Ministry of Food Agriculture Livestock Challenges

Ministry of Food, Agriculture & Livestock

Challenges for Agro-Based Exports (including SPS) Presentation on the Final TRTA even by Aisha Humera, Deputy Secretary Ministry of Food, Agriculture and Livestock (MINFAL) Ministry of Food, Agriculture & Livestock

Target for the current year To enhance the current export to GDP ratio from around 13% to 15% in 6 -7 years Ministry of Food, Agriculture & Livestock

Export projections for the year 2007 -08 ¡ Determined to implement Rapid Export Growth Strategy (REGS) and to achieve high export growth rate, export target of US$19. 2 Bn is set for the year 2007 -08. Ministry of Food, Agriculture & Livestock

Export Comparison World Pakistan 2003: 7, 503 Billion 2003: 11. 2 Billion ng eri e s gin En ood G tile Tex 2005: 10, 159 Billion ing eer s gin En ood G Textile & Clothing Agri Products 2005: 14. 4 Billion Growt h 200305 35. 4% Chemicals le exti T Engg. Goods Source: WTO Database & FBS Ministry of Food, Agriculture & Livestock Growth 2003 -05 21. 0% Others

S# 2013 2006 Commodities Value % Share Low Sc High Sc Core Category 1 Textile & Garments 9. 89 60. 0 22 -25 55. 0 55. 5 2 Rice 1. 11 6. 7 2. 5 -3. 0 6. 2 6. 7 3 Leather & Leather Products 1. 09 6. 6 2. 5 -2. 80 6. 2 4 Sports Goods 0. 35 2. 1 0. 90 -1. 0 2. 2 5 Carpets & Rugs Tapestry 0. 25 1. 5 0. 35 -0. 40 0. 9 1. 0 Development Categories 8 Fish & Fish Preparations 0. 20 1. 2 1. 00 -1. 20 2. 5 2. 6 9 Fruits & Vegetables 0. 14 0. 8 0. 35 -0. 50 0. 9 1. 1 Ministry of Food, Agriculture & Livestock

2013 2006 S# Commodities % Share Value Low Sc High Sc 12 Meat & Meat Preparations 0. 02 0. 10 0. 2 13 Wheat 0. 00 0. 3 -0. 4 0. 7 0. 8 14 Others (Chem/Petro/Stationery etc. ) 2. 79 17. 0 4. 77 -3. 98 11. 9 8. 4 15 Total Export 16. 47 100. 0 40 -45 100. 0 16 GDP 128. 90 270 -280 17 Export – GDP Ratio (%) 13 15 -16 15 16 Ministry of Food, Agriculture & Livestock

UAE Textile, Fish, Fruits & Veg, Leather, Cutlery, M & G, Chemicals & Minerals 1. 3 / 2. 6 Fruits & Veg. Ghee, Meat, Milk, Wheat, Eng. Goods, Furniture, G & J, surgical, Textile, Rice, Cutlery Fruits & Veg, Fish, Textile Carpets, Leather, Surgical, S. Goods, Eng. Goods, M & G, G & J Afghanistan China 1. 1 / 3. 2 0. 5 / 5. 0 USA 4. 2 / 11. 0 EU 4. 5 / 9. 5 Others 1. 9 / 4. 0 Fruits & Veg, Meat, Leather, Fish, Cutlery, Rice, Sports Goods, Furniture, Eng. Goods, Pharma, M & G, G & J Ministry of Food, Agriculture & Livestock Textile & Clothing, Carpets, Leather, Eng. Goods, Fish Surgical Instruments, Sports Goods, Cutlery, Furniture, M&G, G & J, Rice

v v Pakistan’s image continues to be that of a low quality, low price, non consistent and unreliable supplier Low to medium technology and low R&D capabilities. Infrastructure deficit in energy, water and roads etc. Poor technological infrastructure. Absence of integrated and holistic medium to long term export strategy Low productivity and low agriculture yield Average quality of products and lack of brand names v v v Low value addition & Low level of foreign direct investment in manufacturing /exportable sectors. v Non-facilitative taxation system v High cost of doing business despite some positive indications v Lack of product and geographical diversification in exports v Weak export culture and drive. v Absence of economies of scale in engineering sector Ministry of Food, Agriculture & Livestock

Major Challenges for Agro-Based exports ¡ Low-competitiveness on supply side ¡ Lack of productive capacity (as a result of low investment in new machinery and technology leading to lower productivity and high costs) ¡ Tax treatment that favors investment in the non-industrial sectors , particularly speculative businesses i. e; stocks and real estate ¡ Low end and low quality products ¡ Fragmented and informally organized export industries Ministry of Food, Agriculture & Livestock

Major Challenges for Agro-Based exports Unmatched demand for energy ¡ Market access on demand side(compliance with international standards) ¡ Compliance with social, environment and health standards ¡ Insufficient product diversification ¡ competitiveness ¡ Ministry of Food, Agriculture & Livestock

Major Challenges for Agro-Based exports Cold Chain to minimize post harvest losses ¡ High interest rate and lack of infrastructure ¡ Lack of modern storage facilities ¡ SPS requirements ¡ Grading, packing, fumigation, testing and certification problems. ¡ Ministry of Food, Agriculture & Livestock

Rice Constraints Impeding Exports Rice Consignments returned from EU because of Aflatoxin Action Plan Effective regulatory system to monitor residue level ¡ Infrastructure facilities –availability of accredited laboratories for internationally recognized certificates Implementation by Min. FAL through TRTA-II ¡ ¡ Need to develop new varieties of rice and over come flakiness Adequate Funds and Up-gradation of RRI of Kala Shah Kakoo and Dhokri Timeline: 01 to 02 years l Professionals be hired from foreign countries to give training Timeline: Immediate l Stakeholders be on the research advisory committee Timeline: Immediate Action: MINFAL in collaboration with Provincial Govts. Ministry of Food, Agriculture & Livestock

Rice Constraints Impeding Exports Action Plan Non-availability of quality (selected, processed, treated) seeds of existing varieties Abundant and timely availability of best quality seeds (no duty and taxes) Action: MINFAL Timeline: Immediate Incentivize/promote seed processing industry/ business Action : MINFAL Time Line: 01 Year “Basmati Rice” is not yet geographically defined. India has already registered it under the Trade Mark of “Super” and is expected to acquire further market share of top basmati exports market segment Geographical Indication (GI) of Super Basmati as a genuine product of Pakistan both in EU and USA is required Action: MINFAL + Mo. C Timeline: Immediate Ministry of Food, Agriculture & Livestock

Rice Constraints Impeding Exports Action Plan Lack of storage Facilities Warehousing facility of one million ton capacity available at Karachi (Pipri/Landhi may be leased out to the Rice Exporters. Action: TCP; Time Line: 01 Years Lack of quality packing material causing inferior packing presentation. Refinancing facilities not at par with other industries Import of zero rated packing materials for re-export purposes only be streamlined. Action: MINFAL/CBR; Timeline: 01 year Value added industries practically nonexistent Develop feasibility reports for value added products, by -products like, fortified rice, pre-cooked rice, ready to eat rice, cereals, rice oil etc. Incentivize local manufacturing of quality rice machinery and programme lending scheme for technology up-gradation of rice milling & processing industry Action: TDAP; Timeline: 01 -02 years Refinancing facilities to be at par with other industries Action: SBP; Timeline: 01 year Ministry of Food, Agriculture & Livestock

Fruits & Vegetables Export Benchmark FY 06 $ Bn 0. 14 Ministry of Food, Agriculture & Livestock Targets FY 13 0. 9 -1. 1

Constraints Impeding Exports Action Plan Lack of quality products for export To develop and up-grade seeds of quality fruits & vegetables (Kinnow, Mango, Dates, Peach, Potato & Onion etc. ) establish product specific research institutes Action: MINFAL in collaboration with PHDEB, PARC, NIAB, NIBG & Prov. Govts. Timeline: 01 -02 years Lack of Cool Chain System i. e. cold storages & reefer transportation Establishment of cool chains at three levels will reduce pre and post harvest losses from 40 to around 10%. Flow diagram referred Under the National Trade Corridor Improvement Programme (NTCIP), following initiatives will be taken: ¡ 39 modern pack houses completely automated & equipped with advanced electronic devices for packing /grading and storage plants will be set upat 31 fruits & vegetables growing areas throughout the country. ¡ 23 facilities for cold storage and controlled atmosphere storage will be established at the food production areas ¡ Two container yards in Karachi &Lahore with a pool of 200 refrigerated containers and 50 controlled atmosphere refrigerated containers at each location will be established. Ministry of Food, Agriculture & Livestock

Total Loss 10 -11% With Cool Chain 3 months Air Port Cold Store 3% Field Heat Removal 4% 2% 1% Reefer Transport Packaging 1% Urban Cold Store 3% Whole Saler 8% Bulk Transport 20% Post Harvest 7% Seaport Cold Store 2% Retailer Local Mandi Without Cool Chain 3 Days Ministry of Food, Agriculture & Livestock Total Loss 40% C o n s u m er

Meat &Meat Preparation Export Targets Export Benchmark FY 06 $ Bn 0. 02 Target FY 013 0. 10 Ministry of Food, Agriculture & Livestock

Meat &Meat Preparation Constraints Impeding Exports Action Plan Poor viability of organized livestock farming due to § Low reproductive efficiency of animals § Limited scope of fattening programs § Presence of trade related infectious diseases § Lack of research on refinement of vaccines (F&M, BSE etc) and disease diagnosis To improve viability of livestock farming action required are: § Establish Livestock Production Research Institutes in Sindh, NWFP, Balochistan and Southern Punjab § Establishing mobile livestock health care units on fast track basis. § LDDB has initiated several projects for fattening farms Poor management of public slaughter houses Public sector slaughter houses to be privatized and permission to build and operate slaughter houses in private sector be accorded Ministry of Food, Agriculture & Livestock

Meat &Meat preparation Constraints Impeding Exports Action Plan By-product of slaughtered livestock not adequately processed and marketed Foreign expertise may be acquired for establishment of slaughter house by-products plants and development of effective marketing system Action: MINFAL and Prov. Livestock Deptts. Timeline: 0102 years Absence of large livestock farms Model dairy farms to be enhanced from the present 650 to 2400 by 2013 Joint ventures with foreign investors may be explored/established Action: Prov. Livestock Deptts. Timeline: 02 -03 years Poorly managed and maintained infrastructure in livestock markets All levies collected from livestock markets to be reinvested in these markets to improve infrastructural facilities Meat export processing zones be established. These zones are to be regulated as disease free as per OIE requirements (Action: Prov. Govt. ) Action: Prov. Finance and Livestock Deptts. Timeline: 02 years Ministry of Food, Agriculture & Livestock

Export target for Fish & Fish Preparations Export $b bench mark FY 06 0. 20 Ministry of Food, Agriculture & Livestock Target FY 13 2. 5

Fish & Fish preparations Constraints Impeding Exports Inadequate intensification and diversification of inland aquaculture Non development of coastal aquaculture Action Plan Introduction of new species with higher yield. Introduction of intensive fish farming R&D for fish feed and disease control Action: Prov. Fisheries Depts. Timeline: 01 -02 years Shrimp aquaculture along creeks and shallow waters near the coast has to be developed. Action: MINFAL/MFD Timeline: 02 -03 years Ministry of Food, Agriculture & Livestock

Fish &fish preparations Constraints Impeding Exports High Post Harvest Losses. § No insulation in fish holds of more than 8000 fishing boats. § No technical equipment e. g. Winches, Radio, GPS, Fish Finders. § Very little use of fish crates causing crushing of fish. § Polluted block ice Action Plan § § § Un tapped fishing zone (12 -20 miles). § Lack of investment in big and faster launches for deep water fishing, 12 -20 nautical miles, for want of credit. § Modification of fish-holds with insulated sandwich panels and designed to accommodate fish crates. Provision of Winches, GPS and Fish finders to decrease fishing time. Mandatory use of fish crates in fishing boats. Plate ice plant 300 tons / day on BOO. Action: MINFAL/MFD/Provincial Govt. & FHA Timeline: 02 -03 years Pilot project with modern technology to manufacture new high speed fishing boats in composite material. Adequate soft credit may be provided to the private sector for investment in boats and fishing equipment. Action: MFD, FHA & SBP Timeline: 01 year Ministry of Food, Agriculture & Livestock

Fish &Fish preparations Constraints Impeding Exports Lack of Tuna Fishing and Processing. Action Plan Tuna processing Industry through public-private partnership. Incentives need to be developed Action: MINFAL Timeline: 01 -02 years Lack of development of new fish harbors, especially in Balochistan coastal area. Non operation of Korangi Fish harbour Incentives for the private sector for partnership on BOT and BOO basis Action: MINFAL/CBR/Prov. Govts Timeline: 03 years Immediate execution of operational plan of Korangi Fish Harbour Action: MINFAL Timeline: 01 year § Lack of adequate processing facilities for quality exports. Establishment of hygienic peeling facilities. § Value added fish processing industry by incentivizing private sector Action: MINFAL & KFHA Timeline: 02 years Ministry of Food, Agriculture & Livestock

Fish & Fish preparations Constraints Impeding Exports. High costs and irregular supply of energy for cold chains and refrigeration Inadequate training facilities for quality fish handling, processing and marketing Action Plan Zero duty and sales tax and five year income tax exemptions as Incentives for refrigerated vehicles and manufactured insulated sandwich panels. Action: MINFAL & MOF Timeline: 01 year Provide credit and investment incentives for setting up captive power generation facilities Action: MINFAL and MOF Timeline: 01 -02 years Fisheries Training Center at Karachi be strengthened Action: MFD / Karachi Fish Harbor Timeline: 01 year Ministry of Food, Agriculture & Livestock

Compliance of International standards Action Plan Constraints Impeding Exports Progress towards compliance to the standards imposed by importing countries at the borders (SPS, IPR, CSI, ) and those imposed by the customers (ISO certification, Labor, environmental standards) is slow Sanitary & Phytosanitary (SPS) Management ¡ Review and needed amendment of Food, Plant, Animal & Fisheries quarantine laws are to be made. ¡ Measures to address GMO issues are to be taken. ¡ Integration of agricultural (plant & animal) and health border control institutions is to be ensured. Action: MINFAL Timeline: 06 -07 years Intellectual Property Rights To meet legal obligations under the TRIPs, speedy enforcement of IPRs (e. g. IPR violation of optic discs and patent obligations) is required. Action: IPO Timeline: 06 -07 years Social Accountability-8000 Certification To ensure better implementation of Human and Worker rights. awareness campaign and SA-8000 certification of exporting firms may be carried out the earliest Action: MOC Timeline: 03 -04 years Ministry of Food, Agriculture & Livestock

Approach followed by Min. FAL TRADE CAPACITY BUILDING P R O D U C T S Products to Market Develop Competitive Production Capability Compete Prove Conformity with Market Requirements Conform Connect to the Market Connect …. by upgrading supply capacities and standards infrastructures Ministry of Food, Agriculture & Livestock M A R K E T S

Initiatives taken by MINFAL to address constraints • NAPHIS- A coordinating body for all SPS matters. • Developing strategy for cold chain in consultation with Mo. C under NTCIP • Developing zones for horticulture and Livestock in consultation with PHEDB and LDDB • Investing in HR development-mega project of PARC • Creation of Trade and Investment Unit in the • Economic Wing of Min. FAL • Restructuring of Min. FAL-Leadership role as a Knowledge based organization Ministry of Food, Agriculture & Livestock

Creation of NAPHIS Effective SPS Management The Key Management Tasks Ahead -identified under UNIDO, WB study SPS Diplomacy Technically demanding risk management functions Institutional structures and role clarity Suitable and applied regulation and monitoring Application of basic ‘good practices for hygiene & safety Awareness and recognition Ministry of Food, Agriculture & Livestock

Export Market Development ¡ There is a need to link quality product with an appropriate market assistance required from TRTA-II through a twining arrangement of technical assistance through UNIDO and ITC ¡ Need to develop product and market specific studies &action plans ¡ HR development Ministry of Food, Agriculture & Livestock

THANK YOU Ministry of Food, Agriculture & Livestock