to enable farmers to carry out transactions right on their mobile phones through Easypaisa.”

Ayub Jan in his remarks spoke about the partnership between Telenor Pakistan and the Government of Khyber Pakhtunkhwa’s Agriculture, Livestock and Cooperative Department (ALCD). He said: “The Department has the mandate of promoting the interests of agriculture and livestock farmers in the province of Khyber Pakhtunkhwa. It has undertaken various initiatives to modernize the sector, and to augment the dissemination of relevant information to farmers to help increase production. Our partnership with Telenor Pakistan is another step in this direction. We are ready to offer all the support it needs to achieve its goals for this project.”

Small farmers, living in far-flung areas, are usually isolated from market information which may help them in dealing with commodity whole sellers (‘beopari’ and ‘arthis). They also do not have immediate access to information about best practices in agriculture and livestock rearing.

Telenor Pakistan’s project will help farmers in getting the information they need to increase yield through access to best quality commodities, latest agri trends, information on judicious use of pesticides and fertilizers, best breed of livestock, new methods of disease control, and quality feed and fodder.


http://www.thenewstribe.com/2012/04/18/telenor-to-partner-with-kp-to-provide-agri-information-to-farmers/

Riaz Haq said...

Here's a Dawn report on Pakistan's plan to export surplus sugar:

The government intends to export 400,000 tons of surplus sugar and believes that the performance of the agricultural sector is improving despite natural calamities.

“The good news about surplus sugar was given to President Asif Ali Zardari during a meeting at the presidency by a delegation of the Pakistan Sugar Mills Association led by its chairman Javed A. Kayani,” president’s spokesman Farhatullah Babar said on Thursday.

The PSMA chief said sugar production stood at about 4.7 million tons. After meeting the domestic requirement of 4.2 million tons, about 400,000 tons of sugar is available for export. “Export will enable mill owners to make payments to growers in Khyber Pakhtunkhwa, Punjab and Sindh,” he said.

Sources in the agriculture sector said the country was exporting wheat and rice and sugar would be the third major commodity to be exported. They said the Punjab government was already exporting wheat and the centre was sending the surplus crop to Iran.

President Zardari expressed satisfaction over the sugar production and said: “It is a matter of great satisfaction that despite unprecedented natural calamities the country is not only in a position to meet its requirements but is also poised to export sugar.”

He said the government was committed to working in consultation with the sugar industry to solve its problems. “Only through the pro-active involvement of the business community and industrialists, the continuity of policies could be
ensured,” the president was quoted as saying.

He advised the government to hold a meeting with the PSMA so that its proposal to export sugar could be sent to the Economic Coordination Committee of the cabinet for consideration.


http://dawn.com/2012/05/04/plan-to-export-400000-tons-of-sugar/

Riaz Haq said...

Here's Daily times report on cotton & textile industry in Pakistan:

All Pakistan Textile Mills Association (APTMA), with over 50 percent ($14.8 billion) contribution to the total national exports ($25 billion) and 78 percent share in the textile exports of the country, is the largest trade union of Pakistan as well as contributor to the national economy of the country.

Due to effective policies and leadership of APTMA, this year cotton production increased to 15 million bales despite two million bales lost due to floodwaters, as compared to the last year’s 11.7 million bales, thus making Pakistan self-sufficient in cotton sector for the first time in 10 years.

To rid the country of energy crisis, the association is actively engaged with various stakeholders, including the Sui Northern Gas Pipeline Limited (SNGPL), Petroleum and Gas Ministry and standing committees of the National Assembly. Out of 300 days, gas remained closed for 156 days causing loss of $5 billion cotton to production capacity of the country. Advocating the case effectively with the government, the association ensured five days a week gas supply to the industry, besides getting electricity load shedding exemption.

The association’s proposal of levying gas surcharge for gas exploration and laying of new pipelines was accepted. The APTMA leadership and members are also advocating for the Vision 2020 to resolve the gas crisis and sustainable growth of the energy sector, while clarifying how much energy is going to be produced from hydel, coal and other sources besides gas exploration. The association believes that only a futuristic vision can ensure affordable energy for the industry as well as domestic sector of the country.

APTMA group leader Gohar Ejaz said their strong advocacy for the free market mechanism during 2010-11 helped transfer Rs 400 million to Pakistani cotton farmers, equal to their income of eight years, and in the wake of price increase in the international market, remained the biggest contribution of APTMA for the welfare of the stakeholders. He said farmers got prosperity, which resulted in value addition to the crop and an increase of $5 billion export. While in 2011-12, resolving the energy crisis for the Punjab industry remained one of the biggest contributions of APTMA, he said.
----------
Research and development is the key to survival and growth of any industry. Realising this aspect, APTMA has made it a law to collect Rs 20 per cotton bale from the mills to spend this amount on research through Pakistan Central Cotton Committee (PCCC), a semi-autonomous body, with the federal minister for textile industry as its president. Last year, APTMA contributed Rs 300 million, as collected against the production of 15 million cotton bales in the country.

APTMA is also fulfilling its corporate social responsibility towards promotion of textile education in Pakistan. The association established textile colleges in Faisalabad, Karachi and other cities, which were later handed over to the government.

Established since 1957, APTMA is the premier textile industry association having 350 member mills and offices in Lahore, Karachi, Islamabad and Peshawar. Although textile sector has a total 14 associations of various stakeholders, APTMA is the only body, which is taking up the case of whole sector to provincial, national and international level for the growth of the sector – from farmer to exporters.

Textile industry contributes 8.5 percent of the GDP, while APTMA is 50 percent of 8.5 percent textile contribution towards GDP. APTMA provides direct employment to one million workforce as well as three million indirect jobs.

Pakistan is the fourth largest cotton producer in the world as 98 percent of 15 million cotton bales produced in Pakistan are consumed by APTMA members.


http://www.dailytimes.com.pk/default.asp?page=2012\05\07\story_7-5-2012_pg7_5

Riaz Haq said...

Here's Daily Times on Asad Umar's assessment of Pak agriculture:

The low output also adversely affects capability of farmers to earn more, he added. Pakistan, which has been dubbed as a ‘great bread basket’ is struggling due to these factors and is now increasingly becoming an importer of a large number of agri commodities. At the same time, Umar said, Pakistan agriculture sector also faces huge post-harvest losses of 40-80 percent if compared with global benchmark. This double blow—low output and high losses, diminishes income of growers further, he maintained.

Similar is the case with agriculture credit facilities, farm mechanisation and availability of water, he said and added these structural problems need to be addressed. As against 20-25 tractors per square kilometres of arable land for global benchmarks, availability of tractor for Pakistani farmer has been about 10 times lower from this level.

Much to the dismay of farmers, he said, agricultural credit disbursed to farmers in Pakistan declined from $3.4 billion in 2007-08 to $3.1 billion in 2010-11. During the same period, Indian Agricultural Credit increased from $63.3 billion to $103.4 billion, he said. Agricultural credit in Pakistan is 8 percent of agri gross domestic product while in India, it is 31 percent of agri GDP.

Water, being main input for agriculture sector also failed to get attention as far as increasing its supplies for farmers, Umar said and added losses of water are as high as 40 percent before reaching farm gate. He stressed the need to plug these wastages on priority bases. He lamented that despite having tremendous strengths and opportunities, output of agriculture sector is simply pathetic. Our mangoes, citrus and basmati rice are the best in the world, he said and added 75 percent of arable land is irrigated, which is an unmatched blessing.

The real potential agriculture sector is not merely a dream, he said and added many progressive farmers are achieving these levels in various parts of the country. Progressive farmer yields are around 50 percent higher than average yields for the main crops , he said.

Emphasising efficient use of water for reaping optimal benefits, Umar said irrigating an additional 5.0 percent land can generate Rs 100 billion additional farm income.

Sharing his vision about farmer cooperatives, Umer said economy of scale in agriculture sector can be achieved by forming vibrant clusters of farmers. Unfortunately, he said, cooperative role model has been misunderstood in Pakistan and that is small land and animal holding leads to highly inefficient farming practices.

In sheer contrast, he said, Indian cooperatives contribute around 50 percent of the total agricultural credit disbursement and 60 percent of the sugarcane procurement is done by the cooperatives sector. In France, he maintained, 75 percent of all agricultural producers are members of at least one cooperative and cooperatives handle 40 percent of food and agricultural production.


http://www.dailytimes.com.pk/default.asp?page=2012\05\10\story_10-5-2012_pg5_16

Riaz Haq said...

Here's an APP report on Pakistan's dairy industry:

Pakistan can easily triple its milk production by employing simple methods while latest measures can further milk output by 900 per cent.

Pakistan has impressive dairy industry which can be exploited to its real potential, said Economic Councilor Embassy of Netherlands, Ian Van Ranselaar here on Thursday.

He said a developed environment can help revolutionize Pakistan's dairy industry.

"A Dutch cow produces nine times more milk a Pakistani cow or buffalo can produce", he said and added that some measures are needed to bring per cow production of both friendly countries at par.

The Dutch diplomat was talking to Vice President Federation of Pakistan Chamber of Commerce and Industry (FPCCI) Mirza Abdul Rehman, Chairman Coordination Atif Akram Sheikh and Chairman Media Malik Sohail.

Ian Ranselaar further said that 16 Pakistani major dairy stakeholders are due to leave for Netherlands to know the latest trends and techniques.

He said currently balance of trade is in favour of Pakistan and they are working on various projects to boost Pakistan economy.

The diplomat said various Pakistani products including rice, textiles, surgical goods, sports hardware, leather products and fruits are of superior quality but local entrepreneurs lag behind in branding which has been identified as a major obstacle.

"Security situation in Pakistan is not as bad as perceived in many countries which is shying away investors. Pakistan should improve its perception", the diplomat remarked.

The Dutch diplomats were all praise for the tireless efforts of Pakistan Commercial Councillor in Hague.

On the occasion, Mirza Abdul Rehman said with 180 million population, Pakistan has great potential for investment, vast space for business activities and there is no issue of law and order.

Atif Akram Sheikh said both the countries have good political ties which should supplement our trade relations.

Pakistan has three times the animals that Germany has, but yields are one-fifth of Germany's and one-third of New Zealand, representing a significant loss, he added.

Business community is satisfied with the efforts of the Ambassador Hugo Gajus Scheltema, said Sheikh, adding that issuance of visa should be made easier.

Malik Sohail said being the fourth largest producer of milk in the world, Pakistan produces 35 billion liters of milk from around five million animals which is worth Rs.177 billion.

"Our dairy sector is growing by five per cent per annum while demand is increasing by fifteen per cent which calls for urgent measures to address issues effecting production", he underlined.

Pakistan is processing only two per cent of milk production which if increased will help boost living standard of rural population and economy.


http://www.brecorder.com/top-news/1-front-top-news/56904-pakistan-has-potential-to-enhance-milk-production-by-900pc-.html

Riaz Haq said...

Here's a special CNN report on a Pakistani village by Wajahat Ali:

This is a story affecting millions of Pakistanis — and it does not involve suicide bombings, honor killings, extremism or President Zardari's mustache.

"What would you like to be when you grow up?" I asked Sakafat, a boisterous 12-year-old girl, while visiting a remote Pakistani village in the Sindh province.

"A scientist!" she immediately replied. "Why can't we be scientists? Why not us?"

The confident Sakafat lives in Abdul Qadir Lashari village, which is home to 500 people in Mirpur Sakro. It is in one of the most impoverished regions of Pakistan.

There was a characteristic resilience and optimism in this particular village. This should come as no surprise to anyone who knows anything about Pakistan's often dysfunctional, surreal yet endearing daily existence.

The 500 villagers live in 48 small huts, except for the one "wealthy" family who recently built a home made of concrete. The village chief, Abdul Qadir Lashari, proudly showed off his village's brand-new community toilets, paved roads, and water pump that brings fresh water to the village.

These simple, critical amenities, taken for granted by most of us in the West, resulted from the direct assistance of the Rural Support Programmes Network, Pakistan's largest nongovernmental organization. RSPN has worked with thousands of similar Pakistani villages to help them achieve economic self-sufficiency.

I visited the Sindh village with RSPN to witness the results of using community organizing to alleviate poverty. The staff told me its goal was to teach villagers to "fish for themselves."

Every household in the Abdul Qadir Lashari village was able to reach a profit by the end of 2011 as a result of professional skills training, financial management, community leadership workshops and microloans.

Specifically, a middle-aged, illiterate woman proudly told me how she learned sewing and financial management and was thus able to increase her household revenue, manage her bills, and use a small profit to purchase an extra cow for the family. She was excited to introduce me to her cow, but sadly due to lack of time I was unable to make the bovine acquaintance.
--------
Asked what single thing she felt was most important most for her village, she replied education. Upon asking another elderly lady what she wishes for Pakistan, she repeated one word three times: "sukoon," which means peace.

When it was time to depart, the people of the village presented me with a beautiful handmade Sindhi shawl, an example of the craftwork the villagers are now able to sell for profit.

As I left the village with the dark red, traditional Sindhi shawl adorned around my neck, my thoughts returned to the 12-year-old girl, Sakafat, who passionately asked why she couldn't become a scientist.

I looked in her eyes and could only respond with the following: "You're right. You can be anything you want to be. And I have every confidence you will, inshallah ("God willing"), reach your manzil ("desired destination").

By focusing on education and local empowerment to lift the next generation out of poverty, Sakafat's dream could indeed one day become a reality for all of Pakistan.


http://www.cnn.com/2012/05/13/world/asia/pakistan-empowerment/index.html

Riaz Haq said...

Here's a Daily Times story on Pak mango exports:

Mango farmers across Pakistan continue their partnership with USAID to maximise yields, improve product quality, introduce better packaging and create market linkages.

Seven mango farms from Sindh are already scheduled to send commercial shipments to high-end markets across the globe in June of this year.

All these advancements are helping Pakistani mango growers tap into new export markets with each passing season. As the mango season for 2012 begins, this partnership continues to bear fruit. Ghulam Sarwar Abro said a private farm in Kotri Sindh has been a partner with USAID’s Mango Programme.

“We are confident with USAID’s support, all of the ground work has been done. We have the required standards, infrastructure and linkages to tap the international markets on a competitive footing.” More farms will participate in commercial shipments as soon as harvesting begins in Punjab. USAID has signed Infrastructure Upgrade Agreements (IUAs) with 15 mango farmers across Pakistan on a cost-sharing basis to build pack houses.

USAID has also provided assistance to 15 farmers in achieving GlobalGAP certification under a similar cost-share agreement and has planned to increase this number by the end of this season by adding another 12 certified farms.

The USAID Mango Programme is currently in its third year and this year the programme is specifically concentrating on enhancing the market linkages for Pakistan’s mango sector.

He said this project is designed to help the Pakistani economy achieve its export potential. The project has three main areas of interest including an improved Pakistan trade environment through improved regulation, policies, systems and capacity, facilitation of trade at Pakistani borders and establishment of sustainable and competitive Special Economic Zones, including Reconstruction Opportunity Zones.

The project emphasises capacity-building activities that facilitate increased exports from industry, services and agriculture enterprises.


http://www.dailytimes.com.pk/default.asp?page=2012\05\25\story_25-5-2012_pg5_9

Riaz Haq said...

Here's a Daily Times story on hot water treatment of Pak mangoes for export:

Pakistan’s largest hot water treatment plant for removal of various diseases in mango was inaugurated on Saturday. It has been established under the public-private partnership according to the standard of United States Department of Agriculture (USDA), World Health Organisation (WHO) and International Quarantine Standards by the name of Pakistani Horti Fresh Processing (Pvt) Ltd.

The project which was completed in record period of 20 months with its inception has helped to open three new markets for mangoes including Mauritius, Lebanon and South Korea while the Australia is expected to be approved soon which would greatly help boosting Pakistan’s mango exports during the coming ongoing season.

Pakistani mangoes have nine diseases in common, which was unacceptable in the international market but with the start of the operational activities of the new plant, importers have expressed their keenness to place large-scale order for the most desired fruit of the summer season.

It may be recalled here that majority of countries have placed strict conditions regarding import of fruits from across-the-globe and in case of mango, they have requirement of their hot water treatment on 48 degree centigrade for 65 minutes, which makes the fruit acceptable for import purpose.

Currently, Pakistan’s total average mango export stands at 150,000 tonnes which is hardly 8.0 percent of the total annual production of 1.6 million tonnes, which was usually attributed by the exporters on account of limited market access to Pakistani exporters.

Durrani Associates has established the project in collaboration with Ministry of Commerce. Its chief executive highlighting salient features of the project, said that the plant installed has the capacity to process 15 tonnes of the fruit per hour pn 48 C for 60 to 65 minutes.

Similarly for the first time, Ethylene Chamber facility was also used which give colour to mango by food graded Ethylene having no harmful impact on human health as compared to carbide which is widely used in the country for ripening fruit and is spelling harmful diseases for fruit consumers.

He claimed that the biggest breakthrough created by the Pakistan Horti Fresh processing is that now mangoes can be shipped by sea for destinations as far as UK and Canada with shelf life of 35 days.

As compared to by air freight of mangoes to UK which costs Rs 137 per kilogramme (kg) charged by Emirates Airline, the new technology would cost a mere Rs 12 per kg, which would herald new life in exports of fruits to different countries across the globe.


http://www.dailytimes.com.pk/default.asp?page=2012\06\10\story_10-6-2012_pg5_14

Riaz Haq said...

Fresh Plaza reports declining agriculture in Balochistan:

Billions of rupees are being lost, collectively, by growers in Balochistan, due to rising input costs. This is leading to declining output - 50% according to one trader.

Spokesperson of the Falahi Anjuman Wholesale Vegetable Market, Shaikh Waqar Ahmed said the province's agriculture sector was in decline because of energy costs rising, leading many to abandon the sector altogether.

Balochistan has seen a rising trend of imports as domestic prices have risen on falling production. Apples, for example, are increasingly being sourced from Australia and New Zealand.

The problem is in the irrigation. the Water table is very low and growers must use tube wells to get it to the surface. This required diesel which is increasingly expensive.

Ahmed says that the government should intervent and provuide supoprt for the growers, saying that if the fruit and vegetables sector is assisted it can flourish, providing food not just domestically, but also for exports.

Director of Planning at Harvest Tradings, Azam Ishaque said that the area was fortunate in its environment, which was ideal for the cultivation of a wide variety of fruits.

"It has the capacity to generate around $500 million, subject to proper infrastructure and market access from Gwadar port," he claimed.

Balochistan is still Pakistan's second largest fruit and vegetable producing area and the largest when it comes to dates, onions and certain fruits, including apples, apricots, grapes and pomegranates.

Nearly one million tons of fruits are produced in the province annually, with 90 percent of grapes, cherries, almonds; 60 percent of peaches, pomegranates, apricots; 34 percent of apples, and around 403,584 tons of dates.

The Government, under the Trade Policy initiatives 2007/08, approved a special package for the development of Balochistan to improve the marketing and value-added processing of fresh fruits and vegetables.

The significant projects included one apple-grading plant at Quetta, two collection points, one each at Khuzdar and Loralai, and one date processing plant at Turbat.

Construction of 39 pack-houses and 20 cold storage areas has been approved to be set up in the main production and consumption centers, while the sea and airports were to give a due share to Balochistan.

However, as yet there has been no visible progress on the projects.


http://www.freshplaza.com/news_detail.asp?id=98195

Riaz Haq said...

Here's Daily Times on mango export processing in Pakistan:

Pakistan is considered as a country, lagging behind the developed world regarding science and technology, but the situation was not as much worst as seen, because Pakistan has an edge in treatment of mangoes and its shelving.

Mango is a well-regarded fruit and is known as ‘King of fruits’. Mango appears in local markets as the summer season commences.

Globally, it is one of the most eaten fruits. As many as 11 countries, including Pakistan export mangoes. To meet the global standards, mangoes are treated before export. There are four ways of treatment, out of which three are recognised across the world: hot water treatment (HWT), vapor heat treatment (VHT) and radiation.

There are nine types of bacteria that prevail in mangoes. To kill all of those, in most common way of hot water treatment, mangoes are treated with hot water for one hour, during which the temperature is managed at 75 degree centigrade. Resultantly, the pores at mangoes surface get rupture and its shelving become difficult.

Pakistan has a double edge in regard with treatment and shelving of mangoes. The country has a capacity to treat 15 tonnes of mangoes per hour. Besides this, Pakistani private sector has ability of shelving mangoes for 35 days after treatment, however, the rest of exporter countries could shelve mangoes for maximum seven days.

Recently, Pakistan has achieved another significant achievement in export of mangoes sector. Pakistani has recently initiated to export mangoes to China, which itself is the second largest producer and one among the largest consumers of mangoes.

Though China itself produce mangoes in massive quantity, it still is a vast market for Pakistani mangoes as locally produced mango is small in size and less sweet, however, Chinese people like larger in size and sweeter mangoes and Pakistani types of mangoes all their desired qualities.

AQ Khan Durrani, the owner of treatment plants in Pakistan and exporter of mangoes to China, said while talking to the Daily Times that China is biggest country in term of population and is 2nd largest producer of mango in the world with production of 4.5 million tonnes of mangoes annually. Chinese people like mangoes a lot and while exploring this big market of ‘mango lovers’, Pakistan can earn millions of dollar in fruit sector.

“China can be the biggest market of Pakistan mangoes and within three years Pakistani export can be doubled,” he added.

It is pertinent to mention here that the Pakistan produces 1.6 to two million tons of mangoes annually and was ranked fourth to fifth among producer countries of mango. The dire need of hour is that the government should follow and respond to the achievements and strive of private sector, which is going to explore even largest producer countries of mango as consumer market.

Pakistan would become the largest producer and exporter of mangoes due to the quality of local mango, if the government supports the sector. This also would result in very positive impacts on local economy and the position of the country as well.


http://www.dailytimes.com.pk/default.asp?page=2012\07\09\story_9-7-2012_pg7_16

Riaz Haq said...

Here's a BR report on PM Raja talking about PPP's pro-farmer policies:

Prime Minister Raja Pervez Ashraf Tuesday said prudent and farmers-friendly policies of the PPP led government has helped injection of Rs500 billion in the rural economy ultimately benefiting the farming community in the country.

"Due to our pro-farming policies and due payments of agriculture produce of the farmers specially in wheat production, Pakistan once an wheat importing country has now become an exporting country and we are self sufficient in wheat production", the Prime Minister said while addressing APP regularization certificate distribution ceremony to distribute letters among the contract and daily wages employees of Associated Press of Pakistan (APP), here at the Prime Minister Secretariat today.


http://www.brecorder.com/top-news/1-front-top-news/66940-pro-farmers-policies-of-government-helped-inject-rs500-billion-in-rural-economy-pm-.html

Riaz Haq said...

Here's a report on Pakistani banks extending credit to agriculture sector:

Five large banks collectively disbursed agri. loans amounting to Rs 146.3 billion or 103.7% of their annual target (Rs 141 billion) in fiscal year 2011-12, higher by 4.3% as compared with Rs 140.3 billion disbursed during the preceding fiscal year (FY2010-11). National Bank of Pakistan (NBP), Habib Bank Limited (HBL), MCB Bank, Allied Bank Limited (ABL) and United Bank Limited (UBL) have surpassed their annual targets by achieving 106.0%, 103.5%, 103.3%, 102.8% and 100.7% disbursement respectively. Zarai Taraqiati Bank Limited (ZTBL) disbursed Rs 66.06 billion or 94.2% of its annual target of Rs 70.1 billion while Punjab Provincial Co-operative Bank Limited (PPCBL) by disbursing Rs 8.5 billion or 112.1% has surpassed its annual target (Rs 7.6 billion) during FY 2011-12.

Fourteen Domestic Private Banks as a group achieved 112.5% of their target (Rs 54.1 billion) by disbursing agri. loan of Rs 60.9 billion. The Bank of Khyber, Bank Al Habib, Faysal Bank, Soneri Bank, NIB Bank and Askari Bank have surpassed their annual agri. credit disbursement targets by achieving 174.6%, 147.6%,136.7%,132.4%,104.1% and 100.4 % disbursement respectively while other remaining banks could not meet their annual targets.

Five Microfinance Banks as a group disbursed agri. loans of Rs 12.1 billion or 99.3% of their annual target of Rs 12.2 billion during FY 2011-12. It may be pointed out here that the banks had been missing the agri. credit disbursement targets since 2008-09. Achievement of agri. credit disbursement target during the year ended June 2012 was extremely difficult in the backdrop of continuous declining trend in the overall Private Sector Credit and high agri. Non-performing Loans (NPLs) of major banks due to devastating floods of 2010 and heavy rains of 2011 in Sindh province. However, SBP adopted a multi-pronged strategy and made all out efforts in achieving the target of Rs 285 billion allocated by ACAC. The efforts of SBP officials not only helped banks in achieving their target but also surpassing it.

These efforts included swift settlement of crop loan insurance claims, close co-ordination with provincial revenue departments to facilitate the One Window Operation in agri. intensive districts for timely completion of revenue formalities, holding of farmers' awareness and financial literacy programs at grass root level, and follow up of targets with the top management of banks and their agri. Heads. The contribution by SBP BSC field offices in monitoring the regional targets was also greatly helpful.

FOREIGN INVESTMENT IN AGRICULTURE

Food is the first priority of the mankind which offers potentially enormous resources in agriculture to cater to the food requirement not only of the country but of the countries in the region. At the moment the oil rich Arab countries are confronted with food security problems and looking for investment in agriculture lands abroad.
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In Pakistan land About 25% of Pakistan's total land area is under cultivation and is watered by one of the largest irrigation systems in the world. Pakistan irrigates three times more acres than Russia. Agriculture accounts for about 21.2% of GDP and employs about 43% of the labor force. In Pakistan, the most agricultural province is Punjab and Sindh where wheat and cotton are the most grown. However rich lands with honey and milk are still awaiting for development both in Sindh, and Punjab.


http://www.equities.com/news/headline-story?dt=2012-07-24&val=300443&cat=material

Riaz Haq said...

Here's a Wall Street Journal piece on India's drought hurting the economy:

The specter of a drought hanging over major tracts of farmland across India isn't just bad news for crops but also could pour sand into one Indian economic engine that has been a big driver of growth: rural consumer spending.

That spending has been a major boon to consumer-goods companies in the past decade, and a big reason India's economy has seen unprecedented growth rates of above 8% in recent years despite global uncertainties.

But the lackluster monsoon has added to the clouds gathering over India's economy, which grew 5.3% in the first three months of 2012, its slowest rate in almost a decade.

"Not only will there be an impact on the performance of the agricultural sector, but also on other sectors through the effect on rural incomes," said Chandrajit Banerjee, director general of the Confederation of Indian Industry, the leading industry association.

More than 50% of India's overall consumption comes from rural areas, which account for about 70% of the population. Agriculture accounts for about 17% of India's gross domestic product.

The weak monsoon will have "a significant indirect impact on the economy, and industry would be affected due to fall in rural demand," said Sunil Kant Munjal, joint managing director of Hero MotoCorp Ltd., the country's largest two-wheeler company by sales, in a written response to questions.

Mr. Munjal said sales of two-wheelers such as motorcycles and scooters would "certainly be affected" as 45% of sales come from rural areas. He added that lower-than-usual food crops could also raise food prices, hitting spending power even more.
-----------
Anil Kumar Mittal, whose Ludhiana shop sells pesticides and fertilizers, says farmers have used up their cash reserves on diesel to drive pumps to draw groundwater in the absence of rain.

"Last year around this time, business was so brisk that I would barely have time to talk, except for business," he said.

Half of the revenue in the fast-moving consumer-goods industry comes from rural areas. Usually, sales of such items as TVs, radios and processed food rise immediately after the harvest in October of summer-sown crops like rice, as that also coincides with the season of gift-heavy festivals such as Diwali.

But the season may not bring much cheer this year.

"A weak monsoon may impact sales of consumer electronic products in the semiurban or rural markets of India," said Mahesh Krishnan, vice president of Samsung India, in a written response.


http://online.wsj.com/article/SB10000872396390443792604577574882819433976.html

Riaz Haq said...

Here's Wall Street Journal story on Indian farmers' dependence on rain:

The southwest monsoon arrives over India mainly via winds from the Arabian Sea. It usually hits the mainland through the southern state of Kerala by late May or early June and then gradually moves north to cover the entire country by mid-July.

The timing, distribution and quantity of monsoon rains are vital to India's agriculture sector and economy. Nearly two-thirds of the country's farmlands are rain-fed, and about 600 million people are dependent directly or indirectly on agriculture. Agriculture accounts for 17% of gross domestic product.

This year, the monsoon arrived late over Kerala. Its progress over the rest of India has been sporadic, and rains have failed to pick up over eastern and northwestern parts of the country.

To date, rainfall is about 17% below the 50-year average, But in northwestern grain bowl states such as Punjab, Haryana and Rajasthan the deficiency has been much worse, with rainfall of 60%-70% below average.

Parts of the western states of Gujarat and Maharashtra and the southern state of Karnataka have also been affected with the rainfall deficiency ranging from 30% to 70%.

How the monsoon gathers momentum as it progresses toward India's mainland varies from year to year. D.S Pai, head of long-range forecasting in the India Meteorological Department, said this year, the build-up of moisture-laden monsoon winds from the Arabian Sea had been weak and had shifted toward the eastern half of the country from the west due to the play of certain sea winds.

El Niño, a weather phenomenon that usually disrupts rainfall in India, is also expected to emerge in September and could further deepen the crisis. Recently, the India Meteorological Department said that rainfall through the monsoon season is likely to be 85% of the long-period average.


http://online.wsj.com/article/SB10000872396390443792604577575323402758832.html

Riaz Haq said...

Here's a PakTribune report on Pakistan's rising meat exports:

The export of the meat increased from $108.54m (2010-11) to $123.61m in 2011-12, showing an increase of 13.9pc. An official of Ministry of National Food Security and Research told Our Sources that the future plan for the livestock sector is to persuade the policies to achieve 5pc or more growth in meat and 8pc or more in milk production through shifting from subsistence livestock farming to market-oriented and commercial farming.

http://paktribune.com/business/news/Export-of-meat-increases-by-139-per-cent-10279.html

Rising meat exports is good news.

Pakistan is in the middle of a major livestock revolution that is boosting domestic consumption and increasing exports of milk and meat products. This is great for Pakistan's rural economy. It'll reduce rural poverty and improve the lives of the people living in villages and small towns.

Riaz Haq said...

Here's PakistanToday on rising rice production in Pakistan:

The overall produce of rice has been estimated to reach 6.16 million tons during the current year, showing an increase of 28 percent over that of last year, official sources told APP.
“Following the remarkable increase in the yield, the rice export is expected to grow considerably during the current fiscal (2012-13),” said sources in the Ministry of National Food Security and Research. They opined that it was due to prudent and pro-farmer policies of the government that rice export from Pakistan remained over US $ 2 billion for the last four years consecutively.
Giving break-up, the sources said that the rice export fetched US $ 1.836 billion 2007-08, $ 1.983 billion in 2008-09, $2.160 billion in 2009-10, $.2.160 billion in 2010-11 and $ 2.061 billion in in 2011-12.
The sources said that in the year 2009-10 rice was cultivated at an area of 2.88 million hectares with produce of 6.88 million tons, in 200-11 rice was cultivated at an area of 2.37 million hectare with produce of 4.82 million tons and similarly in 2011-12 rice was cultivated at an area of 2.57 hectares with 6.16 million tons produce.
They said that the rice was a major cash and important food crop of the country after wheat and its produce comprised 40% basmati (fine) and 60 percent coarse types. The government, they added during 2008-09 and 2009-10 intervened in order to support farmers as the rice price hit the rock bottom due to bumper crop and plummeting international price.
Highlighting the major issues, the sources said that in view of good returns of the rice crop, there is a spread of basmati varieties in non-basmati zone.
“It may affect basmati rice exports in the long run as the basmati produced in non-basmati zone lacks aroma”, they observed. The sources added that due to higher yield of hybrid rice, farmers are also shifting the Irri-6 to hybrid rice and the hybrid rice quality is low compared to Irri types. They further said that rice crop is low in productivity and production is affected by water shortage and there are enormous post harvest losses and issue of Afflatoxin which affect crop value and quality especially in case of rice export. They stressed the need for more investments in general research and development in rice for further increasing its production.
The sources said that Pakistani basmati rice was one of the top rice commodities all over the world, but the exports of this rich rice commodity witnessed sharp decline of 14.87 percent during the last fiscal year 2011-12 as compared to the previous year.


http://www.pakistantoday.com.pk/2012/08/15/news/profit/rice-yield-up-by-28/

Riaz Haq said...

Here's BR report on Engro Foods:

Engro with its rich history of over four decades of developing the agricultural sector of Pakistan used dairy as a stepping stone to enter the foods business in 2005 to give further impetus to its already diversified business portfolio including fertilisers, petrochemicals, energy, trading and chemicals storage and handling.

In a span of just seven years, with a compound annual growth rate (CAGR) of 65 percent and a planned infrastructure investment in 2012 to the tune of eight billion rupees, Engro Foods has become the country's fastest growing local company catering to a wide demographic consumer base from high income groups to the more economically conscious segment of the market both in Pakistan and abroad.

Serving over five million consumers nation-wide every day, Engro Foods had revenues of about Rs 19.76 billion during 1H-2012 with profitability registering an increase of over 450 percent to close at Rs 1.02 billion. Since its inception Engro Foods has invested heavily in dairy development initiatives, cold chain infrastructure, enhancing capabilities of dairy farmers across Pakistan through innovative breakthroughs that have redefined the milk collection standards and benchmarks in the dairy industry. Employing over 12,000 individuals both directly and indirectly, Engro Foods' continues to touch and improve life for over 160,000 dairy farmers through improved payment cycles, guaranteed collection, improved margins and up to a 15 percent increase in milk yields. Through its wide network of over 900 milk collection centres, Engro Foods focuses its impact at the most economically challenged communities in Pakistan - an effort that has also been recognised at local and international fronts including the IFC managed G20 Challenge on Business Innovation where Engro Foods was declared the winner from over 300 global contracts.

The Company also had the unique opportunity to become the first company in Pakistan to produce one billion packs within a year in 2010 alone; a distinction that has been achieved by only 18 companies out of 3,000 Tetra Pak customers world-wide. Living its vision of 'elevating consumer delight world-wide' the business established its Global Business Unit (GBU) and acquired Al-Safa Halal - the oldest Halal meat brand in North America in 2010. With presence in key retail stores including Loblaws, Wal-Mart, Sobeys, Metro, Kroger etc, Engro Foods GBU has obtained a market share of 15 percent in Canada and three percent in USA in the branded foods category.

Speaking at the occasion, Afnan Ahsan - CEO Engro Foods said: "The story of Engro and that of Engro Foods is a source of national pride. The fact that in a short span of seven years a home-grown multinational company has been created - with a geographic footprint spanning across Pakistan, Afghanistan, US and Canada - is testament to the vision and business acumen of the Company. Engro Foods is an example that through focused approach companies can create real business value - not just in the Pakistani market but also globally." Building on plans for the future of the Company Afnan said: "We are in the early stages of our growth trajectory and looking ahead we will continue to further explore diversification with focused growth in our dairy and beverage business - both locally and on the international front. We are also confident that we will continue to create real value for all our stakeholders by pursuing an inclusive growth strategy that positively impacts each individual through the value chain process."


http://www.brecorder.com/business-a-economy/189/1226476/

Riaz Haq said...

Here's Express Tribune on Pakistani mangoes exports to China:

After years of struggle, Pakistan finally added one of the world’s largest markets for its mangoes – China. The development, a major breakthrough in mango exports, will add millions of dollars to the country’s foreign reserves.

“Pakistan’s mangoes have become a centre of attraction in the largest retail chain of China – Walmart – where the king of fruit is being offered for sale,” Durrani Associates, one of the largest fruit exporters, said in a statement on Saturday.

The exporter was able to access the Chinese market, currently dominated by Taiwanese, Filipino and Thai varieties, after a sample of mangoes, shipped by sea a month ago, earned overwhelming success at Walmart stores.

The shipment contained two containers with 40 tons of mangoes. Firm’s Chairman Abdul Qadir Khan Durrani also visited China at that time and met with representatives of Walmart, which had 370 stores in 140 cities and four municipalities of China by March 1.

“It took us a while before we got clearance from Beijing,” Durrani said. The containers were held at the port and 20 cartons each were taken from both the containers for inspection, he said. After a week-long process, the Quarantine Department cleared the shipment by declaring that the mangoes were free from all diseases.

According to the statement, a three-member team of Chinese importers will visit Pakistan next week to strike an agreement for purchase of 100 tons of mangoes for Walmart stores in the running season.

The delegation will also visit the hot water treatment (HWT) plant – a facility set up for the processing and treatment of mangoes to meet international standards. They will inspect the arrangements for quality control.
---------
In China, mangoes of Thailand are selling at $1.5 per mango, the amount the company pays in air freight alone, making it impossible to compete, Durrani said.

“Exporting mangoes by sea to China is a big breakthrough,” Abdul Qadir Khan Durrani, the chairman, said because it will bring freight cost down to $0.75 per mango, which means Pakistan’s mangoes can sell for about $1.25 in Chinese stores.

China is one of the countries that applies global standards on mango imports. To meet the standards, mangoes are treated before export. There are four known ways of treatment, out of which three are recognised across the world – HWT, vapour heat treatment (VHT) and radiation.
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Pakistan has a capacity to treat 15 tons of mangoes per hour. The private sector has the ability to shelve mangoes for 35 days after treatment while other exporting countries could shelve mangoes for maximum seven days, the statement claimed.

According to the chairman, Pakistan is world’s 5th largest producer of mango, which can produce up to 2 million tons. Mango varieties particularly Sindhri, Chaunsa and Sunehri can beat others because of their taste, he said.

“China can be the biggest market of Pakistani mangoes and within three years exports can be doubled,” he added.


http://tribune.com.pk/story/423993/new-destination-pakistani-mangoes-to-be-sold-in-walmart-china/

Riaz Haq said...

Here's an ET report on HWT technology to increase shelf life and exports of fruits and veggies in Pakistan:

The establishment of Karachi’s hot water treatment (HWT) plant – a facility for post-harvest treatment and processing of fruits and vegetables – is a very good example of how the country’s agriculture sector can benefit by investing in technological advancements. It is because of this technology that Pakistan has been able to venture into some of the world’s largest markets for its mango over the past couple of months.

In order to expand mango exports, Durrani Associates, one of Pakistan’s largest mango exporters, in partnership with the government, set up the Rs220 million HWT plant, which is officially known as Pakistan Horti Fresh Processing (Pvt) Limited. This investment, according to Durrani Associates’ Director Babar Khan Durrani, can be recovered within five years.

Durrani told The Express Tribune that they were already exporting mangoes to Tesco in the United Kingdom and Carrefour in the rest of Europe – two of the world’s largest retail chains – but HWT facility has opened new markets for the exporters. The exporters can use the facility and ship their products via sea now, which will enable them to sell at competitive prices.

HWT increases shelf life of mangoes to 35 days, thus they can now be shipped by sea to remote destinations, a major development, which reduces freight charges to a great extent.

Take the example of China, Durrani said, where air freight alone costs more than $1.25 per kg of mangoes. The processed mangoes can be shipped by sea, he said, bringing the cost down to $0.20 per kg. As a result, the Pakistani exporter was able to impress Walmart China, which, in a week’s time, will strike a contract for supply of another 100 tons of mangoes.
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Talking about how this technology has helped expand mango exports, Durrani said fruits and vegetables processed by HWT facility meet requirements of the United States Department of Agriculture (USDA), World Health Organisation (WHO) and International Quarantine Standards, thus making them globally acceptable.

In the past, Pakistan’s mangoes were denied access to several key markets including the US and China because of nine diseases. HWT kills anthicolas, a major disease that results in black spots on mango skin.

“The skin of our mango is rough but its taste is very good,” company’s Chairman Abdul Qadir Khan Durrani said. “HWT improves the skin while killing all diseases after treating at 50 degrees for an hour,” he added.

He claimed Pakistan has world’s largest HWT plant having capacity to treat 15 tons of mangoes per hour. The second largest plant is in Mexico that treats 4.5 tons of mangoes per hour, he said.

Besides the $2,200 per ton market of Europe, the $1,600 per ton market of China could prove to be the largest importer of Pakistan’s mangoes, Durrani said.
--------------
By contrast, the mango exports are 8% of the production or less than 50% of the export potential, a strong indication that there is still a huge space for more investment on the technology front. “We need more than 10 such plants for meeting mango demand of North American markets,” Director Durrani said.

“Our agriculture sector lacks technology. People shy away from using technology.” It will take a while before all farmers adopt new technologies, he said.
-------------
“About 30% to 40% of our fruits and vegetables are wasted because they are not processed,” Durrani said. “Given the HWT plant can process almost every fruit and vegetable that we produce, we can save our produce from being wasted,” he added.


http://tribune.com.pk/story/424992/fountain-of-youth-technological-progress-boosts-demand-for-mangoes/

Riaz Haq said...

Here's Business Recorder on Pakistan's rising wheat exports:

Following the rising demand and better price in the world market, Pakistan''s wheat exports has again picked up, witnessing some 200 percent growth during the first month of the current fiscal year. Exporters told Business Recorder on Wednesday that after posting some decline in the second half of FY12, wheat exports surged, on the back of demand from Sri Lanka and some other regional countries.

"Pakistan''s wheat exports was declining a few months ago because of low prices. However, better wheat prices and rising demand in the world market have opened up new venues for the export of the commodity," exporters said. Wheat price in the international market was rising because of reports regarding bad wheat crop in Russia, they said.

According to them, wheat prices had crossed $300 per ton after a gap of 6-8 months. Month-on-Month basis, export statistics for the first month (July) of this fiscal year were very encouraging, as wheat export witnessed a massive growth of 198 percent.

Keeping in line with the current trend, wheat exports amounted to $4.652 million in July 2012 against $1.562 million in June this year, depicting an increase of $3.09 million in a single month. In term of quantity, some 15,521 tons of wheat was exported during July against 5,592 tons in June this year.

Export figures for August will be higher than July, as huge export orders have been placed by foreign buyers and several shipments are in the pipeline. However, in the longer run, exports were linked with price stability in the world market, they added. "We are exporting wheat without any government subsidy, disposing off excess stocks, earning millions of dollars in foreign exchange. Wheat price below $300 per ton is not visible for us," exporters said.

The quality of Pakistan''s wheat is best and as per international standard it has 11 to 11.5 percent protein content and is considered perfect for markets in Sri Lanka, Bangladesh, the Gulf states, Far East and Myanmar, they informed. Traders also confirmed that commodity exporters were quickly procuring wheat from domestic market for export as attractive prices are being offered by importers from around the world.

Expressing some reservations regarding wheat exports, they said that hasty buying of wheat from domestic market could create panic in the commodity market, resulting in a massive increase in wheat pries. Wheat prices have witnessed a surge of Rs 2,000 per ton over the past month because of huge buying by exporters. With the current rise, the price of wheat grains rose to Rs 28,000 per ton from Rs 26,500 per tone. Although, the country harvested a bumper wheat crop this year and there is an ample stock in government and private warehouses, extraordinary jump in the quantum of exports could hit domestic prices and wheat availability in the domestic market, traders said.


http://www.brecorder.com/agriculture-a-allied/183/1229620/

Riaz Haq said...

Demand for Food Science graduates rising in Pakistan, reports Express Tribune:

As the food processing sector in Pakistan expands, the job opportunities – and starting salaries – for graduates in food science, nutrition and dietetics are increasing substantially.

The University of Agriculture Faisalabad reports that its graduates are finding jobs faster, with higher starting salaries and rapid career progression for many of its graduates. According to Tahir Zahoor, a professor in the food science department, the top graduates of the university’s food science programmes command salaries of Rs45,000 or higher, and get employed by such brand name employers as Nestle Pakistan, Engro Foods and Unilever Pakistan.

These starting salaries are comparable to those earned by graduates of the country’s leading business schools when they join the largest banks on Karachi’s McLeod Road. And it is not just the starting salaries that are high. Many graduates report earning more than Rs100,000 per month within five years of graduation, though admittedly these are some of the best performing students.

Not all graduates get these packages, of course. But according to the university’s professors, no graduate has gotten a job offer with a starting salary of less than Rs25,000 per month, with Rs30,000 per month being the median salary package. The middle-tier of students typically go to some of the smaller names in food production, such as Dawn Foods (a leading bread manufacturer), Shan Foods (a spice manufacturer), etc.

Revenues and profits at food production firms have been soaring. Between 2005 and 2010 (the latest year for which figures are available), revenues at food companies listed on the Karachi Stock Exchange have grown by an average of more than 18.2% per year. Profits have expanded even faster, by more than 21.2% per year.

This blowout growth has caused many to invest heavily into expanding production capacity. Both Engro Foods and Nestle Pakistan invest upwards of Rs8 billion every year in increasing their production facilities. Engro Foods – started only in 2006 – has been particularly aggressive in broadening its product line-up.

These two companies, however, are not alone. K&N Foods has become the nation’s largest supplier of processed chicken, tempting other food companies to enter into the fray. Dawn Foods, long a manufacturer of just bread and baked products, is now entering meat products. Quetta Textile Mills is setting up a processed chicken facility. And Shan Foods is trying to expand its presence overseas by acquiring a brand in the United Kingdom.

This expansion in the food sector is pushed by a change in the underlying consumer behaviour when it comes to buying food. Consumer spending on processed food appears to be expanding. The average Pakistani household spent almost Rs500 per month on processed food in 2011, over two and half times more than a decade ago, according to the Pakistan Bureau of Statistics, representing a rate of increase faster than inflation....

http://tribune.com.pk/story/424995/as-consumer-sector-booms-demand-for-food-science-graduates-soars/





Riaz Haq said...

Here's a FreshPlaza story on peach farming in Pakistan:

The United States Agency for International Development’s (USAID) Firms Project has successfully trained 449 peach farm SMEs in Swat, Pakistan under a USD 600,000 revitalization program, that aims to facilitate them in gaining access to greater revenues and market linkages; and make overall infrastructure improvements to strengthen the sector.

Swat relies heavily on the horticulture sector with 67 percent of the total peaches produced in Pakistan coming from Swat. In recent years however, calamities have wreaked havoc on agriculture, affecting sales and jobs in the region. The main constraints to growth include lack of infrastructure, poor access to inputs, market linkages, credit facilities, untrained workforce, and poor management practices affecting the quality and yield of the produce.

USAID’s assistance to the Pakistan's peach sector includes trainings, infrastructure, supplies, technical support, tools, and certifications for peach farm SMEs of Swat, under a cost sharing agreement. 449 peach farm SMEs that signed agreements with USAID Firms Project earlier this month received pre and post harvest trainings as part of the capacity building component of this assistance. 150 SMEs have received in-kind support in the form of pruning kits, harvesting kits, and corrugated cartons. Distribution to the remaining 299 will finish by the end of July. The tools and equipment will help ensure minimum damage to fruit during harvest, thereby reducing losses to the growers. To coordinate the effort, cluster leaders have been appointed who ensure a smooth flow of operations with farm SMEs within their clusters and work with them to increase output.

Together these interventions will help peach farm SMEs in adopting best management practices and peach farming techniques, attaining larger scale production, increasing yield, and tapping into competitive new markets. Atta Ullah, a local peach grower from Swat said, “These pruning and harvesting kits and all the other assistance from USAID will benefit the smaller farms and increase the revenue for these SMEs by 10 percent.” Another grower explained “We have learnt so many things we can do better. The training brings new management practices to us and is helping us access gains which were not possible before”.

To further strengthen the sector, USAID Pakistan Firms Project is providing assistance to these SMEs for competitive marketing and product placement, and creating linkages between SMEs from Swat and large-scale buyers and retailers. An existing peach pulping unit in Swat will also be up-graded with modern infrastructure to meet the demand of peach pulp.


http://www.freshplaza.com/news_detail.asp?id=100449

Riaz Haq said...

Here's a BR report on Pak & US scientists collaborating on fighting cotton diseases in Pakistan:

Five American scientists travelled to Pakistan to help Pakistani scientists and farmers combat cotton disease, which has infected cotton throughout country’s cotton belt and can substantially reduce yields and incomes for farmers.



American and Pakistani scientists, in coordination with Pakistan’s Ministry of Textiles and Industry and the International Center for Agricultural Research in Dry Areas (ICARDA), launched a workshop to develop solutions to the Cotton Leaf Curl Virus (CLCV) problem in Pakistan. This workshop is part of the U.S. government sponsored Cotton Productivity Enhancement Program.



In his remarks, Todd Drennan, U.S. Agricultural Counsellor, said “Agriculture touches so many lives in Pakistan and is a vital part of Pakistan’s economy. The United States wants to help enhance the productivity of Pakistan’s agricultural sector, especially small farmers. This cooperation between U.S. and Pakistani scientists on cotton is an example of that commitment.”



The workshop completes a ten day visit by the American technical team. The team met Pakistani cotton scientists to discuss the results of research on CLCV. The team also visited cotton breeding trials in Faisalabad and Multan. As a result of these trials, which are funded by the U.S. Department of Agriculture (USDA), the team reported good news that some new varieties of cotton are showing preliminary signs of resistance to CLCV.



Small farmers are especially vulnerable to the economic impacts caused by this disease.

Because of this, the U.S. Department of Agriculture has designed the cotton disease research project to help Pakistani farmers. American agricultural scientists continually visit Pakistan to collaborate on research to combat disease affecting Pakistan’s principal crops, especially cotton and wheat.


http://www.brecorder.com/pakistan/business-a-economy/77038-pakistan-us-scientists-work-together-to-combat-cotton-disease.html

Riaz Haq said...

Here's a Dawn report on Pakistan's rising citrus exports:

The exports of Pakistani citrus have registered an increase of 70 per cent in a year, Minister for Commerce Makhdoom Amin Fahim told National Assembly on Wednesday.

In a written reply to the question of Ms Nighat Parveen Mir, he said the exports of citrus have been increased up to US$162.6 million from July to March in the year 2011-12 compared to US$95.8 million during the corresponding period last year.

The country has also exported 247,909 metric ton mangoes to various countries from 2008 to 2010-11. In the year 2008-09, as many as 73,437 metric ton mangoes were exported, while 84,921 MT mangoes were exported in 2009-10, and 89,551 MT mangoes were exported in 2010-11.

In a written reply to another question he said, European Union – the union of 27 European countries is the largest business partner of Pakistan. EU had already announced concession on 75 products for Pakistan subject to waiver. The matter is now with European Parliament for legislation before implementation. Pakistan is making diplomatic efforts for getting concessions on 75 products.

He said Pakistan will qualify for duty free access to EU from January 1, 2014 as the country has ratified all the 27 international conventions.

In reply to another question he said, Pakistan and India are in the process of normalizing bilateral trade relations under resumed composite dialogue. As a first step, negative list of 1,209 tariff lines have been notified.

With the phasing out of negative list by December 31, 2012, complete trade normalization with India will be in place subject to the removal of the non-tariff barriers by the Indian government.

In written reply to question he said, country’s imports stands at $34.82 million during 2008-09, $34.71 million in 2009-10, $ US 40.41 million in 2010-11, and $44.91 million in 2011-12.

The volume of trade between Pakistan and Africa was $2.4 billion and $3.09 billion respectively.


http://dawn.com/2012/09/05/citrus-exports-register-70-percent-increase-in-one-year/

Riaz Haq said...

Here's an excerpt of a Nation report on Pakistan's wheat harvest:

In 2011-12 Pakistan farms produced 23.3m tons of wheat. The total value of that harvest is over Rs611 billion or $6.4 billion; and 20pc of our national agricultural GDP is from wheat. Combining these figures illustrate the vital importance of wheat farming to the food security, income, and economic growth of Pakistan. He said that our future food security and economic growth depend on more science and more innovation coordination nationally and internationally. He said that the rust diseases of wheat are of special concern to this community and we are aware of the threat of wheat rusts, including stem rust Ug99, to the productivity of wheat in Pakistan. Wheat Productivity Enhancement Programme (WPEP), is supporting this meeting and our national efforts to protect and enhance the productivity of wheat through the application of science to ensure wheat rusts do not hurt our wheat and that our farm productivity increases. Wheat is the leading crop of the country occupying the largest area (8.7million hectares) under any single crop. Annual wheat planning meeting has been a regular feature and always helpful in discussing research findings and formulation future strategies for enhanced wheat production. The coordination mechanism like the annual wheat meetings has been a regular activity for a long time and with the launching of the WPEP (Wheat Productivity Enhancement Programme) of Pakistan. It will further enhance and strengthen the already existing linkages between the stake holders. WPEP and USDA funded project aims to enhance and protect the productivity of wheat in Pakistan.

http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/business/13-Sep-2012/wheat-worth-rs-611-billion-harvested-in-2011-12

Riaz Haq said...

Here's a News excerpt on tractor sales in Pakistan:

Tractor sales increased immensely, by 190 percent YoY, to 2,855 units in comparison with the sale of 957 units in the same period last year. However, August 2012 sales (2,855 units) went slightly higher as compared to July 2012 sales (2,828 units). Al-Ghazi tractors registered a sales growth of 300 percent YoY but a sales decline of 28 percent MoM to 1,216 units. Millat tractors sales boosted by 151 percent YoY and 44 percent MoM to 1,639 units, the data said.

On cars:

Pakistan Automotive Manufacturers Association (PAMA) has recorded a decline of 30 percent year-on-year (YoY) in automobile manufacturing to 20,820 units in August 2012, according to the PAMA data released for the same month.



A month-on-month (MoM) analysis of the sector demonstrates a comparatively steady performance with the sector’s sales down by a modest 0.5 percent to 10,385 units. This can primarily be attributed to the low base effect of July 2012, owing to fiscal year-end phenomenon and implementation of taxes in the federal budget 2012-13.



Segment-wise breakup shows that car sales in August 2012 went down by 13 percent YoY to 8,467 units while the 1300cc and above segment shrunk by 17.6 percent YoY. Sales of light commercial vehicles (LCV) and 4x4 registered an 18.3 percent YoY declined in August 2012, mainly due to a decrease in sales volume of Bolan, Ravi and Hilux.



Pakistan Suzuki Motor Company Limited (PSMC) registered a sales decline of five percent YoY to 6,002 units but continued its performance as a market leader. However, in August 2012, its market share dropped by six percent YoY to 56 percent. The reason behind this decrease was the discontinuation of its brand Alto, which was PSMC’s leading brand in 1,000cc category.



A better picture can be seen on MoM basis as it shows a seven percent improvement in sales volume of the company, the PAMA data said. This was mainly accounted for the base effect of lower sales volume in July 2012.



PSMC has been successful in attracting its Alto customers towards Mehran, Cultus and Swift models, which registered YoY enormous sales growth of 40 percent, 21 percent, and 16 percent respectively in August 2012 while other models including Liana, Bolan and Ravi showed YoY decline of 26 percent, 10 percent and 34 percent respectively.



Indus Motor Company Limited (INDU) experienced sales contraction of 28 percent YoY during August 2012 to 3,092 units. During this period, sales went down by 30 percent YoY to 6,179 units. The main reason behind this was a 10-day production halt in July-August 2012 due to higher inventory and pre-buying of buyers and road side dealers in June 2012.



Corolla’s sales decreased by five percent YoY to 2,800 units in August 2012 while Hilux sales improved by three percent YoY to 282 units. MoM sales of the Corolla grew by 14 percent while sales of Hilux drastically decreased by 50 percent, the data said.



Imported Japanese second hand cars are becoming major competitor for INDU flagship brand Corolla as during FY12 about 55,000 units of used Japanese cars were imported in the country.



Hence, it has become a serious threat for INDU as all eyes will now be on the upcoming Auto Industrial Development Program (AIDP 2012-17), which will set the course for future direction for imported cars in the country.



Honda Atlas Cars Pakistan Limited (HCAR’s) experienced a sales drop of 14 percent YoY to 1,241 units in August 2012. The period under consideration portrays an improved picture as sales increases by 20 percent YoY.


http://www.thenews.com.pk/Todays-News-3-131559-PAMA-records-30pc-decline-in-automobile-manufacturing

Riaz Haq said...

Here's Economic Times' report on Pakistan sugar exports:

NEW DELHI/MUMBAI: Pakistan has allowed the export of an extra 200,000 tonnes of sugar, on top of the 300,000 tonnes already allowed, as the government aims to trim surplus stocks and bolster local prices.

Higher stocks and expectations of robust output next year encouraged the Islamabad government to allow the export of the additional sugar, Ali Raza Bashir, spokesman for the Finance Ministry, said, though the permission was for less than had been sought.

"There was a request to allow (extra) exports of 400,000 tonnes but the cabinet gave its permission for 200,000," Shunaid Qureshi, chairman of the Pakistan Sugar Mills Association, said by telephone.

The move came as neighbour India sealed deals to import about 5,000 tonnes of white sugar, despite expectations of a domestic surplus, as some traders seek to capitalise on lower prices in Pakistan and higher prices in India.

In Pakistan, sugar output in the crop year starting Oct. 1 is likely to remain steady at last year's level of around 4.7 million tonnes, Qureshi said.

The country's sugar consumption is between 4 million tonnes and 4.2 million and it started the 2012/13 year with around 400,000 tonnes of stock, said a dealer in Karachi who declined to be named.

Most sugar so far has gone to Afghanistan, Saudi Arabia and east Africa.

"These countries will again show interest due to lower prices. Millers in Pakistan want cash to start the crushing season ... They can give discounts to world prices," the dealer said.

INDIA BUYS WHITES

A New Delhi-based trader, who did not wish to be named, said: "The (Indian) traders who have contracted imports from Pakistan perhaps found the FOB price of $545 per tonne attractive enough to buy.

"They stand to gain $15 to $20 a tonne after paying a duty of 10 percent," the trader added.

The sugar price in western India is around $680 per tonne, while in northern and eastern parts of the country it is as high as $720.

India, the world's top consumer and the biggest producer behind Brazil, has been an exporter for the past two years. Exports in the year to September 2012 totalled 3.3 million tonnes.

Traders in India, which levies a 10 percent tax on sugar imports, have booked whites from Pakistan for delivery at the eastern Haldia port, a second Indian trader said.

India is expected to have a small exportable surplus in 2012/13, though higher production costs could make it difficult to find buyers at prices acceptable to mills.

Last month, Indian mills signed deals to buy up to 450,000 tonnes of Brazilian raw sugar because of the attractive gap between domestic and overseas prices.

The strengthening Indian rupee and a wide gap between Indian and Pakistani prices made these deals attractive, said a Mumbai-based trader with a global trading firm.

India could buy more for delivery in October and November to meet higher festival demand, traders said.


http://economictimes.indiatimes.com/news/economy/foreign-trade/pakistan-allows-more-sugar-exports-india-to-import-5000-tonnes/articleshow/16673077.cms

Riaz Haq said...

Here's a BR report on subsidized tractors in Punjab:

Tractor manufacturers have more than 10,000 tractors of various makes in their stocks for immediate delivery under the Punjab government's Green Tractor Scheme 2012-13 to the farmers before sowing of Rabi crops, a senior tractor industry executive told Business Recorder, here on Friday.

The Punjab government has completed the process of providing 10,000 tractors to farmers through transparent computerised balloting of 0.275 million applicants of 18 to 35 years age having land holding of 2 and a half acres to 25 acres irrigable and 50 acres arid land across the province. The Punjab government is providing subsidy of Rs 200,000 on each tractor. The provincial government has so far provided 30,000 tractors during the past four years under the Green Tractor scheme to the small farmers with a subsidy of Rs 6 billion to boost agriculture production in the province.

The executives said though the auto manufactures have increased prices of cars t recently yet the tractor industry is not only maintaining June 2012 prices but also giving one percent discount on the sale of tractors under the Green Tractors Scheme. They however suggested that the government should not delay payment of Rs 200,000 to the tractor manufacturers given as subsidy on the Green tractors. The prices of tractors manufactured in Pakistan are still the most competitive in the region despite severe electricity load-shedding and increased cost of production, they emphasised.

They said that small farmers suffered huge financial losses due to rain floods in Sindh and Balochistan in the out-going monsoon season this year, therefore the government should not increase the proposed rate of General Sales Tax from 5 percent to 10 percent in January next year as it would put an additional burden on the agriculture sector.

They said that the tractor industry sold 5,675 tractors in the first two months of the current financial year as against 2,000 of the previous year. President Farmers Associates of Pakistan (FAP) Dr Tariq Bucha has appreciated the Punjab government's Green Tractors Scheme and said the government should make immediate arrangements for delivery of the tractors to the lucky farmers so that they could be used them for preparing the fields before sowing of the Rabi crops seeds in time. Bucha demanded of the government to also provide subsidy and reduce the rate of GST on accessories such as trolleys, ploughs, etc.


http://www.brecorder.com/agriculture-a-allied/183/1245125/

Riaz Haq said...

Here's Pakistan Times on Benazir Tractor Scheme:

ISLAMABAD: All arrangements have been finalized to hold balloting of Benazir Tractors Scheme to provide subsidized tractors for growers.

The balloting for the scheme is expected to be held on September 6.This was stated by the Federal Minister for Food and Agriculture (MinFA), Nazar Muhammad Gondal responding to the live calls of the people after inaugurating the radio programme “Aaj Mandi key Bhao”, here on Monday.

The minister said that preparations had been finalized to provide 10,000 tractors to farmers under Benazir Tractor Scheme.

It may be recalled that about 355,000 printed application forms had been provided to farmers through the ZTBL branches in addition to those who applied on-line.

About 340,000 application were received, of which 277,106 were finalized for balloting of the scheme.

For Punjab province 5000 tractors, Sindh 2000, NWFP 1200 and for Balochistan 850 tractors would be allocated.

In AJK, FATA 350 tractors each while FANA 200 tractors and Federal Capital 50 tractors quota is fixed.


http://www.pakistantimes.net/pt/detail.php?newsId=3863

Riaz Haq said...

Here's a Fresh Plaza news report on fruits and vegetables production in Pakistan:

Pakistan produces over 14 million tonnes of fruits and vegetables of which almost one-third is wasted and never reaches the consumer. High post-harvest losses not only lower incomes of producers and traders, but also reduce the quantity available in local market as well as for export. Despite large production, our fresh produce exports are negligible (three per cent) and also fetch lower prices in international markets. So far Pakistani exporters have not been able to penetrate into high end supermarket chains, which account for about 80 per cent of the fruits and vegetables sales in the EU and other developed countries. Mango export earns about $24 million annually and around 60-70 per cent of good quality varieties is exported to the Middle East and 15-16 per cent to Europe.

The export of fresh produce, particularly mango is limited by enormous cost of air freight as compared to sea freight. The interest in sea freighting of mangoes is growing and probably it is the only commercially viable option for export to distant places in the future. However, it needs extended time and specific protocols to be developed for maintaining fruit quality, which is only possible using Controlled Atmosphere (CA) Technology. Mangoes from South America are being successfully shipped to the EU using CA Technology. Looking at the need and demand of the sector, Punjab Agricultural Research Board (PARB) initiated a project on “Exploiting Control Atmosphere Technology potential for extended storage and shipping of fresh produce to international markets”. The project was managed by Dr Aman Ullah Malik, Professor of Horticulture, University of Agriculture Faisalabad (UAF) to increase shelf life of fresh vegetables and fruits for the export to distant markets.

The project was executed with collaboration of National Institute of Food Science and Technology (NIFS&T), Plant Pathology department of UAF and METRO Cash & Carry Pakistan.The specific problems addressed were: optimum CA-conditions for different fruits and vegetables; extension of shelf life and maintenance of quality of mangoes and facilitating sea-freighting for reducing cost of shipment to high end markets. Chief Executive PARB Dr Mubarik Ali says the successful establishment of the SOP for CA technology for fresh produce would greatly benefit exporters in future”. It will generate a good return of money invested on research, enhance our exports and create sound recognition for Pakistani fresh products in international markets.
------------
Dr Amanullah said the usefulness of this project has been demonstrated by arranging seminars, trainings, workshops, meetings and visits for the local growers/ store keepers/ cold store operators/ traders and exporters. Another remarkable achievement is publication of two research papers in the 7th International Post-harvest Symposium in Malaysia. A modern Controlled Atmosphere R & D infrastructure has been developed at Institute of Horticultural Sciences to meet the long-term national needs.


http://www.freshplaza.com/news_detail.asp?id=102535

Riaz Haq said...

Here's a Fresh Plaza report on Pakistan kinnow exports:

Exports of Pakistani mandarin may reach the figure of $100 million around in 2012-13. Exports will start from December 1st 2012 and continue till the end of March 2013.

According to Ahmad Jawad, CEO of Harvest Tradings, heavy rains should help increase Kinnow exports for the 2012-13 season compared to last year, despite the fact that this year production is less than last year in Kinnow the farms of Sargodha district, the biggest citrus producing hub.

"For this season, around 1.8 million tons of production are expected and there are prospects that country's exports would be good. A target of 0.2 million tonnes has been fixed this season for Kinnow export."

He explains that Kinnow export to Iran will not take place because of non availability of e-forms by banks.

Indonesia and India have been added as new markets for the coming season. The export of Kinnow from Pakistan to Indonesia is expected to reach 40,000 tonnes during the coming season. Pakistan and Indonesia have already signed a preferential trade agreement to enhance trade between the two countries this year.

Jawad expects a tough time from China on the Indonesian market in terms of price, but in taste he says, "our product is far better than the Chinese Mandarin. Similarly good volumes are expected to go to India as well in the light of Most Favored Nation Status (MFN) which is granted by the Government of Pakistan to increase trade activities on both sides."

Similarly Malaysia also a favorite market for Kinnow due to Free Trade Agreement signed between two countries.

He goes on to say that, "over a period of time, Russia and Ukraine have also emerged as leading importers of Pakistani Kinnow. Total exports to both countries may now contribute to almost half of Pakistan's total exports, provided we deliver required quality to the Russian authorities."

Mr Jawad urged the support of respective commercial counselors for better promotion and level playing field.

He also sees bright prospects for future of Kinnow exports, but says this is subject to proper dedication and more research as the Kinnow is the only fruit whose juice costs as little as a cup of tea.


http://www.freshplaza.com/news_detail.asp?id=103695

Riaz Haq said...

Here's an excerpt of an ET piece on Pak agriculture:

The country produced 24 million tons of wheat in 2010, compared with 11.6 million tons a year in the early 1980s. Wheat has helped feed a population that has grown to 174 million people from 85 million in 1980. Rice production has more than doubled over the same period, rising to seven million tons from 3.3 million tons, and is now a major export crop earning $2.2 billion in foreign exchange.

Cotton has become a major industrial feedstock, with production increasing to 12 million bales in 2010, up from 4.5 million bales in the early 1980s. Livestock production has also substantially increased to a value of $758.604 million from $51.51 million in 1980. Livestock exports totalled $37.46 million in 2010, compared to $1.170 million three decades ago.

If we take into account the case of wheat, it is a major success story for Pakistan that has moved from being a net importer in 1980 to having a sustained presence on export markets during the last decade. Wheat accounts for two-thirds of national cereal production, and is the most important contributor to overall food security.

However much remains to be done. The yield gap is substantial between leading farmers getting six tons per hectare, and the average farmer getting 2.6 tons. Increased adoption of proven agronomic improvements can help reduce this gap. These improvements include provision of quality seed through the private and public sector, timely sowing and availability of inputs, adoption of a more balanced fertilisation, modification of irrigation regimes to more closely match actual crop water requirements and stage of development. Opportunities to increase productivity exist through system improvements such as increased development of conservation agriculture approaches, use of green manuring, development of rice-wheat cropping systems, reduction in soil tillage and use of selective herbicides for weed control offer opportunities to increase productivity.

Pakistan also faces some challenges like the breakdown in resistance to some key diseases which will require further investment in development of new crop varieties, as well as varieties adapted to abiotic stress associated with climate change events. Water availability is becoming a major issue in the major wheat growing regions and while engineering improvements can reduce transmission losses, much remains to be done on improving water use efficiency from the agronomic standpoint in the crop field.

There is no policy of crop rotation. Therefore, the fertility of the soil is decreasing. The average thickness of fertile layer of soil in Pakistan is more than six inches but the average yield is lower than other countries where the layer of fertile soil is only four inches.

Water wastage is very high. Flood irrigation is still in practice which wastes almost 50 to 60% of water. Drip irrigation is the answer.

Pakistan has low yield per acre that means the average crop in Pakistan is just 25% of that of advanced states. Even Saudi Arabia has a higher wheat yield than Pakistan.


http://tribune.com.pk/story/477380/fighting-to-keep-the-bread-basket-filled/

Riaz Haq said...

Here's Daily Times on USAID effort to enhance rural productivity in Pakistan:

US assists rural Pakistan increase productivity

Staff Report

ISLAMABAD: United States Agency for International Development (USAID)’s Pakistan Strategy Support Programme (PSSP) launched a 2-day First Annual Conference entitled ‘Productivity, Growth and Poverty Reduction in Rural Pakistan’ on Thursday.

The aim of this conference is to review the first year’s results from PSSP activities. The International Food Policy Research Institute (IFPRI) implements the PSSP. This is a four-year USAID funded, multi-dimensional, multi-partner initiative under the Pakistan Planning Commission’s framework for economic growth.

USAID is proud to support the Planning Commission’s efforts to achieve high standards of excellence in policy formulation and research through capacity building of researchers and analysts in Pakistan, said USAID Deputy Director Rodger Garner at the inaugural session of the conference. These efforts will contribute to a stronger, brighter future for all Pakistan, he added.

A National Advisory Committee chaired by Dr Nadeem ul Haque Deputy Chairman of the Planning Commission of Pakistan with members including Abdul Wajid Rana, Principal Officer and Secretary of Finance government of Pakistan supervises PSSP.

USAID assistance will enable Pakistan to modernise its policy formulation by improving research based policy analysis. This will create a more favourable enabling environment for investments and enterprise growth, Dr Nadeem ul Haque said.

USAID’s other economic growth activities include creating over 200,000 acres of irrigated land by the end of 2013, as well as increasing the incomes of 250,000 farmers and female agricultural workers by increasing their production and connecting them with markets throughout the country to improve sales and ultimately expand their businesses.


http://www.dailytimes.com.pk/default.asp?page=2012\12\14\story_14-12-2012_pg5_14

Riaz Haq said...

Here's a Forbes piece on Millat tractors in Pakistan:

Almost a year after floods devastated Pakistan, swamping 5.8 million acres of farmland and displacing millions of people, Ashaq Malik, who grows cotton, sugarcane and wheat on 865 acres in Punjab province, has reason to feel optimistic. After nearly a third of his land was inundated, today he is seeing a strong harvest. "As soon as the water level fell down, we started reconstructing the houses and working on the fields," says Malik. "Today there is no problem with the crops."

Companies that service the agriculture sector are also thriving in the rebound, none more than Millat Tractors of Lahore, which also manufactures other farm gear. Last year Millat earned 2.3 billion rupees ($29 million) on sales of $263 million, a 40% increase from the previous year. In the first quarter of 2011 profits grew 52% from the same period a year earlier..

To buy his 150,000 shares, Ansari--then a 39-year-old general manager--sold a plot of land, liquidated his retirement funds and borrowed money from his father. "It was a lot of money to me back then," he says. "Today it's like a lottery coming your way. The value has increased many, many fold since then."

Today the public, including Millat's 1,600 employees, owns 42% of the company; management and kin 28%; and banks and other institutions the rest. Employees are prosperous because of stock dividends and their salaries. Most of Millat's employees pay income tax--a sign of affluence in Pakistan--and have their own cars.
..


http://www.forbes.com/global/2011/0912/best-under-a-billion-11-millat-tractors-pakistan-after-flood.html

Riaz Haq said...

Here's Daily Times on wheat seed resistant to rust disease:

The above wheat seed variety has the potential to resist the virus UG99, said PARC Chairman Dr Iftikhar Ahmad while briefing the committee. He further said, “Experts say it is only a matter of time before wind carries a deadly wheat stem pathogen into Pakistan, the ninth largest wheat-producing nation in the world. Known as UG99, the disease could potentially decimate the country’s highly vulnerable wheat crop and cause a huge food security problem.”

Crop scientists say that next destination of this ‘time bomb’ is obviously Pakistan and then India.

UG99 originated in Uganda in 1999 and has migrated to many countries. It has reached Iran and become a regional threat that now confronts wheat production and stability. The PARC has established the UG99 resistance variety and multiplied and provided to farmers at the time of wheat sowing. For this year, the PARC chairman said 72 tonnes UG99 resistance wheat seed is available and being provided on demand. Every year, the seed is multiplying and soon the country will be able to fully protect against the UG99 deadly disease.

Apart from, Ahmad said that PARC is coordinating with all research institutes across the country. We have commodities base coordination on wheat, maize, sorghum and millet, pulses, oilseed crops, fodder crops, rice and rice hybrid and sugar crops. The PARC also helps the government in mechanisation and coordinattion between private sector and concerned departments. Apart from it, there are a number of collaborations with Punjab in promotion of agriculture research and projects.

The committee was also briefed about the livestock department in federal government after devolution process in the country. Livestock Department Head Dr Khurshid told the committee that livestock has 55.1 percent contribution to agriculture value addition and 11.6 percent share in national gross domestic product. During the year 2011-12, the livestock share in total foreign exchange earning is 8.3 percent. During the year 2012-13, the livestock population is; cattle 38.3 million, buffalo 33.7 million, sheep 28.8 million, goat 64.9 million, camels 1.0 million, horses 400,000, asses 4.9 million and mules 200,000 million.

He told the committee that livestock sector’s prospective role towards rural economic development may well be recognised from the fact that nearly 8.0 million families involved in livestock raising are deriving more than 35 percent income from livestock production activities. He said the government has taken a number of measures to improve the pace of development in livestock sector with focus on value addition.

The import of agro based machinery and equipment including machinery and equipment related to livestock farming and dairy processing units is allowed at zero tariff. Import of high-yielding exotic dairy and beef animals and their semen and embryo are allowed. He also informed the committee that sales tax exemption has been allowed to processed milk, yogurt, cheese and flavored milk, butter and cream.

About future plan, he said the department is planning to persuade the polices to achieve 5.0 percent more growth in meat and 8.0 percent or more in milk production through shifting from subsistence livestock farming to market-oriented and commercial farming with a focus on entire market chain. The future road map is to enter into global Halal food trade market, controlling trans-boundary animal diseases of trade and economic importance through provincial participation and rural socio-economic uplift....


http://www.dailytimes.com.pk/default.asp?page=2013\01\08\story_8-1-2013_pg5_9

Riaz Haq said...

Here's a report on progress in fighting ug99:

Aug. 30, 2012 — The world's top wheat experts have reported a breakthrough in their ability to track Ug99 and related strains of a deadly and rapidly mutating wheat pathogen called stem rust that threatens wheat fields from East Africa to South Asia. With data submitted by farmers and scientists from fields and laboratories, the creators of the "Rust-Tracker" say they now can monitor an unprecedented 42 million hectares of wheat in 27 developing countries in the path of a windborne disease so virulent it could quickly turn a healthy field of wheat into a black mass of twisted stems and dried-up grains.

"Wheat rusts are global travellers with no respect for political boundaries, and it is highly likely that some of the virulent new strains related to Ug99 will eventually be carried across the Middle East and Central Asia and into the breadbaskets of Pakistan, China and India," said Dave Hodson, developer of Rust-Tracker and a scientist with the International Maize and Wheat Improvement Center (CIMMYT). "Effective control often depends on finding out what is happening in distant regions, and the Rust-Tracker can help scientists assess the status of stem rust and other rust diseases, not only in their own countries, but also in neighboring countries."
---------
An estimated 85 percent of wheat now in production, including most wheat grown in the Americas, Asia and Africa, is susceptible to Ug99 and its variants. For now, however, only the original mutation, Ug99, has been found outside of Africa -- in Yemen and Iran. Stem rust can cause farmers to lose their entire crop, but a second rust disease is already causing severe losses worldwide. Like stem rust, yellow rust (also known as stripe rust) has in recent years become more of an immediate threat, with the emergence of new, highly-aggressive strains that are able to knock out genetic resistance in many of the most popular varieties of wheat. Among the countries that have suffered devastating yellow rust epidemics are Azerbaijan, Ethiopia, Iraq, Morocco, Syria, Tajikistan and Uzbekistan, with yield losses as high as 40 percent.

"We need urgent concerted action to address yellow rust," said Mahmoud Solh, director general of the International Center for Agricultural Research in the Dry Areas (ICARDA). "It is a significant problem from the Middle East all the way to China. In any new varieties of wheat we develop, we need to build in durable resistance to both stem rust and yellow rust."

Using Rust-Tracker data, Hodson and his colleagues in Beijing are developing "risk maps" that can assist researchers in countries in the path of virulent strains of stem rust and yellow rust to assess the severity of the threat and prepare to resist it...
--------
The BGRI was launched in 2005 by Dr. Norman Borlaug, who often said that "rust never sleeps." He was right. After confirming that Ug99 had overcome the resistance gene he and others had developed for wheat more than 50 years before, Borlaug began his campaign to make the world pay attention to the new threat to global food security.

Borlaug received a Nobel Peace Prize in 1970 for fighting stem rust, while developing and introducing new varieties of wheat that saved some of the world's poorest people from famine. In the last four years of his life, he took up the battle anew against his ancient enemy, urging significant investments in agricultural research and leaving behind an army of scientists with the means to continue the work.


http://www.sciencedaily.com/releases/2012/08/120831083404.htm

Riaz Haq said...

Here's Fresh Plaza on Pak potato export effort:

Pakistan's first state of the art potato washing and grading machine was installed in Karachi and is hoped to boost the dwindling export of potatoes.

The machine was imported at a cost of Rs 10 million and is of Indian and Mexican construction.

Abdul Wahid a leading fruit exporter and former Chairman of All Pakistan Fruit and Vegetable Importers and Exporters Association said that, despite bumper crops, a lack of modern processing and grading of the potato hindered its export.

The lack of modern equipment, for washing, for one thing, has limited export to a few markets, including Sri Lanka, Malaysia and some Gulf Countries.

The lucrative European, Central Asian and Russian markets have so far remained out of reach, with few exceptions.

The new machine is thought to be the first in the country that will wash and grade the potatoes, preparing them to a standard suitable for international trade.

To have a real impact there will need to be many more such machines imported into the country.


http://www.freshplaza.com/news_detail.asp?id=105326

Riaz Haq said...

Here's Daily Times on crop insurance for small farmers in Pakistan:

ISLAMABAD: The Pakistan Poverty Alleviation Fund (PPAF) has launched the first-ever indexed and hybrid weather micro-insurance products to facilitate and compensate small farmers in Pakistan.
Presided over by Securities and Exchange Commission of Pakistan Commissioner Muhammad Asif Arif, a simple ceremony to this effect was arranged at a local hotel, which was attended by representatives of State Bank of Pakistan, the World Bank, International Fund for Agricultural Development (IFAD), KfW, German Development Bank, UKAID, Tameer Microfinance Bank, National Disaster Management Authority, Pakistan Microfinance Network, government bodies, insurance companies and others.
Addressing the occasion, Arif said that micro-insurance stands at a critical juncture in Pakistan. He commended PPAF on for introducing revolutionary indexed crop and livestock insurance products in Pakistan. As regulator, he said, SECP has remained committed to promoting micro insurance in the country through research, introducing pivotal regulations and promoting a healthy policy environment.
PPAF Board of Directors Member Zubyr Soomro said that the need for micro-insurance has been felt over the years and it is the tipping point to upscale it. He said that we would have to make the most of this opportunity. He said that sincere efforts are needed to make micro-insurance sustainable.
In his remarks, PPAF Chief Executive Qazi Azmat Isa said that micro-insurance initiative is the result of close collaboration between PPAF and IFAD. He lauded the role of insurance companies and SECP as a regulator to make micro-insurance a success. He said that farmers are badly affected by climate change, fluctuation in the prices of their produce and poor quality of agri inputs. He said that micro-insurance would prove to be a vital instrument in fight against poverty.
State Bank of Pakistan Agricultural Credit and Microfinance Department Senior Joint Director Kamran Bakshi said that by launching indexed and hybrid weather micro-insurance PPAF has provided a unique platform to market leaders to serve the poor, particularly the farmers. He said that the focus must be on protecting the borrowers.
PPAF’s Senior Group Head Ahmad Jamal said that PPAF is committed to grassroots development and micro-insurance would prove to be one of the instruments to alleviate poverty. He said that PPAF would capitalise on its outreach so that maximum people could benefit from micro-insurance.
PPAF’s Financial Services Group Head Yasir Ashfaq highlighted that these products will lead the new era for micro insurance in Pakistan. He said indexed insurance products are easy to administer, transparent, innovative and significantly reduce any chances of moral hazard or fraud. He said PPAF envisions scaling up these products at a national level, preparing detailed indices for various districts with the support of stakeholders including government agencies, donors, MFIs and insurance companies.
The weather-indexed crop and ‘live-weight’ livestock insurance products have been designed by PPAF, with support from IFAD through a strategic partnership with SECP.
These products have been prepared in collaboration with Meteorological Department, Livestock Research Institute and are based on needs of small and marginal income farmers. PPAF has launched these products as a pilot in collaboration with local insurance companies in districts Khushab and Chakwal.
The pilot projects have received overwhelming response and showcased significant potential in providing efficient and transparent form of risk mitigation for small and marginal income farmers and livestock owners across the country.


http://www.dailytimes.com.pk/default.asp?page=2013\01\30\story_30-1-2013_pg5_9

Riaz Haq said...

Here's an ET Op Ed by LUMS' Professor Rasul Bukhsh Rais:

I have a serious problem with the cynic brigade that writes and comments on social, developmental and political issues along familiar lines. What is their familiar line? The Taliban are coming, extremism is on the rise, corruption is pervasive and life is miserable. This is a partial truth, not the whole truth. That nothing can change is a viewpoint that conflicts with history and the evolution of societies.

Cynicism in hard times like ours and in a climate of fear, insecurity and violence, sells and viewers and readers readily embrace the dark side of things rather than looking at what is bright and shining. The other issue is the habit of most of my colleagues and columnists to write from the comfort of their offices or homes. They tend to look at the big picture that gives a disturbing spectre rather than examining achievements at local levels, and by dedicated individuals and communities. If there is any meaningful and real change in Pakistan, it is taking place at these levels in every aspect of the social and economic life of this country. By missing details of development and positive change at the smaller scale, we may draw a big picture of a society and country that may not be in agreement with reality. This is what is unfortunately happening.

One of my social beliefs is that only by changing at the local level will Pakistan change for the better at the national level. The national in spatial terms is nothing but local. By often travelling through the villages, mostly in Punjab, I have seen thousands of positive contributions and developments that are neither documented nor narrated. Never has our regular cynic brigade opened its eyes and minds to what this change is and how it is becoming a catalyst for more and larger changes.

Let me share one man’s gigantic contribution at a government agricultural research farm in Bahawalpur. I had heard about Mushtaq Alvi for his collection of berries and date palm trees for some years. Last weekend, I had the opportunity to visit this fabulous farm, which may not be noticed from outside the walls. Mr Alvi, as a young man with his first job, started the plantation in 1985. He went to every place in Pakistan to collect the best local species of date palms, berries, mangoes, guavas and pomegranates. Today, he has 35 species of date palms, 20 of berries, 20 of mangoes and five of pomegranates, and almost every of guavas. Never has his search for new findings ended.

While the collection continues to expand, the farm has supported thousands of farmers and households that would like to have various species of these trees. Every season, thousands of berry plants and hundreds of date palms are distributed. Then there are private collectors of these trees that have developed their own farms and would like to sell plants to new farmers. Each new tree becomes a source for saplings leading to further proliferation.

Scientists like Mr Alvi and many of his colleagues may move on to other research stations or retire but what they have done is something remarkable. This is just one example of ordinary Pakistanis making a difference to society. Unfortunately, our media, commentators and pseudo intellectuals cannot lift their eyes from what is wrong in society and shift their attention, even for a moment, to what is right and working.

Recognition and celebration of achievements by individuals and communities encourages positive change, positive attitudes and stimulates energies for innovation and more contribution. While grieving about the many things that are troubling us, let us not ignore the pleasing side of changing Pakistan. Go out and see it.


http://tribune.com.pk/story/509088/changing-pakistan/

Riaz Haq said...

Here's Daily Times on rising rice exports:

KARACHI: The total rice exports from Pakistan including basmati and non-basmati rice have risen above the $1 billion mark during seven months of this fiscal year (July 2012 to February 24, 2013), which in terms of weight stands at 2.142 million tonnes.

The full fiscal year’s export target of $2 billion seems achievable as up till now more than $1 billion exports have been met.

“Efforts of the Rice Exports Corporation of Pakistan to boost export of Pakistani rice has started yielding positive results as Tanzania has emerged as a potential market for Pakistan’s non-basmati rice,” said Rice Export Corporation of Pakistan (REAP) Acting Chairman Rafique Suleman. During the last seven months of the current fiscal year a total quantity of 95,349 metric tonnes has been exported to Tanzania, whereas last year during the same period the export was 25,484 metric tonnes.

It may be recalled that recently Pakistan’s rice export to China has marked an increase as record volume of non-basmati rice 72,623 metric tonnes to China worth $30 million in just one month (January 2013) was exported during the current fiscal year.

“China has become a major market for Pakistani non-basmati rice over the period of time, which
has greatly encouraged exporters of the commodity to accomplish further success in that territory.”

Similarly Pakistani rice export to countries like Sri Lanka and Kenya has also showed marked improvement.

Basmati rice is in great demand in Sri Lanka and Sri Lankan exporters are willing to import more basmati rice from Pakistan.

Suleman said that efforts are underway to push export of Pakistani rice to substantial level as it is fast gaining popularity across the globe, which is evident from the fact that it is currently exported to more than 100 countries.

Furthermore, exporters are also endeavouring to explore many new markets to enhance and increase the export and in this regard REAP chairman and vice chairman, and leading rice exporters visited Gulfood, Dubai (February 25 to 28, 2013) to explore new business opportunities and promotion of Pakistani basmati rice.

He thanked the commercial sections of Pakistan in East African Countries and especially High Commissioner for Pakistan in Tanzania Tajammul Altaf for his efforts for the promotion of Pakistani rice exports into East African countries. As per the official statement of Tanzania Ministry, they will be able to cover the consumption by local production up to 2018. Altaf informed on phone that last year the total imports from Pakistan were worth $50 million and this year we have achieved $100 million.


http://www.dailytimes.com.pk/default.asp?page=2013\03\02\story_2-3-2013_pg5_13

Riaz Haq said...

Here's a BR story on Pakistan becoming the second largest food donor to WFP:

Pakistan has emerged to be the second largest donor to the United Nations World Food Programme (WFP) consequent to its donation of 75,000 metric tons of wheat to it.



WFP Coordinator for the programme, Amjad Jamal giving details of the country's support said the contribution valued at approximately US$25 million, has placed Pakistan as WFP's second largest donor country so far this year.



The assistance, he said has been announced at a time when critical funding shortages threatened the provision of emergency food assistance to almost one million displaced people in the country's north-west.



The wheat will be milled, fortified and then provided to families displaced by security operations or only recently able to return to their homes in the Federally Administered Tribal Areas (FATA).



Combined with much-needed contributions from other donors, it will allow WFP to distribute a full cereal ration to these groups until the end of the year.



Jamal mentioned that a shortage of resources had forced WFP to reduce rations from January.



This latest contribution follows sizeable in-kind donations from the federal government and provincial governments of Sindh and Balochistan last year.



More than 70,000 metric tons of wheat was successfully delivered to both displaced and flood-affected communities in 2012, following a highly positive response from other donors to WFP's appeal for complementary "twinning" funds.



WFP's emergency response to the needs of displaced communities in the north-west is implemented under a new relief and recovery operation for Pakistan, launched on January 1, 2013.



Aiming to assist about 8 million people at a total cost of US$540 million over the next three years, the operation also seeks to improve economic opportunities and promote social inclusion in FATA, boost community resilience in disaster-prone locations, and prevent and treat moderate acute malnutrition among young children and women in the country's most food-insecure districts.



WFP's partnership with the Government of Pakistan contributes to the National Zero Hunger Programme, drawing on the successes of other countries in the fight to eradicate hunger and undernutrition.



"This very timely contribution is greatly welcomed and demonstrates the Government's ownership of the development process and commitment to helping its people," WFP Country Director and Representative in Pakistan Jean-Luc Siblot, was quoted to have said.



The last thing, he said WFP want to do is to cut assistance for the poorest and most vulnerable, and this wheat will help us to restore the food basket to a level that fully meets basic needs.



International donor community is also expected to provide some US$23 million needed for WFP to mill, fortify, transport and distribute the wheat.



Additional funds will also be required to purchase other commodities in the food basket, including specialised nutritious products for young children.



WFP is the world's largest humanitarian agency fighting against hunger worldwide. Each year, on average, WFP feeds more than 90 million people in more than 70 countries.


http://www.brecorder.com/pakistan/general-news/108397-pakistan-turns-second-largest-donor-to-wfp.html

Riaz Haq said...

Here's PakTribune on promoting livestock revolution in FATA:

PESHAWAR: To bring white revolution and fulfill people's meat demands, the government has decided to launch two mega projects for uplift of livestock sector in Federally Administered Tribal Areas (FATA) areas shortly to bolster income of tribal people especially of women folk.One of the mega projects is “Calves Fattening Project” that would be launched this month to fulfill the demands of quality meat of the ever growing population of the country. Official sources in Fata Livestock and Dairy Development told APP on Sunday that Calves Fattening Project would be launched in Frontier Regions of Peshawar, Kohat and Khyber, Kurram and Orakzai Agencies this month and would later be extended to other tribal agencies. He said it was a two-year project that would be completed with an estimated cost of Rs. 68 million.

A registered farmer/livestock owner, having cows or buffalos' calves (male) between 10 to 50 numbers would be provided free of cost technical support in formation of farms houses besides medicines, insemination, vaccination and fodder's services at their doorsteps, he added. It will be mandatory for the registered beneficiary livestock owner/farmers to look after and keep its calves in his/her farm for at least three months for provision of above services on constant basis by the Livestock Department. He said at least 3000 calves would be fattened in next two years under this Project.This would help improve the income of tribal people besides generating employment opportunities in Fata and will provide healthy and quality meat to consumers. Another project that is establishment of a model farm in Khyber Agency was also in pipeline and hopefully its PC-I would be completed this month and would be launched after completion of codal formalities, he added.

Under this project, 50 cows would be kept in the model farm for cross-breeding that would not only help produce quality and healthy breed but also increase per kilogram meat and milk production in Fata. The estimated cost of this project is Rs.100 million that would be launched in Khyber Agency on pilot basis soon. He said negotiations were underway with donor agencies for establishment of Milk Processing Plant in Fata to improve quality of milk and earn valuable foreign exchange for the country besides bringing economic improvement in the lives of tribesmen.These project will help support national efforts for poverty alleviation by providing a model for sustainable rural development through livestock-based income generating activities at the rural community level and will help reduces poverty, enhances development opportunities for women and poor farmers, improves household food security and nutrition.
----------

In addition to capacity building of doctors and veterinary assistants, he said mobile clinics project was successfully underway in Orakzai, Kurram, Khyber and Bajaur Agencies wherein specialist doctors and vetarnary assistants were providing quality services to farmers and livestock owners living in remote areas.These projects are aimed at to exploit the vast potential of livestock and dairy development in Fata and make it income-generating ventures for tribesmen to improve their life style.


http://paktribune.com/business/news/Rs-168m-projects-for-uplift-of-livestock-sector-in-Fata-10942.html

Riaz Haq said...

Here's PakObserver on US help to improve Pak agri productivity:

Tuesday, March 12, 2013 - Islamabad—The U.S. Agency for International Development (USAID), the International Maize and Wheat Improvement Center (CIMMYT), and the Pakistan Agricultural Research Council (PARC) launched a new project to expand the use of modern technologies in Pakistan’s agriculture sector.

“Boosting Pakistan’s economy is one of our top assistance priorities. That’s why this project will work to modernize agricultural practices to increase the production and quality of livestock and horticultural goods. This in turn will enhance economic development in the country,” said USAID Country Director Jonathan M. Conly at the launch of the project in Islamabad on March 8.

Innovative technologies, introduced in Pakistan with support from the U.S. Government, spurred the Green Revolution in the 1960s and 1970s. The adoption of improved rice and wheat varieties, combined with strategic policies and investments, led to a doubling of yields and output in those two decades. With investment in research, Pakistan transformed its agricultural sector into a driver for economic growth.

Currently, Pakistan’s agricultural sector is growing at a much slower pace than other sectors. “Pakistan’s agricultural productivity has fallen behind comparable countries with similar agro-ecologies,” said Thomas Lumpkin, Director General of CIMMYT. “There is a tremendous potential for growth, but we must act now.”

Through its new four-year, $30 million project, USAID will sponsor research to encourage adoption of new technologies in agriculture, such as laser land leveling, zero tillage, residue management, introducing short duration legumes into rice-wheat cropping systems, and custom service systems for machinery.

The project will also offer short and long-term training. The U.S.-funded project will be implemented by CIMMYT and PARC in cooperation with the International Livestock Research Institute, the World Vegetable Center, the International Rice Research Institute, and the University of California, Davis.

Promoting economic growth is one of the many ways that the United States is helping to create a brighter future for the people of Pakistan. The United States funds large-scale energy projects that will provide electricity to two million households by the end of 2013. The U.S. has rebuilt and renovated 800 schools and has provided scholarships to 12,000 students to attend universities in Pakistan.


http://pakobserver.net/detailnews.asp?id=199817

Riaz Haq said...

Here's a PakistanToday report on raising wheat yield in Pakistan:

American scientists and Pakistani wheat experts are collaborating to increase Pakistan’s wheat harvest and ensure greater prosperity to farmers nationwide.
A bi-national team of scientists, sponsored by the US Department of Agriculture (USDA), met in Faisalabad last week to evaluate wheat varieties for disease-resistance, according to a statement issued by the US Embassy.
In order to determine which wheat varieties will perform best in Pakistan’s unique ecosystem, US and Pakistani researchers studied the effects of heat and other types of environmental stress on the different varieties of wheat that can be planted in Pakistan.
USDA, through its Wheat Productivity Enhancement Project (WPEP), currently helps evaluate 60 wheat varieties planted in 115 wheat trials throughout Pakistan. In order to increase the quality of this joint research, last week USDA also provided Pakistani research institutions specialized wheat planting and harvesting equipment. The new machines, which replaced equipment over 25 years old, will allow scientists to study more wheat varieties each year and more rapidly improve Pakistani farmers’ harvest yields.
“Wheat is critical to the food security of both Pakistan and the United States,” said USDA Plant Health Advisor Ian Winborne after a ceremony at Ayub Agricultural Research Institute (AARI) celebrating the handover of the new equipment. He added, “Lasting links between Pakistani and US scientists can help improve and protect agricultural harvests in both our countries.”
WPEP facilitates scientific collaboration between USDA, the International Maize and Wheat Improvement Center (CIMMYT), and Pakistan’s national wheat programs. WPEP funds scientific exchanges to develop, introduce, and test disease-resistant wheat varieties; improve agronomic practices; and upgrade research capacity in Pakistan.
This initiative is just one part of a comprehensive US economic growth assistance program which includes expanding irrigation by more than 200,000 acres near the Gomal Zam and Satpara dams; constructing more than 1,000 km of roads to connect communities and facilitate trade; modernizing dairy farms in Punjab; and launching private equity investment funds to help small and medium businesses grow.


http://www.pakistantoday.com.pk/2013/03/20/news/profit/us-pakistani-scientists-increase-pakistans-wheat-harvest/

Riaz Haq said...

Here's a Daily Times report on ADB assistance for BISP:

The Asian Development Bank (ADB) has announced $ 200 million assistance for Benazir Income Support Program (BISP) so that it may reach out to the families not benefiting its various schemes. The announcement was made recently while a delegation of the bank was visiting the country with a special objective to look into the areas where the social safety, extended over the poverty-stricken people of the country four years back could be helped out.

Due to transparency and effective utilization of the funds, BISP has received direct technical and financial support from international donors. World Bank, Asian Development Bank (ADB), UK Department for International Development (DFID), USAID, China, Turkey and Iran has doled out funds to support different BISP initiatives. Some countries in the Asian regions, including India, have approached Pakistan for replicating BISP model. BISP conducted countrywide Poverty Survey/Census for the first time and collected the data of almost 180 million people and 27 million households using GPS devices for the informed decision making (to cope with natural disasters and other emergencies). The poverty census completed in record time of one year across all Pakistan including Azad Jammu & Kashmir, Gilgit-Baltistan and FATA.

BISP took start with Rs34 billion (US $ 425 million approximately) for the financial year 2008-09 aiming to cover 3.5 million poorest of the poor families. The allocation for the financial year 2012-13 is Rs. 70 billion to provide cash assistance to 5.5 million families, which constitutes almost 18% of the entire population. The Program aims to cover almost 40% of the population below the poverty line.

More than 7 million beneficiary families have been identified through Poverty Scorecard Survey for disbursing Rs1000/month through ‘branchless banking system’ (Smart Card, Mobile Phone, and Debit Card). Called as Martial Plan and having focus on poverty alleviation through empowering the women, BISP has so far disbursed more than Rs146 billion to the deserving and needy of the country with complete transparency in about 4 years time through the elected representatives of the people, regardless of their party affiliation.

Waseela-e-Haq provides interest free loans up to Rs 300,000 to help recipients set up small businesses. The most striking feature of this program is that the female beneficiary is the sole owner/proprietor of the business and the counseling, monitoring and training for starting the business is provided through Pakistan Poverty Alleviation Fund (PPAF).

Waseela-e-Rozgar has been launched for provision of demand-driven technical and vocational training to the deserving youth, who do not have any skill, through public/private training institutes. A total of 10,000 young males and females have been trained and another 20,000 are currently undergoing training. The target is to train 150,000 students every year.

Besides helping the poor and the marginalized sections of the society in terms of income support and skill development, the BISP is providing insurance cover of Rs.100, 000 in the case of the death of the bread earner of the poor family registered with the authority. With a view that health shocks are the major reason for pushing people below the poverty line, Rs25000 health insurance is being provided to the poorest families for the first time in Pakistan. Pilot phase has been launched from Faisalabad.

Finally, as the Poverty Survey had indicated, millions of poor children never attend any school due to financial limitations. BISP has signed contracts with all the provinces, under its Waseela-e-Taleem Program, initiated with generous help of the World Bank and DFID, to send 3 million children to school through additional cash incentives of Rs.200 per child....


http://www.dailytimes.com.pk/default.asp?page=2013\03\21\story_21-3-2013_pg7_15

Riaz Haq said...

Here's a Nation report on Nestle's $104 million investment in Pakistan:

AHORE – SALMAN ABDUHU - The Nestle Pakistan has announced the completion of its new milk powder drying facility plant with additional investment of $104 million at Nestle Sheikhupura factory.

Nestlé Executive Vice President and Operations and Globe System In-charge Joze Lopez, who is on three three-day visit to Pakistan, inaugurated the $104 million Egron Project and visited the whole plant.

Lopez, addressing the opening ceremony, said that the existing Milk Powder Plant has now been modified with new technology and has an additional yearly capacity of 30,000 tons. The power generation capacity and waste water management system have also been upgraded and additional filling lines have been set up, he added.

He stated the Nestlé is the largest food and beverage company in the world and the Sheikhupura dairy, juice and water factory embodies Nestlé’s increased investment in Pakistan. As part of its three-year plan to expand the production capacity in the country, Nestlé has invested a total of $148 million over the past two years in various factory expansion projects to meet rising consumer demands.

He added that wherever Nestlé is present, the company works and invests in the long term. We are convinced that in order to be successful in the long-term we have to create value for our shareholders, as well as for society. This Creating Shared Value approach encourages businesses to create economic and social value simultaneously by focusing on the social issues that they are uniquely capable of addressing. He observed that Nestlé Pakistan is committed to creating shared value for the communities it works and lives with. The company has made many contributions in this regard, by providing free technical and veterinary advisory and training support to thousands of dairy farmers in the milk districts who now have more sustainable opportunities to gain their living.

Lopez said, “Pakistan is an important growth market for us and we are dedicated to meet the growing demands of our consumers. Major capacity increases, such as the one just inaugurated in Sheikhupura, allow us to constantly upgrade our facilities to the latest standards in global technology.”

MD Magdi Batato, on this occasion said that Nestlé Pakistan is the leading food and beverage company in Pakistan and meets international standards in the manufacturing of its products. In 2012, the company grew by 22 per cent to reach an annual turnover of Rs79 billion (Approximately $800million). Nestlé Pakistan is serving the Pakistani consumers since 1988 and it also associates itself with 200,000 farmers in collecting milk and engages in a number of rural development programme for community development.

“Our reality is ‘Har Dam Pakistani’, (Every Moment Pakistani) and we are delighted to provide our consumers with products manufactured in Pakistan. More than one million Pakistanis, mostly dairy farmers, participate in our value chain and this investment is a further commitment to Pakistan and its people, and to our vision of providing Behtar Kal Hamara, (A Better Tomorrow For Us) to all,” said Magdi Batato, Managing Director, Nestlé Pakistan.


http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/business/23-Mar-2013/nestle-brings-104m-additional-investment-to-pakistan

Riaz Haq said...

Here's a Bloomberg story on Pakistan govt's politically motivated decision to export more sugar:

A shipping subsidy and lower excise tax linked to the export of as much as 1.2 million metric tons of sugar by Pakistan may lead to low inventory and high domestic prices, a unit of the U.S. Department of Agriculture said.

The decision by Pakistan’s Economic Coordination Committee of the cabinet and the Federal Board of Revenue “is being heavily criticized as a politically motivated move by the government to garner support from the sugar industry in the upcoming elections,” the USDA’s Foreign Agricultural Service said in a report posted today on its website.

Stockpiles may drop to a “precariously low level” of 400,000 tons, down from an average of 1 million tons in the past five years, according to the report.

On March 6, the coordination committee approved an inland freight subsidy of about $18 a ton on exports of as much as 1.2 million tons after previously setting the quota at 895,000, according to the report. The federal excise duty on domestic sales was lowered to 0.5 percent from 8 percent to provide an increased incentive to export, according to the report.

“The government efforts to increase the competitiveness of Pakistani sugar in the international market by means of providing direct payment to millers for export could be a violation” of World Trade Organization obligations under an agriculture accord, according to the report.

The government of President Asif Ali Zardari became the first civilian administration to complete its full term. General elections are scheduled for May.


http://www.bloomberg.com/news/2013-03-25/pakistan-sugar-policy-may-cut-local-supply-usda-fas-says.html

Riaz Haq said...

Here's how PPP boasts of its record of the last 5 years, as reported by PakistanToday:


The Pakistan People’s Party on Saturday released a 29-point report on its five year performance, highlighting major achievements during the period.
It makes special mention of the constitutional reforms, particularly the 18th, 19th and 20th amendments which provided provincial autonomy, transfer of presidential powers to parliament, smooth installation of caretaker governments and striking down of president’s power to dissolve the assemblies.
Munir Ahmad Khan, the PPP in-charge policy and planning cell, presented the report before the media at a press conference. He said that credit goes to the PPP for ensuring independence granted to the Election Commission of Pakistan.
Khan also came up with a list of important decisions and steps taken by the PPP government to mitigate sufferings of the people despite terrorism in the country.
In this regard, he mentioned a record increase in wheat production, increase in salaries of govt officials up to 158 percent, disbursement of Rs 70 billion among 7.5 million deserving families through the Benazir Income Support Programmed and financial help to 135,000 deserving people by Pakistan Baitul Maal.
On steps taken by the government for economic revival, Khan cited the Pak-Iran agreement on the gas pipeline, agreement with China on Gwadar Port, increase in foreign exchange reserves from $6 billion in 2008 to $16 billion in 2013, increase in export from $18 billion in 2008 to $29 billion in 2012, boost in stock market from 5,220 points in 2008 to 18,185 points in 2013 and reduction in interest rate from 17 percent in 2008 to 9 percent in 2013.
He believed that these measures would help improve the economy and ameliorate the people.
Talking about the measures taken to increase production of electricity, the PPP leader told reporters that the PPP-led government added 3,600MW of electricity to the system besides initiating additional work on Mangla and Tarbela dams for increase of 4,500MW in the system.
The previous government, he added, also got $3.5 billion for Basha Dam, initiated Neelum-Jhelum, Gomal and Satpara dams and Thar Coal project to get electricity from coal besides Jamphar project to get electricity out of air.
He said further the PPP government also reinstated thousands of government servants who were dismissed during the last 13 years and also regularised thousands of contract employees.
Among steps taken by the government for welfare of the masses, Munir Khan listed resumption of trade union activities, distribution of shares among 500,000 industrial workers, cheep tractors to farmers through Benazir Tractor Scheme, increase rural economy from 50 billion in 2008 to 800 billion rupees in 2013.
He said Faisalabad-Multan Motorway and construction of thousands of kilometres of roads.


http://www.pakistantoday.com.pk/2013/03/30/news/national/ppp-releases-five-year-performance-report/

Riaz Haq said...

Here's a Nation newspaper report on US help for Pak agriculture:

“Since the 1950s, the United States has been working to support agriculture in Pakistan by introducing the orange and helping to double the country’ wheat production. Today, we continue our support because improving crop yields protecting food sources from disease and boosting milk production will increase incomes of the farmers which would ultimately strengthen Pakistan’s prosperity, US ambassador said addressing a gathering of government officials, researchers and farmers during his visit to the National Agriculture Research Center (NARC) here on Wednesday.
Ambassador Olson said that the US government is committed to help the small farmers of Pakistan through projects that enhance agricultural productivity.
The introduction of this wheat variety helps protect Pakistan against UG 99 a dangerous wheat disease in the region that poses a threat to country’ farming community, he claimed.
Olson added that US government has provided new harvesting machine to support the Wheat Productivity Enhancement Project and also is also providing specialized training opportunities to Pakistani wheat scientists to fight against wheat diseases.
While talking on the occasion, Dr. Muhammad Imtiaz, Country Liaison Officer for the International Maize and Wheat Improvement Center, noted that without disease-resistant varieties of wheat experts estimate that Pakistan’s annual wheat harvest could be reduced by 50 percent if when UG 99 arrives.
“Agriculture contributes 21 percent to the GDP of Pakistan and employs 45 percent of the labor force, making it one of the most significant economic drivers of Pakistan,” Dr. Imtiaz said.


http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/islamabad/08-May-2013/us-keen-to-promote-agriculture-in-pakistan-ambassador-olson

Riaz Haq said...

Here's a Frontier Post piece on USAID helping dairy sector in Pakistan:

The USAID Dairy Project has spurred growth in Pakistan’s rural economy by helping women farmers increase their incomes and improve their livelihoods.

Realizing the pivotal role rural women play in Pakistan’s livestock sector, USAID is creating a pool of up to 5,000 locally-trained and readily-available female livestock extension workers to provide veterinary services and advice on the care and feeding of cattle to rural dairy farmers. The project also meets farmers’ basic needs by providing them with quality supplies for their animals, such as feed, vitamins, and medication.

The USAID Dairy Project is a catalyst to create new jobs and improve rural livelihoods in Pakistan. “My husband used to work at a private school, but he had to quit his job because of an illness. Now he is unemployed. I was educated through the 12th grade, but I could not find a job,” said Asma, a resident of Toba Tek Singh in Punjab.

“I was worried about my husband’s health and the fact that I couldn’t do anything for my children’s future even though I am educated. I couldn’t sleep at night. But then I heard about this USAID project. I am happy to say that I am now working in my village as a livestock extension worker, providing basic animal healthcare services in my village.”

USAID’s Dairy Project, launched in July 2011, selects dynamic rural women with a high school diploma and trains them in basic animal health management techniques and entrepreneurship. The program has already trained 2,470 unemployed rural women, helping them earn an average of 2,500 rupees per month. It aims to train an additional 2,530 farmers.

“I am advising people in my village about how to improve milk production,” Asma added. “This USAID project has connected us with livestock experts and pharmaceutical companies we didn’t know about before. So far, I have treated around 600 animals and earned 46,000 rupees. Now, our household is prosperous and my sick husband is getting treatment. I am also re-investing in my own agriculture business.”

Naazra, another beneficiary of the project and a resident of Cheechawatnee, was trained as a livestock extension worker and is now successfully running her own business supplying concentrated feed to local dairy farmers.

“USAID trainers introduced me to a quality manufacturer of cattle feed and gave me a mobile phone so I could easily contact suppliers and customers. I have earned 30,000 rupees in three months by selling quality feed. I used the money to develop my business and meet the basic needs of my family. I even bought a refrigerator, which has been very useful for the summer season.”

These women represent a symbol of change and are a testimony to the fact that careful interventions, designed based on community needs, can truly transform rural livelihoods. Women like Aasma and Naazra are helping to modernize Pakistan’s dairy sector in line with international practices.

The dairy and livestock sectors contribute about 11 percent to the gross domestic product of Pakistan. Forty-five percent of Pakistanis are employed in the agricultural sector. Most dairy farmers have only two to three cattle, and few have access to veterinary services that are crucial to improving milk yields.

Dairy farming is vital for the rural economy of Pakistan, and USAID’s extensive training programs for dairy farmers, women livestock extension workers, and artificial insemination technicians will continue to play an important role in transforming livelihoods in rural communities...


http://www.thefrontierpost.com/article/13010/

Riaz Haq said...

Here's a National Geographic story on sustainable farming in Pakistan:

Zacky Farms, just outside Lahore, is the brainchild of Zafar Khan, a Caltech-educated software engineer who runs one of the most successful information technology companies in Pakistan named Sofizar. What started off as a recreational venture is now a side-business supplying sustainably produced organic milk, vegetables and meat to nearby Lahore suburbs. The farm is modeled on a cyclical model of minimal wastes and multiple product usage. The cows are fed pesticide-free oats, clover and grass and their manure is used to fuela biogas plant which runs the dairy facility. In an era of electricity load-shedding, such an alternative source of energy at a local industrial scale is immensely valuable to replicate as a development path. The residue of the biogas is used to fertigate the fodder fields and vegetable tunnels, which along with green manuring obviates the use of fertilizers. Free-range chickens grace the fields and there is even a fish farm on site. Zafar and his Ukrainian-born wife are committed to sharing their experiences with other farming entrepreneurs in the country.

Further south in a more rural and remote part of Punjab, famed writer and erstwhile lawyer, Daniyal Mueenudin, maintains a mid-size farm which is exemplifying other kinds of innovations. The farm does not boast ecological farming practices, apart from tunnel farming that can help with land conservation and humidity control. However, Daniyal has changed the social landscape of his area through implementing a “living wage” for all his employees. Noting the high level of inequality in Pakistan’s hinterland, the Yale-educated former director of the university’s Lowenstein Human Rights Clinic, is practicing what he preached. He also owns a farm in Wisconsin and could have a comfortable life in the States but his social obligations keep him ensconced in Pakistan for most of the year.

Raising the wage several-fold for works and farm manager, and also offering bonus incentives for performance, has led to positive competition that can help to erode the feudal levels of income disparity which exist in this part of Pakistan. At the same time, Daniyal is also committed to providing new livelihood paths for the agrarian workers as automation reduces farm employment in some areas. He has has fully funded a school and provided a merit-based scholarship for advanced degrees to students from the nearby village. One of the children from this school (the first in her family to even go to school) is now making his way through medical school in Lahore!

Zafar and Daniyal’s stories of commitment to constructive farming for social and ecological good may appear to be outliers but they are catching on and provide hope to a country which is all too often shadowed by despair. In the suburbs of Islamabad, tax incentives and planning rules to encourage farming by urbanites are leading to a growing culture of reconnecting with the land in residential farms. In rural areas, the disaster caused by the floods of 2010 brought forth numerous aid agencies with new ideas for sustainable farming. The Pakistani diaspora, often known in the West for professions ranging from taxi-driving to engineering, may well find opportunities for reconnecting to their land in far more literal ways. With growing commitment from land-owners it just might be possible to use the existential shock of recent natural disasters that have befallen the country into a proverbial opportunity for positive change.


http://newswatch.nationalgeographic.com/2012/02/23/farming-pakistan/

Riaz Haq said...

The trend of online shopping has witnessed rapid growth recently with several retail market portals springing up.
But, a recent increase in their penetration into far-flung areas has also boosted future prospects of the e-commerce market. What used to be limited to metropolitan cities has now spread to semi-urban and rural areas of the country. This is another potential market not only for shopping portals but also for fast moving consumer good (FMCG) companies, due to better availability of internet facilities throughout the country.
Online shopping portal, Daraz.pk, claims that online shopping websites have penetrated into the rural areas. In a recent survey, they revealed that around 48% of all orders placed in the first six months of 2014 were outside of Pakistan’s biggest cities – Karachi, Lahore and Islamabad.
“Half the world’s population will have internet access by 2017, showcasing the potential of e-commerce in the future,” said Daraz.pk co-founder Muneeb Idrees. “It is also expected that the number of mobile-connected devices will surpass the number of people. These statistics represent the expanding ecosphere of e-commerce.”
Established in August 2012, Daraz.pk is a project of Rocket Internet, the world’s largest incubator. The portal is currently offering over 400 brands in 200 cities across Pakistan. After the initial success, other venture capital firms took notice and starting initiating contact with local businessmen in the industry to fund entrepreneurs.
The website gets receives their highest number of orders (six per cent) from Ghotki, a semi-urban area in Sindh. The highest basket size across the country was from Lala Musa in Punjab, doubling the average order size of Lahore.
“In general, more than half our orders are from outside Karachi, Lahore and Islamabad,” said Idrees. “People in smaller towns have access to social media and television. They learn about new products, but don’t have malls in their cities to buy these products.”
The e-commerce market in Pakistan is estimated at around $25-30 million, in comparison to the total retail market of approximately $42 billion. Internet availability, along with introduction of branchless banking through cellular technology, has done wonders for the market.
According to estimates, branchless banking transactions have witnessed a growth of 327% during 2011-13. Daraz.pk is one of the few businesses utilising mobile commerce in Pakistan with great numbers. The management said that 20% of the transactions of the portal take place via mobile phones.
FMCG giant Unilever recently entered in an agreement with Daraz.pk to use its marketing reach all over Pakistan for its beauty and personal care products. The management thinks that this deal could be vital for the retail industry as previously no FMCG had seriously looked into the e-commerce sector. http://tribune.com.pk/story/749770/e-commerce-online-shopping-making-its-way-into-rural-areas/

Riaz Haq said...

Dr. Ishrat Husain on deregulation in Pakistan

As in most debates in Pakistan there are sharply polarised views on the regulation and deregulation of private-sector activities. Some advocate re­gulation by the state as an effective tool to curb the market’s excesses. Others think markets should be left to themselves and the state should have few regulations.

------.

Financial markets have some unique features that are missing in product and factor markets. This distinction is lost sight of in this polarised debate. Shareholders’ equity in bank balance sheets ranges from 8pc to 10pc. The banks are highly leveraged as they raise 90pc to 92pc of their money from depositors and borrowings from other financial institutions and markets. This high leverage effect magnifies both upside gains and downside risks, inducing the bank management, whose compensations are linked to short-term profits, to resort to excessive risk-taking.

The upside gains of the leveraged bets accrue mainly to shareholders and managers, while downside losses are so heavy that the state has to bail them out using taxpayers’ money. This asymmetric treatment of the risks incurred and the accrual of rewards places a heavy responsibility on regulators to ensure that shareholders, and not taxpayers, bear the brunt of excessive risk-taking. Therefore, given the market’s structure in the financial sector, state regulation is not only justifiable but desirable.
---------

The same logic cannot be applied to the market for goods and inputs. If a farmer’s income is determined by forces outside his control he has no incentive for higher production and improved productivity. In Pakistan, the government controls wheat prices, and fertiliser prices are subsidised, largely benefiting big farmers. Irrigation water is allocated in a discriminatory manner inducing inefficiency. The food department procures wheat at official prices from those who are influential or who grease their palms. Under such stringent price and quantity regulation why should the average farmer maximise his efforts to produce more?

The differential in the yield between a progressive and an average farmer ranges between 50pc to 70pc. If there was deregulation of prices and quantity (except for a certain amount of reserves), wheat production could jump to at least 30 million tons — a conservative estimate.

Contrast this with the deregulated milk market. Except for hygiene regulations, milk supply and demand determine the prices. The fastest growth in the average farmer’s cash income has taken place through money from milk. For other non-cereal products, market committees that are inefficient and operate in collusion with officials of the agriculture department have distorted prices.

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The sugar market has, at different times, faced waves of regulation, fixed cane price and opaque market interventions. The government steps in when there is surplus production; it procures from local sugar mills and sells in international markets at loss.

In times of shortages, the government imports sugar, and sells at a price mostly to the mills’ advantage. Efficient and inefficient mills are treated equally; there is no pressure on the latter to exit the market as they are insulated from facing the market test. Thus over-regulation, procurement by the government at non-market prices and intrusive and discriminatory practices have tilted the sugar market against the consumers. Here deregulation is badly needed.

In the manufacturing sector, as many as 40 agencies and departments of the federal, provincial and local governments are involved in giving clearances, no-objection certificates, grants of permits, licences, etc. Most factory owners have reconciled to this situation, making monthly payments to functionaries of these departments commensurate with their nuisance value. A labour inspector can arbitrarily shut down a factory, causing enormous loss to the owners, for whom the easy course is to keep the inspector contented.

http://www.dawn.com/news/1144559/deregulating-the-economy

Riaz Haq said...

Within one month of gaining its independence, Pakistan joined FAO on 7 September 1947, the first UN body it joined, clearly signalling the high priority assigned to developing its agriculture sector. The first agreement between FAO and the government was for technical assistance in agricultural policy and planning in June 1951. FAO
support to the government was coordinated through UNDP until the accreditation of an FAO Representative to Pakistan in 1978.

Agriculture is a mainstay of the Pakistan economy, although it has been declining as a percentage of gross domestic product (GDP) as the country’s industrial and service sectors have grown. Agriculture accounted for 21 percent of GDP
in 2010, compared to 36 percent in 1980. The sector provided livelihoods for 45 percent of the population in 2010, down from 53 percent three decades earlier.

Pakistan’s food security rests upon its wheat production. The country produced 24 million tonnes of wheat in 2010, compared with 11.6 million tonnes a year in the early 1980s. Wheat has helped feed a population that has grown to
174 million people from 85 million in 1980. Rice production has more than doubled over the same period, rising to 7 million tonnes from 3.3 million tonnes, and is now a major export crop earning US$2.2 billion in foreign exchange.
Cotton has become a major industrial feedstock, with production increasing to 12 million bales in 2010, up from 4.5 million bales in the early 1980s. Livestock production has also substantially increased to a value of US$758.604
million from US$51.51 million in 1980. Livestock exports totalled US$37.46 million in 2010, compared to US$1.170 million
three decades ago.
FAO has been at the government’s side throughout this process of development, implementing 573 projects worth
US$314 million that have provided support to policy development, capacity building and pilot and key demonstration
projects. Pakistan is a pilot country for the One UN system and FAO has been at the forefront of developing the
approach that ensures the highest priority is given to the agriculture sector in line with the government’s priorities.

http://www.fao.org/3/a-at014e.pdf

Riaz Haq said...

Potato prices plunge in Pakistan with bumper crop. The total domestic surplus, according to farmers, might be anywhere between 2.5-3m tonnes. The country has never been able to export more than 100,000 tonnes, and has averaged at around 80,000 tonnes. And these figures were achieved during regional shortages, when crops in winter potato producing countries (Bangladesh and India) had failed.
This year, both these competitors have their own surpluses and would compete with Pakistan for foreign markets’ share.
http://www.dawn.com/news/1168386/potato-prices-crash

Riaz Haq said...

Addressing the “Fruit and Vegetable Promotion Conference” in Karachi on Friday, Federal Minister for National Food Security and Research Sikandar Hayat Khan Bosan said that the dream of boosting exports of fruits and vegetables has been materialised thanks to the introduction of new technologies by the agriculture scientists.

“I am proud of the agriculture scientists, whose untiring efforts in research helped boost the exports of fruits, especially mango and vegetables from the country,” the minister said, adding that country’s mango was facing severe problems of fruit-fly disease, resulting in rejection of several consignments and consequently defaming the country besides inflicting huge financial losses to the national exchequer.

However, scientists of the Department of Plant Protection (DPP) PARC in collaboration with All Pakistan Fruit and Vegetable Exporters, Importers and Merchants Association managed to control the disease by introducing hot water treatment technology which resulted in export enhancement. He said that due to these efforts, the country has now become able to export mango and several other fruits and vegetables, opening up new avenues for country exports in the markets of USA, European Union, Japan and other countries.

The conference was organised by the DPP PARC in collaboration with All Pakistan Fruit and Vegetable Exporters, Importers and Merchants Association with an aim to promote agriculture production and exports.

Speaking on the occasion, Ministry of National Food Security and Research Secretary Seerat Asghar said that the ministry was taking all best possible measures to promote research and development in the agriculture sector.

http://www.pakistantoday.com.pk/2015/04/24/business/new-technology-helped-boost-fruits-and-vegetables-exports/

Riaz Haq said...

Australian government would invest US$ 13 million under its Agriculture Sector Linkages Programme (ASLP) Phase-II to improve living standards of small farmers in Pakistan.

The first phase of this programme was launched in 2005 for the support of Pakistan’s agriculture sector which remained successful.

While commenting on the Phase II of the programme, Australian High Commissioner in Pakistan, Margaret Adamson said recently, it has been the cornerstone of Australia’s support to Pakistan’s agriculture sector.

She also highlighting the achievements of the ASLP Phase I and said it included the uptake of furrow irrigation by nearly 1000 citrus farmers in Khyber Pakhtunkhwa, resulting in up to 40 per cent reductions in water usage, and the first successful shipment of mangoes to Europe by a farmer’s consortium.

The High Commissioner informed that Australia is now importing fruit from Pakistan and termed it one of the achievements of the programme.

She said that collaboration between government, business and research bodies, supported by Australian expertise, led by Australian Centre for International Agricultural Research (ACIAR) has been a leading force in the dairy, citrus and mango sectors in Pakistan, and has provided a model for future engagement in agriculture and water between the two countries.

Margaret Adamson said that ASLP will be followed by a similar program that will be known as the Agriculture Value Chain Collaborative Research (AVCCR) programme.

Under design at the moment, it will draw on Australian expertise to assist Pakistan improve agricultural productivity, add value to raw agricultural products and improve access to markets for those products.

AVCCR will complement Australian government’s engagement with other investments in agriculture to provide strategic support to the Pakistan Government in the agriculture sector,” she added.

The High Commissioner said, “Our common climatic conditions, ecological diversity and federal systems of government are an obvious platform of mutual interest to share knowledge and to establish research and technical linkages between our two countries aimed at a sustainable future, food security,environmental protection and economic prosperity for our people.

“We are working closely with the Ministry of Commerce and the World Bank through a $10 million investment in the Pakistan Trade and Investment Policy Program to spearhead national efforts to promote and bolster exports and trade,” she added.

http://en.dailypakistan.com.pk/business/australia-to-invest-13-million-to-support-pakistans-small-farmers-876/

Riaz Haq said...

Pakistanis riding latest wave of motorcycle financing

http://tribune.com.pk/story/1121417/changing-trend-pakistanis-riding-latest-wave-motorcycle-financing/


Banks have historically been shy of extending credit, especially when dealing with non-corporate and non-government clients – a middle income client seeking credit for purchasing a motorcycle would usually be turned away.

Lack of security and high-interest rates were blamed that pushed the risk of default high. However, a better security climate and historically low interest rates have pushed banks towards changing their stance such that they are competing against one another for clients.

Atlas Honda to increase motorcycle production

Background

After showing remarkable growth for over a decade, increase in motorcycle sales in Pakistan came to a halt, stagnating at around 1.7 million units since 2010-11. However, its sales have jumped significantly in the last one-and-a-half years, touching a record 1.91 million in 2015.

For the last few years, heavy-duty and branded motorcycles like Suzuki 150cc, Yamaha YBR125 and Honda CG125 were gaining popularity. The price of these bikes ranged from Rs135,000 to Rs140,000. Looking at their price range and durability, banks were taking interest in bike financing, according to a response from Meezan Bank (when asked about the surge in motorcycle financing.

It’s not the case that bike financing was unprecedented in Pakistan. The credit facility has been in place, but the renewed and increased interest is something new.

Changing time

MBL, like other banks, is in Bike Ijarah or bike financing for a few years now.

“Looking at the growing potential amid increasing needs of bikes in Pakistan – especially in urban areas as a basic need for working middle class – the bank re-launched it as a separate unit with a dedicated team in January 2016,” the management of MBL informed.

Atlas Honda Limited: New line of motorcycles to roll out by October

In the first phase, MBL signed an agreement with Pak Suzuki in Dec 2015. “After successful launch of Bike Ijarah with Suzuki, we are now increasing our menu by introducing Honda bikes. The Memorandum of Understanding (MoU) has been signed with Atlas Honda and we are also very close to bringing Yamaha on board as well,” the bank added.

Replying to a question, MBL said that the bank offers Bike Ijarah to two segments i.e. salaried and business individuals. However, the management said that it got a much better response from salaried individuals that earned between Rs30,000 and Rs60,000 per month.

Other banks were also launching similar schemes. Recently, United Bank Limited (UBL) went a step ahead while offering motorcycle financing with zero per cent mark-up rate for the first six months. One of the Japanese manufacturer claimed that his clients’ credit needs were catered by Askari Bank, Bank Alfalah, MCB Bank, HBL, Bank of Khyber and Khushhali Bank.

Pakistan’s motorcycle industry is broadly divided between Chinese and Japanese manufacturers. But banks only deal with Japanese players (Yamaha, Atlas Honda and Pak Suzuki) because it is easy for them to deal with well-documented companies instead of Chinese assemblers, comprising of small players that fall in the informal sector.

“Banks are not involved with informal or Chinese motorcycle manufacturers. They are more comfortable with the organised bike makers that are mostly Japanese,” Association of Pakistan Motorcycle Assemblers Chairman Sabir Shaikh told The Express Tribune.

Chinese assemblers first introduced bike financing in Pakistan in 2006, which helped them compete against and thwart Japanese manufacturers in Pakistan. However. with growing incomes, the situation is now fast changing as Japanese are regaining their market share, a trend further reinforced with the re-entry of Yamaha in Pakistan in 2015.