INP-WealthPk

Chinese Investment in Agriculture in Pakistan to Bring Win-Win Benefit

November 01, 2021

By Abrar Saeed ISLAMABAD, Nov 01 (INP-WealthPK): Pakistan’s agriculture sector – employing 42.3 percent of the labour force – has been facing problems like low crop yield, improper storage facilities and many other inadequacies despite its huge potential to grow and contribute handsomely towards the GDP. China’s increasing interest in this vital sector has rekindled hope that Pakistan will be able to revamp this sector and overcome the shortcomings and problems with the expertise Chinese have achieved through years of hard work and research. According to statistics made available by the Pakistan Business Council, a business policy advocacy group, Pakistan’s agricultural productivity ranges between 29 percent and 52 percent, far lower than the world’s best averages for major commodities. Pakistan produces 3.1 tons of wheat from one hectare, which is just 38 percent of 8.1 tons produced in France - the world’s best productivity. Similarly, Pakistan produces 2.5 tons of cotton per hectare, which is 52 percent of the 4.8 tons produced in China. Sugarcane yield here stands at 63.4 tons per hectare, which is 51 percent of the 125.1 tons Egypt produces from every hectare while maize productivity is estimated at 4.6 tons per hectare, which is 41 percent of the 11.1 tons that France produces. In the case of rice crops, Pakistan produces 2.7 tons from every hectare, which is merely 29 percent of the 9.2 tons per hectare in the US. The other factor hampering good crop yield is poor quality of seeds, as the local authorities have failed to introduce new varieties of quality seeds for various crops. Scarcity of irrigation water is also one of the contributing factors hampering good yield. The Pakistan Business Council report attributes low productivity as a major barrier to Pakistan becoming a major player in the world’s processed food industry. Around 50 percent of agricultural products are wasted in Pakistan due to unavailability of sufficient cold chains, logistics and processing facilities. “Absence of efficient, new seed varieties, intermittent water supply and unenthusiastic marketing are killing our agriculture,” Gada Hussain, founder of the Sindh Abadgar Board - a lobby group of farmers, said. On the other hand, China’s food demand is increasing with each passing day and to cater to the food needs of its people, China’s reliance on import of food items is also witnessing an upward trend. Remarkable economic growth in the past three decades in China has resulted in sustained growth in consumer income, consumption and urbanization. Rising incomes have also led to changes in food consumption patterns, with a demand for higher diversity, quality and imported food. Since 2009, China’s food imports have been increasing at an average rate of 15 percent per annum and in 2012, China surpassed the USA to become the world’s largest importer of agricultural products. Sales of packaged food have also quadrupled in the last 15 years in China. Therefore, China offers a huge market for imported food products, a report prepared by the Consortium for Development Policy Research at International Growth Centre suggests. The share of Pakistan’s food items exports to China in the face of its overall raw and processed food items is negligible. The vast untapped and low-yielding agriculture produced in Pakistan incited China’s interest in the area for mutual benefit of the two neighbouring countries. In this connection, the China Development Bank (CDB) initially envisaged a long-term plan (LTP) for CPEC on behalf of the government, laying out proposed details of the initiative for various areas of cooperation and investment, including agriculture. The main areas of collaboration in agricultural development and poverty alleviation are aimed at strengthening and upgrading of agricultural infrastructure adjoining the route of CPEC. Construction of water resources and water-saving modern agricultural demonstration zones will be promoted and medium and low-yielding land will be remediated to achieve efficient use of resources. As a part of CPEC, technical exchange and cooperation in fields such as crop seed reproduction, livestock and poultry breeding, breeding and production technology, agricultural products processing, animal & plant epidemic prevention & control, mechanization demonstration and ICT-enabled agriculture will be strengthened. Post-harvest handling, storage and transportation of agricultural products will be improved, and innovation of advanced marketing and sales models have also been proposed. Cooperation between Pakistan and China will also focus on flood management, developing rangeland and deserts and strengthening remote sensing technologies. In order to improve agricultural practices, production of agricultural inputs, particularly pesticides, fertilizer, machinery will be enhanced and support services, including agriculture education and research, will be provided to the farmers to ease adoption of quality inputs. Collaboration in horticulture, fisheries and livestock medicines and vaccines are also key areas covered in the LTP. Pakistan’s Ministry of National Food Security and Research (MNFSR) in its 2018 Food Security Policy envisages nine agricultural development zones along CPEC to develop clusters and infrastructure by encouraging innovation, entrepreneurship, and collaboration. The report says land remediation plans under CPEC would help increase efficiency and productivity of the crop sector by transforming low and medium yield lands into higher ones by enhancing seed usage. Pakistan is one of the countries where China would build its storage stations and processing zones which would greatly lower the chance of perishing of vegetables and other perishable items. Currently, only one-third of total demand is met with the available storage facilities. Investment in the private sector will not only help mitigate this supply deficit, but also educate the local farmers about how to store their products. The multipronged short-term and long-term strategies envisaged jointly by China and Pakistan for agriculture sector revamp will help bring about an economic turnaround for the collective good of both the countries and to the benefit of the farming community in Pakistan.