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SOUTH ASIA INVESTOR REVIEW SOUTH ASIA INVESTOR REVIEW IS FOCUSED ON REPORTING, ANALYZING AND DISCUSSING THE ECONOMY AND THE FINANCIAL MARKETS OF COUNTRIES IN SOUTH ASIA, INCLUDING PAKISTAN, BANGLADESH AND SRI LANKA. FOR INVESTORS LOOKING TO INVEST IN EMERGING MARKETS BEYOND BRIC COUNTRIES (BRAZIL, RUSSIA, INDIA AND CHINA), THIS BLOG IS DESIGNED TO HELP INTERNATIONAL INVESTORS LOOKING TO LEARN ABOUT INVESTING IN SOUTH ASIA WITH FOCUS ON PAKISTAN. RIAZ HAS ANOTHER BLOG CALLED HAQ'S MUSINGS AT HTTP://WWW.RIAZHAQ.COM SUNDAY, JANUARY 23, 2011 High Food Prices Boost Pakistan's Rural Economy Since taking the reins of power almost three years ago, the coalition government in Islamabad, which is led by the Pakistan Peoples' Party, has been increasing the support prices of wheat and other agricultural commodities every year. This policy has had the following effects: 1. It is transferring the additional new income of about Rs. 300 billion in the current fiscal year alone to the ruling party's power base of landowners in small towns and villages, from those working in the urban industrial and service sectors. 2. It has driven up food prices dramatically for all Pakistanis, particularly hurting the poor people the most. 3. It has reduced government tax revenues because the agricultural income is not taxed by either the federal or the provincial governments, and resulted in growing budget deficits. 4. It has significantly increased demand for consumer and industrial goods and services in the rural areas.
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Page 1: Research Data

SOUTH ASIA INVESTOR REVIEWS O U T H A S I A I N V E S T O R R E V I E W I S F O C U S E D O N R E P O R T I N G , A N A L Y Z I N G A N D D I S C U S S I N G T H E E C O N O M Y A N D T H E F I N A N C I A L M A R K E T S O F C O U N T R I E S I N

S O U T H A S I A , I N C L U D I N G P A K I S T A N , B A N G L A D E S H A N D S R I L A N K A . F O R I N V E S T O R S L O O K I N G T O I N V E S T I N E M E R G I N G M A R K E T S B E Y O N D B R I C

C O U N T R I E S ( B R A Z I L , R U S S I A , I N D I A A N D C H I N A ) , T H I S B L O G I S D E S I G N E D T O H E L P I N T E R N A T I O N A L I N V E S T O R S L O O K I N G T O L E A R N A B O U T I N V E S T I N G

I N S O U T H A S I A W I T H F O C U S O N P A K I S T A N . R I A Z H A S A N O T H E R B L O G C A L L E D H A Q ' S M U S I N G S A T H T T P : / / W W W . R I A Z H A Q . C O M

S U N D A Y , J A N U A R Y 2 3 , 2 0 1 1

High Food Prices Boost Pakistan's Rural Economy

Since taking the reins of power almost three years ago, the coalition

government in Islamabad, which is led by the Pakistan Peoples' Party, has

been increasing the support prices of wheat and other agricultural

commodities every year. This policy has had the following effects:

1. It is transferring the additional new income of about Rs. 300 billion in the

current fiscal year alone to the ruling party's power base of landowners in

small towns and villages, from those working in the urban industrial and

service sectors. 

2. It has driven up food prices dramatically for all Pakistanis, particularly

hurting the poor people the most. 

3. It has reduced government tax revenues because the agricultural income

is not taxed by either the federal or the provincial governments, and

resulted in growing budget deficits. 

4. It has significantly increased demand for consumer and industrial goods

and services in the rural areas. 

5. It has forced the State Bank of Pakistan to maintain a tight monetray

policy which is drying up the much-needed credit for the industries and the

average consumers alike. 

Page 2: Research Data

6. It's likely to slow rural-to-urban migration and relieve pressure on major

cities and their inadequate infrastructure. 

In 2008, the government pushed the procurement price of wheat up from

Rs. 625 per 40 kg to Rs. 950 per 40 kg. This action immediately triggered

inflationary pressures that have continued to persist as food accounts for

just over 40% of Pakistan's consumer price index. According to State Bank

of Pakistan (SBP) analysis, cumulative price of wheat surged by 120 per

cent since 2008, far higher than the 40 per cent between 2003 and 2007. it

is also many times greater than the international market price increase of

22 per cent for wheat in the same period. Similarly, sugar prices have

surged 184 per cent higher since 2008, compared with 46 per cent increase

during 2003-07. 

The transfer of additional Rs. 300 billion to Pakistan's agriculture sector

during the current fiscal year 2010-2011 by higher prices of agriculture

Page 3: Research Data

produce and direct flood compensation to 1.6 million affected families at the

rate of one hundred thousands rupees each will boost economic confidence

in the countryside. It will generate rural demand for consumer items

including consumer durables such as fans, TVs, motorcycles, cars,

refrigerators, etc.

The big feudal landowners have been the biggest beneficiaries of the PPP's

gift of high crop prices. However, the policy has helped small farmers as

well, as shown by a recent survey reported byThe Nation newspaper. The

survey of 300 farmers in Sind's Sukkur district was conducted by Sukkur

Institute of Business Administration for the State Bank of Pakistan (SBP). It

has highlighted the following about district's rural economy:

1. In Sukkur district, majority of the farmers are subsistence farmers. 31

percent of them own less than 5 acres of land, and another 34 percent own

up to 12.5 acres of land.

2. They spend an average of Rs. 1,611 a month on their children's

education, with some of them spending up to Rs. 12,000 a month.

3. Wheat, rice, cotton and sugarcane are the major crops being cultivated

by 93 per cent, 58 percent, 37 percent and 12 percent of the respondent

farmers in that order.

4. 24 percent of them are also growing fruits including dates, mangoes and

bananas.

5. 22 percent of the respondent own livestock. 

6. About half (49 percent) use privately purchased seeds for wheat

cultivation, 33 perecent use their own retained seed and 18 perecent use

the seed purchased from Public Sector Seed Corporations.

Page 4: Research Data

7. On average, a farmer uses 96.73 Kg chemical fertilizer per acre with the

maximum and minimum of 350 Kg and 40 Kg respectively. The average per

acre cost of wheat production is Rs. 10,670.

8. All 300 farmers are using tractors for cultivation and preparing land for

crops, and some are using tractors for fetching their crop produce to

market.

Already, the upside of the government policy is that Pakistan's rural

economy is being spurred by high crop prices that may help the GDP

growth this year and next. Increased farm incomes are whetting the rural

households' appetite for industrial and consumer goods in 2011 and beyond.

A key indicator of growing rural economy is the double digit increase in the

sale of tractors. Millat Tractors Limited, the largest supplier of tractors in

Pakistan, had record sales of 41,500 tractors in the calendar year 2010, an

increase of nearly 11% over 37,537 tractors sold in 2009. Of these 41,500

tractors, a record 5000 tractors were sold in the month of Dec, 2010 alone,

acording to The Nation newspaper. Millat sold 10,000 units under Benazir

Tractor Scheme and 5,000 units under the Sindh government tractor

scheme in the last fiscal year. Another 10,000 units were sold as part of the

Punjab government scheme, 70 per cent of the units were sold, according

Page 5: Research Data

to Dawn News.

Earlier, the sales of Fiat and Massey Ferguson tractors grew to 1,632 and

3,194 units in September 2010 from 537 and 3,100 in August 2010. The

overall sales of these tractors rose to 13,931 during July-September 2010 as

compared to 12,690 units in the same period of 2009, according to Dawn

news. 

Over 50 per cent of the motorcycles and 40-45 per cent of cars in Pakistan

are purchased by people living in rural areas. Total car sales in July-

September 2010(including Suzuki Bolan) rose by 12 per cent to 30,030

units as compared to 26,812 units in the same period of 2009, according

to Pakistan Automotive Manufactureres Association PAMA). Furqan Punjani

of Topline Securities said car sales are expected to reach 154,000 units by

the end of June 2011. 

In addition to rising demand for cars and tractors, there is also an upward

trend in two-wheeler sales. The cumulative sales of motorcycles in July-

September 2010 rose to 126,701 units from 105,862 units in the same

period of 2009.

While it is good to see Pakistan's rural farm economy perk up, it is also

important to recognize that the overall national economic outlook can not

improve significantly unless the growing budget deficits and rising inflation

are brought under control. And this will require the ruling feudal elite to

pitch in by paying their fair share of income tax on their rising farm

incomes. It is time for them to lead by example. 

Related Links:

Haq's Musings

Pakistan's Exports and Remittances Rise to New Highs

Page 6: Research Data

Sugar Crisis in Pakistan

Agricultural Growth in India, Pakistan and Bangladesh

Pakistan's Rural Economic Survey

Pakistan's KSE Outperforms BRIC Exchanges in 2010

High Cost of Failure to Aid Flood Victims 

Karachi Tops Mumbai in Stock Performance 

India and Pakistan Contrasted in 2010 

Pakistan's Decade 1999-2009

Musharraf's Economic Legacy

World Bank Report on Rural Poverty in Pakistan

USAID Report on Pakistan Food & Agriculture

Copper, Gold Deposits Worth $500 Billion at Reko Diq, Pakistan

China's Trade and Investment in South Asia

India's Twin Deficits

Pakistan's Economy 2008-2010

P O S T E D B Y   R I A Z H A Q   A T   8 : 5 1 A M  

E M A I L T H I S B L O G T H I S ! S H A R E T O T W I T T E R S H A R E T O F A C E B O O K

L A B E L S :   A G R I C U L T U R E ,   E C O N O M Y ,   F O O D ,   I N F L A T I O N ,   P A K I S T A N

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8 5 C O M M E N T S :

Riaz Haq said...

Here's an agriculture survey in Pakistan, as reported byThe

Nation newspaper:

According to details, the total sample size was 300 respondents, five

farmers were selected randomly from each village to collect their

responses on the survey questions; at some villages 4 or 6 farmers

were selected randomly. In district Sukkur, majority of the farmers

comprise subsistence farmers as 31pc farmers of district are those

who own less than 5 acres of land, while about 34pc farmers holding

up to 12.5 acres of land.

Farmers, studied during survey, spend around Rs.1,611 monthly on

their children education, with the maximum amount of Rs. 12,000.

Farming is a major component of the district's rural economy as

almost all the respondents were engaged in farming. Wheat, rice,

cotton and sugarcane are the major crops being cultivated by 93pc,

58pc, 37pc and 12pc of the respondent farmers.

Around 24pc of the respondent farmers are also cultivating fruits

including dates, mangoes and bananas. Only 22pc of the respondent

farmers are rearing animal (livestock).

Almost half (49pc) of the farmers used privately purchased seeds for

wheat cultivation, 33pc of the farmers used their own retained seed

and 18pc of the farmers used the seed purchased from Public Sector

Seed Corporations.

On the average, a farmer used 96.73 Kg chemical fertilizer per acre

with the maximum and minimum of 350 Kg and 40 Kg respectively.

The average per acre cost of wheat production was Rs. 10,670/-,

based upon the average figures of cost given by respondents of the

survey. 

All the respondent farmers are using tractor for cultivation and

Page 8: Research Data

preparing land for crops and few are using tractor for fetching their

crop produce to market.

JANUARY 23, 2011 10:43 AM

Riaz Haq said...

In terms of export potential, California argriculture industry offers a

model for developing nations. 

Take almonds for example. 

After making big investments in almonds in the past few years,

California farmers are seeing their efforts pay off with predictions

their recent harvest will be a record 1.65 billion pounds or more,

according to Businessweek. 

The big harvest comes amid strong worldwide demand and relatively

high prices. Exports to China have increased eight times in the

past five years, and India and Pakistan doubled their almond

consumption in that time. Even with a record harvest, there's no

risk California, the world's No. 1 almond producer, will saturate the

market, industry experts said.

The Golden State has seen a big growth in almond orchards in the

past five years as farmers shifted from less profitable vegetables to

lucrative nuts. California now has 810,000 acres planted in almonds --

a 25 percent increase from a decade ago -- and produces 80 percent

of the world's supply. Spain is the second-biggest producer, but its

harvest is only a fraction of California's.

The state's most recent crop appeared uncertain after cold wind and

rain last spring partially disrupted pollination of the trees' pink and

Page 9: Research Data

white blooms. But recent forecasts from the U.S. Department of

Agriculture predicted a record crop with at least a 17 percent

increase from the previous year.

"The nut crops in general are looking good in California," said John

Edstrom, who recently retired after 26 years as a Colusa County farm

advisor. The market is generating "cautious optimism" among walnut,

pistachio and pecan growers as well, he said.

California farmers began shifting to almonds when increases in

fertilizer and other costs made it harder to make money on row crops,

such as tomatoes and onions. When almond prices spiked to more

than $2.80 per pound in 2006, growers leapt to plant 49,000 acres of

new trees. After five years, those trees are now bearing significant

fruit, contributing to the record 2010 harvest.

Improved agricultural techniques used by California's 6,000 almond

growers, such as planting trees closer together, cutting back on

pruning and knocking hollow shells off trees during winter to control

a debilitating pest called the navel orangeworm, also have helped

boost production, said Bruce Lampinen, an almond specialist at the

University of California, Davis.

Farmers said they are concerned about a loss of bees with major die-

offs in recent years. UC Davis apiculturist Eric Mussen said bees are

still available, though they are more expensive. The cost of renting

them has doubled to $150 per acre over the past five years.

Water shortages also have been a concern for some, although Almond

Board chairman Mike Mason said they haven't been so bad as to affect

the whole industry.

JANUARY 24, 2011 6:26 PM

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Riaz Haq said...

Here are some interesting excepts from a piece on Pakistanby Nancy

Birdsall of Center for Global Development:

------------U.S. policymakers should note well this series of events and

remember a simple lesson. Billions of dollars of U.S. assistance-and a

sustained diplomatic focus on the reform agenda-have not given the

United States the ability to dictate the outcomes of Pakistan's political

process. This is inconvenient for the United States, but not surprising.

For the United States and for other major donors in Pakistan, money

has never brought leverage. 

Pakistan's energy sector demonstrates the difficulty in achieving the

kind of influence donor countries would like to have. For decades, the

World Bank and the Asian Development Bank-armed with sums

greater than the current Kerry-Lugar-Berman U.S. aid package-have

urged the Government of Pakistan to finally reduce the price subsidies

on electricity, to no avail. Time and again, project documents cite the

same problems, the donors recommend the same solutions, the

government of Pakistan promises to implement the same reform, the

government breaks (and donors lament) the same promises.

Meanwhile, the basic politics maintaining the status quo have not

changed-there are too many reaping the benefits of subsidized power,

and ordinary consumers feel they aren't getting service that warrants

paying more. 

When Vice President Biden visited Islamabad this week, he promised

that the United States would "keep the entire commitment" of the

pledged $7.5 billion in Kerry-Lugar assistance. This assurance will

surely be welcomed by Pakistan, and it's a fair reflection of Pakistan's

short-term and long-term importance to U.S. interests. Adjusting

Page 11: Research Data

where and how aid is spent-including by taking the requests of the

Pakistani government into account-is necessary to respond to the real

needs on the ground. (On that note, we applaud the decision to put

$190 million into direct smartcard grants to help Pakistani flood

victims rebuild their lives). But U.S. policymakers should not expect

the aid money to give the United States greater influence on economic

reforms in Islamabad. This is not the point, nor the potential, of U.S.

aid. 

----------

The key point is that certain aid projects can carry both direct

benefits (better services and infrastructure for the people of Pakistan)

and indirect benefits (incentives for the Pakistani political system to

achieve greater results with their existing resources). Here are a few

examples to consider: U.S. investments in energy generation and

transmission capacity can be linked to public commitments to raise

electricity tariffs only when brownouts have been reduced below an

announced benchmark. In this grand bargain, as service quality

improves, tariffs would go up, and another round of aid investments

would be delivered. In another case, U.S.-financed tools can be

deployed to help Pakistani citizens hold their government

accountable-with regular reports on simple indicators of development,

for example, or an easily accessible database of all development

projects funded from internal or external resources. Or a pilot Cash

on Delivery aid contract in one or more Pakistani provinces could put

levers in the hands of education reformers and help their ideas gain

traction. 

JANUARY 25, 2011 7:29 PM

Riaz Haq said...

Here are excerpts from a piece by Christine Fair on "What Pakistan

Did Right" in 2010 floods:

Page 12: Research Data

Arguably, the Pakistan Meteorological Department (PMD) is one of

the most important reasons why the floods claimed relatively fewer

lives than may have been expected, given the scale of the event. In

January, I met with the Director General Arif Mahmood and his team

in Islamabad. They walked me through, in painstakingly scientific

detail, how their organization saved lives in 2010, as they had done

before and as they will continue to do in the future. 

-----------

Some six months have passed since the onset of the floods.

Surprisingly, many of the predicted disasters did not happen. Pakistan

did not have the predicted second wave of deaths in the camps for the

millions of internally displaced persons. Astonishingly, none of the

predicted epidemics (such as cholera) took place. Pakistan has even

managed to stave off the expected food insecurity.

-----------------

Pakistan's National Disaster Management Agency (NDMA), headed by

Major General (Ret.) Nadeem Ahmed is part of the reason these

catastrophes were prevented. The NDMA, along with the four

Provincial Disaster Management Agencies, coordinated the massive

effort to rescue flood victims, establish camps for internally displaced

people, provide the victims with shelter, water and sanitation

facilities, food and other logistical requirements. The NDMA

coordinates with international donors and maintains a situation room

where staff track calls and resolve problems. In a country that

routinely sustains criticism for organizations that that underperform,

NDMA excels. 

Some of the worst fears about lost crops have not materialized. While

many of Pakistan's fields have not been properly prepared for planting

this year, NDMA working with its domestic and international partners

was able to provide seeds to many cultivators. In many cases, they

simply flung the seed into the land once the water receded. Many of

Page 13: Research Data

these efforts are resulting in bumper crops. This was not expected in

September of 2010. To be sure, this is only the beginning and much

more needs to be done. But measures of this type helped stave off

some of the gravest outcomes expected. 

----------------

There are still challenges. Complaints persist about corruption with

the pre-paid ATM cards (Watan cards) distributed to IDPs. In Sindh,

serious charges of corruption persist regarding the purchase of tents,

blankets, medicines and food for the flood-affected people. Reports

continue that food supplies are languishing in depots while IDPs go

without in Sindh. Indeed, the IDP camp I visited in near the office of

the District Coordination Officer for Dadu, was saddening. The

residents and the camp administrator claimed that there had been no

food distributed in a month.

-----------

Nonetheless, half a year after the floods devastated the country and

after most of the media has left the story behind, 20 million Pakistanis

still need help -- and they need help now. While Pakistan must expand

its own tax net to contribute to the long-term costs of rebuilding its

infrastructure and preparing for future disasters, the international

community should also continue to support immediate needs such as

winterization, food support and rehabilitation of the flood victims.

JANUARY 25, 2011 7:47 PM

Riaz Haq said...

Templeton Asset Management Ltd. is buying shares in Pakistan, the

worst-performing stock market globally this month (August 2010),

after the nation’s worst-ever floods prompted a sell-off, investor Mark

Mobius toldBusinessweek:

About 1,600 people have been killed and 20 million lost homes, farms

Page 14: Research Data

and livelihoods as heavy monsoon rains sent flood waters across the

South Asian nation. The disaster may cut Pakistan’s economic growth

in half, Finance Secretary Salman Siddique said Aug. 13, with

expansion falling as much as 2.5 percentage points short of a 4.5

percent target.

“There will be an impact on growth but company valuations are very,

very attractive now and therefore we continue to invest in Pakistan

despite all the negatives,” Mobius said in an interview in Singapore

yesterday. “The bottom line is that Pakistan is not going to go away.

We want to buy stocks that look cheap as prices come down as a

result of the flood.”

The Karachi Stock Exchange 100 Index has dropped 8.7 percent this

month, the most among 93 benchmark indexes tracked by Bloomberg

globally. The gauge is valued at 7.1 times this year’s estimated

earnings, making it cheaper than any other Asian or emerging-market

benchmark index tracked by Bloomberg.

The Karachi index climbed as much as 1.2 percent, the most in a

month, and traded 0.7 percent higher to 9,604.65 as of 11:37 a.m.

local time on speculation that recent losses were excessive. The gauge

plunged 2.9 percent yesterday, the most in more than two months.

‘Oversold’

“The market was oversold from yesterday and news of Mark Mobius’s

plans to buy Pakistani Stocks because of their attractive valuations

supported overall market sentiments,” said Khurram Schehzad, head

of research at Invest Capital & Securities Ltd., in Karachi. “Local

investors are encouraged and realize the prospect of future gains.”

The World Bank yesterday pledged $900 million in financial support to

Page 15: Research Data

Pakistan, joining the United Nations, the U.S. and other countries in

providing aid.

Mobius, who oversees about $34 billion in developing-nation assets as

executive chairman of Templeton’s emerging markets group, said the

investment company favors banks and energy companies within

Pakistan. He didn’t identify any companies.

Templeton owned more than 5 percent of MCB Bank Ltd., the nation’s

biggest lender by market value, as of June 30, according to data

compiled by Bloomberg.

MCB gained 1.7 percent to 185.50 rupees today, trimming losses for

the year to 7.1 percent. Oil & Gas Development Co., Pakistan’s

biggest energy explorer, rose 1.3 percent, extending its 2010 gains to

23 percent.

JANUARY 27, 2011 12:03 PM

Riaz Haq said...

Pakistan has resumed wheat export after a bumper crop last year,

according to Tribune Express:

SINGAPORE: Pakistan has resumed wheat exports for the first time in

three years, selling cargoes to Bangladesh and Myanmar and more

deals are likely as the nation takes advantage of rising global prices

and surplus stocks at home, following last year’s bumper harvest.

The deals come as fears of global food inflation grow, with devastating

floods damaging crops in Australia, forecasts of US corn inventories

sliding to uncomfortable levels and dry weather hampering

production in Argentina.

Page 16: Research Data

Asia’s third largest wheat producer, Pakistan has sold 200,000-

500,000 tonnes mainly to Bangladesh and Myanmar and international

traders are taking positions for more deals after Islamabad lifted a

ban on overseas sales last month.

“Pakistani wheat is now competitive, they are actively selling cargoes

for the last one week or 10 days,” said one trader with an

international trading company in Singapore.

“Traders are taking positions in the domestic market to corner more

supplies for exports.”

The benchmark US wheat and corn climbed nearly 50 per cent in

2010 on tightening supplies of grains and recent price surge have

stoked worries over food inflation, already in double digits in Asia’s

top consumers China and India.

On Thursday, Chicago corn rose 1 per cent to its highest in 2-1/2

years, while soybeans were steady after 4 per cent gains in the

previous session, buoyed by a surprisingly steep reduction in global

supply of grains and oilseeds forecast by the US government. Wheat

has risen nearly 2 per cent in as many trading sessions.

Uncomfortable stocks, rising prices

US stockpiles of corn and soybeans will be drawn down to

uncomfortably thin levels this year, according to a government report

on Wednesday that sent grain prices soaring and added to concerns

over surging world food prices.

But Pakistan decided to allow the private sector to export wheat last

month, lifting a three-year ban after a bumper crop led to a market

Page 17: Research Data

surplus.

Pakistan in August deferred earlier plans to export 2 million tonnes of

surplus wheat after summer floods washed away at least 725,000

tonnes of the grain.

Traders have said that despite damages from summer floods, Pakistan

still has a surplus for export after a bumper crop of 23.86 million

tonnes in 2009/10 added to a carryover of 4.2 million tonnes from the

previous crop.

A Karachi-based trader said Pakistan has booked orders for about

500,000 tonnes of wheat and shipments had already started.

“Our traders have made deals for about 500,000 tonnes for January-

March shipment, and we expect more orders,” Javed Thara said.

“Most of our wheat went to Bangladesh.”

He said Pakistan could export more than 2 million tonnes of wheat in

the coming months.

Another Singapore dealer confirming the news, said deals for

Pakistani wheat were signed around $350-$370 a tonne, including

cost and freight. “It is 11.0 to 11.5 per cent protein content, perfect

for Bangladesh and Myanmar markets,” he said.

The sowing for the next crop in Pakistan has almost completed and

harvesting will begin in April. The government has set an output

target of 24 million tonnes for the 2010//11 crop.

JANUARY 27, 2011 10:43 PM

Page 18: Research Data

Riaz Haq said...

There seems to be consensus developing among Pakistani economists

that "prompt measures needed to control rising inflation", according

to a report in Daily Times: 

LAHORE: Pakistan is fast heading towards higher inflation and to

overcome this grim scenario; improvement in governance coupled

with a drastic cut in expenditure and revenue generation is crucial. 

The doom and gloom scenario needs an urgent handling. Good

governance, good policies, good institutions, good macroeconomic

management are the drivers of economic growth that have gone

dormant for quite some time. This was the crux of the speeches

delivered at Economic Dialogue 2011 held at Lahore Chamber of

Commerce and Industry on Tuesday. Senior economist Dr Akmal

Hussain said the country is facing its gravest economic crisis in

history after 1971. He said the economy is in deep recession, poverty

along with high inflation is a recipe for disaster.

Unfortunately, he added, the government has zero fiscal space. He

warned that Pakistan was heading towards higher inflation if

immediate improvement in governance is not accompanied with cut in

expenditure and substantial increase in revenue. 

The former WB Executive Abid Hassan said that the institutional

decay has now started taking its toll and the government should take

appropriate measures on emergent basis to stop this decay. He said

that with every passing day the country is going deeper and deeper

into the economic mire. “Today we have reached a situation where

even an economic stimulus would not work. The government should

concentrate on tax collection and controlling unnecessary

expenditures. Unless and until these two measures are not taken, the

economy would not be able to be back on rails,” he said. The PIDE

Page 19: Research Data

Vice Chancellor Dr Rashid Amjad said that the present day doom and

gloom scenario could be changed by overcoming the acute energy

shortage being witnessed by the country. The issue of circular debt

needs to be taken care of by those sitting at the helm of affairs. “PSDP

has a multiplier effect on the employment and economy. It should not

be cut,” he said.

Former chief Economist Planning Commission Dr Pervaiz Tahir

blamed the political chaos for our economic woes and termed the

dictatorship democracy cycle as mother of all ills. 

Energy sector expert Munawar Baseer, ex Executive committee

member Almas Hyder and LCCI President Shahzad Ali Malik while

appreciating the input provided by the economists said that most of

the issues and challenges faced by the country are more of political.

The political leadership while realizing the sensitivity of the situation

should come up with a solid solution with close coordination with the

chambers. “The policies are being made in isolation without the

consultation of real stakeholders and that’s why the economic

situation today has become more complex and directionless,” he said.

The speakers said that the business community should be involved for

the sake of correct decision-making.

They urged the government to evolve a more realistic and pragmatic

framework by putting an end to inter-provincial disparity and the

disparities within the province. The government should re-do its

priority list and concentrate on the few areas that come on the top of

that priority list. 

It is very unfortunate, the speakers said, that the country has become

the most inhospitable for both the local and the foreign investors for

security reasons.

Page 20: Research Data

“Our inability to reach a consensus on water issue and inability to tap

hydrocarbon potential of Balochistan has virtually pushed us to the

wall,” they said. staff report

FEBRUARY 4, 2011 6:42 PM

Riaz Haq said...

Thousands of Indian illegal immigrants are slipping into Texas from

Mexico, according to LA Times:

Reporting from Harlingen, Texas — Thousands of immigrants from

India have crossed into the United States illegally at the southern tip

of Texas in the last year, part of a mysterious and rapidly growing

human-smuggling pipeline that is backing up court dockets, filling

detention centers and triggering investigations.

The immigrants, mostly young men from poor villages, say they are

fleeing religious and political persecution. More than 1,600 Indians

have been caught since the influx began here early last year, while an

undetermined number, perhaps thousands, are believed to have

sneaked through undetected, according to U.S. border authorities.

Hundreds have been released on their own recognizance or after

posting bond. They catch buses or go to local Indian-run motels before

flying north for the final leg of their months-long journeys.

"It was long … dangerous, very dangerous," said one young man

wearing a turban outside the bus station in the Rio Grande Valley

town of Harlingen.

The Indian migration in some ways mirrors the journeys of previous

waves of immigrants from far-flung places, such as China and Brazil,

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who have illegally crossed the U.S. border here. But the suddenness

and still-undetermined cause of the Indian migration baffles many

border authorities and judges.

The trend has caught the attention of anti-terrorism officials because

of the pipeline's efficiency in delivering to America's doorstep large

numbers of people from a troubled region. Authorities interview the

immigrants, most of whom arrive with no documents, to ensure that

people from neighboring Pakistan or Middle Eastern countries are not

slipping through.

There is no evidence that terrorists are using the smuggling pipeline,

FBI and Department of Homeland Security officials said.

The influx shows signs of accelerating: About 650 Indians were

arrested in southern Texas in the last three months of 2010 alone.

Indians are now the largest group of immigrants other than Latin

Americans being caught at the Southwest border.

FEBRUARY 6, 2011 7:48 PM

Riaz Haq said...

Here's an interesting assessment of Pakistan's economy in 2H-2010:

...“The country’s exports, money sent by overseas Pakistanis, balance-

of-payments position and foreign exchange reserves have reflected an

encouraging growth during July-December FY11, showing strong

signs of improvement in the economy,” Saad-bin-Naseer, CEO of Pearl

Capital, told Central Asia Online January 28. Pakistan’s exports were

$10.97 billion, an increase of US $1.88 billion, in the first six months

of FY11.

Page 22: Research Data

That 21% increase was a very positive sign for the growth of export-

oriented industry and the national economy, he said.

In FY11 exports could cross the $22 billion mark for the first time

because of a significant increase in the value of Pakistani products on

world markets, Naseer added.

“The textile industry had taken the lead by fetching $1.28 billion in

additional foreign exchange through exports,” Anisul Haq, secretary

of All Pakistan Textile Mills, told Central Asia Online.“The textile

industry had taken the lead by fetching $1.28 billion in additional

foreign exchange through exports,” Anisul Haq, secretary of All

Pakistan Textile Mills, told Central Asia Online by telephone from

Lahore. “From July-December FY11 textile exports increased to $6.28

billion” compared to 2010 figures.

Total annual textile exports could exceed $13 billion for the first time,

he added. In 2009-10, they totalled $10.5 billion.

“The textile industry had taken the lead by fetching $1.28 billion in

additional foreign exchange through exports,” Anisul Haq, secretary

of All Pakistan Textile Mills, told Central Asia Online.

---------

Another pillar of the economy is remittances from overseas Pakistanis.

The money they sent home increased by $780m in the first half of

FY11, to $5.3 billion, Haq said.

“We hope the country would receive $11 billion from overseas

Pakistanis in 2010-11 with major increase in inflows from Pakistanis

staying in Arab countries and other western countries,” Haq said.

Foreign aid from institutions and countries, not just individuals,

helped. The disbursement of $633m in coalition support and the

extension that the IMF gave the government for imposing the

Page 23: Research Data

Reformed General Sales Tax (RGST) helped improve some of the

major economic indicators, Naseer said.

The picture did much to bolster Pakistan’s balance sheet, which has

had its ups and downs. Pakistan recorded a current account surplus in

the first six months of the fiscal year, which enabled growth in foreign

exchange reserves and stabilised the dollar-rupee exchange rate,

Pearl Capital’s Naseer added.

In 2009-10, the country incurred a $2.5 billion current account deficit

from July-December, but for the same period in 2010-11 it enjoyed a

surplus of $26m – a dazzling switch from red ink to black, he said.

The robust performance of exports and remittances enabled Pakistan

to accrue a record $17.3 billion in foreign exchange reserves by

January 21, he said.

Investor confidence has grown in response to these positive

indicators. The stock market capitalisation grew to $36 billion in

January 2011 from $32 billion in October 2010, he said, adding that

such growth would encourage foreign and local investment.

-----

warned.

Islamabad, which still hasn’t imposed the RGST the IMF wants,

doesn’t collect enough taxes, Khan said. It levies only about 9% of

GDP against the required international standard of a minimum 15%

tax-to-GDP ratio, Khan said.

The government must implement tax reform, reduce reliance on

borrowing from the IMF and generate its own resources to enhance

tax revenues and to bolster economic growth, he added.

Page 24: Research Data

Serious efforts to solve chronic gas and power shortages are also

imperative, he said.

FEBRUARY 11, 2011 5:34 PM

Riaz Haq said...

With rising cotton and yarn prices, Pakistan has the potential to

export $50 billion in textiles, according to a report in Gulf Today:

KARACHI: Pakistan has a potential of at least $50 billion in value-

added textile exports if human resource in this sector is fully

developed, said Textile Commissioner Muhammad Idrees.

Addressing the closing ceremony of 9th round of apparel

manufacturing and management training programme at the

Readymade Garments Technical Training Institute, the official said

that the present volume of exports was not at all satisfactory.

The stakeholders could easily double this volume by improving skills

of workers and through compliance with the standards of buyers, he

added.

The skills development programme comprised one-month training,

which covered cutting, sewing, production management, industrial

engineering and quality control. Experts and consultants from

Technopak, a world renowned consultancy firm, were hired for the

training.

Thirty-one master trainers or middle management professionals from

Artistic Milliners, Naz Textiles, Rajby Industries and Selimpex

International and Soorty Enterprises attended the ninth round of

training project.

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The training project has so far been successfully implemented in 30

factories in Sindh and has trained 279 master trainers/middle

management professionals and 3,693 workers.

The project delivered complete training system, course curriculum,

manuals and consulting guidelines to the factories. Training manuals

are also translated into Urdu language to transfer appropriate

knowledge and skills to workers.

Pakistan’s textile sector is optimistic about meeting the annual export

target, as high cotton prices in domestic and international markets

have caused an increase in prices of value-added textile products,

industry people say.

The government had fixed the textile export target at $14 billion for

the current fiscal year. Members of the textile sector are of the view

that achieving the target is possible, as exports of highly value-added

items such as knitwear and garments have increased in terms of

value.

Statistics released by the Federal Bureau of Statistics (FBS) show the

textile sector has performed well in the first half (July to December) of

the current fiscal year, as its exports increased by 25.79 per cent as

compared to the corresponding period of the previous year.

The industry, however, believes they would need to import up to five

million bales of cotton because the 11 million bales produced so far in

the country will not meet the requirements as some of the crop has

been destroyed by flood.

The industrialists also expressed reservations about gas shortage in

the country that has already caused a huge loss to the industry,

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particularly in Punjab. All Pakistan Textile Processing Mills

Association Chairman Maqsood Ahmad Butt stressed that cotton

prices reached Rs13,000 per maund (37.324 kg) and the sector may

face a shortage of cotton in June if India did not lift the ban on

exports.

“There is a possibility that exports will cross $14 billion target if

cotton shortages are met and gas supply is restored,” he opined.

FEBRUARY 14, 2011 10:28 PM

Riaz Haq said...

Rising crop prices in the US are helping economic recovery in the

farm belt and lifting the value of farmland in the Midwest, according

to the Wall Street Journal:

Farmland values in much of the Midwest are climbing at their fastest

rates since the 2008 boom, the Federal Reserve Bank of Kansas City

said Tuesday.

Fueled by rising crop prices, the value of irrigated and nonirrigated

cropland across the region known as the 10th District jumped 14.8%

and 12.9%, respectively, in the fourth quarter, compared with a year

earlier.

The bank's quarterly survey of the region, which covers western

Missouri, Nebraska, Kansas, Oklahoma, Wyoming, Colorado and

northern New Mexico, found that farmland prices rose for the fifth

consecutive quarter since a drop in the third quarter of 2009, when

the livestock sector was contracting amid the recession.

The Federal Reserve's regional banks closely track farm real-estate

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prices because they are a key indicator of the health of U.S. farming,

which uses about half of the nation's land. Land is farming's largest

asset and source of collateral, which means any increase in value lifts

farmers' borrowing power.

The Federal Reserve Banks in Chicago and Minneapolis have yet to

issue their quarterly surveys, but their reports are also expected to

show that the farm belt is continuing to rebound from the recession

more quickly than the general economy, which has been hobbled by

high unemployment rates and weak home values.

Farmland prices in the 10th District are generating their biggest

gains since the third quarter of 2008, when prices of irrigated

farmland jumped 23.4% and prices of nonirrigated farmland rose

21.2%.

Still, it's not clear how long farmland prices can continue to climb so

sharply. The Federal Deposit Insurance Corp. has already said it's

watching for whether an asset bubble is building. One red flag in

Tuesday's report is that cash rental rates for cropland across the 10th

District rose only about 6% in the fourth quarter, far too little to

justify such a big increase in land prices.

As a result, some farm bankers across the region are beginning to

tighten their standards on real estate loans.

"Bankers in the survey were starting to raise questions about the

sustainability of farmland values" and "paying closer attention to their

loan-to-value ratios," said Brian Briggeman, an economist at the

Omaha branch of the Kansas City Fed.

Farmland prices are heavily influenced by crop prices, which were

climbing until the financial crisis and recession popped the

Page 28: Research Data

commodity-price bubble in late 2008. Led by wheat, U.S. crop prices

resumed their upward climb in June 2010 amid harvest problems in

places such as Russia, and then the U.S. corn belt, as demand was

recovering in the world's emerging economies.

The prices of corn and wheat grown in the Midwest are about double

what they were a year ago, while cotton prices are up 155%. Soybean

prices have climbed 50%. Those high commodity prices are giving

farmers more money to spend on land, as well as attracting the

interest of outside investors looking for an inflation hedge at a time

when the cost of borrowing money for buying real estate is low.

The U.S. Agriculture Department said Monday that it expects net farm

income, a widely followed barometer of the U.S. agriculture sector's

profitability, to climb 19.8% this year to $94.7 billion, which would be

the second-highest inflation-adjusted figure for net farm income in 35

years.

FEBRUARY 16, 2011 9:24 AM

Riaz Haq said...

Here's a report in The News on how Pakistan's Engro company sees

the economy: 

KARACHI: Engro Corporation remains unsure about Pakistan’s

economic trajectory as the country battles militants and tries to

contain a growing fiscal deficit, a top company official said on

Tuesday. 

“Nobody knows what will happen in the coming months,” said Ruhail

Mohammad, Engro’s Chief Financial Officer. “I have my numbers

worked out. I know where sales and profit will be. But things are

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changing so fast that being sure remains almost impossible.” 

Political and economic events of the past six months that saw the

government retreating on key reforms such as raising taxes and

cutting borrowing from the central bank have left businesses without

a firm outlook, he said. 

Although Engro posted a 79 percent rise in yearly profit to Rs6.8

billion in 2010, it continues to face problems, he said. “The policy of

gas curtailment to fertiliser-makers is unjustified. The government has

given us a commitment for uninterrupted supply, especially for the

new plant.” 

Expansion of Engro’s flagship fertiliser plant completed last year. The

corporation can now produce 2.3 million tons of urea annually. 

Mohammad, who was briefing journalists a day after the

announcement of corporation’s financial results, said that Engro has

no problem with increase in the price of gas that is used for making

fertilisers. “The government must increase the price of fertiliser. We

have been saying it for the last two years,” he said. “The agricultural

products such as cotton, rice and wheat have seen a substantial

increase in price. Farmers have the capacity to absorb rise in cost of

urea.” 

He, however, said that contractual obligations must not be breached

once it comes to the additional capacity of 1.3 million tons, which the

corporation has recently added. “For this project, we were offered gas

at concessional rates for making the investment.” 

The price of feedstock gas, which is used for making fertiliser, is

subsidised by the government through a controversial method of

making textile and other industries pay a higher price for the fuel.

Page 30: Research Data

This has been a bone of contention for years. 

“The government will be giving Rs37 billion in subsidy on urea in

2011,” he said. “There is no justification for this at all.” 

On the other hand, curtailment of gas, which is basically a raw

material for fertiliser, brings down production and leaves the

manufacturers with no option but to raise prices to make up for the

lost sales, he said. 

He said the corporation plans to list Engro Foods, Engro Energy and

Fertilisers at the stock exchange this year. 

Mohammad said that work on Engro Energy’s venture into mining of

coal at Tharparkar, Sindh, for power generation continues. “China is

showing a lot of interest in the project. Financing won’t be an issue.”

The corporation will need between $300 million and $350 million for

the Thar project by the end of 2012, he said. 

“We have been cited as a heavily indebted group but if you look at the

books closely we generate Rs35 cash for every Rs100 of debt. I think

that gives us a lot of room to easily pay off the loans.”

FEBRUARY 16, 2011 12:19 PM

Riaz Haq said...

Pakistan govt has distributed Rs 28.6 billion among flood victims,

according to Daily Times:

ISLAMABAD: Government of Pakistan has distributed Rs 28.6 billion

among 1.483 million flood-affected families through NADRA’s Watan

Page 31: Research Data

Card — each card has Rs 20000 cash assistance.

Deputy Chairman NADRA, Tariq Malik stated this while briefing the

UN delegation headed by Margareta Wahlstrom, Special

representative of the Secretary General for Disaster Risk Reduction

who visited NADRA Headquarters today for briefing on Flood Relief

System.

Tariq Malik while elaborating the overall progress said that in Punjab,

608,824 flood-hit families received Rs 11.96 billion while in Sindh

558,997 families received Rs 10.11 billion. In Baluchistan

Rs 1.85 billion have been distributed among 102,945 families and Rs

3.8 billion were disbursed among 199,414 families in the province of

Khyber Pakhtunkhwa. He said in AJK and Gilgit Baltistan

Rs 188,450,000 distributed among 10,173 families and Rs 61,626,000

given to 3,263 families respectively.

He said the selection of beneficiaries is one of the most contentious

aspects of any post disaster cash transfer programs in various

countries. “NADRA walked extra miles as our aim was to protect the

most vulnerable among the flood victims like women household,

widows, special persons and minorities,” he told.

He told 120,081 Watan Cards were given to the households headed by

women folks in the remotest areas of Pakistan — and 11,746 Watan

Cards were given to minorities notified by the provinces.

Emphasising on Grievances Redressal System, Tariq Malik explained

that 3.2 million people visited Watan Card centers, 335,044

complaints were received and NADRA has verified that 167,063 were

eligible of Watan Cards of which around 155,000 have been given

Page 32: Research Data

Watan Cards.

Fifty percent (50%) of the complaints were not genuine as these

included people who already had received Watan Cards or their family

member had received Watan Card. “We are not closing complaints

redressal system, and would like to entertain all complaints on case to

case basis,” he added.

He urged the media, international donor agencies and NGOs to focus

on facts and real data, not on anecdotes or stereotypes or politically

motivated press reports aiming generalisation based on isolated

incidents.

Neva Khan, Country Director Oxfam, Madhavi Malagoda

ARIYABANDU, Regional Programme Officer, UN International

Strategy for Disaster Reduction were among the members of

delegation.

FEBRUARY 22, 2011 5:47 PM

Riaz Haq said...

Here's a piece on "strategic philanthropy" in Pakistan as presented at

Asian Philanthropy Conference:

Zubair Bhatti’s conference paper for the APPC Hanoi Conference

shows many optimistic signs for the future of strategic philanthropy in

Pakistan. Of the estimated six million Pakistanis living outside

Pakistan, around 3.9 million sent home a total of US$5.5 billion from

2006 to 2007—through formal banking channels. The Ministry of

Labor and Overseas Pakistanis even placed the estimated remittances

at some US$8 billion—contributed by around 7 million persons “of

Pakistani origin.”

Page 33: Research Data

And this isn’t even the good news yet. Even more positive is the

observation that these remittances, and the philanthropic purposes

for which they are sometimes allocated, are beginning to be “aimed at

long-term social change,” showing the relative maturity of overseas

Pakistanis when it comes to strategic giving. According to Bhatti:

“Strategic giving is not a new phenomenon in Pakistan. Among the

Muslims of the subcontinent, a proud tradition of philanthropy as an

instrument of social change has long co-existed with the dominant

impulse of helping the poor.” At present, more signs are pointing

towards the giving public’s preference for institutional, if not

strategic, methods and channels for giving. These include the

following:

• The rising number of NGOs, as well as the increasing visibility of

their work and their fund-raising activities;

• The proliferation of major advertisements on billboards,

newspapers, and TV screens showing charitable organisations and

their campaigns;

• The increasing willingness of donors to allocate their donations,

including Zakat, to organisations “rather than to the poor in the family

or immediate locality according to the traditional interpretation of

Zakat;”

• The growing interest in corporate social responsibility among

wealthy businessmen;

• American Pakistanis’ utilisation of personal foundations and funding

organisations in allocating and disbursing large sums of money

toward charitable causes; and

• The large percentage of funds being raised by local Pakistani NGOs

from the diaspora community.

Bhatti cites several “drivers of change” in this shift toward a more

strategic philanthropic perspective in Pakistan. First is the

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observation that overseas Pakistanis “are more educated, more

aware, more affluent... than Pakistanis back home... [They] have seen

the role of strategic philanthropy in [more advanced] societies.”

Next is the aging population of first-generation Pakistani emigrants

and their propensity to be involved in charitable activities given their

affluence, their prominence, and the amount of free time they have on

their hands. Related to this is the rise in status of medical

professionals who left Pakistan in the 1970s to study in medical

colleges, and who now find themselves in a position “where they can

use their financial resources and contacts to mobilize funds for their

alma mater and other related social causes.”

As the population of Pakistani professionals in other countries

matures and reaches out, so does the maturity and reach of its

professional associations. Bhatti shares that, in the United States, the

Association of Physicians of Pakistani Descent in North America

(APNAA)—a 10,000-strong organisation—supports strategic

philanthropy through health and education initiatives in rural areas.

Also in the Unites States, “the growing size of remittances...

represents greater opportunities for organized fund-raising.”

FEBRUARY 24, 2011 10:03 AM

Riaz Haq said...

News about 2010-2011 budgets in South Asia:

The BBC is reporting that "the budget deficit has reduced to 5.1% of

GDP this fiscal year, down from more than 6%. The plan is to cut this

to 4.6% next year".

Pakistan's budget deficit for first six months of 2010-2011 stood at

Page 35: Research Data

2.9%, up from 2.7% last year, according to CNBCand Reuters.

KARACHI, Feb 28 (Reuters) - Pakistan's budget deficit for the first six

months of the 2010/11 fiscal year (July-June) was 2.9 percent of gross

domestic product, the Finance Ministry said on its Web site

(www.finance.gov.pk) on Monday. This compared with a deficit of 2.7

percent in the same period last year. In the October-December

quarter, the deficit eased to 1.3 percent from 1.6 percent in the

preceding quarter. Analysts said the lower second-quarter deficit was

largely due to payments by the United States for logistical support

provided by Pakistan in the war against Islamist militants. In

November 2010, Pakistan agreed with the International Monetary

Fund (IMF) that it would keep the country's budget deficit at 4.7

percent for the 2010/11 fiscal year. However, analysts agree Pakistan

will likely overshoot this figure. Some forecast the deficit to be around

8 percent, higher than the central bank's prediction of between 6.0

and 6.5 percent, if fiscal reforms are not implemented. The original

target of 4 percent was revised following the devastating summer

floods, which caused around $10 billion in damages.

FEBRUARY 28, 2011 9:15 AM

Riaz Haq said...

World Food Program Pakistan director says food prices too high in

Pakistan, according to AFP:

GENEVA — Pakistan's government has pushed food prices too high

for an impoverished population, as malnutrition levels rise despite the

recovery of crops after devastating floods, a UN food relief official

said Wednesday.

Wolfgang Herbinger, director for the World Food Programme (WFP)

Page 36: Research Data

in Pakistan, said food crops especially wheat in the southern flood-hit

plains were recovering fast with the prospect of decent crops over the

coming weeks.

"The crop outlook is not bad but the food security situation remains

difficult because prices remain so high," he told journalists one the

sidelines of humanitarian meetings in Geneva.

"The government is the biggest buyer of wheat in Pakistan they are

setting the farm gate price and they dominate market," Herbinger

explained.

"That's why the wheat price in Pakistan didn't adjust when, for

example, in 2009 and early 2010 the wheat price had gone back a lot,

it stayed high to the detriment of local consumers."

Now ordinary consumers pay double the price for wheat compared to

three years ago and the food security situation has "changed

dramatically," the WFP official added.

Malnutrition levels in the southern province of Sindh have reached 21

to 23 percent, according to the agency.

"That is well above African standards. The emergency standard is 15

percent," the WFP official said.

A recent survey found that in some flood-hit areas 70 percent of

people were taking out loans and even using them to pay for food.

Herbinger admitted that the WFP was "struggling a bit" to bring the

message across to authorities.

"You may have the country full with food but people are too poor to

Page 37: Research Data

buy it," he explained.

"We are working a lot with the Ministry of Agriculture to explain to

the minister that it is not enough to have enough production in the

country if people can't afford it."

"Maybe for political reasons he doesn't always understand it, that it's

one thing to be nice to the farmers but if your consumers can't afford

it then... there's something wrong with agricultural policy," Herbinger

added.

Massive floods caused by monsoon rains in July and August 2010

killed thousands, destroyed 1.7 million homes and damaged 5.4

million acres of arable land, experts have said.

MARCH 23, 2011 10:11 PM

Riaz Haq said...

Here's Pakistan PPP govt's defense of high wheat prices in Pakistan,

as reported by the BBC:

Lowering wheat prices would create food shortages in Pakistan and

encourage smuggling, officials say, responding to criticism from the

UN.

On Wednesday the UN's food relief agency said the government set

prices too high and malnutrition was rising.

But an official at Pakistan's food ministry told the BBC farmers would

simply switch to more lucrative crops if wheat prices went down.

Devastating floods across Pakistan in 2010 damaged acres of arable

Page 38: Research Data

land.

Although crop yields in 2011 are projected to be healthy, prices are

too high for an impoverished population, the director of the UN's

World Food Programme told journalists on the sidelines of

humanitarian meetings in Geneva on Wednesday.

"The crop outlook is not bad but the food security situation remains

difficult because prices remain so high," Wolfgang Herbinger said.

Smuggling risk

Malnutrition levels in the southern province of Sindh had reached

21% to 23%, according to the WFP.

Continue reading the main story

“Start Quote

It is nearly impossible to stop smuggling across the Afghan border,

which is extremely porous”

End Quote Food and Agriculture ministry spokesman

"That is well above African standards. The emergency standard is

15%," Mr Herbinger said.

But lowering prices would do little to help the situation, an official at

the food and agriculture ministry, who wished to remain unnamed,

said.

He also warned that much of the crop would end up in the hands of

smugglers.

"Low farm-gate prices lead to lower acreage of wheat crop as farmers

switch to other crops and it works as an incentive for smugglers

Page 39: Research Data

seeking international prices in the neighbourhood.

"It is nearly impossible to stop smuggling across the Afghan border,

which is extremely porous," he said.

So if prices are lowered, the official said, the risk is that they would

eventually rise to even higher than the level they are currently set at.

In the 1990s and between 2007 and 2009 there were severe wheat

shortages across Pakistan, leading to extremely high prices.

Pakistani officials also say that malnutrition in Sindh province is not a

new phenomenon and is unrelated to the food supply.

"Government statistics show that food consumption has not gone

down despite the doubling of food prices since 2007-08," Kaisar

Bengali, advisor to Sindh's chief minister said.

A lack of public hygiene facilities and safe drinking water were more

important factors in child nutrition, he said.

"These are neglected areas, and there has been hardly any

development in the public health sector here in decades," Mr Bengali

said.

MARCH 24, 2011 9:23 AM

Riaz Haq said...

Flood Emergency Cash Transfer Project, designed to support the

Government of Pakistan’s Citizen’s Damage Compensation Program

(CDCP) in providing cash transfers to more than 1 million flood-

affected households, according to pkeconomist.com: 

Page 40: Research Data

The project will also strengthen the management of the CDPC through

effective grievance redressal mechanisms and establishing control

and accountability measures to ensure efficient and transparent

delivery of the support.

“The 2010 floods were a disaster of historic proportions that affected

over 20 million people and created a massive recovery need,” said

Rachid Benmessaoud, World Bank Country Director for Pakistan.

“Households faced with income shocks often adopt coping strategies

that are not beneficial over time, including reducing assets and

consumption, increasing borrowing, and taking children out of school

to work. Therefore, cash assistance to flood-affected households is

essential to mitigate the adverse effects of income shocks besides

addressing the issue of poverty and vulnerability. Importantly, the

project will also assist in developing necessary capacities and systems

to effectively handle the similar disasters in the future.”

Launched in September 2010, the CDCP provided around 1.4 million

families with cash grants of PRs. 20,000 (approximately US$230) to

cover their immediate needs. The next phase, supported by this

project, will provide an additional payment of PRs. 40,000

(approximately US$460) to around 1.1 million most affected

households, thereby reaching between 7.5 and 8.3 million people to

rebuild their lives. To meet the total financing requirements for the

CDCP, the World Bank has worked closely with other development

partners, some of which (USAID and Italy) have already committed

funds.

“International evidence suggests that cash grants allow the recipients

the flexibility of choosing where to put their resources based on their

specific conditions and priorities.” said Iftikhar Malik, Co-Project

Team Leader. “Beneficiaries are expected to use these additional

Page 41: Research Data

grants to not only cover basic consumption but to also recapitalize

assets as well as recover their livelihoods.”

The World Bank is well placed to support the Government of Pakistan

in extending and strengthening the CDCP due to its substantial

international and regional experience in protecting the affected and

vulnerable through post-disaster cash transfer programs. In addition

to this operation, the Bank has assisted the Government in its flood

response through financing the Post-Disaster Needs Assessment and

making available US$300 million for fast-disbursing financing of

critical flood-related imports and US$20 million for highway

reconstruction.

The credit is from the International Development Association (IDA),

the World Bank’s concessionary lending arm. US$81 million of the

credit carries a 0.75% service charge, 10 years of grace period and a

maturity of 35 years. The remaining US$44 million has the same

terms plus a fixed interest charge of 3.2%.

APRIL 1, 2011 9:37 AM

Riaz Haq said...

Here are some excepts from an Op Ed by Pak industrialist Yousuf

Shirazi of Atlas Group:

---

Pakistan’s mineral resources – oil, gas and copper, much less gold –

remain unexploited. Whatever the case, Pakistan is basically an

agricultural economy. Before Partition, the area now comprising

Pakistan had fed the entire India. Even now when the floods have

affected the crops, Pakistan is exporting rice and wheat. And the

Page 42: Research Data

cotton prices are so high that, together with wheat and rice prices –

reinforced by global revival – it has fed the entire rural area, with

unusual liquidity, so as to give a fillip to consumer demand seldom

seen before!

Pakistan’s major exports consist of textile, rice, leather goods, sports

goods, chemicals and carpets. More than 50 per cent of its export

earnings still come from textiles – now yarn being in the forefront.

Only if Pakistan focuses on agriculture in the right way can it replace

the import with export economy. The current year is expected to

record export of over $25 billion but, on the other hand, imports are

also expected to exceed exports – $35 billion at the close of the year.

The deficit finance – July-December FY10, $6.895 billion – is not any

pride whatsoever. The existing situation can be remedied through

exploration of mines and optimising agricultural growth and export

---------

In a situation like this, perhaps, the only course remains increased

reliance on aid, loans and credit, which, in essence, has been

worsening the economy. These loans and credits, in fact, help the

economies of the developed world more than the economies of the

developing countries. This is achieved through massive import – of

machinery, raw materials, if not food – the PL480 of the USA –

depriving the recipient countries of local investment, production and

export. This has been leading to unemployment and poverty from

which the developing countries traditionally suffer. The solution for

the developing countries lies in reliance on education, healthcare and

socio-economic infrastructure – more so in Pakistan.

---------

Socio-politico-economic harmony will depend, among others, on

development finance through development finance institutions like

PICIC and IDBP that provided long-term development finance. Now

there is none. The commercial banks are doing it, but not adequately

enough. It is not the job of commercial banks either. However, they

Page 43: Research Data

are not only providing development finance of whatever worth, but all

sorts of non-commercial banking – investment banking, leasing, to say

nothing of asset management, and mutual funds. Jack of all trades,

master of none. It is all at the cost of commercial banking, per se. The

regulators may take note of it. The sooner this anomaly is rectified the

better for the export orientation of the economy, and for the socio-

politico-economic development of the country as a whole.

An immediately available solution is facilitating remittances, now

roughly $1 billion per month and taxing the 57 per cent underground

economy, under-invoicing and tax evasion, if not smuggling. The

World Bank’s recent report claims this deprives the exchequer of over

$500 billion annually. This will be equal to, if not, more than the aid,

loans and credits which are always given at a high cost to the

economy. Taxing the underground economy will reinforce localisation

of investment, production and exports – glocalisation, creating

employment opportunities, providing the roti, kapra aur makaan

(bread, clothing and shelter) promised to the masses of people, not

globalisation, which serves global interests. It will enable also much

sought after access to the developed world based on outright merit.

APRIL 2, 2011 5:45 PM

Riaz Haq said...

Here's a NY Times report on Texas farmers planting more profitable

cotton in stead of food crops:

“There’s a lot more money to be made in cotton right now,” said

Ramon Vela, a farmer here in the Texas Panhandle, as he stood in a

field where he grew wheat last year, its stubble now plowed under to

make way for cotton. Around the first week of May, Mr. Vela, 37, will

plant 1,100 acres of cotton, up from 210 acres a year ago. “The prices

Page 44: Research Data

are the big thing,” he said. “That’s the driving force.”

----------

“It’s good for the farmer, but from a humanitarian perspective it’s

kind of scary,” said Webb Wallace, executive director of the Cotton

and Grain Producers of the Lower Rio Grande Valley. “Those people in

poor countries that have a hard time affording food, they’re going to

be even less able to afford it now.”

Myriad factors determine food prices. Ethanol demand has pushed up

corn prices. Wheat prices rose last year when Russia banned exports

after drought devastated its crop.

Farmers typically respond by increasing plantings of the most

profitable crop. In the middle of the last decade, as food prices began

to rise, cotton prices remained low, prompting farmers to switch from

cotton to grains and other food crops. When corn prices jumped with

ethanol demand in 2007, farmers grew much more corn.

This year, cotton prices are the highest they have been in years,

luring farmers despite strong prices for other crops.

The United States Department of Agriculture predicted last month

that southern farmers this spring would plant 12.8 million acres of

upland cotton, the type that accounts for the vast majority of the crop.

That is a 19 percent increase from last year, when farmers grew 10.8

million acres. It also predicted that the acreage for corn and wheat

would grow, although the increases would be lower than they might

have been without the competition from cotton. On Thursday, the

department will release an updated forecast, based on a survey of

farmers.

The effect of the cotton shift is expected to be magnified

internationally, as farmers in other major cotton-producing countries,

Page 45: Research Data

like Brazil, also respond to the high prices.

Cotton futures prices reached nearly $2.20 a pound this month on the

ICE futures exchange in New York, up from $0.73 a pound last July.

The price is expected to fall by harvest time, but farmers said they

hoped to get close to $1 a pound.

In the United States, the economics of growing cotton vary according

to many factors, including regional differences and whether or not the

land is irrigated. Farmers in several southern states said that at a

cotton price of about $1 a pound, their profit could be roughly $200 to

$500 more per acre than they could earn growing corn or wheat. For

1,000 acres planted in cotton, that means an additional $200,000 to

$500,000 profit.

-----

Mr. Patterson expects to plant 1,500 acres of cotton this year, up from

600 last year. He said the frenzy was so intense that even cattle

ranchers were talking about growing cotton.

Farmers say they have no choice but to plant the crops that give them

the best chance of making money. They face many uncertainties, and

their profits can be wiped out by bad weather, rising costs for items

like fertilizer, fuel or seed, or unstable crop prices, which can

plummet as rapidly as they rise.

The National Cotton Council expects substantial increases in all

cotton-growing states, including large jumps in North Carolina,

Mississippi and Tennessee. But Texas is the nation’s biggest cotton

producer, and will have by far the biggest increase in acreage.

APRIL 2, 2011 6:01 PM

Page 46: Research Data

Riaz Haq said...

Someone has to stop the Federal Reserve before it crushes what

remains of America’s Main Street economy, argues former budget

director David Stockman in a piece forMarketwatch.com:

n the last few weeks alone, it launched two more financial sector

pumping operations which will harm the real economy, even as these

actions juice Wall Street’s speculative humors. 

First, joining the central banking cartels’ market rigging operation in

support of the yen, the Fed helped bail-out carry traders from a

savage short-covering squeeze. Then, green lighting the big banks for

another go-round of the dividend and share-buyback scam, it

handsomely rewarded options traders who had been front-running

this announcement for weeks.

Indeed, this sort of action is so blatant that the Fed might as well just

look for a financial vein in the vicinity of 200 West St., and proceed

straight-away to mainline the trading desks located there.

In any event, the yen intervention certainly had nothing to do with the

evident distress of the Japanese people. What happened is that one of

the potent engines of the global carry-trade — the massive use of the

yen as a zero cost funding currency — backfired violently in response

to the unexpected disasters in Japan.

Accordingly, this should have been a moment of condign punishment

— wiping out years of speculative gains in heavily leveraged

commodity and emerging market currency and equity wagers, and

putting two-way risk back into the markets for so-called risk assets.

Page 47: Research Data

Instead, once again, speculators were reassured that in the global

financial casino operated by the world’s central bankers, the house is

always there for them—this time with an exchange rate cap on what

would otherwise have been a catastrophic surge in their yen funding

costs.

Is it any wonder, then, that the global economy is being pummeled by

one speculative tsunami after the next? Ever since the latest surge

was trigged last summer by the Jackson Hole smoke signals about

QE2, the violence of the price action in the risk asset flavor of late —

cotton, met coal, sugar, oil, coffee, copper, rice, corn, heating oil and

the rest — has been stunning, with moves of 10% a week or more. 

In the face of these ripping commodity index gains, the Fed’s

argument that surging food costs are due to emerging market demand

growth is just plain lame. Was there a worldwide fasting ritual going

on during the months just before the August QE2 signals when food

prices were much lower? And haven’t the EM economies been

growing at their present pace for about the last 15 years now, not just

the last seven months?

Similarly, the supply side has had its floods and droughts — like

always. But these don’t explain the price action, either. Take Dr.

Cooper’s own price chart during the past 12 months: last March the

price was $3.60 per pound — after which it plummeted to $2.80 by

July, rose to $4.60 by February and revisited $4.10 per pound.

That violent round trip does not chart Mr. Market’s considered

assessment of long-term trends in mining capacity or end-use

industrial consumption. Instead, it reflects central bank triggered

speculative tides which begin on the futures exchanges and ripple out

through inventory stocking and de-stocking actions all around the

world — even reaching the speculative copper hoards maintained by

Page 48: Research Data

Chinese pig farmers and the vandals who strip-mine copper from the

abandoned tract homes in Phoenix.

The short-covering panic in the yen forex markets following Japan’s

intervention, and the subsequent panicked response by the central

banks, wasn’t just a low frequency outlier — the equivalent of an 8.9

event on the financial Richter scale. Rather, it is the predictable result

of the lunatic ZIRP monetary policy which has been pursued by the

Bank of Japan for more than a decade now--and with the Fed, BOE

and ECB not far behind.

APRIL 5, 2011 10:02 PM

Riaz Haq said...

In flood-stricken Pakistan, a good wheat harvest is expected,

reports Food and Agriculture Organization(FAO):

Islamabad/Rome, 30 Mar 2011 -- A large-scale distribution by FAO of

wheat seeds to the victims of last year’s floods in Pakistan is now ripe

to yield enough food for half a million poor rural households.

With an average family size of eight, this translates into a harvest

large enough to feed four million people for the next six months.

FAO spent $54 million of international donor funding buying and

distributing quality wheat seeds as part of its emergency intervention

that began last August. . Once the harvest is completed, this donation

will have produced a crop worth almost $190 million in wheat flour,

the main staple, at current local retail prices. “The investment made

by donors has been quadrupled,” said Daniele Donati, Chief, FAO

Emergency Operations Service. “Moreover, farmers will be able to

save the seeds from this year’s harvest to plant again later this year.”

Page 49: Research Data

More than 18 million people in Pakistan were affected by last

summer’s severe flooding, which caused extensive damage to housing,

infrastructure and crops.

Farming nearly fully-funded

In responding to the immediate and critical challenges of the 2010

floods, FAO led the Agriculture Cluster, comprised over 200

organizations, reaching 1.4 million farming families across Pakistan.

FAO received $92 million of its $107 million appeal, which has

enabled it to shore up the smallholder agricultural system in the four

Pakistan provinces affected by the flooding. The donors were

Australia, Belgium, Canada, CERF, the European Commission, IFAD,

Italy, Sweden, the United Kingdom and the United States of America.

As well as supporting the “Rabi” wheat planting season, it is

estimated that FAO saved the lives of almost a million livestock by

supplying temporary shelter and enough de-worming tablets and dry

animal feed for almost 290,000 families. Green fodder is now

becoming available as the harsh Pakistan winter turns to Spring.

“The livestock interventions really paid off,” Donati said. “It costs ten

times more to buy a new animal, which often represent a family’s

lifetime savings”.

Canals cleared

FAO is overseeing a thousand cash-for-work schemes by which

workers are paid to clear irrigation canals blocked with silt and flood

debris.

Page 50: Research Data

One severely affected province not to have received much help is

Sindh. This was because the fields remained waterlogged until well

after the end of the Rabi planting season, and in some cases are still

inundated. The UN Agency will shortly distribute quality rice seeds to

almost 25 000 families in Sindh for the upcoming planning season, but

over 700 000 families will require assistance over the coming months.

Recovery priorities

FAO, in partnership with the Government of Pakistan has identified

recovery priorities for the next two years. These are increasing crop,

livestock, fishery and agro-forestry production, improving diets and

nutrition and boosting agriculture extension services to offer advice to

landless and smallholder farmers.

“Pursuit of these core objectives will significantly reduce the

vulnerability of the populations in question, improve food production

and income generation, and increase affected communities’ resilience

to future shocks,” said Donati. FAO expects its recovery programme

to cost $94 million, enough to assist 430 000 families in 24 districts.

An Early Recovery Working Group, co-chaired by the Pakistan

Government’s National Disaster Management Authority and the

United Nations Development Programme, has been set up with eight

sectors covered including one on Agriculture and Food Security, co-

chaired by FAO, WFP and the Ministry of Food and Agriculture.

APRIL 6, 2011 4:58 PM

Riaz Haq said...

Pakistan's ministry of finance is projecting 4% growth in fiscal 2011-

12, according to The News:

Page 51: Research Data

“We are looking at a growth rate of four percent for the next year

because of a good services sector and on the hope of better farm

output,” said a Finance Ministry official who did not want to be

identified.

The figure compares with a 3.7 percent growth forecast by the Asian

Development Bank (ADB) in its Outlook 2011 report released on

Wednesday.

The ADB expects persistent energy problems and security issues will

continue to check Pakistan’s growth in 2011/12, with surging inflation

posing a further major risk.

---

Last year, the worst-ever floods that hit the country inflicted $10

billion in losses, forcing officials to slash growth estimates in between

2.5-3 percent for the current year, down from an expected 4.5

percent.

The services sector, however, is likely to grow by four percent in the

current year to June and there are signs that the farm sector is

recovering from the flooding.

---

Higher cotton, rice and sugar output is expected in the coming year,

analysts said.

“We expect that 2011/12 will be much better than this year ... Our

own (growth) forecast is close to 4.5 percent,” said Sayem Ali, an

economist at the Standard Chartered Bank.

An official at the Planning Commission, which prepares growth

targets, also spoke of likely four percent growth next year, but said

that was contingent on continuing support from remittances from

Page 52: Research Data

Pakistanis working abroad and on exports, which have grown by 20-

25 percent during the first eight months of the current financial year.

However, the large-scale manufacturing sector, which dominates the

overall industry making up 12.2 percent of Pakistan’s GDP, remains a

major concern as it faces chronic energy shortages and high interest

rates that discourage private sector borrowing.

The sector grew 1.03 percent up to January, against 2.34 percent

during the corresponding period last year.

“Energy shortfalls are lowering real growth by at least two

percentage points annually,” the ADB said in its report.

Improved prospects for Pakistan’s economy, however, will largely

depend on the implementation of measures to address key problems

such as inflation, the budget deficit and the need for transparent

revenue policies, according to the ADB.

“Increasing prices are on the warning level, not just for Pakistan, but

for the whole region,” said Rune Stroem, ADB’s Pakistan country

director.

The ADB forecasts inflation in Pakistan will quicken to 16 percent in

2011, the highest in Asia. Revenue generation is another grey area.

The central bank chief said this week that quick steps were needed to

broaden the tax base in Pakistan, which has one of the lowest tax-to-

GDP ratios in the world, currently around 10 percent.

The IMF has not yet released the latest tranche of the $11 billion loan

due in May last year because of the government’s inability to

implement a reformed general sales tax, seen as a key to expanding

Page 53: Research Data

the tax base.

The fiscal deficit, meanwhile, is expected in between 5.3 percent and

5.5 percent of the GDP in 2010/11, but could be higher if some

external flows, including grants, are not received soon.

Stroem said that 5.5 percent deficit estimates seemed unrealistic and

there are signals that these might slip even further.

APRIL 9, 2011 10:11 PM

Riaz Haq said...

Here's blog post from today's Dawn newspaper:

GLORIOUS countryside lies between Rahim Yar Khan and

Bahawalpur. Travelling across six districts in Punjab, before a blazing

summer sets in, I experienced endless fields of wheat waiting to turn

golden, of freshly harvested mustard, acres of ripe sugarcane and

sprawling mango orchards.

Far from the drudge and gloom of metropolitan Pakistan, economic

privation, traffic snarls, extreme religion and the cricket World Cup

agony, this is another Pakistan. Over a quarter of a century after the

green revolution ended the rural economy is back in boom, this time

on the back of rising prices. The feel-good factor is all around.

------------

Alongside the cash economy, the place is also brimming with ideas,

and with an entrepreneurial spirit. A young man I meet at Rahim Yar

Khan’s chamber of commerce has an IT degree and owns an ice cream

distribution business spawning an elaborate cold chain across three

districts. He tells me that sales are surging because rural society is

transitioning to modern desserts which are now more affordable than

Page 54: Research Data

traditional sweets like mithai and khoya.

Meanwhile, he’s toying with the bigger vision of an electronic

marketplace for agricultural produce. Live connectivity to grain

mandis and markets for fresh produce and milk will empower farmers

to obtain prices online and through their cellphones. He wants to

materialise this and wants tips. I give him my two cents worth: study

similar models, write a concept paper, galvanise partners around it,

put in seed money and get the venture to mezzanine level.

For now the agricultural economy is growing more in value than in

volume. As it does, it pulls in a rising demand for inputs. Fertiliser and

agrochemical companies, some listed on the stock exchange are

making record profits. Still, few find time to complain about rising

input prices. With a population of 400,000, Rahim Yar Khan sports

showrooms displaying cars, motorcycles and generators, fast food

outlets and even private healthcare clinics.

Even then, not all the cash would appear to go into consumption.

Pakistan now ranks amongst the world’s top 10 markets for tractors.

Alongside, and despite constrained credit to agriculture, farmers are

investing in agricultural implements, irrigation channels and farm

modernisation.

--------------

“Simple”, he explains, “this year the ginners got together with the

local utility company, Mepco. We’ve instituted a system whereby

instead of intermittent hours of loadshedding we get it in one block of

12 hours. This way we can run the factory on one shift per day”. With

that problem behind him he now wanted to move on; that is, to a

pasteurised milk business.

As the green revolution tapered off, a poultry revolution began; in the

late 1970s. Ever since, Pakistan has been gnawing away

Page 55: Research Data

at broiler chicken and there’s no turning back. Today a dairy

revolution is sweeping Pakistan. As the world’s fifth largest milk

producer, the country can only process three per cent of its milk

production. Sitting in his factory office in Khanpur — one could have

been in any plush office in a metropolis — we open his wireless

notebook and download a pre-feasibility study for a milk pasteurising

business from Smeda’s website. We glean through it, and at a Rs160m

capital outlay it looks doable for him.

--------

In 2009, an NGO distributed young cattle on micro-credit to 1,000

small farmers and built an apex organisation to collect and market

milk from these grass-roots. The Dutch consultant for the NGO

informs me that a modern farmers’ cooperative model is now evolving.

Such models have long been in vogue in Europe and indeed in several

developing countries. Usually the extended supply chain ends at

farmer-owned retail outlets — co-ops. Why hasn’t this concept gained

traction in Pakistan?

---------

And so Pakistan prepares to harvest another bumper wheat crop in

2011.

APRIL 10, 2011 9:38 AM

Riaz Haq said...

Here's blog post from today's Dawn newspaper:

GLORIOUS countryside lies between Rahim Yar Khan and

Bahawalpur. Travelling across six districts in Punjab, before a blazing

summer sets in, I experienced endless fields of wheat waiting to turn

golden, of freshly harvested mustard, acres of ripe sugarcane and

sprawling mango orchards.

Page 56: Research Data

Far from the drudge and gloom of metropolitan Pakistan, economic

privation, traffic snarls, extreme religion and the cricket World Cup

agony, this is another Pakistan. Over a quarter of a century after the

green revolution ended the rural economy is back in boom, this time

on the back of rising prices. The feel-good factor is all around.

------------

Alongside the cash economy, the place is also brimming with ideas,

and with an entrepreneurial spirit. A young man I meet at Rahim Yar

Khan’s chamber of commerce has an IT degree and owns an ice cream

distribution business spawning an elaborate cold chain across three

districts. He tells me that sales are surging because rural society is

transitioning to modern desserts which are now more affordable than

traditional sweets like mithai and khoya.

Meanwhile, he’s toying with the bigger vision of an electronic

marketplace for agricultural produce. Live connectivity to grain

mandis and markets for fresh produce and milk will empower farmers

to obtain prices online and through their cellphones. He wants to

materialise this and wants tips. I give him my two cents worth: study

similar models, write a concept paper, galvanise partners around it,

put in seed money and get the venture to mezzanine level.

For now the agricultural economy is growing more in value than in

volume. As it does, it pulls in a rising demand for inputs. Fertiliser and

agrochemical companies, some listed on the stock exchange are

making record profits. Still, few find time to complain about rising

input prices. With a population of 400,000, Rahim Yar Khan sports

showrooms displaying cars, motorcycles and generators, fast food

outlets and even private healthcare clinics.

Even then, not all the cash would appear to go into consumption.

Pakistan now ranks amongst the world’s top 10 markets for tractors.

Alongside, and despite constrained credit to agriculture, farmers are

Page 57: Research Data

investing in agricultural implements, irrigation channels and farm

modernisation.

--------------

“Simple”, he explains, “this year the ginners got together with the

local utility company, Mepco. We’ve instituted a system whereby

instead of intermittent hours of loadshedding we get it in one block of

12 hours. This way we can run the factory on one shift per day”. With

that problem behind him he now wanted to move on; that is, to a

pasteurised milk business.

As the green revolution tapered off, a poultry revolution began; in the

late 1970s. Ever since, Pakistan has been gnawing away

at broiler chicken and there’s no turning back. Today a dairy

revolution is sweeping Pakistan. As the world’s fifth largest milk

producer, the country can only process three per cent of its milk

production. Sitting in his factory office in Khanpur — one could have

been in any plush office in a metropolis — we open his wireless

notebook and download a pre-feasibility study for a milk pasteurising

business from Smeda’s website. We glean through it, and at a Rs160m

capital outlay it looks doable for him.

--------

In 2009, an NGO distributed young cattle on micro-credit to 1,000

small farmers and built an apex organisation to collect and market

milk from these grass-roots. The Dutch consultant for the NGO

informs me that a modern farmers’ cooperative model is now evolving.

Such models have long been in vogue in Europe and indeed in several

developing countries. Usually the extended supply chain ends at

farmer-owned retail outlets — co-ops. Why hasn’t this concept gained

traction in Pakistan?

---------

And so Pakistan prepares to harvest another bumper wheat crop in

2011.

APRIL 10, 2011 9:40 AM

Page 58: Research Data

Riaz Haq said...

Here's a Dawn-AFP story about a modest job recovery in Pakistan's

textile sector with rising exports:

KARACHI: After a year of unemployment and wondering if his family

would be better off if he died, Pakistani textile worker Murad Ali has

got the spring back in his step.

One of thousands laid off by textile bosses last year, the father of four

is now back at work and one of those to benefit from a surge in

Pakistani exports in the current fiscal year, which ends on June 30.

Experts say rising global commodity prices, a government decision to

prioritise power supply to industry and currency devaluation that has

made Pakistani products more competitive, have fired an export

boom.

Compared with the same period last year, the Trade Development

Authority of Pakistan says textile exports such as silk rose 25.8 per

cent and agricultural produce, such as basmati, rose 6.2 per cent from

July to February 7, 2011.

The textiles sector is one of the key drivers of the Pakistani economy,

accounting for 55 per cent of all exports and 38 per cent of the

workforce, according to official figures.

Bosses have rehired staff who were laid off, but Ali is only getting a

third of the salary as a skilled garment worker that he used to

command.

“I’m earning less than last year. It is difficult to live a better life due to

Page 59: Research Data

price rises, but I’m happy,” Ali said.

He has re-enrolled his sons at school but his wife will continue to

work as a maid. Money is too tight for her to go back to being a

housewife.

“The situation has drastically changed in the favour of the country’s

economy,” said textile tycoon Mirza Ikhtiar Baig, who employs more

than 2,000 workers and predicts exports will rise 10 per cent for the

fiscal year 2010 to 2011.

“Now with demand for Pakistani products rising internationally we

are employing more workers.

“Our exports are getting healthier because of an increase in

international commodity prices and the government’s will to give top

priority to the country’s economy,” said Baig, an advisor to Prime

Minister Yousuf Raza Gilani.

The Asian Development Bank forecasts GDP growth for Pakistan of

2.5 per cent for fiscal year 2011 despite pressures from

unprecedented floods in 2010, with a relatively modest rebound to 3.7

per cent for fiscal year 2012.

-------------

Pakistan suffers from a profound electricity crisis that restricts

production to around 80 per cent of its needs — a situation that will

only worsen as the temperatures crawl higher in the coming months.

The budget deficit has grown to 5.5 per cent of GDP, above a 4.9 per

cent target for the current fiscal year to June 30.

To fund the shortfall, the government borrowed $4.4 billion from the

central bank from July 1 to February 28, a move that worsened

Page 60: Research Data

inflation, rather than raise taxes and cut spending as the IMF and

World Bank would like.

---------

Mohammad Sohail, head of the Karachi-based Topline Securities

research and brokerage house, said the export boom would contribute

to economic recovery, yet warned the gains were minimal.

“It is very fragile because the fiscal deficit is much higher than the

target of 5.3 per cent because of the government’s heavy borrowing

from the central bank,” he said.

----------

“Furthermore, the overall security situation in Pakistan is very

uncertain, which is making the foreigners and local investors wary all

the time.” Independent economist A.B. Shahid said rising

international oil prices had hit the country’s economy hard, adding $4

billion to the oil bill.

Pakistan could have benefited more from 8-9 per cent export growth,

he said, by exporting cloth in its value-added forms rather than raw

cotton and yarn.

While Ali is content with life, he is also wary of uncertainties ahead.

“Life has become too insecure. Everyone is ill at ease. Let’s just wait

and see.” – AFP

APRIL 14, 2011 10:58 PM

Riaz Haq said...

Here's an IRIN story of a family in Muzaffargarh struggling to recover

after the floods in 2010:

Page 61: Research Data

MUZAFFARGARH, 8 April 2011 (IRIN) - Eight months after floods

forced Saleemullah Adeel and his family to abandon their home in

Pakistan’s southern Punjab city of Muzaffargarh, the road to recovery

has proved rough for this landless farmer.

The wheat he planted on 10 acres (four hectares) leased from a large

landowner at an annual fee of US$118 per acre (0.4 hectares) is doing

well, and Saleemullah hopes for a good crop because weather

conditions so far have been good. Near his house, which is now

partially repaired, there are neat rows of vegetables, and a few hens

feed in the yard. But he has little else to be happy about.

“I bought wheat seed and fertilizer after selling the jewellery we had

purchased for my elder daughter’s wedding, which was scheduled for

this month,” Saleemullah told IRIN. “Now it has been postponed [yet]

I have used up all my savings and my two sons, who worked on fish

farms, have lost their jobs.”

The July-September 2010 floods destroyed hundreds of fish farms in

the Muzaffargarh area, according to media reports, leaving many, like

Saleemullah’s sons, out of work.

But Saleemullah’s problems do not end here. Since he did not own the

land he farmed, he was not awarded compensation by the provincial

government, which gave landowners seed and fertilizer. “The landlord

we lease from claimed he needed [the seed and fertilizer] for his own

lands,” he said.

Cotton crop destroyed

Other people, too, have suffered. “I have earned nothing for months

because the cotton crop was destroyed, and factories which crush the

cotton seed to extract oil did not employ us this time as they usually

Page 62: Research Data

do,” said Ahsan Akhtar, 30, whose wife was not hired this year as a

cotton-picker.

Across the country, people have continued to live with losses incurred

during the floods, even as they attempt to recover, but this is proving

tough. “My youngest child, aged six months, has had diarrhoea for

nearly a month,” said Sanober Bibi, 25. “The health workers who used

to visit early on after the floods no longer come, and the medicine

given by the local midwife did him no good at all.” There is no clinic in

their village.

On 6 April Neva Khan, country director of the UK Charity Oxfam,

pointed fingers at the government, telling reporters that a delay on

the part of the government to provide a “reconstruction strategy” had

resulted in delays in urgent rebuilding and recovery work. In some

cases this had “barely started even eight months after the disaster”,

he said.

A government official refuted that claim. "The rehabilitation phase

was started some months ago," Ahmed Kamal, spokesman for the

National Disaster Management Authority, told IRIN. A Sindh

government official, who preferred anonymity, said a "desperate lack

of funds" was holding up recovery in the province, but "progress was

slowly being made".

APRIL 18, 2011 6:23 PM

Riaz Haq said...

Here's a Dawn piece on rising rural income disparities from high

commodity prices:

..Is the current spike in the commodity prices benefiting everyone

Page 63: Research Data

living in the villages, particularly in Punjab and Sindh which together

contribute more than 90 per cent to the country’s agricultural output

and where more than two-thirds of the country’s population lives?

“Whereas a large chunk of this income has ended up with the

agriculture elite, there are signs that some of it has trickled down to

the small farmers as well,” according to Waheed. Others argue that

the transfer of additional cash has widened income disparity in the

rural society even if many small farmers have also benefited from the

soaring crop prices because the “trickle-down” has been uneven and

limited.

-------

Ashfaque Hasan Khan, dean and principal of the NUST Business

School who served as a special finance secretary in Musharraf

government, says the income disparity in the rural areas has widened

as a result of the rising crop prices.

“Only 40 per cent of the rural population is engaged in the crop sector

and a vast majority of them are small landholders. This means only a

small portion of population in the rural areas has gained from the

increasing crop prices,” he elaborates.

In Punjab, for example, less than half of the rural population is

engaged in the crop sector. Some 90 per cent of it falls in the category

of small farmers with landholdings up to 12.5 acres.--------

“An overwhelming majority of small farmers buys inputs on credit

and, thus, is forced to pay a much higher price than those who pay

cash for these inputs,” claims Mughal. “Even if they have cash their

cost has gone up manifold, offsetting the gains of

higher crop prices.”

There are people who are of the view that smaller landholding have

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helped a more equitable distribution of additional incomes among the

growers in Punjab compared to the farmers in Sindh where

landholdings are very large.

Salman Shah, former finance minister, says the additional incomes

generated by higher commodity prices have been distributed more

evenly in Punjab compared to Sindh.

-----------

Shah is of the opinion that the landless labour in the villages has also

benefitted from the new economic prosperity being experienced in

rural areas and their wages have also gone up. But he says only a

comprehensive study of the impact of commodity prices on the rural

society could give answers to many questions.

--------

Many fear that the growing agricultural commodity prices may rob

the farmers of the incentive to boost their productivity. Mughal says

the rising prices and decreasing productivity is not good for the

economy.

“Our productivity per acre has decreased significantly over the

decades whereas India has successfully managed to substantially

boost its crop output. The new wave of economic prosperity in the

rural areas should not be allowed to take our focus off the need to

boost productivity. That will be disastrous for the economy as well as

people,” he warns.

While the soaring prices have brought a semblance of prosperity to

the rural areas, it has added to woes of the urban population where

poverty levels are rising and the quality of life suffering. The

Consumer Price Index (CPI) has increased by 55 per cent over the last

three years whereas salaries have not risen accordingly, according to

Waheed.

Page 65: Research Data

“The urban population that relies on manufacturing growth and

trading, or earns fixed salaries has generally experienced a

deterioration in its standard of living, and is not happy about it. Large

scale manufacturing growth has declined by about one per cent over

the last three years whereas the wholesale trade has risen by a

marginal four per cent,” he says, underlining the impact of rising

price inflation on the urban consumers

APRIL 18, 2011 6:45 PM

Riaz Haq said...

Here's an interesting 2004 ADB assessment of Pakistan's rural

economy:

....

Despite recent good macroeconomic performance, Pakistan continues

to have high levels of poverty. Poverty estimates of 2000-2001,

indicate that around one third of the population lives at or below the

poverty line, with poverty being concentrated in rural areas. Available

international literature indicates a strong and clear-cut relationship

between agricultural growth and poverty reduction. The agricultural

sector is a major determinant of the overall economic growth and well

being in Pakistan, contributing 23 percent of total GDP; employing

42% of the total employed labor force; and accounting for nearly 9

percent of the country's export earnings. Thus, high agricultural

growth is essential for significant poverty reduction in Pakistan.

However, in addition to the direct impact of agriculture growth on

poverty reduction, there is also a much larger indirect effect through

the linkages between agriculture and non-farm growth in rural areas.

Non-farm growth is closely linked with agricultural growth since

peasant farmers spend a large portion of their incremental income on

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locally produced non-agricultural goods thus generating employment

and incomes in the adjoining areas. The increased demand for non-

farm goods leads to a much larger increase in employment, which is a

key vehicle for poverty reduction. Available information also points to

the increasing importance of non-farm incomes for rural households.

The five major sources of income in rural Pakistan are wages/salaries,

transfer income, crop income, rental income and livestock income.

Livestock is a particularly important source of income for the poor

with a majority of poor households, especially the landless and small

landowners, dependent on this sector.

In the light of increasingly limited income generating opportunities in

the on-farm sector, poor households are increasingly turning to the

non-farm sector as a key source of livelihood. In addition, there

appears to be a higher incidence of vulnerability to falling into and

remaining in poverty, among households which are dependent solely

on agriculture. Rural areas that are well connected with the urban

areas seem to be more prosperous, in part because the lack of

employment opportunities in rural areas results either in labor

reallocation or migration. In both cases, human capital plays a

positive and significant role and the poorest of the poor neither

possess the human capital nor have the resources to migrate. This

vulnerable group needs special attention.

Pakistan's Poverty Reduction Strategy Paper outlines four pillars for

accelerating growth and reducing poverty. Pillar One focuses on

accelerating economic growth, pillar Two on improving governance

and devolution, Pillar Three on investing in human capital, and Pillar

Four on targeting the poor and vulnerable. Pillars One and Four focus

on generating employment, especially in the rural areas, small and

medium industries and micro-finance. There are also very strong

linkages between income poverty and the other two PRSP Pillars. For

example, access to justice, successful devolution, increasing the

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human capital of the poor, and ensuring effective safety nets are also

central factors for increasing the incomes of poor people.

---

To increase incomes of poor households and build social capital, the

ADB is funding a Micro-Finance Sector Development Program. As part

of its objective to efficiently provide financial and social services to

the poor, the ADB assisted with the establishment of the Khushali

Bank, a public-private enterprise in partnership with NGOs, under this

program. The ADB is also engaged in several rural development

projects such as the Malakand, Federally Administered Tribal Areas,

Bahawalpur, and Dera Ghazi Khan Rural Development Projects, to

enhance household incomes, particularly for the smallholder and

tenant farmers, and the landless.....

APRIL 18, 2011 7:10 PM

Riaz Haq said...

Here are a few excerpts from Wall Street Journal story titled "India's

Boom Bypasses Rural Poor":

The Mahatma Gandhi National Rural Employment Guarantee Scheme

(NREGA), as the $9 billion program is known, is riddled with

corruption, according to senior government officials. Less than half of

the projects begun since 2006—including new roads and irrigation

systems—have been completed. Workers say they're frequently not

paid in full or forced to pay bribes to get jobs, and aren't learning any

new skills that could improve their long-term prospects and break the

cycle of poverty.

In Nakrasar, a collection of villages in the dusty western state of

Rajasthan, 19 unfinished projects for catching rain and raising the

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water table are all there is to show for a year's worth of work and

$77,000 in program funds. No major roads have been built, no new

homes, schools or hospitals or any infrastructure to speak of.

At one site on a recent afternoon, around 200 workers sat idly around

a bone-dry pit. "What's the big benefit?" said Gopal Ram Jat, a 40-

year-old farmer in a white cotton head scarf. He says he has earned

enough money through the program—about $200 in a year—to buy

some extra food for his family, but not much else. "No public assets

were made of any significance."

Scenes like this stand in stark contrast to India's image of a global

capitalist powerhouse with surging growth and a liberalized economy.

When it comes to combating rural poverty, the country looks more

like a throwback to the India of old: a socialist-inspired state founded

on Gandhian ideals of noble peasantry, self-sufficiency and a distaste

for free enterprise.

Workers in the rural employment program aren't allowed to use

machines, for example, and have to dig instead with pick axes and

shovels. The idea is to create as many jobs as possible for unskilled

workers. But in practice, say critics, it means no one learns new skills,

only basic projects get completed and the poor stay poor—dependent

on government checks.

----------

Others said the ban on mechanization limits the scope of projects to

gravel roads and pits to capture water. Such programs last for only a

couple of years and do little to improve village life. Balveer Singh

Meena, a 31-year old farmer in the village of Mohanpura in northern

Karauli, ekes out a living growing wheat and chickpeas. He eats a

single Indian flat-bread known as roti and vegetables for every meal.

By selling what little excess food they produce, Mr. Meena and his

three brothers are able to make just over $400 per year, which must

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stretch to pay for an extended family of eight people.

-----------

But shortly after the program started in February 2006, workers

complained that local leaders were docking pay and asking for money

in return for job cards. The central government responded in 2008 by

sending money directly to workers' bank accounts. But according to

workers and auditors, the money takes so long to reach those

accounts—up to 45 days—that workers are often forced to accept

lesser cash payments from local leaders on the condition that they

repay the money at the full amount.

Audits of the program in the southern state of Andhra Pradesh found

that about $125 million, or about 5% of the $2.5 billion spent since

2006, has been misappropriated. Some 38,000 local officials were

implicated, and almost 10,000 staff lost their jobs.

In one study of eastern Orissa state, only 60% of households said a

member had done any of the work reported on their behalf. Earlier

this month, the central government gave the green-light for the

Central Bureau of Investigation, India's top federal criminal

investigation body, to launch a probe into alleged misuse of program

funds in Orissa....

APRIL 30, 2011 7:13 PM

Riaz Haq said...

Here's an AFP report on Pakistani tax dodgers:

ISLAMABAD — Pakistan is defying mounting Western pressure to end

a giant tax dodge with fewer and fewer people contributing to

government coffers, spelling dire consequences for a sagging

economy.

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Tax is taboo in Pakistan. Barely one percent of the population pays at

all, as a corrupt bureaucracy safeguards entrenched interests and

guards private wealth, but starves energy, health and education of

desperately needed funds.

Less than 10 percent of GDP comes from tax revenue -- one of the

lowest global rates and worse than in much of Africa, say economists.

Federal Board of Revenue (FBR) spokesman Asrar Rauf said 1.9

million people paid tax in 2010, less than the year before, despite 3.2

million being registered to pay -- itself a drop in the ocean of a

population of 180 million.

As a result, Pakistan's fiscal deficit widened from 5.3 percent to 6.3

percent of GDP in 2010, the Asian Development Bank said this month,

knocking 2011 growth figures to 2.5 percent and predictions for 2012

to 3.2 percent.

---------

This month visiting British Prime Minister David Cameron pressed the

point home, saying aid increases were a hard sell when: "Too many of

your richest people are getting away without paying much tax at all

and that's not fair".

---------

The IMF last May halted a $11.3 billion assistance package over a

lack of progress on reforms, principally on tax.

And despite a flurry of meetings, no new loan has been agreed in the

run-up to the IMF and World Bank's Spring meetings.

An IMF review mission is due to visit on May 8. "Consensus is

building, we have almost reached agreement (on reform)," one

government official told AFP, but gave no details.

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----------

What would really work, say analysts, would be scrapping exemptions

that serve entrenched interests, such as a 50 percent tax discount on

sugar and a gate on taxing agricultural income that largely exempts

wealthy feudal landowners.

But stalemate and vested interests have made that impossible.

"There's talk of early elections. One has a brittle coalition. A lot of the

reform areas that need to be dealt with have very well entrenched and

powerful lobbies that are making the case against it," said a finance

ministry official.

As it is, the tiny minority who contribute say they carry a

disproportionate tax burden, for which they get nothing in return.

Pakistan suffers from an awful energy crisis, yet government spending

on electricity subsidies last year reached just under one percent of

GDP, health spending 0.5 percent and education two percent, said the

finance ministry.

According to a 2009 study by the Pakistan Institute of Legislative

Development and Transparency, the average member of parliament

was worth $900,000 and the wealthiest $37 million.

Those figures stand against estimates that a quarter of the population

lives below the poverty line and that GDP per capita stands at $2,400.

"No one trusts the government," says industrialist Mohammad Ishaq,

former vice president of the chamber of commerce in the

northwestern province of Khyber Pakhtunkhwa.

"Without social welfare and with this corruption, nobody is ready to

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pay tax... in return one gets nothing -- no health, education, social

security."

Eunuchs have been appointed tax collectors in Karachi, the financial

capital, on the understanding that a visit from the maligned

transgender group would embarrass people into paying up.

But former finance minister Salman Shah said tax evasion was

inevitable because of corruption within the FBR, which employs

23,000 people nationwide.

"There's a big mistrust of the tax authority itself. That's why a self-

assessment scheme came in," said Shah.

.............

MAY 1, 2011 8:08 AM

Riaz Haq said...

Overview of Livestock, Dairy, Fisheries & Poultry Sectorsin Pakistan: 

1 Dairy Sector

With an estimated 33 billion litres of annual milk production from 50

million animals, managed by

over 8 million farming households, Pakistan is the 5th largest milk

producing country in the world

Livestock sector contributed approximately 53.2 percent of the

agriculture value added and 11.4

percent to national GDP during 2009 – 10

The milk economy in terms of value is over 27% of the total

Agriculture sector

Additional potential of 3 billion litres of milk, with a growth rate faster

than any other sector

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Of the total 33 billion litres of milk produced, 71% is rural based and

29% is urban based

Of the total production, around 3% is processed and marketed

through formal channels

40% Supply and Demand gap exists in Pakistan.

2 Livestock Sector

Livestock sector contributed approximately 53.2 percent of the

agriculture value added and 11.4

percent to national GDP during 2009?10.

Gross value addition of livestock at current factor cost has increased

from Rs. 1304.6 billion

(2008?09) to Rs. 1537.5 billion (2009?10) showing an increase of 17.8

percent as compared to the

previous year.

The population growth, increase in per capita income and export

revenue is fuelling the demand for

livestock and livestock products.

Pakistan earned USD717 million from leather exports in FY09 and a

meagre USD96 million from meat

exports.

Poultry sector is one of the organized and vibrant segments of

agriculture industry of Pakistan.

This sector generates employment (direct/indirect) and income for

about 1.5 million people.

Poultry meat contributes 23.8 percent of the total meat production in

the country

The meat demand for Pakistan Domestic market is growing at a rate

of 2.73% for Beef, 2.90 % for

mutton and 6.10 % for poultry.

This domestic demand is growing to meet the population growth,

human need for protein and

calcium, migration of population from rural to urban and the

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fluctuating growth due to per capita rise

in income.

-------

3 Fisheries Sector

During the period July?March 2009?10 the total marine and inland

fish production was estimated

952,735 Million tons out which 667,762 Million tons were marine

production and the remaining catch

come from inland waters.

A number of sites have been earmarked on an area of 20,000 acres of

land in Districts Thatta &

Badin along the coast.

Immense potential exists to start commercial scale fish/shrimp

farming in Sindh.

4 Poultry Sector

Poultry is an important sub – sector of agriculture and has contributed

enormously to food production by

playing a vital role in the domestic economy. 

Poultry industry can broadly be divided into three

groups, viz. hatchery, poultry farming and feed sectors. This sector

generates employment and income

for about 1.5 million people in Pakistan. Its contribution in agriculture

growth is 4.81% and in Livestock

growth is 9.84%, whereas, the total poultry meat contributes to 23.8%

of the total meat production in

the country.

Pakistan, with a population of 170 Million people, has gone through a

sizeable growth in the production

of poultry meat and eggs. Per capita availability went up from 23 in

1991 to 46 eggs in 2009 and poultry

meat availability increased from 1.48kg to 2.88 kg during the same

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period. In our Country per capita

consumption of meat is only 7 KG and 60-65 eggs annually. Whereas

developed world is consuming 41

KG meat and over 300 Eggs per capita per year. According to Industry

sources there is capacity of 5,000

Environmental Control Houses in Pakistan and currently only 2,500

houses are working.

The total Poultry population in Pakistan is approximately 610 Million.

MAY 21, 2011 8:33 PM

Riaz Haq said...

Here are a few excerpts from an Express Tribune story on Pakistan's

growing meat exports:

Halal meat is also one of the fastest growing segments within the

global food trade. Between 2001 and 2009, the global beef trade grew

at an average of 10.4 per cent to reach just over $30 billion, according

to data available from the UN Food and Agriculture Organisation

(FAO). However, the market for halal beef imports in the Middle East

and Southeast Asia alone grew by over 18.2 per cent to reach just

under $2 billion a year during that same period.

Pakistan’s market share within this rapidly growing market is a paltry

2.9 per cent. However, Pakistani exporters seem to be determined to

make up for lost time. In the six years ending in 2009, Pakistani red

meat exports have risen by an average of 68.6 per cent a year, though

admittedly from a very low base.

Yet with the advent of more and more new players, and with

surprisingly robust support from the government, Pakistan is on the

verge of becoming one of the largest players in the meat trade, at

Page 76: Research Data

least within the Middle East and Southeast Asia.

Perhaps the single biggest advantage that Pakistan has is proximity.

The country is closer to the Middle East than any of its biggest rivals

in the market. The three countries with the largest market shares are

Australia, Brazil and India, each of which has considerably higher

shipping costs to these export markets compared to Pakistan.

-----------

“The Brazilian animal is exactly the same as most of our breeds of

cattle. The quality of meat is also the same. The only difference is

their ability to market their meat better than us,” said Namazi. He

argues that Pakistan can easily displace Brazil as the Middle East’s

leading meat supplier.

Iran, in particular, seems to be keen for Pakistani beef. The Iranian

government has invested 50 per cent of the capital in the Lahore Meat

Company, a dedicated abattoir that will export meat to Iran.

Australian beef, with a powerful branding effort and a larger source

animal, has a specific niche market that industry experts believe will

be difficult for Pakistan to compete with in the medium term.

India, the one country that could completely destroy Pakistan’s

potential in the meat trade, has placed itself outside the global beef

market after a 2005 Indian Supreme Court ruling that upheld a ban

on cow slaughter as constitutional.

Indian exporters only sell carabeef – meat from buffalo – which is

considered inferior and commands lower prices and margins.

Nevertheless, Indian exporters dominate the market in Malaysia for

the lower end of beef, while Australians command the higher end.

“Malaysia is ripe for a middle-market meat supplier from Pakistan,”

Page 77: Research Data

said another expert in the meat business. Malaysia has had a free-

trade agreement with Pakistan since 2007.

Several companies from Pakistan have entered the red meat export

business and even more are in the process of entering the market.

The oldest and one of the most successful of these is PK Livestock, a

Karachi-based abattoir which has been exporting red meat to the

Middle East for over two decades.

Zenith, a Lahore-based exporter, became the first Pakistani company

to sell beef to Malaysia, after the Malaysian government relaxed its

regulatory requirements for Pakistani exporters.

Others, such as OMC and the Al Shaheer Corporation, have also

successfully begun exporting to the Middle East and are aggressively

seeking regulatory approvals for markets further afield in Southeast

Asia.

Pakistan’s total meat exports may come close to $100 million in 2011

and could surpass the $500 million mark in about five years,

according to projections by ASI Partners.

------

Despite having the eighth largest herd of cattle and the third largest

herd of goats in the world, Pakistan’s animal population is very

scattered, which makes procurement of the animals for the abattoir

expensive...

MAY 27, 2011 8:09 AM

Riaz Haq said...

Oxfam is warning that food prices will more than double by 2030,

according to BBC:

Page 78: Research Data

The prices of staple foods will more than double in 20 years unless

world leaders take action to reform the global food system, Oxfam has

warned.

By 2030, the average cost of key crops will increase by between 120%

and 180%, the charity forecasts.

Half of that increase will be caused by climate change, Oxfam

predicts, in its report Growing a Better Future.

It calls on world leaders to improve regulation of food markets and

invest in a global climate fund.

"The food system must be overhauled if we are to overcome the

increasingly pressing challenges of climate change, spiralling food

prices and the scarcity of land, water and energy," said Barbara

Stocking, Oxfam's chief executive.

Women and children

In its report, Oxfam highlights four "food insecurity hotspots", areas

which are already struggling to feed their citizens.

* in Guatemala, 865,000 people are at risk of food insecurity, due to a

lack of state investment in smallholder farmers, who are highly

dependent on imported food, the charity says.

* in India, people spend more than twice the proportion of their

income on food than UK residents - paying the equivalent of £10 for a

litre of milk and £6 for a kilo of rice.

* in Azerbaijan, wheat production fell 33% last year due to poor

weather, forcing the country to import grains from Russia and

Kazakhstan. Food prices were 20% higher in December 2010 than the

same month in 2009.

Page 79: Research Data

* in East Africa, eight million people currently face chronic food

shortages due to drought, with women and children among the

hardest hit.

The World Bank has also warned that rising food prices are pushing

millions of people into extreme poverty.

In April, it said food prices were 36% above levels of a year ago,

driven by problems in the Middle East and North Africa.

Oxfam wants nations to agree new rules to govern food markets, to

ensure the poor do not go hungry.

It said world leaders must:

* increase transparency in commodities markets and regulate futures

markets

* scale up food reserves

* end policies promoting biofuels

* invest in smallholder farmers, especially women

"We are sleepwalking towards an avoidable age of crisis," said Ms

Stocking.

"One in seven people on the planet go hungry every day despite the

fact that the world is capable of feeding everyone."

Among the many factors driving rising food prices in the coming

decades, Oxfam predicts that climate change will have the most

serious impact.

Ahead of the UN climate summit in South Africa in December, it calls

on world leaders to launch a global climate fund, "so that people can

Page 80: Research Data

protect themselves from the impacts of climate change and are better

equipped to grow the food they need".

MAY 30, 2011 4:46 PM

Riaz Haq said...

Here's a report on Pakistan trying to collect taxes from middlemen

(arti) on their profits:

The government has imposed a 10 per cent advance tax on

commission, or brokerage fee, earned by the agents of cultivators or

farmers and a withholding tax at a rate of 1.5 per cent on the sale of

cotton seed, rice and edible oils.

According to new taxation measures announced by the government on

Saturday, the new taxes will not be applicable to growers who sell

their produce, a circular of the Federal Board of Revenue (FBR) said.

The circular stated that the withholding tax on sale/purchase of seed

cotton will be deducted by withholding agents.

“The withholding agent shall not deduct withholding tax on purchase

of agriculture produce which is directly sold by a grower of the

produce,” the circular added.

The 1.5 per cent withholding tax is being levied on profits earned by

the middlemen in the business of buying produce and selling it to the

markets at higher rates.

To ensure that the withholding tax is collected, the FBR has directed

that the buying agent will have to make three copies of the certificate

and give one to the grower, submit the second copy in office of tax

Page 81: Research Data

commissioner of Inland Revenue and keep the third copy for own

record.._

The FBR has also issued a format for the farmers, describing their

sale of sugarcane, wheat, rice or cotton to the buyer, which also

explains the details of the agricultural land the produce belongs to

and the date of sale.

While the circular also states that “in case sale of seed cotton or other

agriculture produce is made by a grower/cultivator through a

commission agent, then advance tax is collectible under section 123 of

the Ordinance at rate of 10 per cent of the gross commission income

of the commission agent”.

However, the farmers have rejected the new initiative of the FBR and

the farmers’ associations have come up with plans to organise a

demonstration in Multan on April 5.

Agriculturists have been accusing the government of adopting policies

that would only hurt the small- and mid-level farmers and these

measures are being taken to protect the large land owners who

should be paying income tax on agriculture.

Calling the new measures as indirect tax on the agricultural sector,

the President of Pakistan Agriculture Forum Ibrahim Mughal talking

to Dawn said the government was bent upon destroying all the

productive sectors and after imposing 17 per cent General Sales Tax

on agriculture inputs including pesticides, fertiliser and tractors

through presidential ordinance on March 15, 2011, the new move will

have more serious impact on the overall agriculture economy.

Mr Mughal said that new measures would affect the overall

agricultural sector and its productivity which would reverse economic

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cycle for the small and mid-level growers.

“In March government imposed over Rs80 billion taxes on agriculture

sector in form of GST and advance taxes,” he said adding that around

80,000 tractors are being purchased by the growers per annum and

after the imposition of 17 per cent sales tax, they will have to pay a

total of Rs8 billion annually more than the earlier price.

JUNE 1, 2011 9:22 AM

Riaz Haq said...

Pak Suzuki Motors (PSMC) to gain from Punjab govt's yellow cab

scheme, according to The News:

KARACHI: Pak Suzuki Motor Company (PSMC) stands to gain from

the Yellow Cab Scheme announced by the government of Punjab in its

budget for 2011/12, analysts said.

The provincial government has announced that a grant of Rs4.50

billion has been allocated for the scheme, which will partly finance

20,000 vehicles.

Contrary to the yellow cab scheme, the Nawaz Sharif government

introduced in 1992/93, this scheme relies on locally-made vehicles.

‘Mehran’ and ‘Bolan’, the two most popular makes of Pak Suzuki, have

been short-listed for the scheme.

The analysts said the ultimate beneficiary will be the PSMC, which

has been suffering from appreciating yen, relaxation in import policy

and production constraints since a tsunami-hit Japan.

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Gross profit margin of the company has squeezed to mere two percent

in 2010, which was around four percent a year back, they added.

Details of the scheme are yet to be unveiled, but it is expected that

the vehicles would be 50 percent financed by the government of

Punjab, while the buyer would have to pay the rest.

There are concerns of possible lack of transparency in financing.

Besides, there is a lack of clarity about the time period over which the

scheme would be spread.

Furqan Punjani, an analyst at the Topline Research, said that there

are possibilities that out of 20,000 only 12,000 to 15,000 units will go

in the said scheme and the rest might fall victim to corruption.

An analyst at Arif Habib Research said that it is believed that PSMC’s

car volumes would spike by nine percent and 16 percent in CY11E

and CY12F.

Consequently, the earning pershare (EPS) of the company would

improve by 75 percent and 116 percent in CY11E and CY12F,

respectively, he said.

http://www.thenews.com.pk/TodaysPrintDetail.aspx?

ID=53955&Cat=3&dt=6/23/2011

JUNE 30, 2011 7:41 PM

Riaz Haq said...

Some 5,800 peasants in Sindh province are set to receive farmland

previously designated as government-owned flood runoff. By the end

Page 84: Research Data

of March, some 92,000 acres will be allotted to women only,

according to Christian Science Monitor:

.....When the fields are cleared, Nimat Khatoon, a 50-something

peasant farmer who has worked for the wealthy owner of these fields

since her childhood has something worth the wait: a four-acre slice of

land to call her own.

"It's something I couldn't dream of seeing in my lifetime. We're so

happy," she says with a toothy grin, as her children play around her

home made of wooden slats and a thatched roof.

Ms. Khatoon is one of some 5,800 peasants in the province of Sindh to

receive farmland, previously designated as government-owned flood

runoff, from the provincial government over the past two years. A

total of 95,000 acres has already been doled out, and in March

another 92,000 acres are to be allotted to women only.

The land allocations could help break the cycle of debt accrued by

landless peasants, and serve as a jump-start to those whose livelihood

was threatened even after the floods receded.

"Land is the main source of wealth in rural Pakistan," explains Amil

Khan, a spokesman for the charity Oxfam, which is assisting the

government with the project. "If you have no land you don't have a

stake in the system."

Cycle of debt

Indeed, seeds and fertilizers are provided by landlords to tenants who

are then forced into high interest rates when repaying their debt.

What's more, it has become the norm for landless farmers to receive

far less than half the profit from the crops, and use most of that to

begin paying their never-ending debt.

Page 85: Research Data

The government of Sindh – a province home to Pakistan's biggest

landlords – embarked on this project in an effort to redress this

widening imbalance. But it has taken on a special significance after

the 2010 floods, which destroyed 2 million hectares of crops, pushing

landless tenants deeper into debt.

------------

Khatoon's family still owes some 40,000 rupees ($470) to the landlord

her family has worked under for generations – a princely sum, which

could still take another year to clear – though thanks to her newly

acquired land, she's hopeful that for the first time ever, the cycle of

debt won't begin afresh next year.

After the floods

It's a rare piece of good news to come out of Pakistan after the floods.

According to the United Nations World Food Program, hundreds of

thousands of flood victims are still living in temporary camps or

shelters, while analysts warn of Middle-East style unrest if food

inflation, which has soared to some 64 percent in the past three years,

continues to rise as the government prints money to finance its

deficits.

------

Food insecurity continues, she explains, because "the livelihoods of

the lowest strata are not being addressed. First, they are still

beholden to debt cycles." Second, the low-interest loans from the

government favor large landowners, she explains, because small-scale

farmers usually don't use the banking system.

Dr. Habib says these policies came about because of the influence of

feudal landowners in Pakistan's parliament, who have held sway since

the country gained independence from Britain in 1947. But the move

away from that to the new program is a key step toward undercutting

that influence.

Page 86: Research Data

The Sindh government initiative distributes high-risk government land

that runs alongside rivers and tributaries. This land was previously

designated as government-owned flood runoff, but was used by local

landlords. Rich landlords have struck back by filing legal challenges

via local peasants in their employ, to wrest back land that was in their

de facto control.

JULY 1, 2011 10:22 AM

Riaz Haq said...

State Bank tells Pakistan govt to reduce bank borrowing, according

to The Nation:

KARACHI - The State Bank of Pakistan (SBP) has stated that the size

of the fiscal deficit cannot be reduced unless the government controls

excessive borrowing from the central bank, along with fully

implementing fiscal reforms, according to State Bank’s Third

Quarterly Report on the State of Pakistan’s Economy for FY11

released Monday.

“Desirable revenue generating measures - broadening of the tax base,

improving documentation of the economic system, gradual elimination

of un-targeted subsidies and curtailment of quasi-fiscal operations are

necessary to contain the fiscal deficit to below 4.5 per cent of GDP in

FY12”, said the report.

“These efforts need to be accompanied with better debt management

to increase the tenor of domestic debt and lower risks associated with

debt re-pricing and rollover,” it added.

The report predicted these initiatives will also protect the external

account position and rebuild confidence of the private sector and the

country’s international development partners. More importantly, this

will help in reducing inflation and the crowding out of private sector

Page 87: Research Data

credit, thereby facilitating investment, growth and employment

opportunities.

The SBP report further said the impact of the widening fiscal deficit is

clearly visible in the sharply rising domestic debt. The outstanding

government domestic debt reached Rs 5,594 billion (31.8 per cent of

estimated GDP) which is more than double the stock at end-June

2007, the report said and added that this sharp growth in debt stock

is fueling concerns about macro stability and monetary management.

The report showed optimism about the next cotton crop for several

reasons: (a) higher cotton prices during FY10 encouraged farmers to

increase acreage for the next crop; (b) there is a shift towards more

productive (and disease resistive) BT cotton seeds; and (c) water

availability is expected to improve over last year. Rising fertilizer

prices are the key downside risk at the moment.

According to the report, the government has set the wheat

procurement target at 6.57 million tones, which is lower than the

target for the previous year. However, the government may come

under pressure to exceed this target since the market price of wheat

is considerably lower than its support price while banks appear to be

willing to finance the additional procurement. This could feed the

circular debt problem and also crowd out the private sector at the

margin.

“While energy shortages continue to impact a number of industries,

some sectors could face new challenges. For example, the disruption

in the global supply of auto parts from Japan may impact some

manufacturers in Pakistan. In addition, auto manufacturers will face

stiff competition from imported cars as the government has increased

the age limit for used imported vehicles from 3 to 5 years,” it

commented. 

http://nation.com.pk/pakistan-news-newspaper-daily-english-online/

Politics/05-Jul-2011/SBP-asks-govt-to-contain-borrowing

JULY 4, 2011 7:48 PM

Page 88: Research Data

Riaz Haq said...

Here's an OXFAM report about land for landless peasant women in

Pakistan:

Oxfam Media Officer, Caroline Gluck, is currently travelling in Sindh

district in Pakistan. She sends us this blog from there:

Mother of five, Sodhi Solangi, can’t stop smiling as she shows me her

new eight acre plot of land. Cotton crops are growing and, a little

further away, building work is almost finished on a large new house

overlooking the fields where her family will soon settle.

Just a few years ago, 42 year old Sodhi, who lives in Ramzan Village,

Umerkot district, in Sindh, Pakistan, was landless. She and her

husband used to work on others’ lands, earning a share of the crops

as payment. Daily life was a struggle.

“We often had problems”, Sodhi recalled. “Sometimes we had money,

sometimes not. It was very hard for us. We’d spend all our days

working on someone else’s farm and our children would be at home.

“We wore torn clothes. But now things are very different. When you

like something, you can go out and buy it. Before, we would have to

ask the landlord to give us money if we wanted anything, but now we

have money in our hands and we can buy things whenever we want.”

“Now we have our own land and are working on our own land. It feels

so good when we work there. When we used to work for others, we

would have to drag ourselves there.”

Her family’s luck changed when Sodhi was awarded eight acres of

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land, under a programme run by Sindh’s provincial government,

which in 2008 began redistributing swathes of state-held land to

landless women peasants. The landmark scheme was an attempt to lift

more people out of poverty in the province, where more than two-

thirds of the population work the land, but where bonded labour is

still widely practiced and most land is still held by wealthy and

political influential elites.

Sohdi and her family grew wheat and cotton on their new land. And

they managed to earn enough profit to buy another eight acres. 

“We were so happy when we go our land. Now, things are so

different”, said Sodhi. “Whenever we want to eat anything, we can

just buy it. Before, we used to eat dal and potatoes. Now we can buy

all sorts of things – mangos, even chicken.”

“Everyday, we have a lot of food. It’s like a festival of food for us every

time!” she said, laughing.

Meat is an unaffordable luxury for most poor farming families – and

one telling sign of just how much Sodhi’s life has turned around.

Her neighbours and relatives jokingly call her “lady landowner” and

many told me they planned to apply for land during the next phase of

the redistribution scheme.

But Sodhi is one of the lucky ones. Her land, though parched and

lacking proper irrigation, is still cultivable; and, unlike many women,

Sodhi didn’t face legal claims disputing her right to the land from

wealthy landowners or others living nearby.

-----

“The landlord sent officials to threaten the women here saying : ‘We

will destroy your homes and take your tractors. ‘ He also threatened

Page 90: Research Data

to send the police to our home”, said Shareefa Gulfazar, who is in her

fifties, and was awarded 4.5 acres of land.

Her daughter, Dadli Kehar, who was awarded 3 acres of land, fears

they are being tricked out of what is rightfully theirs. With the help of

Oxfam’s partner Participatory Development Initiatives (PDI), both

women plan to fight through the courts for what they believe is their

right to the land.

----

Despite the threats and the likelihood of a lengthy legal battle,

Shareefa and Dadli intend to fight for their land. They know that

having their own land can empower them as well as help to feed their

families and ensure they have a better future.

http://www.oxfamblogs.org/southasia/?p=1088

JULY 8, 2011 7:09 PM

Riaz Haq said...

Here's a report by Oxfam's Caroline Gluck posted onReliefweb:

Pakistan did not carry out essential land reforms soon after

independence. As a result, critics say, Pakistan's agricultural and

rural sectors are characterised by highly feudal relationships which

keep many in abject poverty, including bonded labour. It's estimated

that more than 60% of farmers in Sindh are landless, while vast tracts

of farmland are still owned by small wealthy elites who wield huge

political and social influence.

Sindh's land distribution programme is a bold step forward. For the

first time in Pakistan as well as South Asia, state land is being

specifically distributed to landless women peasants, in an attempt to

Page 91: Research Data

begin reducing poverty and bringing about much wider social changes

in rural areas.

"It's very important for me to get land"

When I visited the packed kutchari, or open hearing, it was bustling

with activity. Many women and their families had traveled in vans

organised by Participatory Development Initiatives (PDI), a local

partner supported by Oxfam, to ensure as many deserving women as

possible had the chance to register for land. PDI staff were also on

hand to help those unable to read and write to fill out land application

forms; and for weeks earlier had carried out awareness campaigns

about the land distribution programme, including using local radio

broadcasts.

"It's very important for me to get land," said mother of four, Janat,

who currently farms on four acres of land belonging to her landlord.

Her family only receive a quarter of the crops they cultivate - the

landlord takes the rest.

"We want land of our own to pass on to our children; to have our own

house and not live with threats or the fear of having to move. A

landlord can ask us to leave at any time," she explained.

Another lady, Sakina, who traveled with her six-year-old son, chipped

in. "Security is a priority for us. If we own land, we will have a safe

house; no corrupt people can snatch our crops from us... There are

always threats from influential people who can take the land from us."

----

The second phase of distribution is now solely targeting landless

women. It hopes to iron out many of the flaws in the original process,

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as well as offering women longer-term packages of agricultural

support including providing seeds, fertilisers, pesticides and technical

help.

Faisal Ahmed Uqaili, co-ordinator of Sindh government's Land

Distribution Programme, acknowledges that about 50% of the original

land allocated had proved problematic. But he says that lessons have

been learnt and around 80% of cases have been settled. Officials were

also under strict orders to ensure greater transparency, he says, to

stop nepotism and corruption. There had been cases reported of

officials trying to sell application papers to the women, or grant land

to people favoured by influential political leaders.

"You need to say the glass is half full instead of half-empty," Faisal

told me. "When you meet these success stories, women are now

making a livelihood for their husbands and families. There is a marked

difference. If change is coming in the life of the people for this allotted

land and for a fairly large percentage of people, then it's the start of

success."

Mother-of-seven Beebul Hassan's face lights up as she holds up a slip

of paper with a signature showing that she's been successful in her

application. She is now the proud owner of four acres of land.

http://reliefweb.int/node/357648

JULY 10, 2011 4:16 PM

Riaz Haq said...

Here's an assessment by Haris Guzdar and Julian Quan of link

between landlessness and rural poverty in Pakistan: 

Page 93: Research Data

Landlessness consistently comes up as one of the most important

correlates of income poverty in statistical and econometric analyses of

poverty-related data in Pakistan. The World Bank’s Pakistan Poverty

Assessment used data from the Pakistan Integrated Household Survey

(PIHS) 1998-99 to show that the head-count ratio of

poverty among the rural landless was 40.3 per cent, while for those

owning land it was 28.9 per cent. Even the owners of marginal

holdings of less than one acre had a head-count ratio of 31.8 per cent

– or 8.5 per cent points lower than that of the

landless.20 These findings are corroborated by the Participatory

Poverty Assessment which identifies land ownership and access to

land as being among the primary determinants of rural poverty.21

Besides its direct impact on agricultural livelihoods, the distribution of

land ownership in Pakistan also had broader economic, social and

political implications for poverty. The existence of monopolistic

landlords was thought to be associated with the creation of

monopolistic conditions in other markets – such as those for credit,

water, inputs and outputs – and thus created uneven conditions.

Furthermore, locally

monopolistic landlords were thought to adversely affect the quality of

governance of

public institutions, including mechanisms for political accountability.

http://www.rspn.org/publications/Microsoft%20Word%20-%20Access

%20to%20Land%20&%20Poverty%20Reduction%20in%20South

%20East%20Asia.pdf

JULY 11, 2011 10:09 AM

Riaz Haq said...

Here's a BBC report of how inflation is hurting Indians and

Pakistanis: 

Page 94: Research Data

Inflation is the price that ordinary Asians are paying for high growth

rates.

For the less well-off, who spend their money on food and fuel, the

story is even worse. The rise in their household expenses at the

moment is usually higher than headline inflation rates.

According to the International Monetary Fund, last year consumer

prices rose 13.2% in India, 11.7% in Pakistan and 9.2% in Vietnam.

Other Asian nations coped better but the average for developing Asia

was 6% - compared to a 1.6% average rise in prices in advanced

economies.

The speed at which prices are shooting up means that unless people

find ways to save and invest effectively, they in fact get much poorer -

even if Asia is getting richer.

---

The world is jealous of Asia's sky-high growth rates, but for ordinary

people the price of success is corrosive inflation which could eat away

their savings.

"From outside it looks good," says Manasi Pawar. "We're staying in a

big house, paying so much in rent and our kids are going to great

schools."

Manasi, a qualified software worker in hi-tech Hyderabad in India,

recently became a full-time mother. Her husband also works in the IT

industry.

The couple epitomise the emergence of a well-to-do middle class in

Asian countries - except there's one significant snag.

Page 95: Research Data

"We were actually losing money," says Manasi.

The couple recently woke up to the fact that inflation rates of nearly

9% meant that their savings were actually disappearing in front of

their eyes.

"We were sitting on a bunch of cash but we didn't know where to put

it, and it's important that we don't let it lie there in the bank - because

a bank doesn't give an interest rate that even matches the inflation

rate," she says.

----

The poorest people in society, who spend disproportionately more on

food, are hit most savagely of all.

But there is a way to fight back against inflation: to save, and to put

some of that money in a part of the economy that rises along with

inflation.

For most people, that means investing in shares or equities. "The only

way you can make money long-term is through an equity linked

product," says Ms Halan.

Money in the bank in India may only earn 3% or 4% - which in fact

means you are losing money. But equity linked funds in this exploding

economy have risen much faster, sometimes as high as 25%. 

http://www.bbc.co.uk/news/business-13959235

JULY 11, 2011 6:35 PM

Riaz Haq said...

Page 96: Research Data

Here's a recent Washington Post story on slowdown in India:

....In developments that parallel events in the other Asian

powerhouse, neighboring China, rising prices have forced the

government to steadily tighten monetary policy. Interest rates rose for

the 10th time in 16 months last week.

But business leaders are unhappy. They say the medicine could be

making the economic situation worse.

Much of the inflation in India is a function of higher oil and food

prices, factors that respond poorly, if at all, to higher interest rates.

Instead of depending on the central bank, the government needs to

push through the kind of agricultural reforms and investment it has

been talking about for years, analysts say.

“Government policy should be focused on improving agricultural

productivity, but because that isn’t happening, the burden is falling

more and more on monetary policy,” said Sanjay Mathur, Royal Bank

of Scotland’s Asia emerging markets economist in Singapore.

“Consequently, a number of sectors that shouldn’t be getting hurt are

getting hurt.”

That means growth could fall back toward 7 percent, some economists

warn, still faster than that of any major economy except China but

below what India could achieve — and needs, if it is to pull hundreds

of millions of people out of poverty.

“There is no point substituting one bad policy with another bad

policy,” said Surjit Bhalla, chairman of Oxus Investments. “When the

patient is down, don’t give him another kick in the pants.”

In the early 1990s, India’s government pushed through a series of

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economic reforms that unshackled the private sector and laid the

foundation for two decades of strong growth. With that growth has

come rising incomes, an expanding middle class and changing eating

patterns. No longer dependent solely on rice, lentils and grains,

Indians are demanding more vegetables, fruit, eggs, meat and fish.

Local agriculture has not kept pace. Farmers grow the wrong mix of

crops, and about 40 percent of production is wasted before it reaches

market because of inadequate distribution, warehousing and cold-

storage systems.

Add to the mix a rural employment scheme that has boosted the

incomes and appetites of India’s poorest, and a demographic bulge in

hungry 15- to 24-year-olds, and it is little surprise that food prices are

rising steadily year by year.

That in turn has pushed up wages, while production of raw materials

such as coal, ores and cotton is also struggling to keep up with rising

demand. Inflation hit 9.1 percent in May, and the central bank says it

is expected to remain high through at least September.

To get food prices down, the government needs to promote

horticulture and revolutionalize agricultural marketing and

distribution, economists say. Allowing foreign companies such as Wal-

Mart to set up supermarkets in India and invest in cold-storage

facilities, a long-promised but still undelivered policy goal, would also

help, they say.

------------

The Organization for Economic Cooperation and Development last

week underlined the need for a new set of reforms in India to bolster

growth, and no one in the finance or planning ministries seemed to

disagree. The problem is getting it done.

----------

Page 98: Research Data

Higher interest rates are choking much-needed investment, which

was almost flat in the first quarter of this year and grew just 4.1

percent year over year, as overall economic growth slipped to 7.8

percent.

The stock market is sliding — shares are down more than 14 percent

this year, making India the worst-performing market in Asia. That in

turn makes it more difficult for companies to raise the capital they

need to invest.

---- 

http://www.washingtonpost.com/business/indian-economy-starts-to-

slow-down/2011/06/23/AGvjUBiH_story.html

JULY 17, 2011 6:45 PM

Riaz Haq said...

Here's a Bloomberg report on rising consumer spending and growing

FMCG sector in Pakistan:

...“The rural push is aimed at the boisterous youth in these areas, who

have bountiful cash and resources to increase purchases,” Shazia

Syed, vice president for customer development at Unilever Pakistan

Ltd., said in an interview. “Rural growth is more than double that of

national sales.”

--------------

Nestle Pakistan Ltd., which is spending 300 million Swiss francs

($330 million) to double dairy output in four years, boosted sales 29

percent to 33 billion rupees ($377 million) in the six months through

June.

“We have been focusing on rural areas very strongly,” Ian Donald,

Page 99: Research Data

managing director of Nestle’s Pakistan unit, said in an interview in

Lahore. “Our observation is that Pakistan’s rural economy is doing

better than urban areas.”

The parent, based in Vevey, Switzerland, aims to get 45 percent of

revenue from emerging markets by 2020.

---------------

Haji Mirbar, who grows cotton on a 5-acre farm with his four

brothers, said his family’s income grew fivefold in the year through

June, allowing him to buy branded products. He uses Unilever’s

Lifebuoy for his open-air baths under a hand pump, instead of the

handmade soap he used before.

------------

Sales for the Pakistan unit of Unilever rose 15 percent to 24.8 billion

rupees in the first half. Colgate-Palmolive Pakistan Ltd.’s sales

increased 29 percent in the six months through June to 7.6 billion

rupees, according to data compiled by Bloomberg.

-----------

Unilever is pushing beauty products in the countryside through a

program called “Guddi Baji,” an Urdu phrase that literally means “doll

sister.” It employs “beauty specialists who understand rural women,”

providing them with vans filled with samples and equipment, Syed

said. Women in villages are also employed as sales representatives,

because “rural is the growth engine” for Unilever in Pakistan, she

said.

While the bulk of spending for rural families goes to food, about 20

percent “is spent on looking beautiful and buying expensive clothes,”

Syed said.

Colgate-Palmolive, the world’s largest toothpaste maker, aims to

address a “huge gap” in sales outside Pakistan’s cities by more than

tripling the number of villages where its products, such as Palmolive

Page 100: Research Data

soap, are sold, from the current 5,000, said Syed Wasif Ali, rural

operations manager at the local unit.

--------------

Unilever plans to increase the number of villages where its products

are sold to almost half of the total 34,000 within three years. Its

merchandise, including Dove shampoo, Surf detergent and Brooke

Bond Supreme tea, is available in about 11,000 villages now.

-------------

Pakistan, Asia’s third-largest wheat grower, in 2008 increased wheat

prices by more than 50 percent as Prime Minister Yousuf Raza Gilani

sought to boost production of the staple.

“The injection of purchasing power in the rural sector has been

unprecedented,” said Sherani, who added that local prices for rice

and sugarcane have also risen.

----------

Increasing consumption in rural areas is forecast to drive economic

growth in the South Asian country of 177 million people, according to

government estimates.

Higher crop prices boosted farmers’ incomes in Pakistan by 342

billion rupees in the 12 months through June, according to a

government economic survey. That was higher than the gain of 329

billion rupees in the preceding eight years.

-------------

Telenor Pakistan (Pvt) Ltd. is also expanding in Pakistan’s rural areas,

which already contribute 60 percent of sales, said Anjum Nida

Rahman, corporate communications director for the local unit of the

Nordic region’s largest phone company.

OCTOBER 4, 2011 6:09 PM

Page 101: Research Data

Riaz Haq said...

Here's a Pakistan Today report on motorcycle manufacturing in

Pakistan:

Karachi - To effectively cope with domestic market of over 1.5 million

units and after successful launch of their products in global markets,

the local motorcycle producers are now planning a further investment

of $100-150 million in their existing units.

The motorcycle industry analysts have pointed out that despite

numerous hiccups faced by the economy in recent years, growth in

motorcycle production has been robust at 15 per cent. “A decade

back, the total motorcycle production in Pakistan was around 100,000

units, now the largest player alone is rolling out half a million units

while total production of two wheelers has crossed 1.5 million. They

said that the encouraging aspect in this regard is that industry is on

the path to sustained growth. The local demand for motorcycles is

likely to exceed 2 million units within a year or two,” they added.

“The global response to our quality motorcycles indicate a sustained

and healthy growth in exports as well” they opined, adding that in

fact, the industry experts are seeing themselves as the largest

exporters in the engineering sector. A sustained growth is only

possible due to regular investment and up-gradation of technology in

the motorcycle industry. “The growth we see in motorcycle production

would not have been possible without investment”, they added.

In this regard, Fahad Iqbal CEO, HKF Engineering, makers of Ravi

motorcycles said that the industry now has to fulfill the growing

demand in both domestic and global markets and for this, it needs to

invest over $100 million in the next couple of years to keep abreast

with market needs and demands. He said that all the motorbike

producers having production of 50,000 units or above are now

planning to expand their capacities to cope up with the market

demands.

“There are almost a dozen players that have achieved this production

Page 102: Research Data

level” he said, adding that even if each of them invests $10-15 million,

the total investment would cross $150 million. These units have been

regularly making investments to increase their market share but now

they have reached a level where they have to invest in high-tech parts

to ensure that instead of having 90 per cent local components,

Pakistani bikes are produced by 100 per cent local parts, he added.

Market analysts urged that in such an encouraging situation, the

government should refrain from taking steps that might jeopardise

this investment. He said that an investment of $150 million by local

players without any government concession is better than vying for

similar investment over a period of 10 years from a foreign company.

The current players, from Italy, China and Japan, are also in various

stages of developing new models in the 100-150 cc range with the

latest technology, he said. However, he added, they were not offered

any relief even on imports of the environmentally friendly Euro 2

components, which have already been introduced in local bike

production.

“Capacities exist in the country in areas like sheet metal parts and

there is a huge investment need in areas such as die casting for parts

like crank cases and crank covers, electronic parts such as CDI units,

engine parts like ACG, clutch, pistons, shock absorbers (cushions),

plastic parts such as emblems” said Arshad Awan CEO General

Engineering and added that even capacity enhancement and thus

investment will be needed in low-tech parts like head lights, tail lights

etc. 

http://www.pakistantoday.com.pk/2011/08/bike-manufacturers-plan-

heavy-investment/

OCTOBER 28, 2011 11:01 PM

Riaz Haq said...

Page 103: Research Data

Here's a NY Times story about soil renewal for agriculture in

Pakistan:

LAHORE, PAKISTAN — In the Pakistani village of Sharbaga, about

130 kilometers from Lahore, a 70-year-old farmer named Mohammed

Ali and his wife plant rice seedlings in a wide field. They stand ankle-

deep in muddy water holding thin green leaves that they deftly press

into the ground. It is hard work under a blazing sun, but this

seemingly mundane task is a significant development that can help

rural Pakistanis improve their lives.

Just a few years ago, this rice paddy and most of the surrounding

fields in this village of 5,000 were barren. For decades the land has

lain fallow because it is saline from poor groundwater.

In 2006, the government of the state of Punjab, traditionally

Pakistan’s breadbasket, and the United Nations Development

Program started an agriculture project to rehabilitate saline farmland

by treating it with gypsum. The Punjab government pays for two-

thirds of the project’s six-year, $17 million budget, while the U.N.

program pays for the rest.

Nearly six million hectares, or about 15 million acres, across Pakistan,

including 2.3 million hectares in Punjab, are barren because of

salinity and water logging. Gypsum’s calcium composition can

neutralize saline soil. Within a season of applying the white powder,

farmers like Mr. Ali had transformed a long-degraded land into a field

that yielded bountiful crops of rice and wheat.

Forty-three percent of Pakistan’s population of 170 million depends on

agriculture for their livelihood and two-thirds of the country’s citizens

live in rural areas. Projects that help improve the lives of people on

the ground are critical to creating stability in Pakistan, and yet these

Page 104: Research Data

are often overlooked.

Sustainable agricultural growth is a “necessary condition for rural

growth, employment generation, poverty reduction and social

stability,” said a 2009 report on Pakistan’s agricultural potential by

Weidemann Associates, an economic development consulting firm

near Washington. The report was prepared for the U.S. Agency for

International Development in Pakistan.

The biosaline project in Punjab has already helped lift 50,000

households out of poverty by raising incomes. From 2007 to 2010, the

increase of rice and wheat production on rehabilitated land totaled

417,016 tons, worth $122 million.

Dozens of enthusiastic farmers who gathered to meet a visitor to

Sharbaga this past summer were unequivocal about how the

agriculture project had improved their lives. Before the project, there

were few ways to make money in the village aside from sporadic

manual labor. Farmers owned small parcels of largely infertile land,

and most of the men migrated to cities for work in factories or as

temporary laborers.

Now, all the men said their farming incomes had double or tripled, to

as much as $230 a month, compared with the $90 or less that they

could earn working in a factory, and migration to the cities is

declining.

---------

Reviving agriculture has been life-changing for many rural Pakistanis.

Zeba Bibi, who also cultivates a garden in Liliani village, wants to

know how she can make her mango trees healthier and more

productive. She aspires to one day buy a tractor with extra income

from crops grown on her family’s desalinated land. “We are looking

forward to a better life,” she said.

Page 105: Research Data

http://www.nytimes.com/2011/11/17/business/energy-environment/soil

-renewal-puts-pakistans-poor-on-stronger-ground.html

NOVEMBER 16, 2011 5:31 PM

Riaz Haq said...

Here's Business Recorder report on Pakistan's exporters' participation

in an Abu Dhabi exhibit:

Pakistan makes foray at SIAL Middle East to explore the Gulf food

market and boost exports by attracting local and regional players

participating in the region's premier food fair, which opened Tuesday

at the Abu Dhabi National Exhibition Centre.

Seven Pakistani firms attending the three-day event for the first time

displayed their range of products at the Pakistan pavilion.

They will meet local food importers and regional players to explore

the market, which is expected to cross $50 billion by 2020.

"Pakistan has emerged as an important player of food supplies to the

UAE and Gulf region particularly in rice, meat, poultry, seafood,

fruits, vegetables and spices. We hope SIAL Middle East will facilitate

our exhibitors both in product and geographic diversifications,"

Pakistan Ambassador to UAE Jamil Ahmed Khan told Khaleej Times.

The second edition of SIAL Middle East welcomed 12,000 trade

visitors with exhibitor line-up of more than 500 food, beverages,

equipment manufacturers, suppliers.

Argentina, China, Italy, Iran, France, Pakistan, South Korea, Taiwan,

Page 106: Research Data

Thailand, Turkey, Tunisia, UAE, UK and US also set up pavilions to

exhibit their products to make inroads in the region striving to ensure

food security amid rising inflation across the globe.

According to a new research, Gulf Cooperation Council (GCC) states

will spend $53.1 billion by 2020 on food imports to feed growing

population.

The region, spent $25.8 billion on food imports last year, depending

heavily on imports of agriculture and food products.

Food consumption in GCC is expected to rise at the rate of 4.6 per

cent annually between 2011-15 and reach 51.5 million tonnes per year

during this period.

Pakistan's exports of food products to GCC region stand at $1 billion

and UAE shares around 50 per cent of the total bill.

Appreciating premier event, Pakistan Ambassador said SIAL food fair

has become a truly international brand.

"It’s a great pleasure to be part of this food event for first time. We

welcome valued visitors to the Pakistan pavilion who will have a

chance to meet with our leading food suppliers at this dedicated

business platform in the thriving region of the Middle East."

Pakistani exhibitors displayed rice, juices, assorted pickles, edible oil,

fresh fruits, vegetables, assorted syrups, wheat flour and flour

products among others.

According to Pakistan Embassy officials, Pakistan has the potential to

double its food export to the UAE by adding value to its products.

Page 107: Research Data

"Our average unit price of food exported items is comparatively less

than most of the competing countries, but we need to do value

addition by establishing brands in the region," an official said.

http://www.brecorder.com/pakistan/business-a-economy/36142-seven-

pakistani-firms-explore-food-market-in-gulf-.html

NOVEMBER 22, 2011 8:50 AM

Riaz Haq said...

Here are some excerpts from Forbes cover story (Dec 19, 2011) on

venture money for Pak entrepreneurs:

Novogratz plays the role of auditor because, as CEO and founder of

the Acumen Fund, helping people starts with financial due diligence.

In April Acumen sank $1.9 million into the bank (National Rural

Support Programme Bank in Pakistan) in exchange for an 18% stake,

one small investment in a decadelong experiment in charitable giving.

Instead of shoveling aid dollars to causes or governments that give

away life-sustaining goods and services, Acumen espouses investing

money wisely in small-time entrepreneurs in the developing world

who strive to solve problems, from mosquito netting to bottled water

to affordable housing. It’s a new twist on the old adage about teaching

a man to fish, except that Novogratz wants to build an entire fish

market.

------------

Acumen has given Pakistani farmers the ability to access cash at

credit card rates, versus the loan shark terms of before—a staggering

125,000 clients have tapped the bank for $30 million in new credit

this year. Novogratz’s infusion has also allowed the bank to take

deposits for the first time, introducing the idea of savings, and 6%

interest rates, to a community that has been locked in poverty for

Page 108: Research Data

centuries. Since April 10,000 farmers have deposited $7 million in the

bank, which of course has resulted in yet more loans.

----------

Weeks later Novogratz fortuitously got two anonymous gifts of

$500,000 each and took her first trip to Pakistan in January 2002.

Acumen has since invested $13 million there in 12 businesses: Ansaar

Management Co. (affordable housing), Kashf Foundation

(microlending to women) and Micro Drip (agricultural irrigation),

among them. She has also collected $2.7 million from 40 Pakistani

donors and traveled to that country 20 times, turning one of the most

volatile, anti-American populations into a vibrant experiment in

alleviating poverty.

-------------

That’s why I find myself in a rural village 10 miles outside the city of

Lahore, Pakistan’s second-largest city. Novogratz has come to check

on another investment—and to collect the precious data she hopes to

use in new fundraising. Here on 20 acres, Saiban, a nonprofit

developer, has built homes for an eventual 450 Pakistani families,

most of whom earn $2 to $4 a day. The $4,000 units are 85%

occupied. You see the occasional motorcycle parked in front, where a

few women mill about, talking or hanging laundry.

-----------

These aren’t the answers Novogratz is fishing for. She wants to hear

examples of people using their homes as collateral to get college loans

for their children or amassing a better dowry for their daughters so

they can marry into a more prosperous family. She wraps up the

meeting. “So, the next time I come, you’re going to have some good

metrics for me? ’Cause this is my challenge for the world.” Someone

says, “Inshallah [God willing].”

Novogratz smiles, but shakes her head: “Not inshallah. We’re going to

do it!”

....

Page 109: Research Data

http://www.forbes.com/sites/helencoster/2011/11/30/novogratz/4/

DECEMBER 1, 2011 8:52 AM

Riaz Haq said...

Quality seeds essential for agriculture development, reports APP:

Supply of good quality seed is the base of sustainable and developing

economy. "For improving the seed quality Pakistan Agricultural

Research Council (PARC) Scientists are making appreciable efforts in

agriculture research sector", Dr Iftikhar Ahmad, Chairman, PARC said

while speaking in a meeting here on Tuesday.

The meeting on "Review of Variety Release and Seed Production

System in Pakistan" was jointly organized by PARC and International

Center for Agricultural Research in the Dry Areas (ICARDA). The

PARC Chairman further elaborated that seed supplied to farmer is an

important measure for achieving enhanced agricultural production.

"Due to lack of awareness and information about quality seed we are

unable to achieve required productivity, and the bad quality seed has

the potential to threaten food security for whole country", he added.

Foreign delegate from ICARDA, US Department of Agriculture

(USDA), and International Maize and Wheat Improvement Center

(CIMMYT) were present on the occasion. Provincial presentation

under the guidance of Secretary Agriculture, Government of Punjab,

Arif Nadeem and heads of other agricultural institutes from Sindh,

Balochistan, and Kheyber Pakhtoonkhwa graced the occasion.

Dr Iftikhar Ahmed, who chaired the meeting emphasized on improved

varieties for quality seed that are basic requirements for enhancing

the agriculture productive as well as in livestock sector.

He said that seed certified Cooperation Department also established

in Khyber Pakhtunkhwa, Sindh, Balutistan, Baluchistan as in

Page 110: Research Data

functioning Punjab province for betterment of farmers and also

launched a campaign for awareness of quality seed.

During a roundtable meeting of which 30 members participated from

across the country discussed current challenges that are being faced

to the seed sector.

The members of the meeting special focused on accelerating the

transfer of new improved varieties to farmers. The meeting was a

follow-up of a three-week mission sponsored by ICARDA during which

seed specialist Dr Mishael Turner had wide-ranging consultations

with both public institutions and private companies.

He was of the view that the threat posed by epidemics of rust diseases

of wheat had raised awareness about the need to move new improved

resistant varieties rapidly from research institutes to farmers through

the variety release system.

These concerns enabled ICARDA to secure funding from USAID to

compare variety release procedures in different countries.

Discussion among the participants covered many issues affecting

plant breeding and the seed industry in Pakistan and provided an

open exchange of opinions among the stakeholders. Key themes that

emerged from the meeting included the need to strengthen public

private partnerships and the ways to improve capacity building for all

partners of the seed sector.

There was an agreement among the participants that the new

Ministry of National Food Security and Research should take up these

issues as soon as possible.

http://nation.com.pk/pakistan-news-newspaper-daily-english-online/

Business/14-Dec-2011/Quality-seed-vital-for-agri-development

DECEMBER 13, 2011 8:26 PM

Riaz Haq said...

Page 111: Research Data

Here's Punjab CM pitching his province's potential as the food basket

to the world, reported by Daily Times:

Pakistan is as an emerging country of fully traceable products for the

world to meet food supply demand of increasing global population.

Chief Minister, Punjab, Muhammad Shahbaz Sharif at a meeting with

EU ambassadors said Punjab government has diverted substantial

resources to develop science-based, vibrant and internationally linked

agriculture sector that could not only meet the food security

challenges but also compete in domestic as well as in international

markets.

Punjab Government has entered into certification regime to produce

fully traceable agricultural and livestock products to reach high-end

markets of the developed world and to enhance export upto $2 billion

annually, he added.

He said Pakistan has the potential to become 10th largest economy of

the world after Germany. He apprised the distinguished envoys

Punjab government has allocated Rs 2.024 billion for a mega project

to improve supply chain of selected agricultural and livestock

products for improving quality and introducing traceability as per

international market standards and requirements.

He said participation of Punjab in the forthcoming International Green

Week (IGW), Berlin Germany would be an excellent opportunity to

showcase traceable agricultural and livestock products from Punjab

and to project Pakistan.

He said display of traceable agricultural and livestock products at

IGW would open the doors of high-end markets of the world leading

towards generation of tremendous business opportunities for Punjab,

Pakistan.

He said Punjab government was benefiting from Star Farm and Metro

to enhance capacity of our producers, suppliers and traders to boost

exports.

Ambassadors from 18 European Union countries including Lars-

Page 112: Research Data

Gunnar Wigemark, EU ambassador to Pakistan were present in the

meeting.

Lars-Gunnar said Punjab has tremendous potential in agriculture and

livestock sectors to get its due share in global trade of food products.

He lauded Punjab government for adopting techniques and standards

required for food safety and quality, and linking its traceable

agricultural products to the global markets.

Arif Nadeem, Secretary Agriculture said 15-20 fully traceable fruits,

vegetables, rice and meat products would be showcased at IGW for

which capacity of about 25 exhibitors has been built for compliance of

Global GAP and International Featured Specifications (IFS) by Star

Farm.

He told METRO would organise Pakistan week in their chains in

Berlin, parallel to the IGW event, therefore, fresh produce to be

brought in Germany would not only be displayed and sold at the event

but also at the Metro stores/chains in Berlin.

He said a vendor selected for the event has prepared thematic design

of Pakistan pavilion, which contains Business to Business (B2B) and

Business to Consumer (B2C) areas for display of products.

The concept, ‘farm to fork’ will be demonstrated through cooked

dishes of traceable products as well at the

occasion, he added.

Rizwan Khan, Vice Chairman, Punjab Board of Investment and Trade

highlighted the significance of International Green Week scheduled

for January 20-29, 2012 at Berlin, Germany and briefed about

aesthetics and media coverage of the event, embassy coordination and

back end support in terms of product development.

The diplomats of EU Countries and others expressed satisfaction on

the level of preparedness of Punjab government for participation in

the forthcoming IGW, Germany.

http://www.dailytimes.com.pk/default.asp?page=2011\12\18\story_18-

12-2011_pg5_7

Page 113: Research Data

DECEMBER 17, 2011 9:55 PM

Riaz Haq said...

Here's a story in The Nation on high wheat prices hurting exports:

LAHORE – Pakistan is likely to spoil its surplus wheat owing to its

high price as compared to the international market and substandard

storage system, losing an opportunity to earn millions of dollars

through its export.

Experts feared that fresh imminent increase in the wheat support

price will halt export of wheat and its products. At present, 5.5 million

tons of wheat was lying in stores and open places with public sector

departments while our requirement for next few months was only two

million tons. They said 1.4 million tons of wheat was present only in

Punjab and added that one of the prime reasons of piling up of this

wheat stock was high prices.

Former chairman of the Flour Mills Association, Asim Raza Ahmed,

while talking to The Nation, claimed that wheat prices were already

high in Pakistan as compared to other countries. Supporting his claim,

he said Russia had sold wheat to Egypt and Iraq at the rate of $220 to

$250 dollars per ton which in Pak rupees is Rs 22,000 per ton

compared to Pakistani wheat price of Rs 23,750 per ton. He said that

wheat was playing an important role in agriculture of Pakistan.

Pakistan is not only self-reliant in this crop from the last three years

but also exporting wheat. Pakistan exported 1.7 million tons of wheat

and 1.3 million tons of wheat products this year and was competing

on this front with Russia, Turkey, Australia, India and America. Some

experts were of the view that the government’s poor measures for

utilizing bumper wheat crops may cause it billions of rupees losses

again because of substandard ways of stocking of the commodity in

packing material, which is not recommended by the experts.

Page 114: Research Data

The upcoming wheat harvesting season will be overwhelmingly

tremendous as the government increased the wheat support prices to

Rs 1,050 per maund for encouraging the production of the commodity.

But it will also be harmful for the growers, as they will fail to dispose

of their commodity due to high rates.

The country is expected to harvest more than 25 million tons of wheat

in the next season as against the national requirement of 21 to 22

million tons, leaving surplus of about 3 to 4 million tons of wheat for

export market, which should be exported to earn precious foreign

exchange for the country.

http://nation.com.pk/pakistan-news-newspaper-daily-english-online/

Business/18-Dec-2011/Surplus-wheat--export-in-jeopardy

DECEMBER 18, 2011 5:19 PM

Riaz Haq said...

Pakistan to support declining cotton prices, according toBloomberg:

Dec. 19 (Bloomberg) -- Pakistan, the fourth-largest grower of cotton,

may buy as much as one million bales through state- run Trading

Corp. to support prices, the spokesman for the country’s ginners’

group said today.

“Our group is meeting the prime minister today to settle the details of

the deal,” Arshad Islam, spokesman for Pakistan Cotton Ginners

Association, said in a phone interview from Karachi. “We are

expecting to sell one million bales and above. The last time the

government bought from us was in 2005, when they bought 1.6

million bales.”

Cotton prices in Pakistan have declined 42 percent in the financial

Page 115: Research Data

year started July 1, tracking weak international rates as demand from

China waned and global production rose. Cotton in New York has

tumbled 59 percent since reaching a record $2.197 per pound on

March 7.

Pakistan is hoping to grow 12.7 million bales in the year that began

July 1 on better yields, the association said on Dec. 13. This is higher

than the 12.2 million bales estimated by the government in October. A

bale in Pakistan weighs 170 kilograms (375 pounds).

http://www.businessweek.com/news/2011-12-19/pakistan-may-buy-1-

million-bales-of-cotton-to-support-prices.html

DECEMBER 19, 2011 9:09 AM

Riaz Haq said...

Pakistan's food exports are surging, reports PPI:

ISLAMABAD, (Asia Pulse) - Pakistan's exports of food commodities

surged by 22.73 percent during the first five months of the current

fiscal year to reach at $1.514 billion, Federal Bureau of Statistics

(FBS) reported.

The overall food exports were recorded at 1.514 billion during July-

November (2011-12) as compared to the exports of $1.233 billion

during July-November (2010-11), according to FBS figures issued.

The food products that contributed to positive growth included fish

and fish preparations, exports of which increased from $106.742

million last year to $125.959 million during the first five months of

this year, showing an increase of 15.83 per cent.

Exports of fruits also increased by 13.94 per cent from $77.753

Page 116: Research Data

million to $88.595 during the period under reviews, showing positive

growth of 13.94 per cent, the data revealed.

Exports of vegetables and tobacco increased by 28.47 percent and

27.62 per cent respectively during the period under review.

During the month of November 2011, the food exports witnessed

negative growth of 25.85 per cent and 6.93 per cent when compared

to the exports of October 2011 and November 2010 respectively.

The overall food exports during November 2011 were recorded at

$223.360 million against the exports of $301.246 million in October

2011 and $239.984 million in November 2010, the data revealed.

http://www.lankabusinessonline.com/fullstory.php?nid=152011880

DECEMBER 22, 2011 10:22 PM

Riaz Haq said...

Pakistan produces 13.67 million tones of fruits and vegetables per

annum, according to Online News:

An official told Online on Tuesday out of which about 25 per cent goes

waste, between farms to consumers, while only 4 per cent is exported

at far 41 per cent lower price compared to world average price.

The horticulture sector contributes about 12 per cent to the national

agricultural Gross Domestic Product (GDP) and holds great potential

for increasing export of quality horticultural produce, and offering

multiple employment opportunities throughout the supply chain, he

added.

Page 117: Research Data

The official said, “However, its growth & profitability is restrained

mainly by lack of proper post harvest management and transport

infrastructure. Improving post harvest management infrastructure

(grading, packing, storage and transport/cold-chain) will help reduce

high post harvest losses, increase production surplus along with

improving shelf life and quality of fresh produce, which will help to

stabilize prices in domestic markets as well as to substantially boost

export to highly lucrative and competitive international markets.”

It is pertinent to mention here that Ministry of Commerce had decided

to establish a “Cool Chain System” under “National Trade Corridor

Improvement Project”. The Cool Chain project is bound act as a

backbone for the development of supply chain infrastructure for

horticulture produce.

http://www.onlinenews.com.pk/details.php?id=187430

DECEMBER 27, 2011 5:53 PM

Riaz Haq said...

Here's a News story on Pakistan missing kinnow orange export target:

Pakistan’s kinnow export target of 300 million tons for this year seems

difficult to achieve due to the hurdles created by the customs

authorities, an exporter said on Thursday.

The Co-chairman of All Pakistan Fruit and Vegetable Exporters,

Importers and Merchants Association (PFVA) told The News that

exporters suffered a loss of $10 million on export of kinnow, as

shipments were delayed because of complete checking of

consignments. “In many consignments planes left and cargo was not

taken,” he said.

Page 118: Research Data

CEO Harvest Tradings Ahmad Jawad said Japan may be good market

for Pakistan kinnow in the coming years if Pakistan Horticulture

Development and Export Company (PHDEC) and Ministry of

Commerce make serious efforts to explore this market as we did in

mangoes last year. “The planners need to realise that there are

certain areas where the private sector cannot help exports grow,” he

said.

The import of citrus in Japan has doubled in 2010/11 due to decline in

local production Jawad said quoting a report of the US Department of

Agriculture (USDA). The US and Australian citrus import to Japan has

increased substantially during the period.

The import of fresh produce in Japan increased to 21,406 tons for the

12 months to September 2011, up from 10,797 tons for the same

period a year before, the USDA Global Agricultural Information

Network (GAIN) report said.

The US accounted for the majority of the increased volume, with a 93

per cent jump to 17,650 tons giving it a market share of 82 per cent.

Matching with Japan’s new role as Australia’s largest citrus export

market, Australian imports jumped 136 percent to 2,276 tons. New

Zealand, Chilean and Taiwanese imports also grew over the period.

Japan’s citrus imports are expected to decline by about 12 percent to

19,000 tons in 2011/12, the report added, because of Japanese Mikan

production bouncing back.

“On the other hand Pakistan’s export target for kinnow set at 300,000

tons this year is becoming harder to meet as the season unfolds due to

unlimited blunders,” he said.

Page 119: Research Data

The CEO Harvest Tradings further emphasized that starting with

Pakistan’s image building the trade or counsellors should work as

marketing managers fully knowing about the market demand there

and about the quality of products and selling tactics by Pakistan’s

competitors.

They should be very much in touch with the business communities

there, exchange business data and information, provide businessmen

at both ends with proper consultation meant to increase bilateral

trade and investment, help resolve trade disputes between

entrepreneurs of Pakistan and any other country.

http://www.thenews.com.pk/TodaysPrintDetail.aspx?

ID=86002&Cat=3

JANUARY 5, 2012 8:51 PM

Riaz Haq said...

Here's a market research report on Pakistan's agriculture sector:

Pakistan Agribusiness service provides proprietary medium term price

forecasts for key commodities, including corn, wheat, rice, sugar,

cocoa, coffee, soy and milk; in addition to newly-researched

competitive intelligence on leading agribusiness producers, traders

and suppliers; in-depth analysis of latest industry developments; and

essential industry context on Pakistan's agribusiness service.

Pakistan's agricultural output has steadily declined in its contribution

to GDP in the past decade, down from 24.0% in 2000/01 to 20.9% in

2010/11. That said, the sector still employs the largest number of

workers in the population and we expect the industry to remain a

Page 120: Research Data

government priority as the country deals with issues of food security

and the vulnerability to natural disasters. Over the long term, we

foresee the dairy, poultry and wheat industries as benefiting the most

from increased investment.

However, despite the existing network of irrigation systems across the

country, we believe that significant improvements in infrastructure

and better supply chains will have to be implemented in order for the

country to reap the full benefits of its fertile soil.

Key Trends

- Rice production out to 2015/16: 7.5% to 7.3mn tonnes. We expect

the country to increase its share in the basmati rice trade as

production expands over our forecast period.

- Wheat consumption out to 2016: 14.2% to 25.3mn tonnes.

Consumption growth will be driven by rising incomes and population

growth, as well as increased access to good-quality milk.

- Sugar production out to 2015/16: 35.1% to 4.8mn tonnes. Large-

scale consumers such as confectioners, candy makers and soft drink

manufacturers account for about 60% of the total sugar demand and

will be the main drivers of growth.

- 2012 Real GDP Growth: 3.8% (up from 2.4% y-o-y in 2011; forecast

to average 3.7% from 2011 to 2016).

- Consumer Price Inflation: 11.2% average in 2012 (down from 13.7%

in 2011).

- Central Bank Policy Rate: 12.0% (lower than 14.0% in 2011)

----------

South Asia rice exporters should benefit the most from the recent rice

trade disruptions out of Thailand. So far, traders report that more

than 100,000 tonnes of rice for export have been stalled as a result of

the country's worst flooding in decades. Some sources estimate that

this could rise to more than 300,000 tonnes. Given these

Page 121: Research Data

developments, the spotlight has now turned to South Asia to meet

demand for the grain in the near term.

Despite the recent floods, which destroyed approximately 20-30% of

the sugarcane crop in the Sindh region, we forecast 2011/12 sugar

output from Pakistan at 4.1mn tonnes, 2.5% up from our previous

estimates. This is largely due to an overall 5-8% increase in sugarcane

yields, area harvested and favourable monsoon rains during the

growing season. Sugar crushing is estimated at 82% and sugar

recovery at 8.8%. According to provincial reports, higher sugar prices

farmers received last year, coupled with strong demand from the

industrial sector, have boosted planting in the provinces of Punjab,

Sindh and Khyber Pakhtunkhawah.

http://www.researchandmarkets.com/research/b503cb/pakistan_agrib

usin

JANUARY 13, 2012 6:46 PM

Riaz Haq said...

Former British foreign secretary David Miliband joins Pakistan private

equity fund as advisor, according toExpress Tribune:

In what appears to be a coup for the fledgling Pakistani private equity

industry, Indus Basin Holdings has managed to get Britain’s former

foreign secretary David Miliband on board as a senior adviser.

“We are delighted to be able to bring on board the expertise of

Miliband who knows the region and its challenges well,” said Indus

Basin founder and CEO Aamer Sarfraz, according to a press release

issued by Miliband’s office. “He shares our conviction that investment

in Pakistan’s agricultural sector can have substantial long-term

Page 122: Research Data

impact on the country’s poorest farming communities.”

“I am delighted to be advising Indus Basin Holding, a company that is

investing in Pakistan’s future at a time of such fundamental

importance,” said Miliband in a press statement. “I care deeply about

Pakistan, the development of its economy and its future in the wider

region. IBH is committed to developing an agricultural sector which

has huge potential, but currently lacks investment. I look forward to

working with IBH in building support and investment in Pakistan’s

agricultural capacity and productivity.”

Officials at the company say they had been trying for the past year

and a half to secure the contract with Miliband, who served as

Britain’s foreign secretary between 2007 and 2010. He also served as

Britain’s secretary of state for the environment, food and rural affairs

previously.

-----------

Indus Basin Holdings is only a relatively recent entrant into Pakistan’s

nascent private equity and venture capital space but already began to

attract a lot of attention for the kinds of big-name investors it was

able to attract in its fund, which is focused on capitalising on

opportunities presented by raising productivity levels in Pakistani

agriculture.

The company’s investors include Tim Draper, the famous American

venture capitalist known for being an early investor in Skype and

Hotmail, and Baron Lorne Thyssen-Bornemisza, a Swiss aristocrat

whose family owns the ThyssenKrupp, a German technology

conglomerate with over 670 subsidiaries and 200,000 employees

worldwide.

Indus Basin’s investments currently include Agroventures, a

Faisalabad-based breakfast cereal manufacturer, and Rice Partners, a

Page 123: Research Data

company that is focused on contract farming and marketing Pakistani

rice directly to North American and European retailers.

http://tribune.com.pk/story/324941/high-connections-david-miliband-

joins-pakistani-private-equity-firm/

JANUARY 20, 2012 5:16 PM

Riaz Haq said...

Here's a Daily Times story on Pakistani Punjab's participation at an Ag

exhibit in Germany:

Diplomats, international economic experts and investors in Berlin,

Germany have termed the exhibition of agriculture items of Pakistan

in Berlin as a great success of Punjab and Pakistan. As many as 21

different products and agriculture items have been displayed in the

exhibition by Pakistani farmers and industrialists.

Addressing a function held in connection with the exhibition, Punjab

Chief Minister Shahbaz Sharif said that he was thankful to political

leadership and senior officials of Germany for the warm welcome

extended to him and his entourage.

A large number of European investors, diplomats, Pakistani citizens

and farmers attended the function. The chief minister expressed the

confidence that his visit would help promote export of agriculture

items of Pakistan and strengthening of Pak-German relations. He

praised that the hospitality extended by German government and said

he would always remember the people there.

Former MPA Chaudhry Arshad Jutt, who was also a member of the

delegation, apprised the audience that the exhibition was the result of

Page 124: Research Data

the chief minister and his colleagues’ efforts. He said that the chief

minister and his colleagues paid all expenses from their own pockets

for participating in it. Agriculture Secretary Arif Nadeem said that the

Punjab government had allocated Rs 2 billion for promoting export of

agriculture items to foreign countries. He said that due to the steps

taken for this purpose, now farmers had to pay only 30 percent

whereas the remaining 70 percent expenses would be borne by

Punjab government.

The Livestock secretary said that besides export of high quality meat

to European countries and setting up of modern slaughterhouses in

Punjab, production of livestock was also being increased. Punjab

Investment Board Vice Chairman Muftah Ismael said that Punjab

government had sent teams to various countries for the promotion of

exports.

Earlier, the chief minister and his team attended a reception arranged

by the head of multinational company Metro. Shahbaz said that he

and his government were thankful of the Metro International for the

assistance provided for the exhibition of agriculture items in

Germany.

Expressing his views regarding exhibition, Metro International

chairman said that the chief minister and his government had taken a

bold initiative through this exhibition. Dr Andreas Kohler, member

parliament and president chamber of law, said that this exhibition

would play an important role in dispelling the impression of

extremism and terrorism about Pakistan existing in the western

world. He said that Germany was ready for extending all kind of

cooperation to Punjab in arranging more such exhibitions.

Shahbaz also visited a modern slaughterhouse in East Berlin. He

evinced keen interest in various sections of the slaughterhouse. He

Page 125: Research Data

said that similar slaughterhouses were being set up in Punjab for

increasing the production and export of meat. The chief minister

further said that like fruit and vegetables, Punjab government is also

taking extraordinary measures for promotion of livestock.

http://www.dailytimes.com.pk/default.asp?page=2012\01\23\story_23-

1-2012_pg7_23

JANUARY 22, 2012 10:22 PM

Riaz Haq said...

Here's an Express Tribune report on Psakistan's fruits and vegetables

exported to Sri Lanka:

A Pakistan trade delegation, visiting Sri Lanka these days, has

proposed setting up a body under the title Horticulture Export

Marketing Access with the objective of facilitating export of

agricultural produce to Sri Lankan markets.

The proposal was floated by the leader of the six-member delegation,

Faqir Nusrat Husain, at a ceremony held in Colombo.

The delegation, sponsored by the Trade Development Authority of

Pakistan, is on a week-long visit aimed at exploring ways and means

to enhance bilateral trade in fruits and vegetables, flowers and other

agricultural produce.

Team members include prominent agriculturalists from across the

country, who have specialised in production and export of various

fruits and vegetables including guava, chikoo, mango, citrus, berry,

potato, dry fruits, gur, tobacco (cigar) and fresh and dry dates.

Page 126: Research Data

Faqir Husain told Sri Lankan agriculturalists that Pakistan’s fruits and

vegetables had good quality and were also cheaper, adding Pakistan

provided an ideal alternative to Sri Lanka, which imported these items

from far-off countries.

Eager to reap maximum benefits from the free trade agreement (FTA)

with Sri Lanka, the delegation also planned to explore opportunities in

the tea industry. In this regard, it will visit Kandy to interact with the

local chamber of commerce and the Tea Research Board. It will also

visit tea factories and spice gardens.

The team members plan to hold meetings with Sri Lankan fruit and

dry fruit importers as well as other stakeholders to explore

possibilities of enhancing bilateral trade.

Sri Lanka, which imported $300 million worth of agriculture produce

from Pakistan last year, was the first country to sign an FTA with

Pakistan. Since the agreement came into effect in June 2005, bilateral

trade has strengthened and Pakistan is the second largest trade

partner of Sri Lanka in the South Asian region.

http://tribune.com.pk/story/328188/pakistan-proposes-export-

facilitating-body/

JANUARY 28, 2012 6:47 PM

Riaz Haq said...

"As the green revolution tapered off, a poultry revolution began; in the

late 1970s. Ever since, Pakistan has been gnawing away at broiler

chicken and there’s no turning back", wrote Punjab's director general

of board of investments in a recent Op Ed in Dawn.

Page 127: Research Data

In 2011/12 K&N’s expects to produce 80 million layer and broiler

chicks, reports thepoultrysite.com. 

In the 1960’s and 1970’s, obtaining safe, reliable sources of poultry

feed was an insurmountable challenge in Pakistan. This led Khalil to

set up his own feed mill to produce feed for K&N’s operations at

Karachi in 1971. With the growing need of feed for the integrated

production operations in Central Punjab province and Northern areas

of the country, a feed mill established by a multi-national company at

Lahore, was acquired by K&N’s to take advantage of low-cost feed

ingredients available in the Central part of Pakistan.

The growth of commercial poultry production through the decades

changed the mindset of consumers towards farm raised broilers and

eggs, helped by lower prices and greater availability. Today, Desi

chicken and eggs are produced in lower volumes and considered more

of a delicacy.

Yet the strength of the live/wet chicken market culture, the negligible

overheads of roadside sales – a butcher’s knife costs less than US$1 –

and the reassurance of Halal slaughter remain significant influences

slowing the uptake of processing, says Adil Sattar.

Practical problems, particularly the limited availability of cool chain

facilities and frequent power breakdowns, have to be overcome with

production and distribution of processed products inevitably involving

high overheads.

"Earlier, within our industry, poultry processing was considered a

non-viable poultry business activity as many firms had tried but ended

up closing down their operations," says Adil. "At K&N’s, we

endeavoured to develop the market, and other companies are now

looking to start processing operations."

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Today, chicken is the most popular protein source in Pakistan,

primarily through the industry’s growth and success leading to lower

cost and widespread availability, with per-capita consumption about

7kg (15.4lb) per year. The tradition is to eat chicken at home, always

skinless cooked in curries, with rice or barbecued.

Restaurants offer local cuisine including a variety of curries, barbecue

dishes and different types of rice, with a number of upmarket cafes

and restaurants serving western cuisine and many of the international

fast food caterers such as McDonald’s, KFC, Pizza Hut, Nando’s,

Hardees and Subway also present.

FEBRUARY 4, 2012 6:01 PM

Riaz Haq said...

Here's a News report on meat consumption in Pakistan:

The consumption of poultry meat increased by 239 percent in 11

years from 322 million tons in 1999/2000 to 767 million tons in

2010/11, but it is still only 0.7 percent of the global poultry

production, experts said on Monday.

At a seminar organised by Big Bird to commemorate its 20 years

association with the global poultry giant Hubbard pioneer of poultry

in Pakistan Dr Yaqoob Bhatti in his paper revealed that the value of

poultry infrastructure exceeds Rs300 billion and annual turnover of

commercial poultry is Rs40 billion.

With 105 hatcheries, the annual broiler chick production is 820

million, he said, adding that the commercial egg production is 8.690

billion per annum in addition to 3.742 million production of rural

Page 129: Research Data

eggs.

Pakistan Poultry Association former chairman Abdul Basit said that

poultry is the cheapest source of animal protein not only in Pakistan,

but the world over. The average daily animal protein consumption in

Pakistan is only 17 grams per capita, while the average minimum

requirement is 27 grams, he said.

There is a dire need to increase poultry production in the country that

has largely grown without helpful government policies or facilitation,

said Basit. The industry, for instance, has since long been demanding

the government to disallow poultry farm clusters through a law as

chicken farms at least 1.5km apart greatly reduce the risk of spread of

diseases among various poultry flocks, he said.

He said his concern has to relocate its very large chicken farms each

time when place was surrounded with many other farms too close to

his farms. He said he has shifted his major high quality grand parent

farms to Thar deserts. Dr Mustafa Kamal said that the consumption of

mutton has declined rapidly, while that of beef and poultry has

increased.

The share of poultry meat increased from 16.4 percent to 24.3

percent, he said, adding that the consumption of mutton declined

from 0.649 million tons to 0.616 million tons, showing a fall of 20

percent in total meat consumption share.

Still, he said, Pakistan as a meat eating country produces around 50

percent broiler chickens of those produced in India, which has seven

times human population and has a good chance to develop Grand

Parent breeding operations, which has an existing capacity of

producing eight million parent stocks for domestic as well as for

export purposes.

Page 130: Research Data

Olvier Behaghel of Hubbard France said that Pakistani poultry

improved efficiencies rapidly during the last 20 year that has helped it

control the cost. Maturing time of a broiler has reduced during this

period from four days to 46 days and from 38 days to 40 days, he said.

The weight gain of the chick at the time of maturity has increased

from 1.5-1.7kg to 1.9 to 2kg and feed consumption by the time of

maturity has declined from 2.2-2.5kg to 1.7-1.9kg. “Pakistan, he said,

is gradually reaching global and Hubbard standards in chicken health,

morality and efficiency in productive processes.

http://www.thenews.com.pk/TodaysPrintDetail.aspx?

ID=70726&Cat=3

FEBRUARY 4, 2012 6:21 PM

Riaz Haq said...

Here are excerpts of Express Tribune story on Nestle Pakistan's

record revenue and profits: 

Even as the economy continues to grow sluggishly, Nestle Pakistan

announced another year of record breaking profits, which grew by

13.5% to reach Rs4.7 billion – or about Rs102.94 per share – on the

back of a 26% increase in revenues, which reached Rs64.8 billion.

----------

Managing Director Ian Donald – a South African national who has

been with the global parent company for 40 years – believes the key

for Nestle to grow in Pakistan is primarily by growing the packaged

foods market.

“Take the example of yoghurt. We are 80% of the market when it

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comes to packaged yoghurt. But that packaged segment is only 2% of

the total market,” he said in an interview with The Express Tribune.

“So it doesn’t really matter what our market share is. We need to

grow the whole packaged segment.”

A key constraint to growing that segment, however, seems to be the

limited purchasing power of the ordinary Pakistani consumer. “Our

single biggest challenge is how to get the right quality product to the

consumer at a price that they can afford,” said Donald.

Over the past year, inflation has not helped matters. While Nestle’s

global food portfolio is highly diversified, in Pakistan it focuses heavily

on milk and dairy products. As milk prices continue to rise by more

than 20% a year, the company has not been able to pass on the

entirety of that effect to its customers. This is at least partially

reflected in its gross profit margins, which shrank by 1.2% to 25.8% in

2011. Energy costs have continued to go up as well. Nonetheless, the

company was able to grow the volume of products sold by a healthy

12%.

-----------

“We have a lean mindset,” said Giuseppe Bonanno, the company’s

head of finance and control in Pakistan. The company’s operating

costs are certainly lower than most of its competitors. For instance,

Nestle’s logistics costs are about 12% of revenues, compared to

between 18% and 19% for both Unilever Pakistan and Engro Foods,

two of its biggest competitors. Part of the advantage is economies of

scale: Nestle about as big as both of its rivals combined. But part of it,

said Donald, is that the company invests heavily in its infrastructure.

In 2011, the company invested about Rs8.9 billion in building up its

capacity.

Nestle already has a gigantic infrastructure in Pakistan. The company

collects milk from over 190,000 farmers spread out over an area of

Page 132: Research Data

about 145,000 square kilometers.

Another part of its growth strategy seems to be augmenting and

developing its existing brands rather than adding newer brands to its

line-up in Pakistan. “We cannot afford to invest in too many brands

because we cannot grow all of them,” said Donald.

However, the company has introduced brands such as Nido Bunyad,

which is a powdered milk product targeted to the rural consumer at a

price that is competitive with non-packaged milk.

The rural economy seems to be a key market for Nestle. “It seems to

us that the rural economy is growing faster than the urban economy.

However, we are also consciously driving growth in the rural

markets,” said Donald.

The company identifies its fastest growing markets as Peshawar,

Multan and areas that it describes as “peri-urban”, areas that lie on

the outskirts of most large cities and form a part of its metropolitan

area.

Nestle’s growth in Pakistan has been a mixture of both organic as well

as through acquisitions. When asked about whether Nestle might

pursue acquisitions in the future, Donald replied: “We are always

open to considering opportunities.”

As part of its plan over the next three years, the company will spend

about 320 million Swiss Francs in growing its presence in Pakistan.

http://tribune.com.pk/story/333671/despite-stellar-earnings-nestle-

pakistan-aspires-for-better-results/

FEBRUARY 8, 2012 9:02 PM

Page 133: Research Data

Riaz Haq said...

Here's a News report on US presence at the Karachi Agri Expo 2012:

The US Ambassador Cameron P Munter on Saturday said that the

United States is committed to the development of Pakistan’s

agricultural sector.

The United States is working with government and private sector

authorities to improve productivity and food security, and to increase

farmers’ incomes and stimulate overall economic growth, he said

speaking at the Dawn Pakistan Agri-Expo.

“This event highlights the collaborative efforts in agriculture between

our countries that spans more than five decades and continues today,”

the US envoy said.

The expo, a two-day national agricultural exposition supported by the

U.S. Department of Agriculture (USDA) and the United States Agency

for International Development (USAID), showcases new agricultural

farming technologies, products, and development programs.

The US Ambassador Cameron P Munter, Karachi Consul General

William Martin, and the US Embassy Agricultural Counsellor Todd

Drennan highlighted US-Pakistan agricultural cooperation during a

visit today to the Dawn Pakistan Agri-Expo.

Ambassador Munter and Consul General Martin toured the USA

Pavilion, where they met with companies that are implementing

USDA- and USAID-funded programmes and are importing US

agricultural products.

Page 134: Research Data

The USA Pavilion, under the theme of ‘Linking US Agriculture to the

World’ highlights US-Pakistan institutional linkages and partnerships,

which are introducing new technologies, farm equipment, and farming

practices to the Pakistani agricultural sector.

The exposition, taking place in Karachi on February 11 and 12 and in

Lahore on February 17 and 18, brings together exhibitors and

participants from across Pakistan and the world from various business

sectors involved with agriculture production and distribution.

http://www.thenews.com.pk/TodaysPrintDetail.aspx?

ID=92246&Cat=3

FEBRUARY 11, 2012 10:23 PM

Riaz Haq said...

Here's Part 1 of National Geographic story about Pakistan's heartland

of Punjab:

The fertile alluvium deposited by the mighty Indus river and its

tributaries in Pakistan have given the country’s demographic

heartland of Punjab an agrarian edge. Yet, errant canal planning and

over-pumping from tube-wells have degraded vast tracts of land.

Salinity and water-logging afflicts around 6.3 million hectares of land

and an additional 4,000 hectare of land gets affected every year

(estimates from University of Agriculture, Faisalabad, Pakistan,

November 2011). Climate change and conflicts over hydroelectric

impoundment infrastructure have also made the arable lands of the

country further vulnerable to flooding, as we saw in the epic floods of

2010 when an estimated 20 million people were displaced.

Amidst all these challenges to the farming economy of the country,

Page 135: Research Data

there are glimmers of hope that Pakistan’s elite are trying to

reconnect with the land in sincere and innovative ways. During my

last trip to Lahore – the capital of Punjab province and Pakistan’s

second-largest city (after Karachi), I was heartened to see urbanites

retreating to farms in the surrounding countryside. Previously such

farms were merely ornamental playgrounds of wealthy families but

now there is a growing interest in these ranks to reconnect with the

earth for societal good.

Zacky Farms, just outside Lahore, is the brainchild of Zafar Khan, a

Caltech-educated software engineer who runs one of the most

successful information technology companies in Pakistan named

Sofizar. What started off as a recreational venture is now a side-

business supplying sustainably produced organic milk, vegetables and

meat to nearby Lahore suburbs. The farm is modeled on a cyclical

model of minimal wastes and multiple product usage. The cows are

fed pesticide-free oats, clover and grass and their manure is used to

fuela biogas plant which runs the dairy facility. In an era of electricity

load-shedding, such an alternative source of energy at a local

industrial scale is immensely valuable to replicate as a development

path. The residue of the biogas is used to fertigate the fodder fields

and vegetable tunnels, which along with green manuring obviates the

use of fertilizers. Free-range chickens grace the fields and there is

even a fish farm on site. Zafar and his Ukrainian-born wife are

committed to sharing their experiences with other farming

entrepreneurs in the country.

Further south in a more rural and remote part of Punjab, famed writer

and erstwhile lawyer, Daniyal Mueenudin, maintains a mid-size farm

which is exemplifying other kinds of innovations. The farm does not

boast ecological farming practices, apart from tunnel farming that can

help with land conservation and humidity control. However, Daniyal

has changed the social landscape of his area through implementing a

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“living wage” for all his employees. Noting the high level of inequality

in Pakistan’s hinterland, the Yale-educated former director of the

university’s Lowenstein Human Rights Clinic, is practicing what he

preached. He also owns a farm in Wisconsin and could have a

comfortable life in the States but his social obligations keep him

ensconced in Pakistan for most of the year.....

http://newswatch.nationalgeographic.com/2012/02/23/farming-

pakistan/

FEBRUARY 23, 2012 7:49 PM

Riaz Haq said...

Here's Part 2 of National Geographic story about Pakistan's heartland

of Punjab:

...Raising the wage several-fold for works and farm manager, and also

offering bonus incentives for performance, has led to positive

competition that can help to erode the feudal levels of income

disparity which exist in this part of Pakistan. At the same time,

Daniyal is also committed to providing new livelihood paths for the

agrarian workers as automation reduces farm employment in some

areas. He has has fully funded a school and provided a merit-based

scholarship for advanced degrees to students from the nearby village.

One of the children from this school (the first in his family to even go

to school) is now making his way through medical school in Lahore!

Zafar and Daniyal’s stories of commitment to constructive farming for

social and ecological good may appear to be outliers but they are

catching on and provide hope to a country which is all too often

shadowed by despair. In the suburbs of Islamabad, tax incentives and

planning rules to encourage farming by urbanites are leading to a

Page 137: Research Data

growing culture of reconnecting with the land in residential farms. In

rural areas, the disaster caused by the floods of 2010 brought forth

numerous aid agencies with new ideas for sustainable farming. The

Pakistani diaspora, often known in the West for professions ranging

from taxi-driving to engineering, may well find opportunities for

reconnecting to their land in far more literal ways. With growing

commitment from land-owners it just might be possible to use the

existential shock of recent natural disasters that have befallen the

country into a proverbial opportunity for positive change.

http://newswatch.nationalgeographic.com/2012/02/23/farming-

pakistan/

FEBRUARY 23, 2012 7:50 PM

Riaz Haq said...

Here's some info on Nestle's rural entrepreneurship program in

Pakistan:

The Small Entrepreneur Development Project was launched in March

2009 from a partnership between Nestlé Pakistan Ltd. (as

implementing partner) and the Swiss Agency for Development and

Cooperation (SDC) which has co-funded the project. Its aim is to

contribute to the improvement of economic opportunities, income

generation and food security in rural areas of the country. Livestock

and dairy farmers are provided with training and assistance to both

enhance their skills as small entrepreneurs and improve their market

linkages. Training is provided through the Nestlé Agricultural

Services in the location of training farms specially dedicated to the

project.

Page 138: Research Data

Current dairy farming constraints

The livestock and dairy sector represent 11% of Pakistan's GDP.

There are 10 million farming families and 50 million cattle heads in

Pakistan, out of which 7 million farming families (approx 35 million

people) live in the Punjab Province. Many of them are landless

farmers.

The lack of sustainability of dairy farming in Punjab is due to the lack

of training and skills, poor infrastructure, poor breeds, lack of good

fodder management, lack of support mechanisms for the farmers, lack

of financial services and expertise in running small enterprises.

It is then no surprise that there are no commercial dairy farms or

formal dairy farming structures in Pakistan. The majority of these

farmers are domestic dairy farmers with only 2 to 3 cows or buffalos.

All this amounts to poverty driven farmers, no socio-economic growth

in the dairy sector, poor living conditions and very low social

standing, particularly for women. 48% of the farmers are women. As

part of their domestic chores, they care for the livestock but are not

socially acknowledged for these services and are kept out of the

decision making processes. Hence there is a strong need to initiate a

Page 139: Research Data

development programme targeted specifically at the women which the

Nestlé-UNDP Partnership Programme tackles with great success (see

specific project description). 

While the demand for milk and meat is growing by 5%, the actual

supply increase represents less than 2% per annum. There is a large

potential for farmers to play a positive role in the development of the

dairy sector in Pakistan's economy. Regretfully, very few initiatives

provide farmers with livestock and dairy training at the grass root

level which could strongly link rural development to economic

growth....

-----------

Nestlé Pakistan has established the training facility over 103 acres of

leased land as an investment for the development of the dairy sector

and to work towards sustainable farming and an improved rural

economy - benefiting the farmers through increased prosperity and

food security. Furthermore, this win-win community development

model is designed to sustain itself in the following manner:

Institutional linkages with the Government departments and financial

institutions once established will sustain beyond the life of the project;

capacities of the farmers once built shall yield economic benefits and

further contribute to generate employment; training modules

developed and tested by Nestlé Agri-Services will continue to be used

beyond the life of the project. 

http://www.community.nestle.com/rural-development/asia/pakistan/Pa

ges/small-entrepreneur-development-project.aspx

FEBRUARY 29, 2012 9:22 AM

Page 140: Research Data

Riaz Haq said...

Here's a Businessweek story on Fatima Fertilizer investing

in Africa:

Fatima Fertilizer Co. (FATIMA), Pakistan’s third-biggest maker of the

farming ingredient, plans to build a new factory in Africa at an

investment of about $1 billion to tap international markets.

The company expects to finalize plans this year to set up the factory,

Fawad Ahmed Mukhtar, chief executive officer, said in a telephone

interview from his Lahore head office. The fertilizer maker may

consider forging a partnership by investing $200 million, he said,

without elaboration.

Fatima registered its American Depositary Receipts in New York in

March 2011 to raise its profile and expand overseas, aiming to

overcome a chronic gas shortage at home. Pakistani fertilizer makers

including Engro Fertilizer Ltd. and Fauji Fertilizer Co. get as much as

50 percent less gas than they need to run their factories, curbing

production, according to Foundation Securities Pvt. in Karachi.

Fatima’s planned Africa factory may have a capacity to produce more

than 1 million tons of fertilizer because the company expects to get

“the best gas rates,” Mukhtar said.

“Besides local sales, we are also looking to export from there to

Pakistan, Brazil and the markets in Africa,” Mukhtar said yesterday.

To set up the plant Fatima is considering countries including Nigeria,

Algeria, Tanzania and Mozambique, where there is “enough gas,

which means that they will offer us good rates and good terms,” he

said.

Fatima rose 1.6 percent to 24.90 rupees at the close in Karachi

Page 141: Research Data

yesterday. The stock has almost doubled in the past 12 months,

compared with a 10 percent gain for the Karachi Stock Exchange 100

Index.

Diversifying Risks

Companies in Pakistan including Lucky Cement Ltd., the nation’s

biggest producer of the building material, are expanding overseas to

cut dependence on their home market. Lucky will begin construction

of a cement factory in Congo by June through a joint venture.

Expanding overseas will help companies including Fatima to diversify

risks, according to Taha Khan Javed, manager research at Foundation

Securities.

“Pakistan is facing a severe shortage of gas, so that takes away the

feasibility to establish a plant here,” said Javed. “From Africa they can

export anywhere in the world.”

The company will rely on a mix of its own cash, bank loans and

investment from partners to fund the new plant, Mukhtar said. Fatima

posted a net income of 4.12 billion rupees ($45 million) in the year

ended Dec. 31, the first annual profit in four years after it started

commercial operations in July.

The Danish Industrialisation Fund for Developing Countries and

Haldor Topsoe AS, a Denmark-based maker of catalysts, have agreed

to partner Fatima and will also help arrange funds, Mukhtar said,

without specifying if they will collaborate on the African factory.

ADR Trading

“We are looking at projects internationally for setting up new plants

and starting production in two to three years,” said Mukhtar.

Depending on the “opportunity at hand,” Fatima may set up more

Page 142: Research Data

than one plant overseas, he said.

Fatima Fertilizer’s ADR, each representing 50 local shares, may begin

trading in the over-the-counter market in New York by June, Mukhtar

said. Bank of America Corp. is the market maker, Bank of New York

Mellon Corp. is the depositary, and Standard Chartered Plc is the

custodian bank, he said. 

http://www.businessweek.com/news/2012-03-13/fatima-fertilizer-

plans-1-billion-africa-plant-to-grow-overseas

MARCH 13, 2012 5:33 PM

Riaz Haq said...

Here's an APP report on Pak food exports so far this fiscal year:

The exports of fish and fish preparations surged by 14.69 percent

during the first eight months of current fiscal year (2011-12) against

the corresponding period of last year.

The exports of fish and fish preparations were recorded at $195.284

million during July-February (2011-12) as against the exports of

$170.274 million during July-February (2010-11), according to data of

Pakistan Bureau of Statistics (PBS).

However, in terms of quantity, the fish exports witnessed nominal

increase of 0.34 percent by going up from 74,265 metric tons to

74,518 metric tons.

Page 143: Research Data

On month-on-month basis, the seafood exports also witnessed positive

growth of 13.88 percent during February 2012 when compared

to the same month of last year.

The fish exports during February 2012 were recorded at $21 million

against the exports of $18.441 million during February 2011.

However, as compared to the exports of $21.401 million recorded

during January 2012, the exports during February witnessed negative

growth of 1.35 percent, the data revealed.

In terms of quantity, the fish exports increased by 5.57 percent in

February 2012 when compared to the exports of February 2011,

however decreased by 2.62 percent when compared to the exports

of January 2012.

The overall food exports from the country witnessed nominal increase

of 0.59 percent during the first eight months by going up from $2.601

billion during July-February (2010-11) to $2.616 billion in July-

February (2011-12).

Page 144: Research Data

The major food products that witnessed positive growth in exports

included.

The food products that witnessed increase in exports during the

period under review included rice (other than basmati), exports of

which increased by 2.91 percent, fruits (15.02%), leguminous

vegetables (1,315%), tobacco (37.85%), oil, seeds, nuts and kernels

(59.84%), meat and meat preparation (16.46%) and other food

products

(45.80%).

The commodities that witnessed negative growth in exports included

basmati rice (17.78%), vegetables (36.69%), wheat (53.22%) and

spices (1.49%).

The overall exports from the country during the period under review

witnessed negative growth of 0.48 percent by going down from

$15.263 billion to $15.189 billion.

Imports into the country, during the period, increased by 16.36

percent by going up from $25.600 billion to $29.788 billion.

Page 145: Research Data

Based on the figures, the trade deficit during the first eight months of

the current fiscal year was recorded at $14.599 billion, against the

deficit of $10.337 billion last year, showing an increase of 41.23

percent.

http://www.thenews.com.pk/article-42262-Pakistan-seafood-exports-

surge-by-15pc-in-8-months

MARCH 30, 2012 10:52 PM

Riaz Haq said...

Here's a Pak Observer report on Pak fishing industry exports:

Karachi—Holland’s Ambassador to Pakistan Mr Gajus Scheltema

disclosed that a powerful lobby of international fish exporters was

strongly opposing the exports of fish from Pakistan to the European

Union countries. Talking to mediamen in Karachi he said that the

international fish exporters lobby was actively involved in creating

obstacles in the way of Pakistan’s fish exports to EU nations.

When asked to name the lobby, the Dutch Ambassador said that the

leading international exporters do not want to see fish exports from

Pakistan. He, however, that Netherland was assisting the Balochistan

government to develop Pasni Port and Fish Harbour that would help

Pakistan to enhance fish exports to European Union countries. He

pointed out that a firm, engaged in the exports of fish, had demanded

license to export fish from Pasni to EU.

Mr Scheltema pointed out that the government of Japan had provided

Page 146: Research Data

a grant of Rs800 million for the rehabilitation of Pasni Fish Harbour in

Balochistan. Holland is engaged in rehabilitation of the harbour so

that it meets the required international standards to export fish to EU

and other countries in the world.

He said that the Japanese grant would be utilised for the procurement

of a dredger; maintenance and dredging of the harbour; and extension

and improvement of the breakwater.

Holland’s Ambassador further stated that his country could invest in

agriculture, dairy and livestock in Pakistan. He said that Holland is

one of the leading producers and exporters of dairy and livestock

products in the world. He said that Holland and Pakistan should

explore the agriculture, dairy and livestock sectors for mutual

investment. Some Dutch companies are willing to explore avenues of

investment in these areas in Pakistan and the companies could export

agriculture, dairy and livestock products to European Union.

He said that Holland was keen to enhance trade with Pakistan and

also supporting Pakistani business people who seek to export to the

Netherlands. Scheltema said that their ‘Centre for Promotion of

Imports from Developing Countries’ waseducating Pakistani exporters

for improvement of their products to export level quality.

He said that Pakistan has a huge potential in agriculture and food

processing sector and Holland is planning to invest in these sectors.

He also pointed some trade hurdles in importing of cows and cattle

from Netherlands to Pakistan.

He further said that Holland was willing to help government of

Pakistan in promoting the wind energy in the country. He said that he

had recently met the Federal Minister for Water and Power Syed

Naveed Qamar and apprised him of the Dutch companies interest in

Page 147: Research Data

developing wind energy projects in Pakistan.

Mr Scheltema said that Holland had strongly supported Pakistan in

getting the GPS+ facility from the European Union that would help

this country to enhance its textile exports share to EU markets. He

said Holland was enjoying very cordial relationship with Pakistan and

he was making efforts to strengthen the bilateral ties between the two

countries. Holland plans to earmark 30 million euros for clean

drinking projects in urban cities and some other water-related

projects in Pakistan, he said. He said Holland had already worked in

various water sector projects and keen to invest in water

management, flood control, clean drinking water, waste water

treatment and de-silting projects. 

http://pakobserver.net/detailnews.asp?id=147970

APRIL 1, 2012 8:31 AM

Riaz Haq said...

Here's Khaleej Times on Pakistani food brands in UAE:

Pakistani food companies made inroads to the UAE market at the

Gulfood exhibition in February. The major groups held fruitful

meetings at the exhibition and they will start launching their products

from June onward, according to industry insiders.

K&N’s Foods (private) Limited, a leading name in poultry and meat

products in Pakistan, is expected to market its products in the UAE by

June. Brands in edible oil like Sufi Cooking Oil and Habib Oil, leading

herbal trademark Qarshi and confectionery products leader Hilal,

among others are also planning to enter the UAE food market this

year.

Page 148: Research Data

“We are in talks with some leading groups and distributors to launch

our brand in the UAE and we are confident to market our products by

June,” Atiq R. Siddiqui, K&N’s head of exports, told Khaleej Times.

K&N’s Foods, which started its operation in 1964, is the first

international brand in recent years, which has given permission to

export frozen items to the UAE. The brand is considered a beacon for

Pakistan’s poultry industry and its halal processed chicken, ready-to-

cook and fully-cooked products are popular among domestic

consumers.

“We have established the brand in Pakistan and now the company is

ready to make a foray into the international market. The UAE will be

the first international and regional market for K&N’s products,”

Siddiqui said.

In reply to a question, he said Gulfood is a premier event for food

industry. It is considered a good opportunity to interact with

stakeholders to promote the brand and explore new business

opportunities, he said.

“We showcased our products at Gulfood and received a good response

from local businesses. We are in discussion with some leading names

to launch our brand in the UAE market,” he said.

As many as 23 Pakistani companies in the food business attended the

Gulfood exhibition in Dubai this year and displayed their full range of

products in Pakistan pavilion. The exhibitors had fruitful meetings

with the local importers and indenters and most of them are

optimistic to launch their products at competitive price in the Gulf

markets. 

------------

Page 149: Research Data

Pasha said the volume of Pak exports to the UAE touched $1.8 billion

in 2011 out of which food group exports were to the tune of $500

million. “There is, however enough room to expand keeping in view

the UAE’s global food imports of more than $7 billion annually,” he

said.

In reply to a question, he said some projects in food business are in

the pipeline that will further strengthen the bilateral trade relations.

“There are a few joint ventures ranging from farmland acquisition to

joint production of commodities, fruits and vegetables and building of

state-of-the-art food silos are in the pipeline,” Pasha said.

Asif Jabbar, director and group chief executive of Alif Investments,

welcomed the entry of Pak brands into the UAE market.

“We have successfully launched many Pakistani brands including the

Junaid Jamshed and Meat One. It is good to see that more Pakistani

brands in food business are set to enter the local market,” he said and

cautioned the new entrants about the stiff competition in the local

market.

“The marketing of a new brand in the UAE is not an easy job amid

competition from international and regional brands. One should be

aware of marketing cost and other expenses in an international

commercial city like Dubai to find place in the competitive market,”

Jabbar concluded.

http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/business/2012

/April/business_April110.xml&section=business

APRIL 7, 2012 4:37 PM

Page 150: Research Data

Riaz Haq said...

Here's a BR report on State Bank of Pakistan's ag loans target for the

year:

The State Bank of Pakistan has set Rs 285 billion target for

disbursement of agriculture loan among small farmers for current

fiscal year.

Director Development Finance of SBP Karachi, Dr Muhammad Saleem

said this while addressing "Agricultural & Industrial Awareness

Convention-2012" here on Tuesday.

Khyber Pakhtunkhawa Higher Education Minister Qazi Muhammad

Asad Khan participated as chief guest in the convention organised by

the State Bank, Rawalpindi in collaboration with commercial banks

and insurance companies.

More than 120 stalls of handicrafts, clothing agriculture equipment,

handmade beautiful jewellers, banking products and food, etc, were

set up by women from various organisations and banks to promote

rural culture and potential of trade in these areas.

Horse dancing and culture displays made this event more beautiful.

More than 1500 people including students, farmers and women

participated in the convention.

Chief Manager State Bank Akhtar Raza, Group Head of United Bank

Ltd (UBL) Jameel Ahmed, Vice Chancellor Hazara University Haripur,

Professor Dr Sahawat and others were also present on the occasion.

Dr Muhammad Saleem said the SBP had set Rs 270 billion agriculture

loans target for small farmers in the previous financial year while

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actually Rs 260 billion loan was distributed among farmers.

He said that agri loan is being given to farmers through one-window

operation.

He said farmers could give better output if banks provide them loan in

time on easy instalments.

"Agriculture is backbones of our economy and its share in Gross

Domestic Product (GDP) is 21 percent.

Livelihood of 47 percent people is directly or indirectly is linked with

agriculture sector.

The SBP is playing pivotal role in progress of agriculture sector by

providing loans especially to small farmers," he said.

Dr Muhammad Saleem said the SBP formulates policy in consultation

with all the stakeholders including farmers.

The SBP changes its policy with passage of time by keeping the

necessities of farmers in view.

Addressing the convention, Khyber Pakhtunkhawa Higher Education

Minister Qazi Muhammad Asad Khan said land of Haripur is fertile

and the farmers of this area can give maximum production if they

were given some financial support for seed, fertiliser and tractor and

other inputs necessary for increasing production.

He urged the SBP to set up its branch in Haripur for promotion of

small industries and agriculture sector.

About the Haripur University, He said Haripur has also become a part

Page 152: Research Data

of the community of 120 universities.

"The government should increase budget for education to 4% of GDP.

The quality of education can only be improved by increasing the

budget for this sector.

Group head of UBL, Jameel Ahmed said the State Bank has good legal

framework and governance in the region.

The employees of the Bank are servants of people.

"It is your money and used to benefit you," he added.

Vice Chancellor Hazara University Haripur, Professor Dr Sahawat

said knowledge-based economy and use of latest technology is of vital

importance for progress of agriculture sector.

http://www.brecorder.com/agriculture-a-allied/183/1175388/

APRIL 10, 2012 6:01 PM

Riaz Haq said...

Here's a Reuters' report on rice exports from India & Pakistan

stabilizing prices:

A rebound in rice supply from India and Pakistan this year will calm

fears over food inflation faced by poor nations as cheaper grain from

the South Asian neighbours corners a third of the global market.

South Asia’s ample grain stocks will help it undercut key traditional

suppliers, as a populist scheme in Thailand prices its grain out of

Page 153: Research Data

competition and high export floor prices in Vietnam deter some

buyers.

India is likely to emerge as the world’s second largest rice exporter in

2012, selling around 7 million tonnes, while Pakistan’s shipments are

expected to bounce back to about 4 million tonnes amid the high

prices of rival Thailand.

“Indian rice supplies will act as a price stabilisation factor against

high global food inflation,” said Tajinder Narang, advisor at a New

Delhi-based trading company Emmsons International.

Global food prices rose in March for a third straight month with more

hikes to come, the UN’s Food and Agriculture Organisation (FAO) said

last week, with higher prices of oilseeds and grains contributing to

the rise.

The FAO index, which measures monthly price changes for a basket of

cereals, oilseeds, dairy, meat and sugar, averaged 215.9 points in

March, up from 215.4 points in February.

Although the index level is below its Feb. 2011 peak of 237.9, it still

exceeds the level during the 2007-08 food price crises that triggered

global alarm.

After benchmark Thai white rice prices climbed to a record above

$1,050 a tonne in May 2008, several nations, including India, put a

ban on exports.

That left buyers scrambling for supplies, unleashing concerns over

food inflation and the threat of unrest in poor nations in Africa and

Asia. But high stock levels in India and Pakistan could help avert a

replay this year.

Page 154: Research Data

---------

India’s exports this year are expected to jump 50 per cent from last

year’s shipments of 4.6 million tonnes, according to data from the US

Department of Agriculture. India had exported 2.2 million tonnes in

2010.

Neighbouring Pakistan, which is expected to ship 3.8 million to 4.0

million tonnes in 2012, or an increase of at least 19 percent from 3.2

million last year, is cracking new markets with the sale of 200,000

tonnes to China and unconfirmed exports to the Philippines through

unofficial channels.

“When we got a setback from Iran, our exporters looked elsewhere

and that has led to diversification,” said Javed Agha, chairman of the

Rice Exporters Association of Pakistan, referring to the impact of

tightening Western sanctions over Iran’s nuclear programme.

In Thailand, prices have spiked due to a government intervention

scheme due to run until the end of June, that is paying farmers 15,000

baht for a tonne of paddy, lifting Thai rice export prices to $500-$560

per tonne....

http://dawn.com/2012/04/11/india-pakistan-rice-supplies-to-ease-

agflation-fears-wa/

APRIL 11, 2012 8:14 AM

Riaz Haq said...

Here's a PakistanToday report on SBP's efforts to increase funding of

agriculture and financial literacy among farmers:

Presiding over a one-day ‘Farmers’ Financial Literacy & Awareness

Page 155: Research Data

Program on Agricultural Financing,’ which was jointly organized by

State Bank and Habib Bank Ltd. today at NRSP Training Center,

Bahawalpur, he said the agriculture sector has a key role in country’s

economy and stressed the need for making necessary finances

available to farmers for multiple cropping activities. He outlined

SBP’s efforts for creating awareness amongst the farming community

and developing capacity of commercial banks through its various

training and awareness programmes.

--------------------

Dr. Saeed Ahmed, Head, Agricultural Credit and Microfinance

Department, SBP said the programme is aimed at creating awareness

among the farming community about agriculture financing products &

services offered by banks, money management techniques and lending

procedures, documentations, etc. Besides, it would also develop

capacity of agriculture field officers of banks in agri. financing and

synergize the efforts of all stakeholders including policy makers,

executing agencies, service providers & farming community to

improve access to agricultural credit, he said, adding that SBP’s

promotional initiatives and policy interventions have translated into

around 200 percent increase in the flow of credit to the agriculture

sector from Rs. 137.4 billion in 2005-06 to Rs. 263 billion in 2010-11.

However, he pointed out, despite this encouraging growth, the

disbursement to the agriculture sector was around 40% of the total

estimated credit requirements. ‘SBP has planned to increase the

disbursement to 70-80 percent during the next five years covering 3.3

million borrowers by adopting a multipronged strategy,’ he added.

The inaugural session was followed by a technical session for the

agricultural credit staff of banks in which senior officials of SBP and

HBL made detailed presentations on dynamics of agriculture finance

and related policies. The purpose of this session was to train the

agriculture finance officials of banks enabling them to conduct

farmers’ financial literacy programs at their end and to share the best

practices in agriculture lending with the participants.

Page 156: Research Data

http://www.pakistantoday.com.pk/2012/04/12/news/profit/agriculture-

can-farm-out-economy/

APRIL 11, 2012 6:39 PM

Riaz Haq said...

Here's a News report on rising sales of cars, motorcycles and tractors

in Pakistan:

Sales of automobiles in the first nine months (July-March) of the

current fiscal year increased 15 percent to 128,576 units, compared

to 111,852 units same period last year, according to the data released

by the Pakistan Automotive Manufacturers Association (PAMA).

According to the data, in the third quarter (Jan.-March) of this year,

automobile sales increased 7 percent to 46,632 units from 43,753

units in the correspondent quarter last year. When compared with the

second quarter of this year, sales in the third quarter showed an

impressive growth of 22 percent.

Pak Suzuki Motor Company (PSMC) continued to depict strong sales

showing a growth of 32 percent in the July-March period to 81,360

units compared with 61,693 units in the same period last year.

Analysts attribute strong growth to the yellow cab scheme announced

by the Punjab government. In March 2012 alone, PSMC sales stood at

11,198 units, up 16 percent from same month last year and 12

percent from February 2012.

Page 157: Research Data

On the other hand, Indus Motor Company sales growth remained

subdued during the period under review. The company sold a total of

38,858 units compared to 37,259 units in the same period last year,

up by 4 percent. In the third quarter, the company sold 14,792 units

against 14,851 units in the same period last year.

Samina Kanji, an analyst at BMA Research, a 15 percent year-on-year

growth in auto sales is primarily due to the yellow cab scheme of the

Punjab government. On the other hand, motorcycles and three

wheelers sales increased on month-on-month basis and sales in March

stood at 70,671 units as compared to 65,011 an increase of 5,660

units, the data showed. Total sales of farm tractors decline to 6,229

units as compared to previous month sales of 8,906 units. Sales of

trucks and buses sales in March stood at 379 units as compared to

304 units in February 2012.

http://www.thenews.com.pk/Todays-News-3-102452-Auto-sales-show-

15pc-growth-in-nine-months

APRIL 12, 2012 10:01 AM

Riaz Haq said...

Telenor to offer agri info to farers via its wireless telephone network,

reports newstribe:

Telenor Pakistan, in partnership with the Government of Khyber-

Pakhtunkhwa, will provide agriculture and livestock information to

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farmers in the province.

In addition, farmers will be offered the Easypaisa platform to trade in

agricultural commodities. Information will be provided via push SMS,

voice recordings and small community gatherings.

The aim is to benefit farmers — especially small farmers — by

providing them relevant and timely information, and the ability to

carry out related mobile transactions on their handsets. All

information will be provided by the Government of Khyber-

Pakhtunkhawa while Telenor Pakistan will act as the distribution

channel of the information. A pilot project will initially be run in

Mardan district.

To mark the occasion an MoU signing ceremony was arranged at a

local hotel. Arbab Muhammad Ayub Jan, Minister for Agriculture,

Khyber Pakhtunkhwa was the chief guest. The MoU was signed by

Roar Bjaerum, Vice President Financial Services, Telenor Pakistan

and Arbab Muhammad Ayub Jan, Minister for Agriculture, Khyber-

Pakhtunkhwa.

Roar Bjaerum, in his comments, highlighted the benefits the project

will bring to the farmers of the province. “We will provide farmers the

information they need to grow better crops and to raise hardy

livestock. By doing so, we want to help them make more informed

decisions when it comes to agriculture and livestock planning and

trading. This way we hope to contribute toward alleviating poverty

and empowering farmers economically. We will also offer mobile

branchless banking solutions to enable farmers to carry out

transactions right on their mobile phones through Easypaisa.”

Ayub Jan in his remarks spoke about the partnership between Telenor

Pakistan and the Government of Khyber Pakhtunkhwa’s Agriculture,

Page 159: Research Data

Livestock and Cooperative Department (ALCD). He said: “The

Department has the mandate of promoting the interests of agriculture

and livestock farmers in the province of Khyber Pakhtunkhwa. It has

undertaken various initiatives to modernize the sector, and to

augment the dissemination of relevant information to farmers to help

increase production. Our partnership with Telenor Pakistan is another

step in this direction. We are ready to offer all the support it needs to

achieve its goals for this project.”

Small farmers, living in far-flung areas, are usually isolated from

market information which may help them in dealing with commodity

whole sellers (‘beopari’ and ‘arthis). They also do not have immediate

access to information about best practices in agriculture and livestock

rearing.

Telenor Pakistan’s project will help farmers in getting the information

they need to increase yield through access to best quality

commodities, latest agri trends, information on judicious use of

pesticides and fertilizers, best breed of livestock, new methods of

disease control, and quality feed and fodder.

http://www.thenewstribe.com/2012/04/18/telenor-to-partner-with-kp-

to-provide-agri-information-to-farmers/

MAY 2, 2012 7:35 PM

Riaz Haq said...

Here's a Dawn report on Pakistan's plan to export surplus sugar:

The government intends to export 400,000 tons of surplus sugar and

believes that the performance of the agricultural sector is improving

despite natural calamities.

Page 160: Research Data

“The good news about surplus sugar was given to President Asif Ali

Zardari during a meeting at the presidency by a delegation of the

Pakistan Sugar Mills Association led by its chairman Javed A. Kayani,”

president’s spokesman Farhatullah Babar said on Thursday.

The PSMA chief said sugar production stood at about 4.7 million tons.

After meeting the domestic requirement of 4.2 million tons, about

400,000 tons of sugar is available for export. “Export will enable mill

owners to make payments to growers in Khyber Pakhtunkhwa, Punjab

and Sindh,” he said.

Sources in the agriculture sector said the country was exporting

wheat and rice and sugar would be the third major commodity to be

exported. They said the Punjab government was already exporting

wheat and the centre was sending the surplus crop to Iran.

President Zardari expressed satisfaction over the sugar production

and said: “It is a matter of great satisfaction that despite

unprecedented natural calamities the country is not only in a position

to meet its requirements but is also poised to export sugar.”

He said the government was committed to working in consultation

with the sugar industry to solve its problems. “Only through the pro-

active involvement of the business community and industrialists, the

continuity of policies could be

ensured,” the president was quoted as saying.

He advised the government to hold a meeting with the PSMA so that

its proposal to export sugar could be sent to the Economic

Coordination Committee of the cabinet for consideration.

http://dawn.com/2012/05/04/plan-to-export-400000-tons-of-sugar/

Page 161: Research Data

MAY 4, 2012 8:50 AM

Riaz Haq said...

Here's Daily times report on cotton & textile industry in Pakistan:

All Pakistan Textile Mills Association (APTMA), with over 50 percent

($14.8 billion) contribution to the total national exports ($25 billion)

and 78 percent share in the textile exports of the country, is the

largest trade union of Pakistan as well as contributor to the national

economy of the country.

Due to effective policies and leadership of APTMA, this year cotton

production increased to 15 million bales despite two million bales lost

due to floodwaters, as compared to the last year’s 11.7 million bales,

thus making Pakistan self-sufficient in cotton sector for the first time

in 10 years.

To rid the country of energy crisis, the association is actively engaged

with various stakeholders, including the Sui Northern Gas Pipeline

Limited (SNGPL), Petroleum and Gas Ministry and standing

committees of the National Assembly. Out of 300 days, gas remained

closed for 156 days causing loss of $5 billion cotton to production

capacity of the country. Advocating the case effectively with the

government, the association ensured five days a week gas supply to

the industry, besides getting electricity load shedding exemption.

The association’s proposal of levying gas surcharge for gas

exploration and laying of new pipelines was accepted. The APTMA

leadership and members are also advocating for the Vision 2020 to

resolve the gas crisis and sustainable growth of the energy sector,

while clarifying how much energy is going to be produced from hydel,

Page 162: Research Data

coal and other sources besides gas exploration. The association

believes that only a futuristic vision can ensure affordable energy for

the industry as well as domestic sector of the country.

APTMA group leader Gohar Ejaz said their strong advocacy for the

free market mechanism during 2010-11 helped transfer Rs 400 million

to Pakistani cotton farmers, equal to their income of eight years, and

in the wake of price increase in the international market, remained

the biggest contribution of APTMA for the welfare of the stakeholders.

He said farmers got prosperity, which resulted in value addition to the

crop and an increase of $5 billion export. While in 2011-12, resolving

the energy crisis for the Punjab industry remained one of the biggest

contributions of APTMA, he said.

----------

Research and development is the key to survival and growth of any

industry. Realising this aspect, APTMA has made it a law to collect Rs

20 per cotton bale from the mills to spend this amount on research

through Pakistan Central Cotton Committee (PCCC), a semi-

autonomous body, with the federal minister for textile industry as its

president. Last year, APTMA contributed Rs 300 million, as collected

against the production of 15 million cotton bales in the country.

APTMA is also fulfilling its corporate social responsibility towards

promotion of textile education in Pakistan. The association established

textile colleges in Faisalabad, Karachi and other cities, which were

later handed over to the government.

Established since 1957, APTMA is the premier textile industry

association having 350 member mills and offices in Lahore, Karachi,

Islamabad and Peshawar. Although textile sector has a total 14

associations of various stakeholders, APTMA is the only body, which is

taking up the case of whole sector to provincial, national and

international level for the growth of the sector – from farmer to

Page 163: Research Data

exporters.

Textile industry contributes 8.5 percent of the GDP, while APTMA is

50 percent of 8.5 percent textile contribution towards GDP. APTMA

provides direct employment to one million workforce as well as three

million indirect jobs.

Pakistan is the fourth largest cotton producer in the world as 98

percent of 15 million cotton bales produced in Pakistan are consumed

by APTMA members.

http://www.dailytimes.com.pk/default.asp?page=2012\05\07\story_7-

5-2012_pg7_5

MAY 6, 2012 4:10 PM

Riaz Haq said...

Here's Daily Times on Asad Umar's assessment of Pak agriculture:

The low output also adversely affects capability of farmers to earn

more, he added. Pakistan, which has been dubbed as a ‘great bread

basket’ is struggling due to these factors and is now increasingly

becoming an importer of a large number of agri commodities. At the

same time, Umar said, Pakistan agriculture sector also faces huge

post-harvest losses of 40-80 percent if compared with global

benchmark. This double blow—low output and high losses, diminishes

income of growers further, he maintained.

Similar is the case with agriculture credit facilities, farm

mechanisation and availability of water, he said and added these

structural problems need to be addressed. As against 20-25 tractors

per square kilometres of arable land for global benchmarks,

Page 164: Research Data

availability of tractor for Pakistani farmer has been about 10 times

lower from this level.

Much to the dismay of farmers, he said, agricultural credit disbursed

to farmers in Pakistan declined from $3.4 billion in 2007-08 to $3.1

billion in 2010-11. During the same period, Indian Agricultural Credit

increased from $63.3 billion to $103.4 billion, he said. Agricultural

credit in Pakistan is 8 percent of agri gross domestic product while in

India, it is 31 percent of agri GDP.

Water, being main input for agriculture sector also failed to get

attention as far as increasing its supplies for farmers, Umar said and

added losses of water are as high as 40 percent before reaching farm

gate. He stressed the need to plug these wastages on priority bases.

He lamented that despite having tremendous strengths and

opportunities, output of agriculture sector is simply pathetic. Our

mangoes, citrus and basmati rice are the best in the world, he said

and added 75 percent of arable land is irrigated, which is an

unmatched blessing.

The real potential agriculture sector is not merely a dream, he said

and added many progressive farmers are achieving these levels in

various parts of the country. Progressive farmer yields are around 50

percent higher than average yields for the main crops , he said.

Emphasising efficient use of water for reaping optimal benefits, Umar

said irrigating an additional 5.0 percent land can generate Rs 100

billion additional farm income.

Sharing his vision about farmer cooperatives, Umer said economy of

scale in agriculture sector can be achieved by forming vibrant clusters

of farmers. Unfortunately, he said, cooperative role model has been

misunderstood in Pakistan and that is small land and animal holding

Page 165: Research Data

leads to highly inefficient farming practices.

In sheer contrast, he said, Indian cooperatives contribute around 50

percent of the total agricultural credit disbursement and 60 percent of

the sugarcane procurement is done by the cooperatives sector. In

France, he maintained, 75 percent of all agricultural producers are

members of at least one cooperative and cooperatives handle 40

percent of food and agricultural production. 

http://www.dailytimes.com.pk/default.asp?page=2012\05\10\story_10-

5-2012_pg5_16

MAY 9, 2012 4:49 PM

Riaz Haq said...

Here's an APP report on Pakistan's dairy industry:

Pakistan can easily triple its milk production by employing simple

methods while latest measures can further milk output by 900 per

cent.

Pakistan has impressive dairy industry which can be exploited to its

real potential, said Economic Councilor Embassy of Netherlands, Ian

Van Ranselaar here on Thursday.

He said a developed environment can help revolutionize Pakistan's

dairy industry.

"A Dutch cow produces nine times more milk a Pakistani cow or

buffalo can produce", he said and added that some measures are

needed to bring per cow production of both friendly countries at par.

Page 166: Research Data

The Dutch diplomat was talking to Vice President Federation of

Pakistan Chamber of Commerce and Industry (FPCCI) Mirza Abdul

Rehman, Chairman Coordination Atif Akram Sheikh and Chairman

Media Malik Sohail.

Ian Ranselaar further said that 16 Pakistani major dairy stakeholders

are due to leave for Netherlands to know the latest trends and

techniques.

He said currently balance of trade is in favour of Pakistan and they

are working on various projects to boost Pakistan economy.

The diplomat said various Pakistani products including rice, textiles,

surgical goods, sports hardware, leather products and fruits are of

superior quality but local entrepreneurs lag behind in branding which

has been identified as a major obstacle.

"Security situation in Pakistan is not as bad as perceived in many

countries which is shying away investors. Pakistan should improve its

perception", the diplomat remarked.

The Dutch diplomats were all praise for the tireless efforts of Pakistan

Commercial Councillor in Hague.

On the occasion, Mirza Abdul Rehman said with 180 million

population, Pakistan has great potential for investment, vast space for

business activities and there is no issue of law and order.

Atif Akram Sheikh said both the countries have good political ties

which should supplement our trade relations.

Pakistan has three times the animals that Germany has, but yields are

one-fifth of Germany's and one-third of New Zealand, representing a

Page 167: Research Data

significant loss, he added.

Business community is satisfied with the efforts of the Ambassador

Hugo Gajus Scheltema, said Sheikh, adding that issuance of visa

should be made easier.

Malik Sohail said being the fourth largest producer of milk in the

world, Pakistan produces 35 billion liters of milk from around five

million animals which is worth Rs.177 billion.

"Our dairy sector is growing by five per cent per annum while demand

is increasing by fifteen per cent which calls for urgent measures to

address issues effecting production", he underlined.

Pakistan is processing only two per cent of milk production which if

increased will help boost living standard of rural population and

economy.

http://www.brecorder.com/top-news/1-front-top-news/56904-pakistan-

has-potential-to-enhance-milk-production-by-900pc-.html

MAY 10, 2012 10:41 PM

Riaz Haq said...

Here's a special CNN report on a Pakistani village by Wajahat Ali:

This is a story affecting millions of Pakistanis — and it does not

involve suicide bombings, honor killings, extremism or President

Zardari's mustache.

"What would you like to be when you grow up?" I asked Sakafat, a

boisterous 12-year-old girl, while visiting a remote Pakistani village in

Page 168: Research Data

the Sindh province.

"A scientist!" she immediately replied. "Why can't we be scientists?

Why not us?"

The confident Sakafat lives in Abdul Qadir Lashari village, which is

home to 500 people in Mirpur Sakro. It is in one of the most

impoverished regions of Pakistan.

There was a characteristic resilience and optimism in this particular

village. This should come as no surprise to anyone who knows

anything about Pakistan's often dysfunctional, surreal yet endearing

daily existence.

The 500 villagers live in 48 small huts, except for the one "wealthy"

family who recently built a home made of concrete. The village chief,

Abdul Qadir Lashari, proudly showed off his village's brand-new

community toilets, paved roads, and water pump that brings fresh

water to the village.

These simple, critical amenities, taken for granted by most of us in the

West, resulted from the direct assistance of the Rural Support

Programmes Network, Pakistan's largest nongovernmental

organization. RSPN has worked with thousands of similar Pakistani

villages to help them achieve economic self-sufficiency.

I visited the Sindh village with RSPN to witness the results of using

community organizing to alleviate poverty. The staff told me its goal

was to teach villagers to "fish for themselves."

Every household in the Abdul Qadir Lashari village was able to reach

a profit by the end of 2011 as a result of professional skills training,

financial management, community leadership workshops and

Page 169: Research Data

microloans.

Specifically, a middle-aged, illiterate woman proudly told me how she

learned sewing and financial management and was thus able to

increase her household revenue, manage her bills, and use a small

profit to purchase an extra cow for the family. She was excited to

introduce me to her cow, but sadly due to lack of time I was unable to

make the bovine acquaintance.

--------

Asked what single thing she felt was most important most for her

village, she replied education. Upon asking another elderly lady what

she wishes for Pakistan, she repeated one word three times: "sukoon,"

which means peace.

When it was time to depart, the people of the village presented me

with a beautiful handmade Sindhi shawl, an example of the craftwork

the villagers are now able to sell for profit.

As I left the village with the dark red, traditional Sindhi shawl

adorned around my neck, my thoughts returned to the 12-year-old

girl, Sakafat, who passionately asked why she couldn't become a

scientist.

I looked in her eyes and could only respond with the following: "You're

right. You can be anything you want to be. And I have every

confidence you will, inshallah ("God willing"), reach your manzil

("desired destination").

By focusing on education and local empowerment to lift the next

generation out of poverty, Sakafat's dream could indeed one day

become a reality for all of Pakistan.

Page 170: Research Data

http://www.cnn.com/2012/05/13/world/asia/pakistan-empowerment/in

dex.html

MAY 13, 2012 6:38 PM

Riaz Haq said...

Here's an ET story on Engro supply chain in Pakistan:

Have you ever wondered where the milk in packaged dairy products

comes from? In case you assumed that big food companies maintained

their own dairy farms that generated thousands of litres of milk daily

and remained insulated from fluctuations in open market rates, you

are wide of the mark.

In fact, only 5% of about 1.2 million litres of milk that Engro Foods

collects every day for its dairy segment during the flush season – from

January to April each year when fodder is available in abundance and

milk production is high – comes from its own corporate farm located

in Sukkur.

The rest of the milk supplies during the flush season and the summer,

when milk production drops by roughly 50%, comes from about

15,000 small farmers scattered between Sanghar and Jhang districts,

an area of 135,000 square kilometres.

Streamlined under Engro Milk Automation Network (EMAN), Engro

Foods maintains a sales force of 1,500 people across 1,200 villages in

Sindh and Punjab. They collect milk, mostly in small quantities, from

farmers between 6:00am and 9:30am every day, which is then

transported for further processing.

But why would a villager with just a few cattle sell the excess quantity

Page 171: Research Data

of milk to Engro Foods instead of the traditional milk contractors

known as dodhis?

According to Aamir Khawas, who works as head of milk procurement

and agri services at Engro Foods, doing business with a large food

company offers small farmers a number of benefits. “Animals are

susceptible to diseases. Our network of veterinarians ensures sick

animals receive immediate treatment. That’s a benefit no traditional

milk contractor can offer,” he said.

Moreover, the moment a farmer sells milk to an Engro representative,

in whatever small quantity, the transaction is recorded electronically

in a centralised database by swiping the EMAN card that each of the

15,000 suppliers carries.

The availability of real-time data ensures that money is transferred to

the farmer the day the transaction takes place. This is in contrast to

the past practice of issuing receipts on paper that took at least a week

before a transaction was recorded and payment processed.

In addition, Engro’s advisory service helps farmers increase milk

production. “There’re two ways for a farmer to increase his revenue.

If he gets Rs41 instead of Rs40 per litre, his revenue increases by

Re1. But if the milk output increases by one litre, his revenue

increases by Rs40. We help him do the latter,” Khawas said.

So how does Engro ensure that the milk is pure? “It’s very easy. We

pay farmers not on the litres of milk they bring to us. Rather, the basis

of payment is total solid contents of the milk,” he said, explaining that

milk consists of three things – water, fat and solid non-fat (SNF). Total

solid contents are the sum of fat and SNF.

“It’s hard to adulterate when the quantity is low. So no matter how

Page 172: Research Data

much water you add, the solid contents can easily be determined by

running a few tests,” he said.

A total of 13 tests are carried out when a farmer hands over milk to an

Engro representative. It is picked up from there by an Engro van that

carries out another 20 tests on the collected milk. It then reaches the

regional office where 30 more tests are done to check its quality.

Eventually, milk is taken to the Engro plant where the final 40 tests

take place before it is processed, packaged and dispatched to the

retail market.

With the demand of milk increasing by 15% annually and supply rising

by just 2% a year in Pakistan, the dairy sector looks like a heaven for

investment. The Sukkur farm of Engro Foods has already grown 10

times since its inception with about 3,000 cows. “Yet we’re looking for

a major expansion in the near future.”

http://tribune.com.pk/story/378282/the-benefits-of-business-with-a-

large-food-company/

MAY 14, 2012 8:57 AM

Riaz Haq said...

Here's a VOA report on Afghan dependence on Pakistan:

Farmers and traders in eastern Afghanistan say that despite a decade

of foreign development projects, they remain economically dependent

on their neighbors in Pakistan.

The main bazaar in the capital, Jalalabad is crowded with people

buying and selling fresh melons, ripe tomatoes and sacks full of

onions and potatoes. Fruits and vegetables from all across the country

Page 173: Research Data

come to this market where it is sold to locals. But due to unreliable

electricity and cold storage a lot of Afghan farmers' produce goes just

across the border into neighboring Pakistan where it is stored and

then re-sold.

"My name is Allah Mohammad," a local vegetable seller says

introducing himself. He is selling his tomatoes from one of the many

produce carts that line a busy road.

"We have heard there are no storage facilities and electricity. But in

Pakistan they have facilities and electricity," he says.

Not far from the market, at the main loading station, onions and

potatoes are being inspected and then loaded onto trucks headed for

Pakistan. Gul Morad, head of inspection and regional chief for fruit

and vegetable traders whose office is above the station says matter-of-

factly, that cold storages do exist in the districts.

“Three to four years ago, USAID and DIA built us small cold rooms

under the name ‘storages’ - but their capacity is only 4 to 5 tons. For

these you have to use generators.” Morad explains. “Even if the

generator stops for one hour, the room gets hot and the goods lose

their quality.”

USAID says the deserted units do not appear to be theirs. The agency

did however help fund Morad’s 24-ton cold-storage which he pays to

maintain. The unit runs on both generators and power from the

electrical grid and is a key part of the local economy.

Morad says most of time (when market prices go down) farmers and

shopkeepers bring their produce here and store it for one or more

days - for free. When the market gets better they take it out and sell

it.

Page 174: Research Data

Local farmers and traders say proper refrigeration means higher

profits, because they can store their own produce and make a better

return in the off season.

However with too little cold storage, residents now rely on stored

produce imported from Pakistan, which can sell for nearly triple the

cost.

Many people, like farmer Ihsanullah from Ghawchak in Sukhroad

district believe that some of the marked up vegetables are originally

from here, but are imported into Pakistan, stored and then sold back

into the Afghan market.

“Two things,” Ihsanullah says “potatoes and onions, they go from

Kabul into Pakistan and are kept in storage and sent back to us. We

sometimes work in the market so I am certain these two things are

bought by big traders, stored and sent back.” He says, “our biggest

problem here is that we don’t have storage.”

Inspection chief Morad disagrees and says the stored goods that come

to Afghanistan are grown in Pakistan.

But both men agree that farmers and consumers both suffer from the

lack of local refrigeration.

Agriculture is the main source of income for the country however

Afghans say plans to develop the agriculture sector have not been

realized. The Afghan government and the international community’s

efforts to build sustainable storage and supply reliable electricity have

not met expectations

Page 175: Research Data

http://www.voanews.com/content/competition_suspicion_refrigeration

_afghan_market_products/667055.html

MAY 17, 2012 10:40 PM

Riaz Haq said...

Here's a News report on US Aid program helping livestock farmers:

Nina Fite, consul general of the United States in Lahore recognised

recent graduates of a US Agency for International Development

(USAID) supported livestock export training programme at a

certificate ceremony, a statement said on Friday.

The programme trained the participants in GlobalGAP certification, a

standard for dairy and meat exportation required by several European

and international markets. By implementing these standards,

Pakistani meat and dairy producers will be able to export to wider

markets, growing their businesses and boosting Pakistan’s economy,

it said.

“The United States is committed to promoting the economic

development of Pakistan. One important element of this commitment

is our support to local farmers with programmes to build their

business capacity and generate higher incomes – higher incomes that

will improve their lives and the lives of their families,” said Fite.

“Programmes, such as this USAID-funded training, will have a direct

and positive impact on the lives of Pakistanis through the promotion

of livestock entrepreneurship,” she said.

Page 176: Research Data

Global Good Agricultural Practices (GlobalGAP) is an international

private body that sets voluntary international standards for the

certification of agricultural production processes. 

http://www.thenews.com.pk/Todays-News-3-109037-US-helps-

Pakistan-increase-meat-dairy-exports

MAY 18, 2012 9:07 PM

Riaz Haq said...

Here's a News report on US Aid program helping livestock farmers:

Nina Fite, consul general of the United States in Lahore recognised

recent graduates of a US Agency for International Development

(USAID) supported livestock export training programme at a

certificate ceremony, a statement said on Friday.

The programme trained the participants in GlobalGAP certification, a

standard for dairy and meat exportation required by several European

and international markets. By implementing these standards,

Pakistani meat and dairy producers will be able to export to wider

markets, growing their businesses and boosting Pakistan’s economy,

it said.

“The United States is committed to promoting the economic

Page 177: Research Data

development of Pakistan. One important element of this commitment

is our support to local farmers with programmes to build their

business capacity and generate higher incomes – higher incomes that

will improve their lives and the lives of their families,” said Fite.

“Programmes, such as this USAID-funded training, will have a direct

and positive impact on the lives of Pakistanis through the promotion

of livestock entrepreneurship,” she said.

Global Good Agricultural Practices (GlobalGAP) is an international

private body that sets voluntary international standards for the

certification of agricultural production processes. 

http://www.thenews.com.pk/Todays-News-3-109037-US-helps-

Pakistan-increase-meat-dairy-exports

MAY 18, 2012 9:07 PM

Riaz Haq said...

Here's a Daily Times story on Pak mango exports:

Mango farmers across Pakistan continue their partnership with

USAID to maximise yields, improve product quality, introduce better

packaging and create market linkages.

Seven mango farms from Sindh are already scheduled to send

commercial shipments to high-end markets across the globe in June of

this year.

All these advancements are helping Pakistani mango growers tap into

new export markets with each passing season. As the mango season

Page 178: Research Data

for 2012 begins, this partnership continues to bear fruit. Ghulam

Sarwar Abro said a private farm in Kotri Sindh has been a partner

with USAID’s Mango Programme.

“We are confident with USAID’s support, all of the ground work has

been done. We have the required standards, infrastructure and

linkages to tap the international markets on a competitive footing.”

More farms will participate in commercial shipments as soon as

harvesting begins in Punjab. USAID has signed Infrastructure

Upgrade Agreements (IUAs) with 15 mango farmers across Pakistan

on a cost-sharing basis to build pack houses.

USAID has also provided assistance to 15 farmers in achieving

GlobalGAP certification under a similar cost-share agreement and has

planned to increase this number by the end of this season by adding

another 12 certified farms.

The USAID Mango Programme is currently in its third year and this

year the programme is specifically concentrating on enhancing the

market linkages for Pakistan’s mango sector.

He said this project is designed to help the Pakistani economy achieve

its export potential. The project has three main areas of interest

including an improved Pakistan trade environment through improved

regulation, policies, systems and capacity, facilitation of trade at

Pakistani borders and establishment of sustainable and competitive

Special Economic Zones, including Reconstruction Opportunity Zones.

The project emphasises capacity-building activities that facilitate

increased exports from industry, services and agriculture enterprises.

http://www.dailytimes.com.pk/default.asp?page=2012\05\25\story_25-

5-2012_pg5_9

Page 179: Research Data

MAY 24, 2012 4:37 PM

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A B O U T M E

RIAZ HAQ

I am the Founder and President of PakAlumni Worldwide, a global

social network for Pakistanis, South Asians and their friends. I also

served as Chairman of the NEDians Convention 2007. In addition to

Page 183: Research Data

being a South Asia watcher, an investor, business consultant and avid

follower of the world financial markets, I have more than 25 years

experience in the hi-tech industry. I have been on the faculties of

Rutgers University and NED Engineering University and cofounded

two high-tech startups, Cautella, Inc. and DynArray Corp and

managed multi-million dollar P&Ls. I am a pioneer of the PC and

mobile businesses and I have held senior management positions in

hardware and software development of Intel’s microprocessor product

line from 8086 to Pentium processors. My experience includes senior

roles in marketing, engineering and business management. I was

recognized as “Person of the Year” by PC Magazine for my

contribution to 80386 program. I have an MS degree in Electrical

engineering from the New Jersey Institute of Technology.

www.pakalumni.com http://www.riazhaq.com

http://southasiainvestor.blogspot.com

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