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

115 comments:

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.

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.

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!

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...

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.

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...

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...

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 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.
---------
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...

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 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...

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.
------------
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.
--------------
“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.
--------
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?
---------
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 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.
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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...

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...

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 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'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...

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...

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 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 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 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 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...

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?...
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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 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.
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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 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.
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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.

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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)
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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...

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...

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.
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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%.
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“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 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 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...

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 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 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 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 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 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.
-----------
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 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.
------------
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.
-------------
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 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 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 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 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 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 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 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 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...

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.

Riaz Haq said...

Equipped With New Test Capabilities, Laboratory in #Pakistan Helps Improve #FoodSafety, Increase #Meat #Exports https://www.iaea.org/newscenter/news/equipped-with-new-capabilities-laboratory-in-pakistan-helps-improve-food-safety-increase-exports#.WXp1USN5gMA.twitter …
The Pakistani Veterinary Residue Laboratory in Faisalabad, a food laboratory supported by the IAEA and the Food and Agriculture Organization of the United Nations (FAO), has acquired the capability to undertake state-of-the-art tests to certify the safety of food. It has recently earned International Organization for Standardization (ISO) accreditation, and officials expect this to contribute to increased meat exports thanks to food safety certificates the lab will be able to issue for the first time.

“Pakistan produces some of the world’s finest tasting foods, especially meat and other animal products,” said Ahmad Waqar, who is in charge of this cooperation at the Permanent Mission of Pakistan to the IAEA. “In the past, Pakistan has had exports rejected because they did not comply with the food safety standards of importing countries. This resulted in safety concerns, significant economic losses and food waste.”

The livestock sector contributes 12 percent of Pakistan’s GDP. In 2010, the European Union rejected 134 food export consignments due to the presence of contaminants. This raised concerns in Pakistan about the need to improve its food safety control system.

Veterinary drug misuse comes with consequences

As with many farmers around the world, it is common practice to administer medicines to animals to keep them healthy, rather than to treat disease when it occurs. “From a food safety point of view, problems especially arise when farmers do not have correct advice on what drug to buy and use, or do not follow instructions on how, when and how much to administer or how long to wait until the drugs have cleared out of the animal’s body,” said James Jacob Sasanya, food safety specialist at the Joint FAO/IAEA Division of Nuclear Techniques in Food and Agriculture. If drugs remain in the animals, they, or their residues, may end up in food products and could pose a health hazard to consumers.

For meat and other food products to be accepted as safe for consumption, they must be tested, among others, for veterinary drug residues to ensure these residues do not exceed safety or reference limits. “Pakistan did not have the capacity to conduct these tests until the new laboratory became operational,” Waqar said.

The laboratory was established by Pakistan’s Nuclear Institute for Agriculture and Biology of the Pakistan Atomic Energy Commission. The IAEA’s technical cooperation programme helped by providing the laboratory with state-of-the-art equipment, and supported training opportunities at various European reference laboratories and expert missions to assist with implementing measurement protocols and methods as well as regular technical advice. Through this support, the laboratory has increased its testing capability and received the accreditation.

The certificate is valid for three years for the analysis of seven types of antibiotics and hormone analyses in food products. As a result, Pakistan now has the capacity to process over a thousand food samples each year.

Sheep products used to make sausages are one of the key export products and are monitored by 13 quarantine centers in Pakistan. These centers rely on credible laboratory testing, which for the first time is now available at the Veterinary Residue Laboratory and internationally recognized. “In the absence of its own national analytical capabilities, tests had to be outsourced to other countries, which is both expensive and time-consuming,” Sasanya said. “With this new achievement, Pakistan can now rely on its own analytical capabilities.”

Several countries from around the world are benefitting from this nuclear-derived technique and the assistance of the IAEA and the FAO for its implementation, including Botswana and Morocco.

Riaz Haq said...

Auto sales rise 41pc YoY in July

https://www.thenews.com.pk/print/222765-Auto-sales-rise-41pc-YoY-in-July

KARACHI: Sales of locally assembled cars, including vans, jeeps, and light commercial vehicle (LCVs), reached 19,577 units in July 2017, registering an increase of 41 percent year-on-year (YoY) basis, the latest industry figures showed on Thursday.

“These numbers are in-line with our estimates. We attribute this apparently large increase to low-base effect due to lower number of working days last year (eid holidays fell in July 2016),” said Rai Omar Basharat, an analyst at Topline Securities, in an auto sector research report.

The figures showed that sales of Pak Suzuki Motor Company (PSMC) increased by 37 percent YoY in the period under review driven by the strong demand for Wagon-R as its sales shot up 77 percent YoY.

“With the launch of its new model, sales of Cultus increased by 66 percent YoY, whereas Ravi, which witnessed a jump of 41 percent YoY, also contributed to the growth of the company sales,” Basharat said.

He added that sales of Honda (HCAR) outperformed its peers, posting 113 percent YoY growth drawing strength from the success of the new Civic and a new SUV variant BR-V.

The report said that Indus Motors (INDU) sold 4,618 units in the outgoing month, up 11 percent YoY. “The company’s focus remained on production of higher margin Fortuner, which showed stellar growth of 543 percent YoY,” Basharat added.

Also, according to the Topline analyst, buyers were postponing their purchase of Toyota corolla, waiting for the face-lift model, which has just arrived. According to the figures released by automakers, tractor sales continued to exhibit upward trajectory with sales growing by 125 percent YoY in period under review.

“We expect the lower GST, improving crop yield due to Punjab government Kissan Package and continuation of fertiliser subsidy to improve farmers’ purchasing
power, thus improving the overall tractor sales going forward,” the analysts said in the report.

It must be noted that in the budget FY18, the Sindh government had set aside Rs2 billion in subsidy for farmers on tractor purchase. Moreover, truck and bus sales of Pakistan Automotive Manufacturers Association (PAMA) member companies in July 2017 remained strong, growing by 13 percent YoY.

“We foresee this trend to continue, fueled by China-Pakistan Economic Corridor (CPEC) led growth, higher road connectivity, lower financing rate and change & enforcement of axle load limit per truck on highways by National Highway Authority (NHS),” the Topline analyst said.

Finally, the sales of two and three wheeled vehicles grew strongly in July, up 42 percent YoY, owing to a rise in disposable income of lower middle class. “Sazgar Engineering Works Limited (SAZEW) outperformed broader 3-wheeler industry during the outgoing month, exhibiting 58 percent growth in sales YoY,” the report added.

Riaz Haq said...

#Pakistan PM to open 363 Km Kachhi canal to irrigate 72,000 acres farmland in Dear Bugti, #Balochistan. #agriculture

http://nation.com.pk/multan/14-Sep-2017/pm-inaugurates-kachhi-canal-project-in-dera-bugti-today


Quetta - Prime Minister Shahid Khaqan Abbasi is scheduled to arrive in Balochistan today (Thursday) for the inauguration of Kachhi Canal Project upon its completion in Dera Bugti.

As per reports, Premier Abbasi will arrive in Dera Bugti to formally inaugurate Kachhi Canal Project on Thursday for which all preparations have been finalised and he will also address a gathering of Pakistan Muslim League-Nawaz (PML-N) workers and supporters in Sui where a large number of tribal elites are expected to join the PML-N fold.

Tight security arrangements have been made for prime minister’s scheduled visit to Balochistan.

It merits mentioning here that the Kachhi Canal Project was kicked off in 2002 but delay in its completion made the cost of the project go high and the project kept on moving on a snail’s pace. After 15 years, its preliminary phase has been completed, while in the second phase the canal will irrigate more areas.

The 363-km long Kachhi Canal Project is located in Punjab whose 281 km part is in Punjab and 80 km falls in Balochistan. The canal originates from Taunsa Barrage at Indus River. The Kachhi Canal will provide sustainable irrigation water supply to 72,000 acres of agricultural land thus bringing green revolution in Balochistan.

The project embraces significant position in Balochistan water infrastructure and agriculture sector which will fuel financial progress in the province.

Balochistan Governor Muhammad Khan Achakzai, Chief Minister Nawab Sanaullah Zehri and other ministers, MPAs and security officials will be present at the inaugural ceremony of Kachhi Canal Project.

Riaz Haq said...

#Pakistan #wheat and #sugar #exports jump 100% in July 2017. #tobacco exports up 835%. Vegetable exports up 27% http://www.blackseagrain.net/novosti/pakistan-wheat-sugar-exports-increased-by-100pc-in-july …

The exports of wheat and sugar from the country during the first month of current financial year witnessed 100 percent increased as compared the corresponding month of last year.

During the month of july, 2017, about 353 metric tons of wheat valuing US$ 114,000 exported as against the export of the same month last year.

According the data of Pakistan Bureau of Statistics 58,555 metric tons of sugar worth of US$ 27.584 million were also exported from the country during the period under review.

Meanwhile, about 188 metric tons of tobacco valuing US$ 730,000 exported as compared the exports of 24 metric tons worth of US$ 78,000 of same period last year.

The exports of tobacco from the country registered 835.90 percent increase during first month of current financial year as compared the same month of last year, it added

During the period under review, about 24,393 metric tons of fresh fruits worth US$ 19.483 million exported as compared the exports of the corresponding period of last year.

On the other hand about 32,702 metric tons of vegetables valuing US$ 10.330 million exported.

During the period under review fruit exports decreased by 16.10 percent, where as vegetables exports increased by 26.80 percent respectively, it added.

Riaz Haq said...

#Pakistan exported #food commodities worth $500m in July-Aug 2017. #exports #rice #wheat #fish #sugar

https://www.geo.tv/latest/159391-pakistan-exported-commodities-worth

The country earned US$ 512.3 million by exporting different food commodities during the first two months of the current financial year as compared the earnings of the corresponding period of last year.

During the period from July to August 2017, food group exports from the country increased by 30.6 percent as compared the exports of the same period of last year.

According to the data of Pakistan Bureau of Statistics, since the last two months exports of rice grew by 40 percent as around 428,993 metric tons of rice worth US$ 223.97 million were exported.

The rice exports, during first two months of last financial year, were recorded at 3810,861 metric tons, which were worth US$ 159.54 million, it added.

Meanwhile, the exports of basmati rice grew by 10.35 percent and about 59,433 metric tons of basmati rice, worth US$ 62.741 million, were exported as compared the exports of 59,192 metric tons, valuing US$ 56.857 million, in the same period, last year.

The exports of rice other than basmati also witnessed an increase of 58.98 percent, around 369.580 metric tons of rice costing US$ 161.198 million exported as compared to the exports of 251,669 metric tons worth US$ 102.888 million last year.

From July-August, 2017-18, fruit and vegetable exports increased by 8.74 percent and reached at 56,280 metric tons worth of US$ 20.58 million against the exports of 73,751 metric tons of US$ 18.88 million of the same period last year, it added.

The other commodities which witnessed an increase in their exports during the period under review include fish and fish production, which increased by 19.63 percent, wheat and sugar increased by 100 percent respectively.

It may be recalled here that imports of the food commodities into the country also witnessed an increase of 27.18 percent and about US$ 1.123 billion was spent on the import of different food items to fulfill the domestic requirements.