Pakistan’s Agriculture Sector-3(Horticulture)

Challenges and Response

Shahid Hussain RajaIndependent Consultant-Public Policy

www.sanoconsultants.co.uk August 18,2013

Introduction Horticulture Sector-Profile SWOT Analysis Issues and Challenges Recommendations Conclusions

Sequence

Despite its significance in agricultural growth, commercial activities and poverty alleviation, the horticulture sector has not received the attention it deserves.

Its slow development reflects a weak policy and regulatory framework, production and productivity problems, post harvest losses, marketing problems and limited capital investment.

These problems have contributed to low quality standards, minimal export of horticulture products, low rates of return on investment that consequently fail to attract new investment.

This presentation explains the ground realities about horticultural sector of Pakistan and suggests a strategy to develop this sector to its full potential

Introduction

Despite its relative decline in formal economy in percentage terms, agriculture is still dominant sector in overall economic structure

Pakistan’s survival and growth are directly dependent on its agriculture due to its socio-political interconnectedness and its economic and financial linkages-backward and forward

Its performance still dictates all our macro indicators - GDP, Poverty, External Balance, Inflation etc

Pakistan’s Agriculture-Significance

Out of total area of Pakistan of approximately 80 million hectares, about 58 million hectares have been surveyed

The area under cultivation is 22 million hectares (38%) out of which nearly 19 million hectares is irrigated; the rest is rain fed

The area under forest is 4 million hectares (7%) and the balance surveyed area 8 million hectares can be classified as the cultivable waste

Coupled with suitable climate and availability of fairly good water resources, agriculture has been the major activity for centuries in this part of the world

Agricultural Sector-Basic Facts

Agriculture sector of Pakistan comprises four sectors - livestock, crop, forest and fisheries

Livestock contributes 56% of the total agriculture production, crop sector adds 38% while fisheries and forestry contributes 2% each

Out of crops sector ,horticulture occupies fairly significant position in terms of area, production, share in GDP and employment.

A viable and profitable horticulture sector can provide a sustainable livelihood to the rural agriculture community .However small land holding precludes the possibility of horticultural cultivation on commercial lines

Agricultural Sector-Basic Facts

Pakistan has a great potential for horticulture due to variety in land and climate which provide opportunities for the production of a wide range of horticulture crops.

A large number of indigenous fruits, vegetables and floriculture commodities are produced in the country while there is scope for cultivation of exotic crops.

In some fruits and vegetables, Pakistan occupies prominent world position in terms of production i.e. apricots(6th),date palm(5th), Onion(7th),mandarin (6th),mango (4th) etc

With more than 435,000 hectares under vegetables, Pakistan ranks 17th in the world while in production it ranks 20th with a total production of around 5,500,1000 tons

Horticulture-Sector Profile

With an area around 200,000 hectares under production, Pakistan produces 2.15 million tons per annum( 95% of world’s Kinnows) out of which around 370,000 tons worth Rs.10 billion is exported.

Apples are grown on 111,600 hectares and getting annual production of 366,000 tons out of which ----million tons worth --- are exported

Peaches are mostly grown over an area under 15,000 hectares and production is 54,000 tons.

Mango, the second important fruit crop, is grown on173,700 hectares and production is around 2 million tons. It produces approximately 6% of the world’s total production and is currently the third largest producer.

Horticulture- Products Profile/Fruits

Grapes, a low water consuming crop, is planted over 16,000 hectares and increasing owing to rise in demand. Production of grapes ranges from 65,000 to 70,000 tons.

Guava is widely grown in Pakistan with production of about 500,000 tons over an area of 62,000 hectares.

Produced in all the four provinces, the area under cultivation of dates is 90,000 hectares with production of 531,000 tons.

Other fruits like banana, persimmon, pomegranates, cherries and plums are also grown

Horticulture- Products Profile/Fruits

Onions, grown in all the four provinces is cultivated on an area of 125,000 hectares and production is 1.70 million tons

Garlic is the second most widely used cultivated alliums after onion. It is grown in all the four provinces of Pakistan over an area of 6,800 hectares producing 57,000 tons

Potato, fourth most important crop in terms of volume, is

cultivated on an area of 140,000 hectares with production of 3 million tons

Chillies are grown on 75,000 hectares with a production of 188,000 tons

Horticulture-Products Profile/Vegetables

SWOT Analysis

Huge area available for horticultural plantation

Climate suitable for cultivation of indigenous and exotic fruits and vegetables

Possibilities of fruit/crop inter-cropping

Year round availability of fruits/vegetables due to geographical spread

Increased awareness about tunnel farming/drip irrigation and its widespread adoption

Strengths

Low production, often geographically dispersed -less area/low yields

Side business to crops/livestock-less attention

Bad horticultural practices -huge production losses

Low technological base-less production/productivity

Poor marketing leading to lower profitability

Inadequate value addition-less profitability

Unsatisfactory processing-post production losses

Weaknesses

Global corporate interest in food products

Growing population-domestic and world which expands the market

Growing prosperity-local ,regional and global which increases demand for luxuries

Improved transportation network saving time

Regional integration reducing costs of doing business

New technologies resulting in efficiency gains and time/costs reduction

Opportunities

Climate change and environmental degradation

Sudden death syndrome diseases affecting certain food trees, post harvest fungal disease

Increasingly strict food safety standards in developed and even in middle income countries

Renewed interest in bio-fuel production adversely affecting food security and horticulture

Threats

How to meet the increasing demand of high quality horticultural products by increasing its production on sustainable basis without adversely affecting the production of food/cash crops or habitat for livestock in the face of looming threat of climate change and environmental degradation

Challenge

We need to formulate a comprehensive horticultural policy which should indicate the broad direction, create institutions and define their respective roles, make rules for coordination, set safety standards and provide an incentive and rewards system for various stake holders

Within this framework the Government’s role should be confined to policy formulation, regulation, capacity building and facilitation, while the private sector will take the lead in investment and value chain development, on its own or on public-private partnership basis

Within the national policy settings, horticulture will be developed with the following five broad objectives;

Response-Horticultural Policy

Increase productivity by increasing efficiency in all horticultural operations through public as well as private sector investment in R&D and Extension

Increase profitability by rationalizing input and output prices, reducing production and post production losses and developing efficient marketing infrastructure

Make horticultural produce competitive in the rapidly globalizing world by reducing cost of production, improving quality and ensuring Sanitary and Phyto-Sanitary (SPS) compliance

Response-Policy Objectives

Ensure sustainability by promoting environment friendly good horticultural practices through incentives and rewards, awareness campaigns and promulgation of appropriate legal framework

Ensure equitable distribution of gains from enhanced productivity by making available public sector goods and services to all stakeholders without distinction

Response-Policy Objectives

Accelerating the national economic growth by increasing the rate of growth of this important subsector of the economy

Reducing unemployment by creating jobs in horticulture sector

Increasing Pakistan's foreign exchange earnings by increasing quantity, quality and variety of horticultural exports

Ensuring food security and nutritional balance of the people’s food

intake by providing them vitamin rich horticultural products

Helping the state in its poverty alleviation efforts by providing them a labour intensive, low capital intensive investment

Improving the condition and status of women by providing them opportunities to own resources

Response-Strategic Objectives

A. Horizontal expansion - increasing the area under horticultural products

B. Vertical expansion - increasing the yield of the horticultural products

C. Structural transformation - diversification and value addition

D. Cross Cutting Interventions - rural reforms

Horticultural Policy-Main Thrusts

1.Bringing new areas under horticultural cultivation

2.Reclaiming degraded lands

3.Intercropping

4.Urban/peri-urban farming

A.Horizontal expansion

There is a vast scope of horizontal expansion in respect of horticultural products due to their agronomic qualities

New techniques of tunnel farming and drip irrigation has revolutionized this sector

Increased productivity in crop sector can release additional lands for horticulture

Even marginal/mountain lands, not fit for profitable cultivation of cash/food crops can be brought under fruit/vegetables

A/1-Bringing New Areas

Degraded lands, not fit for profitable cultivation of cash/food crops can be brought under horticultural production with the help of technology, chemicals and water

New techniques and technology of saving water has made it possible to use these land for horticultural production on profitable basis

A/2:Using Degraded Lands

Encourage eco-friendly inter-cropping practices as it increases the area under cultivation by cultivating vegetables in between the rows.

Similarly farmers can plant crops in orchards to increase their profitability

Agro-forestry is another profitable option for the farmers and the country

However farmers must be given proper technical support for this practice to be cost effective and eco friendly

A/3:Intercropping

Increased urbanisation is devouring fertile lands for construction of spacious houses and infrastructure

Besides formulating appropriate land use policy, government should encourage urban and peri-urban farming by utilizing the vacant areas and promoting kitchen gardening

Modern techniques and technology have made it technically feasible and financially cost effective to go for this form of micro farming

Proper guidance, availability of urban farming infrastructure and timely technical support can provide incentives for urbanites to become part time farmers

A/4.Urban/Peri-Urban Farming

1.Agricultural Education and Research

2.Skill Formation

3.Farm Mechanization

4.Inputs◦ Seeds◦ Chemicals◦ Water◦ Credit

B.Vertical expansion

Our agricultural Research& Development and Extension suffer from many structural, and management weaknesses-low funding, weak coordination and linkages among research, education and extension, inadequate technical and professional capacities of the agricultural research institutions, infrastructure etc

Government should promote demand driven quality based R&D and extension services by encouraging public-private partnerships that are linked to horticulture value chains

Research and development programs must focus on finding solutions in terms of increasing productivity, broaden harvesting time of crops and increase farmers’ profitability.

B/1:Research,Development and Extension

New varieties should be introduced. Seedless varieties of some new horticultural crops such as persimmon, cherries, strawberry, lychee and others have already been introduced and established as commercial crops.

Potential new crops should be identified; especially high value horticultural crops suitable for local climatic conditions.

Biotechnology as a tool for rapid multiplication of quality planting material, virus cleaning, genetic transformation, have significant potential but requires capacity building and safeguard procedures to be developed.

B/1:Research,Development and Extension

Skill development through in-service training at different R&D institutions can enhance capabilities of extension staff.

Postgraduate programs in fruits, vegetables, floriculture, medicinal and spices crops and post harvest management should help providing skilled human resource for the horticulture industry.

Such programs should be initiated in agriculture universities and research institutes in all provinces.

Skilled labor should be attracted and retained through competitive minimum wages for the agricultural labor and the development of industry vocational training programs

B/2.Skill Development

Intensification and diversification of farm mechanization by ensuring easy access of the farmers to essential horticultural machinery

Its efficient and optimal use by incentivizing the private sector for opening machinery leasing/hiring outlets in villages

Federal Government should exempt the duties and surcharge on import of horticulture machinery like grading units, cold storage chambers, greenhouses and trickle irrigation accessories such as micro-tubes, mini sprinkler and bubblers for interested businessmen

Expansion and modernization of local machinery manufacturing by providing them training, incentives and technical/financial support to produce horticultural implements as per international standards

B/3.Farm Mechanisation

Limited availability of true to type root stock is the biggest handicap in establishing state of art fruit and vegetables nurseries in the country

State should promote the establishment of such nurseries by providing appropriate legislative cover, financial support and technical guidance

All nurseries must work according to the approved nursery protocol, developed in consultation with technical experts and stakeholders

Only registered nurseries should be eligible for support and facilities offered by the government

B/4.Inputs-Seeds

There are various estimates of production losses due to non-use of appropriate chemicals by the farmers

Ignorance, fear and costs of using are the general reasons for this neglect

There is need to create awareness among the farmers for judicious use of chemicals for reducing the production losses

There are eco friendly measures to reduce this loss for those who are excessively conscious of use of chemical inputs

B/4.Inputs-Chemicals

Water was already scarce but its scarcity is becoming acute due to its increased demand, misuse, wastage and climate change.

There is thus need to rationalize its use even for farming purposes where it is wasted the most.

New water saving techniques and technologies have provided hope for mitigating its impact

Innovative methods such as rain water harvesting and recycling of sewage water for kitchen gardening need to be encouraged

B/4.Inputs-Water

The sector is informal and profit margin is low which has diverted investment to other sectors

Lack of financial resources and high interest rates of financial services available ,at the disposal of farmers is biggest handicaps for its growth

Government should facilitate soft loans for promotion of horticulture industry for a period of five years

The government should facilitate the stakeholders involved in horticulture business to access commercial credit by reducing compliance and transaction costs

B/4.Inputs-Credit

1. Processing

2. Marketing

3. Value addition

4. Diversification

5. Production Relations

C. Structural Transformation

Provide information to the growers on harvest technologies of fruits, removal of field heat, grading of the produce and appropriate packaging.

Post harvest losses must be examined and programs planned to minimize these losses, when financially viable, through linking production to agro industrial transformation and through encouraging private sector to build cold storages.

The development of appropriate packaging technologies that minimize product damage.

 

C/1.Processing

The marketing of horticultural products is supply based with producers being price takers and receiving lower prices during high supply periods.

The Government should develop integrated value chains with producers and producer groups as an integral component of these value chains.

The building of contract farming, collaborative marketing arrangements with processors etc be prioritized

Market information system should be established including price-clearing houses of agricultural commodities in provincial/federal capital.

C/2.Marketing

Government should promote public-private partnerships and provide incentives/ support for value addition and value creation through development of:

Environment-friendly packaging/ packaging industry Cold chain infrastructure Wholesale market infrastructure Fruit and vegetable processing and dehydration industry Integrated pest management industry and services Organic and herbal/ medicinal crop production/processing

Enhanced quality should be enforced in accordance with World Trade Organization’s (WTO) requirements

C/3.Value Addition

Horticulture production should be based on quality that will promote exports for which accredited quality control and testing laboratories must be established to certify quality of the produce for exports and in the domestic market.

A coherent sanitary and phyto sanitary (SPS) management system for strong coordination and effective interaction between various departments involved in inspection, testing and other related activities should be facilitated

The regulations and procedures of export and import of

horticulture industry commodities should be reformed to reduce compliance and transaction costs as part of achieving efficiency gains

C/3.Value Addition

Besides increasing the production of indigenous fruits and vegetables, we have to diversify our horticultural portfolio by promoting the cultivation of exotic fruits and vegetables which are in demand at global level

This is a centuries old process and is continuing all over the world. We will not face much problems as our terrain and climate suitable for production of variety of exotic horticultural products

We need the services of marketing people and researchers to find those products which are globally trades and can be grown here from agronomic point

Organic farming is another niche area which needs to be exploited by providing appropriate legal framework and proper incentives and support should be promoted

C/4.Crop Diversification

Production relations relate to the way land is owned, cultivated and crops are disposed of

In Pakistan only two types of production relations are in vogue i.e. owner cultivation and tenant cultivation

We need to also promote three other modes which are essential for modernising our horticultural transformation –cooperative, contract and corporate

These are in operation in some areas but with limited success. Time has come to provide a comprehensive legal framework and institutional mechanism to streamline these production relations

C/5.Production Relations

Formulation of comprehensive Land Use Policy

Improving Rural Infrastructure

Environmental Sustainability

Creating Linkages and promoting Investment

Gender Mainstreaming

Rural Non-farm Sector

D.Cross cutting Interventions

Developing a national land use policy for rational use of land resources is the need of the day as valuable arable land is being converted for non-farming purposes at alarming rates

Add to it the declining fertility of our agricultural lands due to non sustainable agricultural practices plus the degradation of our lands due to water logging and salinity going on for decades, a negative side effect of our irrigation practices

Lastly we are misusing our scarce land resources as we are cultivating crops on lands extremely suitable for horticultural use

All these issues needed to be addressed by formulating a

long term comprehensive land use policy by the government

D/1.Land Use Policy

Government should facilitate developing modern infrastructure (wholesale markets, pack houses, cold stores, reefer containers) under public - private partnerships led and managed by the private sector

All-out efforts should be made for the improvement of infrastructure like roads for the safe transportation of horticulture commodities

The focus should be on developing airport facilities for wide bodied cargo planes to land at airports in the main production areas, improving handling facilities at ports providing one window operation and establishing of effective and viable cold chain development

D/2.Improving Rural Infrastructure

There is an urgent need to create awareness among the farmers about the looming threat of climate change/environmental degradation and popularizing the good sustainable agricultural practices among them

We will have to synchronise the extension services of the provincial agricultural departments and marketing outlets of the private agro services providers to promote environment friendly practices

Government should promulgation legislation for stopping of practices aggravating the threat of climate change and allocate resources for carrying out research to develop varieties responsive to climate change

They need to look into adjusting the cropping pattern and fine-tuning the planting and harvesting schedules, practicing crop rotation and diversifying crop mix

D/3.Environment /Climate Change

Recent growth has wrought enormous environmental destruction in India.

In a recently released report commissioned by the Indian government, the World Bank estimates that environmental degradation annually costs India a horrific 5.7 percent of GDP.

This shaves off almost all of the annual six percent per capita GDP growth recorded between 2000-01 and 2010-11. Outdoor pollution alone kills 1.16 lakh people every year.

Almost a quarter of India’s child deaths can be attributed to inadequate availability of clean water and sanitation, itself related to environmental degradation.

Climate Change-Indian Scene

Government should not only allocate substantial funds for investment in the rural areas but also provide necessary legal framework and proper fiscal and financial incentives to encourage private sector for investing in critical areas

Government should invest in improving the rural infrastructure, skill formation, research institutions and establishment of common facilitation centers

It should encourage the private sector to come forward in cool chain, storage and reefer containers value addition and scientific modern processing and new technologies

D/4.Investment and Linkages

All the non-crop agricultural activities provide excellent opportunities for accelerated gender mainstreaming

Even presently women play an important role in livestock husbandry, poultry farming, dairy production and horticultural cultivation

Targeted attention to create gender balance through skill formation, awareness campaign, financial assistance and technical support can yield handsome dividends in short period

It will also help government in its efforts to reduce poverty, bulk of which is in the rural areas

D/5.Gender Mainstreaming

Agricultural sector in general and horticultural sector in particular cannot grow to its full potential unless the rural non farm sector develop along with its formal farm sector

Sustained growth of the rural economy lies in the development of efficient and effective agri-based supply chains that link the agriculture sector with their corresponding upstream and downstream links in the rural non-farm (RNF) to the national and international markets

RNF provides 40-60% of incomes/jobs in rural areas, much of its activity occurs in the trading, services and processing sector having strong forward and backward linkages with agriculture

Informal and low capital using entities catering mostly to domestic markets, RNF presents opportunities for providing value addition to primary production at the farm level

D/6:Rural Non Farm Sector

Pakistan has a great potential to increase its horticultural production by bringing in new areas under cultivation of horticultural products, introducing new exotic products in its horticultural portfolio, improving the productivity, adding value and increasing its exports

In order to do so it will have to put more resources in research and development, extension, improving marketing infrastructure improving processing etc

This demands lot of resources which can be provided by the private sector ,local and foreign, if we fine-tune our legal framework supported by appropriate institutional mechanism and added by a strict dispute resolution mechanism

Conclusion

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