AGRIBUSINESS SUPPORT FUND SHORES UP AGRIBUSINESS

KANWAL SALEEM
Oct 19 - 25, 2009

Agribusiness Support Fund (ASF) has signed an agreement with Mojaz Foundation under which the former will provide matching grant of Rs 1.4 million for establishment of Agribusiness Extension Services wing.

The contract signing ceremony was held at ASF premises in Lahore in which Chief Executive Officer of ASF Khalid Khan met his counterpart at Mojaz Foundation, Ramesh Singh Aurora.

During the ceremony, Singh updated Khalid Khan on the activities of Mojaz Foundation. Both parties shared opinions on exploring further avenues of collaboration for development of rural communities through mutual efforts in the Agribusiness Sector.

Under the agreement, Mojaz Foundation will implement a quick startup, rapid impact program designed to improve livelihood for farming and non-farming community of rural Narowal through community-managed market based agriculture development program.

A new concept to be introduced in this context is the 'Community Hatti' for provision of high quality agricultural inputs to the community members on controlled rates at district level. The Community Hatti will also act as a point of contact for Mojaz Foundation's early warning system regarding weather, floods, and market variations.

The program will emphasize on converting traditional agriculture practices to agri-based micro enterprise development that ensures household income enhancement for the women in particular.

The program will focus on enhancement in production of horticulture crops: Potato, Guava, peas, cauliflower through extensive agricultural extension work and establishing model (demonstration) farming. Furthermore, the program will also focus on introducing offseason vegetable farming in Rural Narowal.

ASF was created with Rs4.1 billion Agribusiness Development & Diversification Project of MINFA (ADDP) with support from ADB. The aim of ASF is developing the agribusiness sector in Pakistan and thereby supporting economic growth & employment generation. ASF has been tasked with promoting the private sector agribusiness enterprises by providing matching grants for purchase of 'Business Development Services' and also providing capacity building support to BDS providers.

Mojaz Foundation is a not-for-profit organization with a primary purpose and basic crosscutting theme of progressively 'Sustainable Economic Development' through income enhancement and employment generation by ensuring access to financial and non-financial services to the poor.

ASF during 2008-09 approved some 763 matching grant projects as compared to 650 for 2007-08, thereby registering 17.38 percent growth in number of approved projects. The average value of matching grants projects as on June 30th, 2009 was Rs. 0.283 million as compared to Rs. 0.285 as on June 30th, 2008. Similarly, the total value of projects approved during the year was Rs.185.22 million as compared to Rs. 184.98 m for 2007-08 showing 0.13 percent growth in the total value of projects, according to the Fund's annual report.

Additional contracts, valued at Rs. 13.68 million, for formation of 240 Farmer Enterprise Groups (FEGs) were signed with Rural Support Programs (RSPs) & non-government organizations.

The organization establishes relationship with a number of partner institutions, which facilitate an increase in outreach to potential agribusiness stakeholders. The partner institutions include National University of Science & Technology (NUST), University of Agriculture Faisalabad (UAF), Arid Agriculture University Rawalpindi (AAUR), Nestle Pakistan, COMSATS Institute of Science & Technology, and Lahore University of Management Sciences (LUMS). Capacity building and training programs, which have been conducted so far, include British Retail Consortium 3rd Party Auditor Training, offseason vegetable production training, agribusiness planning & entrepreneurship and dairy farm management.

Another success for ASF has been the raising of awareness among stakeholders on international safety standards and compliance to meet consumer demand. As a result of ASF's pioneering role, to-date 72 matching grant supported international compliance certificates (including GlobalGAP, HACCP, British Retail Consortium (BRC), ISO 22000 and Organic) have been acquired by agribusiness growers, processors and traders. ASF interventions have increased the ability of growers and agri-enterprises to respond to sanitary and phytosanitary (SPS) and food-quality standards to meet the increasingly stringent domestic and international market requirements.

During the year, the company was once again successful in initiating a number of first in Pakistan activities including the establishment of on-farm mango washing, drying, grading and packing units in Multan, establishment of a Banana Plant Tissue Culture laboratory at Tando Allahyar and cost-effective indigenous solutions for problems faced by chili growers in Sindh.

The Farmer Enterprise Group (FEG) component has proven to be a very effective pro-poor intervention, which has resulted in improved incomes for small producers through capacity building, value addition, and market linkages. A survey conducted by an international consultant in December 2008 confirms that the FEG program has had a significant impact upon the income of their predominantly poor and landless members. The consultant reported that the activity has also resulted in the generation of permanent employment, not only for FEG members but also for non-member farm laborers. The process of forming FEGs through non-government organizations (NGOs) engaged in rural support programs involving intensive capacity building among FEG members, which make a significant contribution to FEG cohesion and sustainability.

ASF support has enabled FEGs to diversify into new, higher value products and invest in improved technologies. It has also acted as a catalyst to subsequent expansion and further investment in technology, helping to ensure the sustainability of the FEGs and their activities.

Taking into consideration the improving economic indicators (including the anticipated decline in inflation & interest rates in near future), it is expected that ASF activity will pick up pace during the forthcoming year.