AGRI EXPORTS — PAKISTAN FEARED TO LOSE DRASTIC CUT IN REVENUES
Quality is the key to enhance agriculture exports
By KHALID BUTT, Lahore
June 13 - 19, 2005
Pakistan is feared to lose drastic cut in revenues from agricultural exports owing to failure to meet the quality standards determined by the World Trade Organization (WTO).
The grave situation has prompted the government to approach the Asian Development Bank (ADB) for an additional support of Rs1.8 billion to ensure the quality requirements of the choosy markets around the world.
Informed sources told PAGE that the assistance sought to help increasing the country's agricultural export surplus by providing necessary technical assistance prior to shipments of the food stuff.
Implementation of the WTO regulations have created a competitive and compelling environment for Pakistan's agriculture, which needs to be dealt with utmost urgency.
Under the quality assurance plans, the government would provide its share of Rs1.3 billion to undertake initiatives with the help of the ADB to increase the country's agricultural exports.
Many developing countries have seen a fairly rapid expansion in agricultural exports over the past decade, with China, Thailand and India amongst regional performers, Pakistan's share in total world exports has actually declined.
By contrast, India's total exports rose by more than three fold to over $70 billion during 1990-2002, increasing its share in the world trade from 0.5% to 1%.
Pakistan's agricultural exports, mainly fruits and vegetables have remained heavily concentrated in low value-added goods, while other producers in the region, especially India and Sri Lanka have improved product technology and value addition. Even in low technology segment such as fresh fruits, Pakistan's exports have either declined or remained stagnant in recent years.
Application of the trade-distorting sanitary and phytosanitary (SPS) was most important as it relates to food safety, and animal and plant health.
The WTO agreement envisages the countries to take health protection measures within their borders based on internationally established guidelines and risk assessment procedures.
Since, the exporting countries are required to follow the international standards, it is necessary for farmers to use the ISO certified products for pesticides, insecticides and seeds instead of going after the eye catching advertisements of cheap and low quality products especially the pesticides which can mark the positive results of the toil to harvest a good crop.
To be fit enough to survive in the face of tough competition, we are bound to use certified products for fulfilling the pre requisite of international standard.
Pointing towards another WTO clause i.e. the Trade-Related Intellectual Property Rights (TRIPS), sources observed that the owners of patented products have an exclusive right to make use of this clause. Farmers are bound to use the ISO certified seeds and agriculture inputs provided by the multinational companies (MNC's). This will limit production as the seeds may or may not suit conditions of the soil where these are being used. Before implementation of the WTO, farmers could share the agricultural inputs between themselves but now they are bound to use inputs of the MNC's, which is ISO certified. This will result in escalation of the cost of production.
Actually, the stagnation in the agriculture exports is largely because of the demand in the world markets for a better quality product and improved tracebility, related to the WTO regulations and standards and other increasingly stringent standards in developed markets.
The last comprehensive survey of the manufacturing sector estimated that there were 4,474 firms based across all sectors and that the food and beverages accounted for 984 firms. Sub classifying the food and beverages industries into those directly related or allied to the agribusiness sector, there were 95 firms, or 10 percent of the food, beverage and tobacco sectors; and 20 percent of all industries in Pakistan which is minimal given the potential for value addition and processing provided by the large volume of horticulture crops produced.
It is estimated that about 1.5 million people could be employed in small and medium horticultural enterprises. It was said that enterprises engaged in horticulture business are generally operating either at micro scale village based activities, or large scale operation being undertaken by nationally recognized companies.
According to the ADB, there is a need to promote the growth of micro scale horticultural enterprises and mini processing units to support the transition to small and medium scale enterprises to develop a competitive agribusiness sector in domestic and international markets. The ADB has told the Pakistani authorities the agribusiness sector has the potential to be a source of economic growth and income generation with small farmers as major beneficiaries.
PRODUCTION AND EXPORT OF IMPORTANT FRUIT (000 TONNES)
(VALUE MLN. RS)