EXPORT POTENTIAL OF FOOD PRODUCTS
AROOJ ASGHAR (Arooj.Asghar@hotmail.com)
June 15 - 21, 2009
The development of agro-industries is vital to economic planning and progress in many countries. Depending on the productivity, these products can be exported to neighboring countries. Instead of exporting raw crops it is economically more viable to promote the export of processed food products such as fruits, vegetables, marine food, and some other agro-based industries such as the floriculture and herbal products.
Although the direct value addition and employment generation in the food processing sub-sector of the manufacturing sector is relatively low, it has a greater degree of indirect effects as the agricultural production has a greater degree of linkages with other sectors of the economy. In Pakistan of the total export earnings, the share of primary commodities and processed and semi-processed products constitute almost 60% of the total exports. There have been some structural changes over time, but the contribution of agro-based products has more or less sustained its position.
In Pakistan food products have a latent potential to earn a major chunk of foreign exchange as some countries are vastly relying on imported edibles. For instance Libya imports 75% of edibles to accomplish its domestic demand. Cultivation and processing of food are the best opportunities to pursue at the present scenario so as to broaden the export base and accelerate economic growth. These industries are likely to open new vistas of poverty alleviation, employment generation, and improved levels of income.
Food processing industry can have a value added contribution which tends to increase with the level of urbanization and development. If Pakistan produces and exports a greater proportion of cereals such as rice, wheat and maize the value added by the grain mills will be relatively high as in Thailand, Indonesia and Vietnam. This in turn increases the contribution of the food processing industries to the national economy. There is a wave of food crisis across the globe. Prevailing high prices of agricultural commodities suggest that to enhance earning potential of the farmers Pakistan should focus on modernizing agriculture sector with greater emphasis on crop diversification and its value chains so as to enhance exports.
Different areas in Punjab, Balochistan and Sindh are suitable for cultivation of tropical, temperate and sub tropical fruits. More than 30 varieties of fruits are produced in different climatic zones of the country; major among them being citrus, mango, date, apple and banana. While some other fruits like guava, apricot, peach, pear, plum, grape, pomegranate and almonds are also grown. But only a small fraction of these are exported due to lack of storage facilities. The best quality fruits are exported as fresh fruits. Grading and packing of fresh fruits help maintain fruit quality, which increase their prices. The major operational activities in this process include sorting, washing, waxing, drying, grading and packing. The exporters, who do not have 'in-house' processing facilities, obtain fresh processed fruits from processing plants. Although, fresh fruit processing plants provide an opportunity to target international customers and exporters directly, proper attention is not being given to this area. There is a need to boost the grading/packing industry for all major fruits.
Fisheries and aquaculture are an important source of food, employment and revenue in Pakistan. Seafood include tuna, mackerel, shrimp, prawns, molluscs, lobsters, crabs and barnacles etc. The fishing grounds in Pakistan are termed as highly rich in marine life with a large number of species that have great commercial value. Pakistan's consumption of fish is very low, and thus most of the produce is exported. However, there is a great dependence on a few species for exports, with very little value addition. Marine food exports are 71% of total fish exports.
1- Improvement in the production methods, grain growing and harvesting techniques, livestock feeding, slaughtering and milking technique
2- Effective development and promotion of the special economic zones and export processing zones
3- Improvement in the transportation and storage methods, transportation time and sanitation of storage facilities
4- Access to international negotiations, establishment of inquiry points and contact points in WTO to promote participation of Pakistan in multilateral negotiations
5- Balanced development of centralized quality control system and competitive market system for export
6- Pakistan needs to improve hygiene and environmental conditions in handling fish and its products to increase its share in EU and Japanese markets
7- Crop diversification experiments in major agriculture producing countries, for instance crops for bio-fuel, suggest that Pakistan could also benefit from favorable global prices
8- The government should provide incentives to the private sector for storage development which is critical to price stability. Adequate support to develop private marketing channels for greater competition should be provided. Small farmers should be provided greater access to credit to improve their productivity
9- Periodic government intervention to hedge against extreme price volatility should continue
10- The prevalent system of general subsidies, which leads to leakage of benefits to the non-deserving people, should be replaced by targeted subsidies to poor and indigent consumers
In spite of being an agrarian economy and having 65% of the population directly or indirectly involved in agriculture Pakistan is still importing food items. Pakistan's rising imports include milk and milk products, meat, vegetables, wheat, dry fruits, tea, spices, edible oil, sugar and pulses. With the exception of tea, the country can produce the entire range of these commodities. Pakistan would have been converted into a food basket for foreigners provided that right policy directions had been adopted by the authorities. Pakistan can become an exporter of the foodstuff if the government concentrates on agriculture, does not repeat past mistakes, and takes new initiatives particularly on two sub-sectors i.e. horticulture and livestock.