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Pakistan Tops South Asia in Agriculture Value Addition
While Pakistan has lagged in South Asia region in manufacturing value addition, the country enjoys a significant lead in agriculture value addition over Bangladesh and India. Livestock revolution and increasing farm mechanization have enabled Pakistan to significantly raise agriculture productivity and rural incomes since 1980s. There is rising tractor ownership and growing economic activity in dairy, meat and poultry sectors now accounts for just over 50% of the nation's total agricultural output. The result is that per capita value added to agriculture in Pakistan is almost twice as much as that in Bangladesh and India. However, Pakistan still gets less crop per drop than India which means there is significant opportunity for water saving.
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Agriculture Value Addition. Courtesy: Dr. Krishna Prasad Pant |
Agriculture Value Addition:
As of 2014, the agriculture value addition in Pakistan is estimated at $1,050 per worker, significantly higher than $700 per worker in India and $600 per person in Bangladesh., according to the World Bank data as reported by Dr. Krishna Pradad Pant in Agriculture Investment in his paper titled "South Asia:trends, opportunities and challenges".
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Agriculture Value Addition. Courtesy: Dr. Krishna Prasad Pant |
Adding value is the process of changing or transforming a product from its original state to a more valuable state, according to Professor Mike Boland of Kansas State University. The professor explains how it applies to agriculture as follows:
"Many raw commodities have intrinsic value in their original state. For example, field corn grown, harvested and stored on a farm and then fed to livestock on that farm has value. In fact, value usually is added by feeding it to an animal, which transforms the corn into animal protein or meat. The value of a changed product is added value, such as processing wheat into flour. It is important to identify the value-added activities that will support the necessary investment in research, processing and marketing. The application of biotechnology, the engineering of food from raw products to the consumers and the restructuring of the distribution system to and from the producer all provide opportunities for adding value."
Tractor Ownership:
Agriculture mechanization is measured in terms of tractor ownership in horsepower per hectare of cultivated land. It has grown in Pakistan from 1.02 hp per hectare in 1992 to 1.5 hp/ha in 2015, according to a paper titled "In Pakistan, Agriculture Mechanization Status" by Muhammad Aamir Iqbal. It is still significantly lower than India's 2.50, China's 3.88 and Japan's 7.0.
Pakistan's tractor market is growing. In 2017, over 60,000 tractors were sold. Production capacity stands at 70,000 units per annum and models range from 55 to 85hp, according to a report in Pakistan's Dawn newspaper. Since the launch of the indigenization program initiated in the eighties by the Pakistan Tractor Corporation, the industry has achieved 95% localization in terms of production.
Crop Per Drop:
Data on irrigation efficiency in Pakistan highlights significant opportunities for saving water.
In an average rainfall year, the water productivity for wheat in Pakistan (0.76 kg/m3) is 24% less than the global average (~1.0 kg/m3), according to Water Watch . During the drought of 2001- 02, water productivities were at the same level as the global average. Hence, drought results in a more efficient utilization of water resources by wheat crops grown in the rabi (the dry winter season).
Water Watch found that rice yield in Pakistani Punjab is on-average 24% higher than in Sindh. The water productivity of rice (0.45 kg/m3) is 55% below the average value for rice in Asia (~1.0 kg.m3). Contrary to wheat, the water productivity of rice decreased during the 2001 drought, because rice is sensitive to water stress and to salinity that is intensified through increased groundwater withdrawals.
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Pakistan lags India in water productivity. Crop yields show distinct North-South and East-West variations: wheat yields in the Indian Punjab average 29% higher than in the Pakistani Punjab to the west, and wheat yields in the Pakistani Punjab are 33% higher than in the Pakistani Sindh to the south. These spatial patterns of wheat yield are similar for 1984-85 and 2001- 02. Because crop evapotranspiration in the Pakistani Punjab and Indian Punjab are similar, the difference in crop yields between these two regions is also responsible for the difference in water productivity values. This important conclusion implies that increased water productivity can only be achieved by increased crop yields. Experiments of the Pakistan Agricultural Research Council across the country (n=41) have indicated that the overall yield of wheat can be increased by 54%, provided that inputs are optimal. Improved management of water quality (groundwater and canal water) and evacuation of drainage water are important components for improving agricultural production. Seed quality, fertilizers, and pesticide control should also be improved.
Summary:
While Pakistan has lagged in South Asia region in manufacturing value addition, the country enjoys a significant lead in agriculture value addition over Bangladesh and India. Livestock revolution and increasing farm mechanization have enabled Pakistan to significantly raise agriculture productivity and rural incomes since 1980s. There is rising tractor ownership and growing economic activity in dairy, meat and poultry sectors now accounts for just over 50% of the nation's total agricultural output. The result is that per capita value added to agriculture in Pakistan is almost twice as much as that in Bangladesh and India. Pakistan still gets less crop per drop than India which means there is significant opportunity for water saving.
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Views: 513
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Comment by Akhtar Hussain on September 10, 2018 at 11:35pm
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Mr. Haq, this is encouraging news and with the construction of the new dam, I am sure productivity will increase. We have to do more and Inshallah we will. Thank you for providing the important links as well.
Kindly,
~ Akhtar.
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Comment by Riaz Haq on September 11, 2018 at 8:58am
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Groundwater Aquifers vs Dams. Building large dams is only part of the solution to water stress in Pakistan. Even more important is building structures to trap rain water for recharging aquifers across.
https://www.riazhaq.com/2018/06/pakistan-water-crisis-facts-and-myths.html …
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Pakistan among top three dairy producers
Amin Ahmed Updated June 01, 2017
https://www.dawn.com/news/1336575
ISLAMABAD: The Food and Agriculture Organisation (FAO) of the United Nations says Pakistan is among the three countries in Asia and Pacific region which are the world’s top dairy producing countries.
The total value of Asian dairy production exceeded $110 billion in 2013, and figured in the three top commodities in the region in terms of gross value of production. While the dairy production in Pakistan, India and China largely meet domestic consumption, Australia and New Zealand produce a surplus, FAO says on the occasion of World Milk Day being celebrated on June 1 (Thursday).
According to latest figures published in Pakistan Economic Survey 2016-17, milk production in the country is on the increase and during the current fiscal year the gross production of milk was estimated to be 56,080,000 tonnes.
FAO warned that while dairy has big potential, the sector needs to be more sustainable and competitive in Asia and Pacific region. This means helping smallholder farmers gain greater access to markets and services and develop successful dairy business models to increase domestic production.
The aim is to create a sector, which is socially responsible and produces safe and healthy food making more efficient use of the natural resources and reduces the effects on the environment. Only by doing so, will the sector become more sustainable for the benefit of future generations. FAO remains committed to working with all stakeholders to achieve a dairy sector that contributes to health and prosperity of the world.
An Asia Pacific Regional Audit done by the International Osteoporosis Foundation has concluded that the average dietary calcium intake in Asia is well below the FAO-WHO recommendation of 1,000 to 1,300 milligrams per day and most Asian countries have seen a two-to-three fold increase in the incidence of hip fractures during the past 30 years.
In order to facilitate dairy farmers, duty free import of calf milk replacer and cattle feed premix was allowed. During the current fiscal year, 310.2 metric tonnes of calf milk replacer and 298.9 metric tons of cattle feed premix was imported.
Last December, the Royal Friesland Company acquired 51 per cent of Engro Foods Pakistan, which was one of the largest private sector foreign direct investments in Pakistan’s dairy sector, amounting to $450 million.
Under the new deal and 2020 strategy arrangements, Engro Foods will aim for higher milk quality, variety of milk packages and products and farmers’ capacity building leading to a reduction in poverty.
In addition, regulatory duties to the tune of 25pc have been imposed on the import of skimmed milk powder and whey powder. This is to attract further investments in the dairy sector along with protecting small dairy farmers.
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#Pakistani giant #Engro to bet big on rising #middleclass in #Pakistan. Engro weighing acquisitions and starting new businesses in #agriculture, #healthcare, #realestate , #communications and other #consumer-linked sectors to profit from rising #incomes. https://www.thenews.com.pk/latest/368531-in-shift-pakistani-giant-e...
Pakistan’s chemicals-to-energy conglomerate Engro Corp has seen its fortunes rise on the back of massive Chinese investment, but plans to shape its future growth around the country’s vast population and expanding middle class, its chief executive said.
Engro Corp, best known for its fertilizer and petrochemicals factories, as well as engineering projects, is Pakistan’s largest listed conglomerate, and after recovering from a brush with bankruptcy in the early part of this decade is now sitting on a $500 million cash pile.
It has been a major beneficiary from Beijing’s Belt and Road Initiative splurge, working with Chinese firms on coal and power projects worth billions of dollars.
Engro’s rising fortunes since 2012, when its factories were crippled by gas shortages, mirror the improvements in Pakistan, a nuclear-armed nation where economic growth has accelerated due to vast Chinese investment and a sharp drop in militancy and power outages.
In the near term, Engro’s outlook is linked to a mile-long $1.5 billion coal mine in the Thar desert near the border with India, part of Beijing’s pledge to invest about $60 billion in Pakistan.
But with Pakistan’s new government hinting it may review Belt and Road contracts due to concerns they were too expensive, some analysts see risks on the horizon for Engro and say planned power plants around the mine may struggle to obtain financing.
Ghias Khan, Engro’s chief executive, told Reuters this week he was “pretty confident” the government would not re-open deals with sovereign guarantees.
“If they do, that will have a very negative impact,” Khan said.
This year Pakistan’s economy has also been shaken by a shortage of dollars, and speculation Islamabad may turn to the International Monetary Fund to ease current account pressures.
CONSUMER GROWTH
Undeterred by Chinese investment jitters and the recently wobbly economy, Khan said Engro was weighing acquisitions and starting new businesses in agriculture, healthcare, real estate, communications and other consumer-linked sectors to profit from rising incomes in the Muslim majority country of 208 million people, 60 percent of whom are aged under 30.
“We’ve come to a realization what has gotten Engro where it is today is not good enough for our next phase of growth,” Khan said in an interview at Engro’s ocean-front headquarters in Karachi, an Arabian Sea metropolis.
“What we are proud of is our ability to execute large-scale projects and put up large industrial complexes. But we are mindful we have to get into businesses which are more related to the population growth, and take us closer to the consumers.”
In Karachi, mushrooming shopping malls and ever-rising number of cars on the road point to a multi-year consumer boom as people’s disposable incomes have doubled this decade, analysts say.
Khan compared Pakistan’s current economic level, population growth and per capita income, which stands at about $1,600, to where China, South Korea and India were at earlier points in their development.
“If you look at sectors that did well when they were where Pakistan is today ... like real estate, automobiles, healthcare, logistics - everything is somehow related or linked to population growth or the middle class,” Khan said.
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#Tractors production in #Pakistan up 33.20%. During the period from July-June, 2017-18 about 71,894 tractors were manufactured as compared to the 53,975 tractors of same period of last year. #agriculture https://pakobserver.net/tractors-production-up-33-20pc/ via @pakobserver
The domestic production of tractors during fiscal year 2017-18 witnessed growth of 33.20 percent as compared the production of the corresponding period of last year.
During the period from July-June, 2017-18 about 71,894 tractors were manufactured as compared to the 53,975 tractors of same period of last year.
On month on month basis, the local production of tractors also grew by 15.21 percent as it was recorded at 3,926 units in June 2017 to 4,523 units in June 2018. according the Quantum Index Number of Large Scale Manufacturing.
It may be recalled that the overall Large Scale Manufacturing Industries (LSMI) of the country witnessed growth of 5.38 percent during the year 2017-18 compared to last year.The LSMI Quantum Index Numbers (QIM) was recorded at 147.07 points during July-June (2017-18) against 139.55 points during July-June (2016-17), showing growth of over 5.38 percent.
Meanwhile the production of trucks witnessed growth of 5.76 percent by going up from the output of 608 units in June 2017 to 643 units in June 2018.
The production of trucks also increased from 7,712 units last year to 9,187 units, showing growth of 19.13 percent while the production of tractors increased by 33.20 percent, from 53,975units to 71,894 units.
On year-on-year basis, the production of jeeps and cars increased by 40.90 percent during the month of June 2018 against the output of June 2017. During the period under review, Pakistan manufactured 16,234 jeeps and cars during June 2018 against the production of 11,522 units during June 2017.
During last financial year, the production of light commercial vehicles (LCVs) witnessed an increase of 19.74 percent in production during the period under review by growing from 24,265 units last year to 29,055 LCVs during 2017-18.
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USAID to expand agri-tech-based private sector investment in Pakistan
October 16, 2018
https://pakobserver.net/usaid-to-expand-agri-tech-based-private-sec...
Dedicated to private sector agricultural technology innovation as a key to unlocking the full potential of Pakistan’s horticulture, dairy and livestock sectors, USAID Pakistan through the Pakistan Agricultural Technology Transfer Activity signed Memoranda of Understanding (MoUs) with 10 leading private sector agri-tech companies to help scale up investments in affordable new agricultural technologies. The project has signed MOUs with Ali Akbar Group Enterprises, CattleKit, Farm Dynamics, Haji Sons, Farm Solutions, Dairy Solutions, Solve Agri Pak, Matra Asia, Ravi Agriculture, and Noorani Industries.
The PATTA project partnership seeks to enable agri-tech knowledge transfer and eliminate the barriers to technology adoption, increasing awareness and ultimately enhancing farmers’ production, and profits. The results will improve Pakistan’s overall agriculture-fuelled economic infrastructure and contribute to food security.
PATTA’s partners demonstrate willingness to invest in technology expansion to convert agricultural innovation into commercial success with a pro-farmer approach. Chief of Party PATTA Dr. Daney Jackson stated, “These MOUs formalize PATTA’s partnership with leading private sector companies to support agricultural technology adoption across Pakistan.”
This local partnership-driven technical assistance is spearheading private sector development in the agricultural technology sector. USAIDPATTA will support at least 30 private sector companies to become more competitive and profitable by upgrading equipment, commercialising and marketing500 technologies and modernizing management practices. Technology, innovation and agriculture can increase agrarian production, profitability and expand the work forceby 3400 jobs. Private sector investment is expected to increase by USD 4.8 million and sector sales by USD 17.68 million in 4 years through PATTA’s initiatives.
In a recent MOU signing ceremony, CEO Farm Solutions Bilal Chaudhry stated that partnership with USAID will enable the private sector to accomplish gains that cannot be realized alone.
CEO Matra Asia Anwar-ul-Haq stated, “The partnership between Matra Asia and USAID will help increase farmer profitability by reducing the input costs and increasing yields.”
PATTA’s 10 private sector partners are also striving to narrow the gap between men and women by providing opportunities to women farmers and entrepreneurs. One of these partners – Haji Sons – has ensured that their technology demonstrations also reach female farmers, enabling them to adopt leadership positions in agricultural technology.
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China ready to help boost Pakistan’s farming sector
https://www.thenews.com.pk/print/381300-china-ready-to-help-boost-p...
Pakistan and China have agreed to broaden agro-cooperation by adopting a comprehensive approach to fast-track communication and implementation to tap the immense potential of the most important sector, a statement said on Monday.
“Agricultural cooperation will set new and important direction that should focus on areas as well as the level of cooperation and finalisation of specific plans,” MA Aiguo, Vice Minister for Agriculture and Rural Affairs, China, said in a meeting with Makhdum Khusro Bakhtyar, Minister for Planning, Development & Reform (PD&R).
Aiguo said China was ready to share its expertise and successful agriculture models with Pakistan. Bakhtyar said Pakistan’s agriculture sector employed 45 percent of manpower and contributed about 24 percent in GDP. “It provides livelihood to 64 percent of the country’s rural population and shares 20 percent in total exports,” the minister added. The minister identified that Pak-China agricultural cooperation had to focus on the vertical increase in productivity of existing crops, transfer of knowledge and technologies, seed and plant protection as well disease control, value addition and marketing of agri products including dairy, livestock, and fisheries. “The mutual cooperation should cover the whole basket of agri-sectors,” he added.
Bakhtyar stressed there was a massive potential of developing Pakistan’s agriculture sector and achieving a win-win situation. He pointed out that joint ventures, value-addition, cold chain management for fruits/vegetables, marketing, and branding would help Pakistan overcome the past weaknesses and increase its exports to China and other nations of the world.
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#American #agribusiness giant Cargill to grow #Pakistan business with US$200 million investment for expansion across its #agriculture trading and supply chain, edible #oils, #dairy, #meat and animal feed businesses while ensuring safety, food traceability. https://www.thenews.com.pk/latest/420270-cargill-to-grow-pakistan-b...
Cargill renewed its long standing commitment to Pakistan by announcing plans to invest more than US$200 million in the next three-to-five years.
The announcement was made soon after Cargill’s global executive team, led by Marcel Smits, head of Global Strategy and Chairman, Cargill Asia Pacific region, and Gert-Jan van den Akker, president, Cargill Agricultural Supply Chain, met with the Prime Minister Imran Khan and other senior government officials to discuss the company’s future investment plans.
Being a global food and agriculture producer with a strong focus on Asia, Cargill aims to partner on Pakistan’s growth by bringing its global expertise and investment into the country.
The company’s strategy includes expansion across its agricultural trading and supply chain, edible oils, dairy, meat and animal feed businesses while ensuring safety and food traceability.Cargill will bring world class innovations to support the flourishing dairy industry in Pakistan, which is already moving toward modernization, as well as the rising demand for edible oils backed by evolving consumption patterns and a growing market for animal feed driven by sustained progress made by the poultry industry in Pakistan.
Cargill’s proposed investments will support Pakistan’s overall economic development and contribute to local employment.
The visiting delegation informed the Prime Minister that M/s Cargill intended to invest in Pakistan as back as 2012 but were discouraged by mismanagement, corruption and non-availability of level playing field during the previous governments. However, investor’s confidence has restored after the incumbent Government and the policies being pursued by it.
The prime minister welcomed investment plans of M/s Cargill in the area of agriculture development, import substitution and enhancement of agricultural products.
He highlighted the efforts of the government towards ensuring transparency, providing the business community with level playing field and improving ease of doing business in the country.
The PM assured the delegation full support from the government.
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Cargill details major investment in Pakistan
https://www.foodbusinessnews.net/articles/13172-cargill-details-maj...
Cargill has announced plans to invest more than $200 million in Pakistan over the next three to five years. The funds will be used to expand Cargill’s agricultural trading and supply chain, edible oils, dairy, meat and animal feed businesses in the country. Additionally, the company has earmarked funds for safety and food traceability efforts.
“Having been in Pakistan for more than 30 years, Cargill is happy to demonstrate our commitment to the country’s future through investment in our business and communities here,” said Imran Nasrullah, country head, Cargill Pakistan. “Finalizing one of our first investments in the agricultural supply chain in Pakistan is our top priority. We have received a very positive response from the Pakistani government, and we value their support as we expand our presence here, helping industries, farmers and communities succeed.”
Cargill started its Pakistan operations in 1984 and today has business interests in refined oils, animal feed, grains and oilseeds, cotton, sugar and metals. Cargill is one of the largest suppliers of palm oil and soybeans and cocoa powder to Pakistan. With the head office in Karachi, Cargill currently employs 50 people in Pakistan.
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Cargill plans $200M expansion in Pakistan, with focus on poultry and dairy
Cargill will also start grain trading and add other operations in Pakistan.http://www.startribune.com/cargill-plans-200m-expansion-in-pakistan...
Cargill Inc. will invest $200 million in Pakistan over the next several years to build out the company’s supply chain there and harness growing demand for chicken throughout the region.
Cargill Inc. will invest $200 million in Pakistan over the next several years to build out the company’s supply chain there and harness growing demand for chicken throughout the region.This marks a substantial expansion for the Minnetonka-based agribusiness — the world’s largest — which has run a small operation in Pakistan since the early 1980s. It’s also the company’s latest in a rapid series of investments throughout Asia, and specifically in the south and southeast parts of the continent.
Cargill currently has cotton, sugar, metals and animal feed business interests, as well as oil-crushing facilities, in Pakistan, but will scale up its legacy grain-trading business there over the next three to five years. Cargill did not provide additional details on what those operations will entail, but the company said it will increase its employee base beyond the modest 50 people currently working in the country.
“Finalizing one of our first investments in the agricultural supply chain in Pakistan is our top priority,” Imran Nasrullah, head of Cargill Pakistan, said in a statement. “We have received a very positive response from the Pakistani government and we value their support as we expand our presence here.”
Cargill’s investment will expand its dairy and meat business in Pakistan and deepen its focus on the Asia-Pacific region. Marcel Smits, the company’s former chief financial officer, was given a newly created role — head of Asia Pacific — in October amid a major executive reshuffle.
The company said Smits’ role was to “lead Cargill’s accelerated growth plan in the Asia Pacific region, a high-potential market for the company and its customers.” One month later, the company announced several multimillion-dollar investments in Thailand, Malaysia and the Philippines.
South and Southeast Asia hold some of the greatest growth potential in chicken, according to a recent Rabobank analysis.
Cargill is also growing its chicken business in another growth region: Central and South America. Cargill acquired Campollo in late 2018, less than a year after it acquired Pollos Bucanero, both Colombia-based chicken companies.
The office of Pakistan Prime Minister Imran Khan applauded Cargill’s investment. The news comes as Pakistan attempts to attract foreign investment to stabilize and grow its economy.
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