NEWS COVERAGE PERIOD FROM MARCH 23RD TO MARCH 29TH, 2020
NEW CHALLENGES IN FOOD SECURITY, AGRICULTURE
March 23, 2020
Agriculture plays a motherly role in the economy. It feeds people. Policymakers need to protect this role of agriculture aggressively as feeding people looks like a challenge amidst the spread of the coronavirus — Covid-19.
Sadly, the State Bank of Pakistan (SBP) apparently overlooked this need when it announced its monetary policy for two months on March 17.
The central bank cut its policy rate by 75 basis points to 12.50 per cent. It did not offer any special incentive package for food and agriculture, although it did for health and medical centres to combat the spread of coronavirus.
Now all eyes are set on the federal government. They must come up with targeted input incentives, tailor-made schemes to boost farm production and a specific package for enhancing food exports at a time when a global recession is looming.
Creating fiscal room for this purpose has become difficult after a smaller-than-expected rate cut that may still keep the government’s domestic debt servicing cost high. But by not passing on the full benefit of a steep decline in international oil prices to consumers, the government has already opened an avenue to ensure some increase in its revenue. But that will work only if authorities succeed in containing the spread of the deadly virus and the consequent flattening of economic growth.
The recent cut in the benchmark interest rate can hardly do any good to the farm sector
The central bank has lowered its economic growth projection for this fiscal year from 3.5pc to 3pc. In the last fiscal year, the PTI government claimed 3.3pc growth but that remains widely disputed to date.
The impact of the coronavirus on our food and agriculture can be telling. Supplies of fresh vegetables and fruits from farms to big city markets have already started falling. Scarcity has hit many places in Karachi and prices have skyrocketed. Grocery shops and medical stories have not been closed amidst a general 15-day closure of other markets and shopping malls in Karachi. In various localities, complaints about the unavailability of rice, wheat flour, cooking oil and sugar have started pouring in.
Hoarders and profiteers are active, ignoring warnings of “stern action of the state” in Prime Minister Imran Khan’s televised address to the nation. Many well-to-do panicked people are also overstocking groceries.
Our food trade via land routes with Afghanistan, Iran, China and India remain partly or completely closed as of March 18. The inter-provincial movement of trucks loaded with grains and groceries is also coming to a gradual halt in case of Sindh and Balochistan. Depending upon the rate of the spread of coronavirus, the entire country may experience this situation with varying degrees of intensity.
The recent cut in the central bank’s policy rate can hardly do any good to the agriculture sector. It is too little and the agriculture sector’s challenges are unprecedentedly enormous and complex. The challenge is not just to lower the cost of borrowing for farmers and thus help them grow more food for us. The challenge is to ensure food security amidst supply chain disruptions.
The challenge is to ensure the availability of rural workforce, uninterrupted supply of inputs from factories to farms, smooth transportation of farm produce to markets, enough storage of food at provincial and district levels and its orderly release for consumption while keeping hoarders, profiteers and panic-stricken people at arm’s length. By the time this write-up is published, the government may have come up with a food security plan as promised on March 15 by the prime minister’s special assistant on national health, Dr Zafar Mirza.
Provincial departments dealing with agriculture had not chalked out their own food security plans until March 17. One can only hope that they do this immediately. Failure on this count may create a big chaos. Only time will tell how harmoniously federal and provincial governments can work and how efficiently our National Disaster Management Authority (NDMA) lends its support to respond to food security challenges in coming days and weeks.
Wheat harvesting is due to start at some places and is expected to pick up pace in April-May. People from rural areas who work on daily wages in adjoining towns and cities usually return to their villages at the time of crop harvesting. It will be a challenge for provincial authorities to properly screen the labour returning from Karachi to rural areas.
Apart from the challenges posed to agricultural supply chains due to the outbreak of the coronavirus, agricultural growth remains a broader concern. It was a big concern even before the arrival of the virus — and has now become even bigger. The massive devaluation of 31.7pc in the last fiscal year coupled with high running inflation during this year is still having a lagged impact on agricultural growth.
To make matters worse, the rupee that had remained stable in the first eight months of this fiscal year has started faltering once again. But thanks to depressed international commodities markets, the rupee’s weakness this time — if it remains within limits — can be somewhat offset in the food imports bill due to depressed international commodities’ prices.
The scarcity of water, poor access to bank finance and unbearably high interest rates also have hit farmers. More recently, man-made sugar and wheat crises brought sugar and wheat barons overnight riches while making consumers suffer.
It will be a real test of the federal and provincial governments to rein in those powerful sugar and wheat mafias that resorted to large-scale hoarding in the recent past and now have more room for their dirty play amidst the coronavirus panic.
Making food security–related data available online and promoting online sale and purchase could be helpful. —MA
Published in Dawn, The Business and Finance Weekly, March 23rd, 2020
FIVE-YEAR PROGRAMME LAUNCHED TO INCREASE PRODUCTIVITY OF WHEAT
By SARMAD MAHMUD on March 23, 2020
A five years National Programme for enhancing profitability through increasing productivity of wheat costing Rs.16518 million has been initiated in Punjab; disclosed by Deputy Director Agriculture (Extension) Dr Iftikhar Ahmed Waraich on Sunday.
Talking to Business Recorder here he said that the concept of the programme was to enhance profitability of farmers through increasing productivity of wheat crop to 7 mounds per acres and reduce its cost production retrieve its area for oilseed and other high value crops and ensure availability round the year on affordable prices.
Special attention under the plan would be focused on the promotion of mechanization by providing of agriculture machinery on 50 percent cost sharing basis in the Province he disclosed. He further added that under the plan efforts would be made for the development of climate smart high yielding varieties and improves the provision of certified seed acres the Punjab.
Dr Iftikhar further added that promotion of wheat cultivation with certified seed, balance use of fertilizer, timely sowing, weed management, application of irrigation at critical stages and reduction in post harvesting losses would be carried out under the programme.
The revamping and dissemination of latest technologies on wheat would be provided to farmers through agriculture extension staff, agriculture input dealers and service providers he said.
Dr Iftikhar said that the vision of the Punjab government was to transforming agriculture sector into diversified modern market driven through knowledge based empowerment efficient resource utilization and removing the existing practices to raise growth rate up to 5 percent.
The major intervention of the project was to improve of sail health through provision of gypsum on cost sharing basis, provision of agriculture machinery on 50 percent costing sharing basis, seed replacement from 17 percent to 50 percent.
SUFFICIENT STOCKS OF FOOD ITEMS AVAILABLE, SAYS MINISTER
Khaleeq Kiani March 24, 2020
ISLAMABAD: The government on Monday estimated the cost of the rescue-cum-stimulus package being prepared for protecting various sectors of the economy from the adverse impact of the coronavirus outbreak at Rs1.16 trillion — almost 2.7 per cent of the country’s GDP (gross domestic product).
Also on Monday, Minister for National Food Security Khusro Bakhtiar said that there were sufficient stocks of all food items in the country.
The package expected to be announced on Tuesday by Prime Minister Imran Khan will cover a host of sectors, including exports, food security, safety nets, capital market, small and medium enterprises, medicine and related items, electricity, gas and petroleum products.
A senior government official, who is part of the consultative process, told Dawn that the relief package would include Rs200 billion each for exporters and daily wage workers, Rs100bn for SMEs, Rs280bn for farmers in the shape of wheat procurement, Rs50bn for utility stores, Rs120bn for vulnerable families, Rs50bn for medical staff and government workers, Rs50bn for prices of petroleum products, Rs30bn for the capital market, Rs13bn for the National Disaster Management Authority and Rs75bn for prices of food items.
Govt estimates rescue-cum-stimulus package at Rs1.16tr
He said the Federal Board Revenue had been directed to announce tax breaks on about 61 items relating to food and medical sectors.
A major relief has also been firmed up by the federal government in consultation with the State Bank of Pakistan to support export industries because they are losing export orders and the government has asked them to ensure that their employees remain unaffected.
Officials said the government had been blessed with a big saving in the shape of reduction in international oil prices and would pass a major portion of this saving to people through price cuts. However, the full impact of oil price savings would not be passed on to consumers due liquidity challenges and a part would be retained in the government kitty. Also, it is still unpredictable how soon the oil prices may go up again and hence the government is not finding it advisable to have big fluctuations.
Sources said that the relief on energy prices was still being worked out along with some other adjustments in the package in the light of latest directives of the prime minister who wanted to put in place all the supply chain mechanism and ensure its communication with the population before a formal announcement for a countrywide supply chain.
Besides various ministries, Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh also had consultations with the provincial governments and the business community through video conferences. Sindh Governor Imran Ismail and advisers to the prime minister on commerce and austerity and institutional reforms and petroleum were also part of the consultations.
The businessmen, including representatives from the garments and textile sector, pharmaceutical industry, Pakistan Stock Exchange and tourism and hotel industry, gave proposals regarding the issues they had been facing. They said they should be enabled to look after their daily wagers over the next two-three months and be provided with assistance to carry on their business with improvement in their liquidity position.
Dr Shaikh said that “the government is faced with a challenging situation, and in this challenging situation, the prime objective of the government is to do three things. This included containing the spread of virus, provide healthcare facilities, essential food items at affordable rates and help maintain enough cash in hand to the common man and provide help and assistance to the business community to run their businesses during the times of the pandemic without a permanent setback to the economy”.
An official statement quoted Dr Shaikh as saying that based on proposals by various sectors, the government would “give a plan that is simple and implementable to meet desired objectives”. He asked the business community to have faith in the government to support them.
The secretary finance said the Securities and Exchange Commission of Pakistan had given proposal and mechanism to the Sindh home department to help in running business/trading at Karachi’s stock exchange. The food industry shall remain open and continue business as usual and wherever needed the federal government will have dialogue with the provincial government to facilitate the business community.
The PM’s adviser asked the business community to look after daily wagers and workers who are outside the registered regime as helping them is also “our social responsibility”.
Addressing a press conference, Khusro Bakhtiar said that there was no fear of any shortage of food items in the country and advised people to avoid panic buying which could result in supply disruptions.
He said that about 1.8 million tonnes of wheat stocks were available and the Sindhi government and Passco would be starting fresh procurement within this week. He said the public sector had been given a target of 8.2m tonnes procurement during the current season at a cost of Rs88bn against the last season’s procurement target of 4m tonnes.
The minister said there was also no problem with rice as Pakistan produced 7m tonnes and domestic consumption was no more than 3.5m tonnes. He said pulse channa stocks were enough for more than eight months, while stocks of other pulses were for more than two-and-a-half months of consumption. He said the prices of pulses were declining in the global markets and panic buying would mean the consumer paying higher price.
Mr Bakhtiar said edible oil stocks were also enough for more than two months and its prices were falling globally. He said arrangements had been made at the district level to quickly shift any product from one district to another.
Published in Dawn, March 24th, 2020
RICE CANAL EMBANKMENTS BEING WEAKENED BY UNLAWFUL LIFTING OF SAND & GRAVEL
March 24, 2020
LARKANA: Lifting of sand and gravel (reti bajri) from the bed of Rice Canal near Mahotta Regulator and New Bus Stand in Larkana on a large scale is causing considerable damage to the flood-protective bund built and strengthened several a times at a cost of millions of rupees.
The unlawful practice, going unnoticed on the part of the officials concerned, is also weakening the canal’s embankments.
Ironically, scores of trucks and tractor-driven trolleys are allowed into the area to lift sand and gravel and take away the consignments. Residents of the nearby areas, on whose distress calls in the wake of rain emergency the embankments and bund are strengthened, believe that some irrigation and other officials are hand in gloves with those running the business. They also believe that sand and gravel traders worked under the patronage of some politically influential figures of Larkana district.
The track used by these transport operators is a routine route of the engineers and other staff of irrigation department but they seem to have turned a blind eye to the movement of such consignments and never tried to get this unlawful activity stopped.
The stone-pitching work to strengthen the canal embankments and bund had last been carried out by the irrigation department after the 2010-11 super floods that had caused heavy damage to them. The floods had not only posed a serious threat to the nearby towns and villages, but also left the embankment and dyke weak.
The pressure always increases during abkalani period and when Indus is in flood situation.
The Sindh government had spent several billion rupees on a project, executed in the wake of the super floods, to strengthen embankments of Rice and Dadu canals to save many towns and hundreds of villages from flooding.
These canals are to get increased flows in the paddy-sowing season and, therefore, it is feared that the canals’ embankments weakened by the lifting of sand and gravel on a large scale may not withstand the pressure.
Local residents say that the dumpers and bulldozers were also being used by transport operators to pave the way for their tucks and tractor-driven trolleys. These heavy vehicles, they claim, were causing damage to the stone-pitched columns supporting embankments and dyke.
People living close to the regulator and bus stand appeared sick of such vehicles’ movement saying that atmosphere in their area mostly remains polluted with dust flying in the air during daytime. The worst-hit localities fall between Rice Canal bridge and Naudero van stand, they say. Another nuisance is herds of buffaloes usually driven into the canal. The animals pass considerable time enjoying a dip contaminating the water and also creating unhygienic conditions along its bed.
None of the irrigation officials, including engineers, appeared ready to comment on the situation. Some of them, however, claimed that some ‘higher authorities’ had allowed lifting of reti bajri. They also requested anonymity. They admitted that the transport operators on their own pitched the path leading to the canal bed in order to have a smooth ride for their vehicles.
Published in Dawn, March 24th, 2020
PUNJAB FOOD AUTHORITY MOVES TO ENSURE FOOD SECURITY
By Rizwan Asif March 24, 2020
LAHORE: In a bid to prepare for a foreseeable lockdown across major cities, the provincial food authority has increased the supply of wheat form surplus districts on an emergency basis to boost the availability of flour in Lahore, Rawalpindi and Gujranwala divisions amidst the pandemic.
The Punjab Food Department, has reduced the usual two-month time period of transferring wheat to transport contractors down to one month, while increasing the fixed quantity of wheat for transfer by 15%. Further, the department has also ordained the Deputy Directors and District Food Controllers across the province to ensure efficient and errorless transfer of the produce.
The department currently has 1.05 million tonnes of wheat in holdover, which should last the province up to 42 days. A fresh yield of wheat will also be available in the market starting April, which will add to Punjab’s wheat reserves.
Despite impact of virus, Pak-China trade to improve in second half
Details reveal that upon directives of senior government officials, Additional Director Food Muhammad Hussain Khokar and Deputy Director Food Omar Daraz had held a meeting with the contractors on Wednesday. The said meeting was held to discuss prompt transportation of wheat to Gujranwala, Lahore and Rawalpindi divisions from 44 warehouses with surplus wheat in other districts.
Transport contractors were also informed of the government’s plans of a lockdown in the wake of the pandemic’s spread in the country. “In such a situation, it is imperative to ensure the food security of the people and to keep the supply of flour stable, for which the government has decided to increase official wheat stocks in the three major divisions in accordance with the requirements of at least one month.”
At the time of meeting, the Rawalpindi division possessed over 125,000 tonnes of wheat, which is expected to last up to 22 days. Whereas, Gujranwala division had over 20, 000 tonnes which would be sufficient for at least 6 days, while government warehouses in Lahore division had over 70,000 tonnes of wheat which is expected to last for at least 10 days.
Furthermore, during the aforementioned meeting, transporters also informed the food officers about improper practices that have been leading to waste of produce in the past. “Wheat at certain wheat centres is not unloaded properly and vehicles remained parked for several days in certain districts.
While transporters in some districts of Southern Punjab are being forced to provide speed money by deliberately delaying certain documents and issuing bills.”
Govt green-lights army deployment across country to fight coronavirus
On the other hand, all transporters present at the meeting demanded the government to uniformly implement the successful model of procedure for wheat delivery and related matters as introduced by Bahawalpur Division Deputy Director Shabbir Alawi in areas and departments under his authority, across all districts.
After hearing the complaints of the transporters, Additional Director Food Muhammad Hussain Khokar issued the required directives by calling deputy directors of wheat delivery in various divisions. In addition to that, Secretary Food Waqas Ali Mehmood and Director Food Wajid Ali Shah shared that there is more than one million tonnes of wheat in government warehouses in the province, which is sufficient for the next 42 days.
“In 10 to 15 days the new yield of wheat will also be available in the market and the department will buy 4.5 million tonnes of wheat, which as per estimate should be sufficient for more than a year’s worth of flour,” they reassured.
Published in The Express Tribune, March 24th, 2020.
MNFS&R ASKS PROVINCES TO EXEMPT OUTLETS/SUPPLY CHAIN OF AGRICULTURE INPUTS
By ZAHID BAIG on March 24, 2020
In the wake of alarming situation of pandemic Covid-19, and lockdown announced by the provincial governments and start of Kharif Season 2020, the Ministry of National Food Security & Research (MNFS&R) has asked all the four provinces to exempt the outlets/supply chain of agricultural inputs (pesticide/fertilizer/seed) during the said lockdown to ensure timely availability of agricultural inputs.
A letter issued by the MNFS&R written to the chief secretaries of all the provinces said it is requested that outlets/supply chain of agricultural inputs (pesticide/f ertilizer/seed) may be exempted during the lockdown to confirm timely availability of agricultural inputs and their application in the field.
“This will ensure the food security in the country and to meet estimated production target of all crops,” the letter added. According to the sources, the Directorate General Agriculture (Extension &AR) Punjab had also approached the Secretary Agriculture Punjab on this subject requesting that the home department may be asked for inclusion of seed, pesticides and fertilizer shops in special category with food, health and other essential services to allow these working.
The letter said that planning for planting Kharif crops had already been started and procurement for seeds, fertilizers and pesticides was increasing with the rise in demand for spring crops – corn, sugarcane and vegetables. There are reports of closure of agriculture input shops in Punjab in the wake of recent upsurge of COVID-19.
The letter apprehended that this closure may prove detrimental to farm productivity, especially under inclement weather conditions. Commenting on this decision of government, a farmer and climate professional Aamer Hayat Bhandara said as a farmer he can really feel the problems the agriculture farming sector would face during the COVID 19 lockdown. “Wheat is near maturity and half of the corn is in the field and half is about to sow after potatoes.
If there is a lockdown and inputs – fertilizer, pesticides and seeds are not available – all the supply chain of food items would be disturbed. I have advocated at many platforms that our wheat yield is already facing decline due to the unexpected rains in March and now if it is not treated with rust-free chemicals and harvesting is not done it will challenge the food security in Pakistan.”
“Potatoes are still in the fields, most of the corn crop is younger than a month and desperately needs fertilizer and chemicals to raise till the grain. On the other hand, unavailability of seed and inputs will surely disturb the sowing of next rice.
It is a good decision to ensure the food supply chain in the country but on the other hand the government also needs to work and discuss with potential stakeholders to strategize the harvesting of wheat particularly in areas where it is done manually by hand of labour. What will happen if section 144 is imposed and labour is not available to harvest the mature wheat crop?” he wondered.
Copyright Business Recorder, 2020
VEGETABLE AUCTION STOPPED IN OLD SABZI MANDI
The Newspaper’s Staff Correspondent March 25, 2020
HYDERABAD: Administration officials did not allow vegetable-laden vehicles to enter old Sabzi Mandi off the Hali Road and diverted them to the site of new Sabzi mandi off the lined channel here on Tuesday.
The vehicles carrying onion and other vegetables were halted at Fateh Chowk by police and diverted to the new mandi.
Latifabad Assistant Commissioner (AC) Faraz Siddiqui told Dawn on Tuesday that the mandi’s vegetable representatives had been told that the auction of onion, tomato and potato would not be allowed inside the old Sabzi mandi. Their auction would now be held in the new mandi while other green items like chillies, coriander and mint could be sold and auctioned in the old Sabzi mandi.
Vegetables started reaching to the new mandi site in the second half of the day. The officials have already told fruit sellers that 100 per cent of their business would be shifted to the new Sabzi mandi and they would not be allowed to work at the existing mandi.
According to Altaf Memon, who is representing vegetable sellers, the administration had prevented the vehicles carrying vegetables from entering the old Sabzi mandi.
The AC communicated his decision to him mentioning that the auction of onion, potato and tomato would not take place in the old mandi, he said. “But I didn’t agree with it because only one group of vegetable sellers was present in the mandi and the other group was absent,” he said. He said that mint, coriander and chillies would be sold from the old mandi after auction. The space that was in use for vegetable auction had been vacated, he added.
The Hyderabad administration is shifting the old mandi to its new site in line with the directives of the Supreme Court-mandated judicial commission headed by retired justice Amir Hani Muslim. Fruit and vegetable sellers had resisted the decision on the ground that infrastructure in the new Sabzi mandi is not complete and needed many basic amenities. But the administration rejected their claim.
The traders also claim that there were serious anomalies in the allotment of plots of the mandi as multiple claims were there on one plot.
The traders had moved the Sindh High Court Hyderabad circuit bench against imposition of Section 144 CrPC by the civil administration and the court had issued a restraining order on Jan 30, allowing traders to work in the old mandi. But following the situation evolving in the backdrop of coronavirus, the administration filed an application before the court on March 19, praying the court to modify its restraining order.
Published in Dawn, March 25th, 2020
SC APPEALED TO BAN EXPORT OF VEGETABLES, FRUITS FOR THREE MONTHS
By TERENCE J SIGAMONY on March 25, 2020
The Supreme Court was requested to direct for imposing ban on export of vegetable and fruits for three months, so that the people could get fruits and vegetable at affordable prices. Advocate Zulfiqar Ahmed Bhutta filed a petition in the Supreme Court under Article 184(3) of the Constitution making federation through secretary Establishment Division as respondent.
He prayed before the apex court to direct the federal and the provincial governments to formulate export policy by which hike in prices of food and vegetable be stopped. The petitioner submitted that due to rapid spread of coronavirus across the globe, everyone was terrified about his/her survival and several countries had imposed mandatory lockdown recommending around 1.7 billion people to stay at home.
He stated that as there was no vaccine available for the treatment of coronavirus and only remedy to defend it was to improve the immune system, which was only possible through different fruits and vegetables, especially kino, which had high quantity of vitamin-C. However, in the markets a reasonable kino is being sold at Rs 230/- per dozen, which is beyond the reach of an average poor family.
The only reason behind this hike in fruits and vegetable prices is the worst policy adopted by the government regarding export of vegetable and fruit to other countries at the cost of hunger of its own people, the petitioner submitted.
He contended that at this critical juncture, there was an urgent need to provide and arrange cheaper and healthy food including vegetable and fruits to the people for which immediate ban upon export of vegetable and food items was necessary, so that the people could take it, to protect themselves from coronavirus.
“Similarly, provision of basic food items at affordable prices should be ensured to the people as it is the basic fundamental rights of the people guaranteed under the Constitution,” Bhutta said.
Copyright Business Recorder, 2020
COVID-19: ASKING RIGHT QUESTIONS ON FOOD SECURITY
By BR Research on March 26, 2020
The federal government pulled a remarkable sleight of hand that went unnoticed in the presser held on March, 24. Sadly, top journos present – wearing their ‘economist’ hats – were too busy finding out whether their credit card payments will be deferred or not – to have grilled the ministers over it.
It was the single-largest spending under the wheat procurement head – Rs 280 billion – that should have caught the eye of observers. Based on support price of Rs 1,400 per 40kg fixed just two weeks ago, the earmarked funds would buy 8 million tons of wheat, only that is eerily similar to the procurement target already announced by ECC before the onset of pandemic.
Minister for NFS&R noted that funds were being set aside to extend immediate support to farmers. Given the crop is grown by over 80 percent of all private farms in the country, additional wheat procurement would be a sure shot way to inject cash into farm economy “over next 6 weeks”. Except, the key word is “additional”, and the amount is anything but.
Well-placed sources within the ministry initially remarked that the amount is for “additional procurement, given the task for the year is monumental”. Upon cross-verification, the version could no longer be confirmed; instead, became abundantly obvious that the bill for procurement will be footed largely by provincial food departments, as per regular practice. Federal’s share through PASSCO stands at just 25 percent of total, as explained earlier in this space (For more, read: ‘Wheat output: steady won’t cut it’ published on March 20, 2020).
Having said that, the government may not entirely be faulted for tinkering with the presentation, given it was hard pressed by the media ‘to be seen doing something’. However, considering that the ECC is not chaired by the PM, it is hoped that the intended audience of the spin was general public only.
From a food security lens, if there is one thing the government must be seen doing right now is limiting supply chain disruption – a challenge that the PM has repeatedly emphasized. Barring wheat procurement, the NFS&R segment of the presser was a welcome change, as the minister signalled calm to the markets noting adequate availability of stocks of essential kitchen items such as ghee, rice, onion, and tomatoes.
This was much needed given the country has jumped from one food-related shortage to the next over the past year, driving food inflation into double digits. Minister’s confidence building measure was especially vital to dissuade any incentives to hoarders, as he noted that such practices will fail to payoff given falling commodity prices in the international market.
It remains to be seen whether availability of kitchen essentials will face major disruption if the lockdown continues for several weeks or not. It is unfortunate that the minister was not subjected to tough questions following his presentation, thus few still warrant a mention.
For example, it was noted that stocks of pulses and legumes is already available in the market for coming two months. And while global prices may witness a substantial decline due to demand compression, can markets truly persevere in the face of port disruption? As things stand, logistics, and not affordability of imported items is the core operational facet of the crisis.
And while pulses remain top-of-the-mind-recall for their mantle as “poor’s meal”, a much bigger challenge may come from the poultry sector. Soybean – primary input for poultry feed – is a billion-dollar import item that remains hidden in the crevices of 8-digit trade details. From near-port storage of raw material, to processing and slaughtering, poultry’s is a complex supply chain involving hundred, if not thousands of personnel, and is almost certain to be hit by restrictions on movement.
That said, any market failure in this respect will hardly be a fault of the government as it painstakingly struggles to perform a balancing act between a health crisis and economic continuity. In these uncertain times, what it can still offer is transparency by avoiding false promises. For its part, the media can begin with asking the right questions regarding food security, so the public may be prepared for the prolonged disruption it faces.
The pandemic will not go away without taking its pound of flesh from the economy. Transparency and preparedness through public engagement may prove our only weapon against the common enemy.
TWIN CITIES CONFRONT ACUTE SHORTAGE OF WHEAT FLOUR
By ABDUL RASHEED AZAD on March 26, 2020
Following the government decision to lockdown the country to deal with spreading coronavirus, an acute shortage of wheat flour has been created in Rawalpindi/Islamabad, while sugar price has further increased from Rs 4,000 per 50kg bag to Rs 4,100 per 50kg bag.
Traders, while talking to Business Recorder here on Wednesday, said that in the past few days, flour millers were either not supplying flour or significantly reduced the supply, saying that the government had stopped wheat supply to the millers.
Traders further said that on Wednesday the flour millers had told them that there was no wheat flour available, and supply would resume following the release of wheat stocks by the government on Thursday (today).
It was observed that the sugar millers had once again increased the refine sugar price in the market from Rs 4,000 per 50kg bag to Rs 4,100 per 50kg bag, which in retail market had reached Rs 87 per kg from Rs 85 per kg.
The other day, flour milers increased the wheat-flour price by Rs 140 per 25kg bag from Rs 1,060 to Rs 1,200 per 20kg bag, ghee/cooking oil, pulses, tea and packed milk prices within past few days had also increased.
The traders said prices of all the pulses had jumped up by Rs 20-30 per kg, ghee/cooking oil price had jumped by Rs 90 per 5kg tin as Dalda and other good quality ghee/cooking oil prices went up from Rs 1,200 per five litre tin to Rs 1,290 per five litre tin.
Moreover, it was also observed that the prices of a number of vegetables also witnessed an increase as onion price went up from Rs 325 per 5kg to Rs 370 per 5kg, which in retail is being sold at Rs 80 per kg against Rs 70 per kg.
Tomatoes price jumped up from Rs 170 per 5kg to Rs 220 per 5kg, which in retail is being sold at Rs 50 per kg against Rs 40-45 per kg, eggs price in wholesales market jumped up from Rs 100 per dozen to Rs 115 per dozen, which in retail are being sold at Rs 125 per kg.
However, chicken prices witnessed a reduction owing to the halt in marriages-related functions as live chicken price has jumped down from Rs 5,500 per 40kg to Rs 4,500 per 40kg, which in retail is being sold at Rs 130 per kg as against Rs 155 per kg, and chicken meat is available at Rs 200 per kg against Rs 250 per kg.
Moreover, it was also witnessed across the twin cities that the retailers and venders of fruit and vegetables have started charging their own prices as the authorities concerned stopped checking them.
However, according the secretary Islamabad Fruit and Vegetable Market, the office of the Market Committee was functioning with full strength, which has issued the official rate list of essential commodities including vegetables and fruits to the retailers/venders.
A representative of Islamabad/Rawalpindi vegetable market said the market was open but the lack of workers, and the fact that several roadside retail vegetable vendors went out of business for a different set of reasons have caused serious disruptions.
He added in Rawalpindi/Islamabad fruit and vegetable market enough stock was available and that the traders were waiting for retailers to lift it but in the absence of transport most of the perishable stuff would go rotten.
Copyright Business Recorder, 2020
SINDH GOVERNMENT TO DISTRIBUTE FOOD ITEMS AMONGST NEEDY: MINISTER
By RECORDER REPORT on March 26, 2020
Sindh Minister for Information, Local Government, Housing & Town Planning, Religious Affairs, Forest and Wildlife Syed Nasir Hussain Shah has said that the Sindh government would distribute essential food items amongst the needy people during the period of lockdown in collaboration with the welfare organisations.
The provincial minister for information said that he recently chaired a meeting in which representatives of various welfare organisations, including Edhi, Cheepa, Alamgeer, Al-Khidmat and others, were present and they all discussed in detail the possible ways of distribution of free rations among the people during the lockdown period.
In a statement released from Ali House Karachi, he said that the welfare organisations engaged in distributing free ration amongst the poor and needy were indeed an asset of this country. Nasir Hussain Shah said that all these welfare organisations were actively participating and assisting the Sindh government in its relief activities during the lockdown.
Paying tribute to those working for welfare organisations, the provincial minister for information said that they were those great people who had dedicated their lives to helping the poor and needy. He said that in these testing times, the government could do nothing alone, adding that with the help of these great people all the needs of the poor and needy would be fulfilled and delivered on time. He said that in this time of trouble, the government as well as the welfare organisations were a ray of hope for the people.
He said that the government had already constituted a committee comprising representatives of the welfare organisations as well as the representatives of the government which would monitor and supervise all necessary steps to be taken to distribute rations among the people during lockdown. He said that this committee would ensure that the ration and all other necessities reached the needy on time without any discrimination.
He said that this committee would also issue an SMS number in this regard to facilitate people to get free rations. He added that it was a major challenge during the lockdown for the Sindh government to reach to the people who earned a living on daily basis and feed their families through that limited earnings.
Provincial minister expressed hope that the government with the help of the welfare organisations would be able to meet this big challenge successfully. He said that it was a matter of great pleasure that at these extremely testing times the whole nation was on one page and the role of welfare organisations was exemplary.
He also paid tribute to all the security agencies, including the Pakistan Army, Paramilitary Rangers, Police and others agencies, as well as the doctors and paramedics, saying that despite the danger of the coronavirus, the way these security forces’ personnel and health officials were doing their duty was extremely commendable.
Copyright Business Recorder, 2020
MINISTRY OF IT AND FAO SIGN COLLABORATION AGREEMENT
March 26, 2020
Islamabad : Ministry of IT and Telecommunication and Food and Agriculture Organization (FAO) of United Nations virtually signed framework collaboration agreement to jointly work for the development of agriculture sector of Pakistan by using information technology, says a press release.
Shoaib Ahmad Siddique, Secretary IT & Telecommunication and Ms. Minà Dowlatchahi, Food and Agriculture Organization (FAO) Representative virtually signed framework collaboration agreement while sitting in Pakistan and Rome, Italy respectively.
As to control the spread of Coronavirus social distancing is imperative , Ministry of IT is performing all its function through use of ICT. Online signing of collaboration agreement with FAO is an example of performing official duty while ensuring social distancing. FAO country representative in Pakistan signed agreement while she was located in Italy one of the worst-hit country by Coronavirus.
Speaking at the occasion, Mr. Shoaib Ahmed Siddique said that agriculture is the mainstay of Pakistan’s economy as it contributes around 20 percent in the overall gross domestic product (GDP) and is also a big source of employment. Low growth, water shortage, environmental concerns, volatile energy prices, rising expectations of consumers – these are some of the complex challenges the agriculture sector is facing today, in the face of diminishing production profit margins for farmers.
He said Ministry of IT & Telecommunication would do everything to resolve these challenges through technology interventions by bringing innovative solutions for increased yield and profit margins for the farmers by diminishing the role of middlemen.
On the occasion, Federal Secretary Ministry of IT Shoaib Ahmad Siddiqui also expressed deep grief over loss of precious lives due to Coronavirus in Italy and expressed sympathies for deceased families. He also expressed deep grief over loss of precious lives due to Coronavirus in Pakistan. He prayed to Almighty Allah to end this pandemic from the world and save the humanity.
Minà Dowlatchahi, FAO Representative in Pakistan through a video link thanked to Federal Secretary Ministry of IT for his kind words.
She said that innovation in agriculture in Pakistan is a necessity — small farmers are not only food producers, they are consumers and also guardians of Pakistan natural resources: soils, water, biodiversity and seeds. Eighty percent of arable land is in small farms in Pakistan, the vast majority still under outdated agriculture systems. Innovation is the process whereby individuals or organizations bring new or existing products, processes or ways of organization into use for the first time. Innovation in agriculture cuts across all dimensions of the production cycle along the entire value chain – from crop, forestry, fishery or livestock production to the management of inputs and resources to market access.
It is time to help small-holder men and women farmers in Pakistan innovate at scale, adapt to climate change, increase their incomes and contribute to the transformation of Pakistan agriculture systems and will contribute to sustainable and inclusive food systems and healthy diets in the country.
Through the framework collaboration agreement both organizations vow to collaborate in providing a framework for supporting the formulation and execution of local and/or national projects in Pakistan. These projects will aim to benefit sustainable and inclusive agricultural and food systems (agriculture, livestock, forestry, aquaculture) to contribute to achieving zero hunger and poverty eradication.
Both FAO and MOITT through Ignite will share material such as statistical information, software and maps, made available by the FAO or MOITT/Ignite for use in the activities under this collaboration agreement. Both organizations jointly agree to host the “e-Agriculture Innovations Challenge” to be held in Islamabad to address the pressing challenges facing agriculture sector.
NEWS COVERAGE PERIOD FROM MARCH 16 TO MARCH 22nd, 2020
MEAT COMPANIES INDUCE CONSUMERS TO EAT VEGETABLES
AP March 16, 2020
LOS ANGELES: Meat companies are making it easier for you to eat your vegetables by blending them into burgers, meatballs and sausages.
Applegate is introducing a line of meat-and-veggie burgers and meatballs at grocery stores next month. Tyson Foods is already selling a beef and pea protein patty as well as blended sausages. Perdue Farms has chicken-and-vegetable nuggets while the Better Meat Co., a California startup, makes blended ground beef, pork and chicken. More options will arrive this summer for grilling season.
All are hoping to quell consumers’ growing misgivings about meat and its impact on health and the environment. The United Nations called for reduced meat consumption last year, saying agriculture and food production was responsible for 37 percent of global greenhouse gas emissions.
A recent Harvard study suggested that boosting consumption of red meat increases the risk of early death.
Companies like Tyson have already made the leap into pure plant-based products like its Raised and Rooted pea protein-based nuggets that imitate chicken. That competes squarely with startups like Beyond Meat and Impossible Foods, which sell plant-based burgers that closely imitate meat.
But David Ervin, Tyson’s vice president of alternative protein, says its internal research shows only about 17 percent of consumers have tried plant-based meat, even though 69 percent would consider eating it. The top barrier to trying plant-based meat is taste, he said. Blended burgers, with the familiar taste of meat, are an entry point for them to begin to explore that area.”
Connie LaFeve, a semi-retired administrative professional in Washington state, became a vegetarian in 1985 when she joined the Seventh-day Adventist church. Now, she occasionally eats meat and fish, but limits her consumption for health and environmental reasons. She likes turkey and mushroom blended burgers because they’re easy to cook and low in sodium.
Applegate President John Ghingo said meat companies can’t ignore conscientious carnivores” like LaFeve.
It’s important that we don’t have a fear-based reaction to the change but look at the underlying needs, he said. People want changes they can make that are pragmatic and help them move the needle.
Applegate, a natural and organic meat brand owned by Hormel Foods, is introducing four-ounce beef burgers that mix 72 percent lean organic beef with one-third cup of vegetables, including cauliflower, lentils, spinach and butternut squash. It’s not as juicy as an all-beef hamburger, but the vegetables give it more flavor. One burger has 200 calories and 15 grams of fat. By comparison, a 73 percent lean beef burger from Walmart has 340 calories and 30 grams of fat.
Applegate’s turkey burgers have a different mix of vegetables, including sweet potatoes, white beans roasted onion and kale. They’re moister and more flavorful than a typical turkey burger. Ghingo said Applegate worked with chefs on the blends and tries to showcase the vegetables and their texture, not hide them.
This is not about grinding up the vegetables and plants to imitate meat, he said.
In some cases, blended burgers may even be healthier than plant-based ones, which add salt for flavor. Tyson’s Raised and Rooted blended burger has 150 calories, seven grams of fat and 260 milligrams of sodium. Impossible Foods’ burger has 240 calories, 14 grams of fat and 370 milligrams of sodium.
Dasha Shor, a global food analyst with the market research company Mintel, said meat companies need to have a mix of products in their portfolio as the market evolves, including plant-based meats and cultured meats, which are grown from cells.
Over the next few years or a decade, you’re going to see a less-but-better approach to eating animal proteins, she said. Consumers will not stop eating meat, but might eat less but of higher quality.
For now, though, she says there is one big stumbling block: price. Applegate charges $9.99 for four Well Carved burgers. Aldi charges $5.29 for the same amount of organic beef. Non-organic ground beef is even less expensive.
Shor said it’s hard for consumers to justify spending more on blended products, since vegetables are cheaper than meat. Companies charge more, for now, because they’re recouping development costs, sourcing new vegetables and adding time and labour to blend the products.
Ervin said the price will come down over time as more products are introduced.
Published in Dawn, March 16th, 2020
OF LOOSE MILK AND TIGHT MARGINS
Kazim Alam March 16, 2020
While buying a majority stake in Engro Foods at the end of 2016, the Dutch investor expected to surf on the front edge of a wave that was to knock the traditional milkman off his central perch in the retail milk market.
Three years on, the foreign investor is still dog-peddling at the tail end of that wave, leaving little impact on the overall consumption pattern of loose milk. Meanwhile, its 2016 bottom line of Rs2.4 billion turned red in 2019 with a loss of nearly a billion rupees. Its share price almost halved to Rs62.76 from Rs123 over the same period.
Following one of the biggest foreign investment deals worth about Rs48bn, the rechristened FrieslandCampina Engro has gone from being the poster child for Corporate Pakistan to a cautionary tale for global smart money.
“In capital terms, there is an unrealised loss (for the foreign investor). In terms of the bottom line, the company has faced challenges, particularly last year. Before that, we were at least profitable. Last year was a serious hit,” Ali Ahmed Khan, managing director of FrieslandCampina Engro, told Dawn in a recent interview.
‘Would I be willing to put up 30 more plants to service just Lahore? The answer is yes,’ says FrieslandCampina Engro MD Ali Ahmed Khan
Pakistan is desperately seeking foreign direct investment (FDI) to create jobs and generate non-debt–creating dollar inflows. The chairman of the Board of Investment (BOI), federal body tasked with bringing foreign investors to Pakistan, resigned last week. He was the third BOI chairman to step down since the PTI government came to power in August 2018. FDI amounted to $1.66bn in 2018-19, down almost 52 per cent year-on-year. Net inflows in the first seven months of 2019-20 rose 66pc to $1.56bn.
FrieslandCampina Engro’s flagship product — UHT-treated Olper’s milk — enjoys a market share of 45.4pc in the packaged milk segment, which makes the brand “a little bit ahead” of its main rival, Mr Khan said while citing a recent report by Nielsen, a market intelligence company.
Olper’s along with its rival Milkpak by Nestle Pakistan control more than 90pc of the market in the UHT-treated milk segment. Nestle Pakistan recorded a decline of 3.9pc and 36.6pc in its sales and profit, respectively, last year.
The share of packaged milk is less than one-tenth — around 2bn litres a year — of the annual tradable production of 25.5bn litres, according to the company’s estimates.
Although the net profit margin of FrieslandCampina Engro hit a multi-year low in 2019, it registered sales growth of almost 20pc.
“The volume decline was already in place when the acquisition happened (in late 2016). It accelerated in 2017 and part of 2018. Towards the end of 2018, we started a volume recovery while 2019 was a serious volume recovery,” Mr Khan says.
“We’re entering 2020 in much better shape as far as our margins are concerned versus the second half of 2019. We’ve grown volumes.”
The company increased the retail price of the one-litre pack of Olper’s to Rs150 from Rs130 in July-Sept 2019. In contrast, the retail price of loose milk ranges from Rs80 in rural areas to Rs110 in urban centres.
“This is not the last price increase that you’re going to see,” he says, noting that the company has yet to pass on the full impact of the “massive cost increase” in two of its major inputs.
The packaging cost grew 30pc last year because of the devaluation, he says. More significantly, the company had to pay farmers a 15-20pc higher price for milk. In absolute terms, that translates into an average 10-rupee increase to Rs60 per litre, he adds.
Contrary to the general perception that Pakistan is the third largest milk producer worldwide, a claim validated by the website of FrieslandCampina Engro’s parent company, Mr Khan asserts that the country is actually milk deficient.
“Before the devaluation, Pakistan’s was certainly the most expensive milk in the world. We were buying milk for about 50 US cents per litre. In the West, farmers are getting 35-40 cents per litre and even that is surplus milk that their governments buy to maintain the price,” he says.
Domestic cows and buffalos produce on average five litres of milk a day as opposed to around 35 litres in the West. Mr Khan says farmers should try to double the production of milk by feeding their animals sufficiently instead of raising the per-litre price by Rs2-5 every year. “That is the biggest issue in getting affordable (packaged) milk to people.”
The dairy industry is in the middle of yet another campaign against loose milk producers. Aesthetically appalling images of actors spitting into loose milk drums draw consumers’ attention to unhygienic practices of the commodity’s primary producers. Doctors in white lab coats proselytise viewers about the dangers of loose milk.
“Those are facts. It’s not something the doctors have made up,” he says about industry-funded research with a whiff of frustration. The dairy industry makes no secret of its objective to have the consumption of loose milk banned altogether. So what should the hundreds of thousands of ragtag milkmen do to get out of the hair of a handful of corporate Goliaths?
“Farmers don’t sell milk to consumers. It’s the middleman who is destroying the quality of milk in this country. We’re willing to be the middleman,” he says.
But the dairy industry is ill-prepared to meet the demand, at least in the short run, even if loose milk consumption stopped suddenly. For example, Lahore alone consumes 180 million litres of milk every month. The total milk processing capacity of FrieslandCampina Engro is 250m litres for the whole year and for the entire country.
“Would I be willing to put up 30 more plants to service just Lahore? The answer is yes. That’s the opportunity FrieslandCampina sees in this country when it invests. We will bring the cost of packaged milk significantly down, near the level of loose milk, if the share of packaged milk doubles to 4bn litres a year.”
Published in Dawn, The Business and Finance Weekly, March 16th, 2020
INCREASING MILK YIELD OF KUNDI BUFFALOES
Mohammad Hussain Khan March 16, 2020
The share of livestock in agricultural GDP has increased from around 52 per cent to 60.5pc, according to the Economic Survey of Pakistan 2018-19. The gross value addition of livestock has increased 4pc from Rs1.384 trillion in 2017-18 to Rs1.440tr in 2018-19. Therefore, livestock’s share in the overall GDP is 11.2pc.
The livestock sector in Sindh is struggling to achieve the desired growth in milk yield and save Kundi buffaloes by curbing the slaughter of calves. Sindh’s milk production is 16.8 billion litres out of Pakistan’s 59.759bn litres, estimates a livestock department technical official. He believes that this number can be increased substantially if input costs are reduced. The country’s livestock population was about 201.9 million in 2019 whereas Sindh’s livestock population is around 41.767m as per the last census figure in 2006.
Out of the total milk production, 62pc (16.8bn litres) comes from cattle and buffalo and the rest from other sources. A hefty 80pc of Sindh’s total milk production comes from rural areas, 15pc from peri-urban and 5pc from urban areas.
Marketing is a major irritant that is hampering growth in the sector. Since milk is perishable, it is estimated that 30-40pc is lost due to the farmers’ lack of milk-holding and preservation capacity. Thus, it is sold at lower rates in the neighbourhood or to middlemen who then earn more than the milk producers.
A strong value chain could help ensure better returns to rural areas’ livestock farmers. “If we start focusing on value addition we can have better income prospects from milk-based commodities such as cheese and butter that have a longer shelf life.
But farmers will need training for this as well as linkages with the cooperate sector,” said Dr Abdul Manan Khokhar, a veterinary officer in Sindh’s livestock department.
The average yield of Sindh’s Kundi buffalo is around 4.5 litres which is less than Punjab’s Neeli Ravi buffaloes. However, the latter’s feed requirements are higher than the former. Since Kundi buffaloes have on record produced 34 litres, the Sindh livestock department is focusing on their genetic improvement plan.
Feed expense accounts for 75pc of the input cost which is why farmer’s don’t opt for the more expensive formula feed that can increase milk yields, explains Dr Khokhar. “Formula feed ensures proper nourishment in animals. Inadequate nutrition weakens them and compromises their milk yields,” he says.
Around four years ago, the Sindh government approved the Sindh Breeding Policy and the Sindh Breeding Authority was established. The authority formed an association of breeders and ensures registration of all artificial insemination practitioners.
“The practitioners have been strictly directed to induce pure or descriptive breed’s semen in the descriptive breed and exotic semen is to be induced only in non-descriptive breeds.
This will help us ensure proper selection and low producing breeds will be culled automatically in the process,” said an official.
Unavailability of pure fodder remains a problem and livestock farmers use the residue of crops as fodder for animals. Pure fodder availability is about 12pc or less.
An estimated 0.6m calves are slaughtered in Karachi per annum which is a direct threat to the breeding of Kundi buffaloes. Therefore, the Sindh government is collaborating with the Japanese government since 2014 under the Rs1.065bn Sustainable Livestock Development for Rural Sindh project.
The project aims to increase Kundi buffaloes’ milk production. With training, better livestock management techniques and use of formula feed, one of the pilot farmers in Pahlaj Rai, Hyderabad district, is now being able to milk 8.6 litres instead of 4.2 litres.
Calves bought from cattle colonies are kept for 90 days in the calf salvation centre (CRC) established by the livestock department directorate for proper feeding at different stages. Two calves are handed over to pre-selected pilot farmers after the completion of the 90-day period.
“Previously, the mortality rate for calves was 40-50pc but the CRC has improved these numbers significantly,” said a project official. After three years of proper care, a farmer can pay the livestock department for one of them and keep both animals or sell them to a fellow farmer, he explained. “We evaluate health and other parameters, focusing particularly on feed and care,” he added.
Around 5,000 farmers — both male and female — have been trained under the project against a target of 3,000, according to an official of the Japan International Cooperation Agency (JICA) who coordinates with the Sindh livestock department. The JICA has borne 80pc of the cost of the project (Rs838m) and the Sindh government has borne the rest of it (Rs227.061m). As part of the project, the capacity of veterinary officers has been increased.
Since the project ends in June 2020, the government of Japan wants the Sindh government to undertake it single-handedly to ensure its sustainable growth. JICA wants budgetary allocations to be made under the government’s annual development programme for the continuity of the project and to replicate it on a larger scale across the province.
JICA is willing to send technical experts periodically to assist provincial livestock officers. The Sindh government is said to have prepared an action plan spanning three years for the continuation of this intervention. Farmers and project officials are optimistic about the government’s plans.
Published in Dawn, The Business and Finance Weekly, March 16th, 2020
DAP FERTILIZER: TWO VESSELS FROM WUHAN EXPECTED TO ARRIVE
By RECORDER REPORT on March 16, 2020
Two bulk commodity vessels carrying Di-Ammonium Phosphate (DAP) fertilizer from Wuhan, Hubei (China), the epicenter of Coronavirus are expected to dock Karachi within next few days. In the light of the novel COVID-19 virus that has wreaked havoc in the global markets, the government has taken a number of precautionary measures including closing of education institutes to avert outbreak in the country.
The degree of coordination with China as a major trading partner poses a real threat of a health emergency in Pakistan. The tariff department of Karachi Port Trust (KPT) has convened a meeting on Monday (today) to finalise arrangements of precautionary measures before cargo handling operations at port concerning the preventive measures to contain the spread of Coronavirus.
According to KPT, two bulk commodity DAP fertilizer cargo vessels M V Amber-L45 and M V VTC Glori from China are Pakistan-bound and due to arrive in March, which raises the imminent threat of a spread of Coronavirus. The port authorities have flagged their concern of a possible coronavirus spread as the officials on the ship may carry the novel virus.
A recent example at Pradip Port in India also highlights the risk of virus spread through cargo ships whereby an Indian couple was a suspected case and was immediately transferred to a quarantine facility. The risk is amplified since two of the three vessels are expected to come from Wuhan, Hubei, the epicentre of the novel coronavirus.
The port authorities need to have their utmost attention diverted towards the prevailing issue and ensure high-level of surveillance for the ships coming from China. According to industry data, the DAP inventory in Pakistan at end of February stood at 500,000 tons.
In addition, the FFBL, the sole domestic producer of Di-Ammonium Phosphate (DAP) fertilizer in Pakistan, expected to produce a further 360,000 tons in the next six months. Therefore, the total inventory of 860,000 tons will be sufficient to meet the country’s average consumption of 711,000 tons (based on 2015-2019 data) for the next six months without any need for import.
Some of the countries have taken strict measures to restrict the spread of virus. Their measures serve as a trail for Pakistan to follow in order to curb the plague. Singapore Port Authorities are requiring all vessels that have called at ports in mainland China over the past 14 days to submit a health declaration form.
In addition, they have also cancelled shore leaves for the crew. Similarly, Australia has refused to allow ships that have been called at Chinese ports to enter their own ports until the crew has been declared virus-free. The Government of Pakistan and the port official’s lackluster response few days ago had led to a loss of 14 precious lives in Karachi when a toxic gas leak occurred near the port.
The sources in the Ministry of Ports and Shipping informed this correspondent that health declaration form will be obtained from the vessel officials, and in case of denial, the ship will continue to be docked for at least 14 days to avert any danger of a spread of coronavirus.
Copyright Business Recorder, 2020
FARM RESEARCH KEY TO PROGRESS’
By APP Published: March 16, 2020
MULTAN: Punjab Agriculture Secretary Wasif Khursheed on Sunday said that 568 new varieties of vegetables, fruits and other crops have been discovered so far under the agriculture research department.
The secretary expressed these views while chairing a meeting to review activities of the department. He directed the department to expedite research for on grains, vegetables and fruits while keeping in view the environmental changes so that a climate smart agriculture model could be given a practical shape.
He urged the department to play its role in bringing an agricultural revolution through modern research.
He recalled that agriculture contributes 20 percent of the country’s Gross Domestic Product. Wasif said 44% of Punjab’s total population and 65% of rural population’s employment is linked with agriculture. He said the economy could be improved by promoting high value agriculture in the province.
He added that promotion of agriculture sector was among the top priorities of the government. He an agriculture policy had been approved and uplift projects had also been implemented under it.
Published in The Express Tribune, March 16th, 2020.
THE VICIOUS CYCLE OF SUGAR POLITICS
By DR KHADIJA BARI Published: March 16, 2020
KARACHI: It is no secret that sugar, as a commodity, wields disproportionate influence on Pakistan’s politics.
A quick look at the ownership structure of the sugar industry endorses this claim. Approximately 40 out of 89 sugar mills are directly or indirectly owned by the politicians, controlling almost 50% of the sugar market.
We do not have to dig too deep to come across names of political stalwarts belonging to all major political parties who have their stakes in this sector. It is difficult to distinguish mill owners from the political elite.
The nexus between politics and sugar industry has made this sector one of the most profitable businesses in this country. Pakistan Sugar Mills Association is perhaps the only platform where the political elite works in complete harmony with each other.
What is there in this sweetener that attracts the political leadership but leaves a bitter taste in the mouth of general public, particularly the taxpayers?
Firstly, the consistent financial support to mill owners by successive governments, particularly in the form of export subsidies (all at the expense of taxpayers), has made this industry inherently inefficient.
The industry has little interest to bring its cost of production down by containing wastages and generating revenues through value addition of byproducts.
Secondly, the government has kept mill owners safe from international competition and provided them with a captive local market through high import duties.
This kind of intervention by the government is bound to make any sector uncompetitive and inefficient. Consequently, today the Pakistani consumer is paying a price well above the international market price for sugar.
Furthermore, the self-interest of mill owners under political patronage has also led to the unprecedented growth of sugar mills, particularly in south Punjab, where sugarcane production is at an ecological disadvantage. This has resulted in an approximately 26% decline in cotton production.
Sugarcane is a resource-intensive crop, requiring almost twice the amount of water than cotton, which is highly challenging for the already water-deficient country.
More and more land is being brought under sugarcane cultivation at the expense of other crops, to satisfy the increased appetite of sugar mills, jeopardising the overall agricultural production.
In short, this industry has become the biggest beneficiary at the expense of taxpayers, environment and economic efficiency of the country.
Sugar production has a complex structure. On the one hand are the small to medium growers with 50% of them having less than five hectares of land under cultivation, and on the other are the political heavyweights sitting in national and provincial assemblies with more than 50% of the sweetener’s market.
This uneven market power with the industry participants has created distortions, giving rise to rent-seeking behaviour of the political-cum-industry elite.
A lack of a definite policy framework in this industry has led to a continuous financial and economic turmoil and an ever-going tug of war between the mill owners and growers.
Judicial intervention is often required to bring the industry participants to some consensus every year. This causes unnecessary delays in the crushing process, leading to significant losses for the industry at large and farmers in particular.
Sugarcane is a bulky commodity that needs to be processed immediately after harvesting, otherwise it dries up and loses weight very rapidly.
Ideally, sugarcane should be into the mills for crushing within six hours of harvesting, to retrieve maximum sucrose from it. In Pakistan, on average, it takes around 24 to 48 hours for the sugarcane to reach the mills.
Unfortunately, the ground reality is even worse. Mill owners have low morals. Every year we see mills indulging in post-harvest negotiations over the minimum support price of sugarcane.
This leads to long delays, with sugarcane-laden trucks waiting outside the mill gates for days. These carefully timed post-harvest negotiations exploit the farmers when they are the most vulnerable.
Time is a double-edged sword for the poor farmers. On the one hand, their produce is losing weight (on which their payment is based) and on the other they are unable to prepare their land for the next crop until the entire sugarcane is picked up.
As the farmers’ livelihood is entirely dependent on their crop’s sale, such intentional delays force them to comply with the middlemen’s offerings, which are far below the procurement price set by the government.
It is often believed that these middlemen are hired workers of mill owners, who not only give them approbation but also commission for managing to get the crop at a price far below the minimum support price.
On the flip side, the mill owners often moan severe liquidity problems. They complain that the price of sugar is not increased in proportion to the increase in the support price of sugarcane. This erodes their profits, rendering them uncompetitive in the market.
They also blame farmers for growing inferior variety of sugarcane with emphasis on weight rather than sucrose content. However, interestingly none of these issues have dis-incentivised the expansion and setting up of new sugar mills.
In 2007, there were 78 mills and currently the number has gone up to 89, regardless of high government regulations against the establishment of new firms. All these new mills have strong political connections.
The sugar industry needs a policy framework that eases obstacles to productivity through collaborative efforts.
Under the recent judicial activism, it might be worthwhile to reintroduce the concept of zones. Sugarcane fields were divided into zones till the early 1990s.
Zoning laws mandated that the mills purchase sugarcane only from the growers in their zone. Similarly, the growers were also bound by law to sell only to these mills. This policy proved to be efficient as well as cost-effective.
It reduced transportation costs and trimmed the lead time significantly between harvesting and crushing. Moreover, it was in the interest of mill owners to make timely payments to the growers and collaborate with them on better cane quality.
Zoning also stimulated inter-zone competition, leading to zonal efficiency and better yields. The government had to discontinue with this policy because of a handful of powerful mill owners, who were taking advantage of the growers by not giving them the minimum support price and making payments after long delays.
De-zoning, however, brought with itself more disarray in the industry, including the menace of middleman. It led to an unprecedented growth of mills even in areas that were at an ecological disadvantage for sugarcane production.
A high support price of sugarcane vis-a-vis other crops like cotton and wheat has led the farmers to grow sugarcane on their land instead of more viable options such as wheat and cotton.
To summarise, we can say that it is not easy to separate the deep-rooted political influence from the sugar industry. No one policy can help the industry break away from its current predicament. However, zoning can strengthen the links within the industry participants and push the industry to learn and survive on its own. It could be a step in the right direction.
The writer is a faculty member and ex-chairperson of the Economics and Finance Department at the Institute of Business Administration, Karachi
Published in The Express Tribune, March 16th, 2020.
GLOBAL SUGAR CONSUMPTION TO PLUNGE THIS YEAR
Reuters March 17, 2020
NEW YORK: International sugar trader Czarnikow on Monday cut its estimate for global sugar consumption this year by nearly 2 million tonnes, saying the coronavirus pandemic will reduce overall sugar use in countries that imposed lockdowns.
In a note to clients, the global trader headquartered in Britain said it is reducing by 5 per cent the expected sugar consumption in countries such as China, Germany, France, Italy and South Korea, among others.
Published in Dawn, March 17th, 2020
CORONAVIRUS: FRUITS AND VEGETABLES EXPORTS MAY SUSTAIN HUGE LOSS
By RECORDER REPORT on March 17, 2020
The overall export of fruits and vegetables from Pakistan is likely to sustain huge loss of $ 150 million due to coronavirus. Waheed Ahmed, the Patron-in-Chief of Pakistan Fruit and Vegetable Export Association (PFVA) has said that Pakistan is currently confronted with an alarming situation due to unprecedented serious effects of corona virus pandemic.
All industrial sectors are under immense pressure due to Corona virus pandemic, however the demand of agriculture produces, fruits and vegetables have multiplied manifolds. In addition, suspension of flights has created serious threats for transportation and trading sectors.
Transportation of food stuff via sea route is also experiencing problems and under these circumstances only those countries having adequate food for their local population and strong agriculture sector can encounter such serious crisis, he added.
Due to curtailment of operations by airlines, the export of fruit and vegetable to Europe, Far East and Middle East faces serious threat, while closure of hotels, restaurants and sharp drop in tourism, there is a significant reduction in demand of fruits & vegetables in the world.
Mega super stores are shutting down as preventive measures against the deadly corona virus, which is having pronounced negative impact on export of fruits and vegetables as well, Waheed disclosed.
It is anticipated, if the present situation prevails for next two months, the overall export of fruits and vegetables from Pakistan is likely to sustain huge loss of $ 150 million, he cautioned.
If the coronavirus pandemic is not fully controlled then the export of mango, to be commenced from June, would also be seriously affected leading to huge financial losses to the exporters as well as agriculture sector, he added.
After sealing of western border of Pakistan, export of fruit and vegetable via land routes to Iran, Afghanistan and central Asian countries have also been suspended, he informed.
He also urged all political parties for joint efforts at this crucial time for development of the agriculture and horticulture sector, so that in case of any likely internal and external crises, the food security of Pakistan can be ensured.
In this context, serious efforts shall be made by all the political parties to chalk out well-defined policy to ensure implementation of the recommendations spelled out in the 10 years’ comprehensive road map titled “Pakistan Horticulture Vision 2030″ developed by the PFVA for rapid growth of this sector, Waheed suggested.
This road map developed by the PFVA through a tedious and time consuming process of consultations has not only been deeply acknowledged by the members of assemblies, the experts have also declared that this road map is a realistic documents for development of national policy for the Agriculture sector , he mentioned.
The export of fruits & vegetable can be enhanced to USD 2.5 billion within a period of five years should the recommendations given in the Vision-2030 on short , medium and long term policies is fully implemented.
Copyright Business Recorder, 2020
PUNJAB TO LAUNCH RS 2.647 BILLION PILOT SHRIMP FARMING CLUSTER PROJECT
By ZAHID BAIG on March 17, 2020
The Punjab fisheries department will soon launch ‘pilot shrimp farming cluster’ development project at a cost of Rs 2.647 billion on 2500 acres of land in the province.
Farmers under this programme will be given subsidy on seed and fish for three consecutive years to help them become self-sustainable. The project is in line with the department’s mission of ensuring availability of protein to masses; lower the malnutrition and exploitation of untapped natural resources and uplifting of socio-economic condition of fish farmers.
Sources told Business Recorder on Monday that Muzaffargarh has been identified to carry out this pilot project as saline water area of the district is most suitable for fish production. Applications have been received from farmers to join this programme during the first year of this project. These applications are under scrutiny and successful candidates will be announced shortly.
Successful candidates will be given 75 percent subsidy on seed and feed during the first year of the project and 50 percent during the second year, so that farmers do not rely on any subsidy or assistance for good.
Farms on 1250 acres to be developed during the first 1-3 year of this project while another 1250 acres of land would be brought under shrimp farming in the last two years of this project with same methodology of extending 75 percent subsidy on seed and feed in first year and 50 percent during the next year, sources added.
Director General Department of Fisheries Punjab Dr Sikandar Hayyat commenting on the project said that the department is trying to expand fisheries production in saline areas while it has also established an aquaculture research lab in Muzaffargarh to explore the true potential. He said that the Project Implementation Unit (PIU) is also arranging training of fish farmers for promoting different fish producing methods such as shrimp farming and cage cluster development etc.
Copyright Business Recorder, 2020
DROUGHT RAISES THAI RICE PRICES OVER 6-YEAR HIGH
By RECORDER REPORT on March 17, 2020
Drought conditions in Thailand stoked concerns of a supply shortage and lifted rice export prices to a more than 6-1/2 year high this week, while strong domestic demand amid a coronavirus outbreak pushed Vietnamese rates to more than a one-year peak.
Thailand’s benchmark 5% broken rice prices rose to $470-$495 per tonne on Thursday, their highest since August 2013, versus last week’s $460-$467 range.
“Many rice mills are refusing to sell due to uncertainty over supply during this dry season,” a Bangkok-based rice trader said, echoing the concerns of others.
Many parts of the country’s rice growing area have been hit by drought and traders said higher prices were also denting overseas demand.
The Thai government has said this year’s dry season could extend beyond the usual period of April through to June.
In Vietnam, rates for 5% broken rice rose to $400-$405 on Thursday, their highest since November 2018, compared with $390-$400 a week earlier.
“Domestic demand has been strong over the past week as families are rushing to stockpile rice in anticipation of the further spread of the new coronavirus,” a trader based in Ho Chi Minh City said.
“This massive stockpiling has forced exporters to raise their prices due to scarce supplies,” the trader added.
Vietnam’s rice exports in the first two months of this year rose 31.7% from a year earlier to 928,798 tonnes, according to government customs data released on Wednesday.
In top exporter India, rice export prices extended their losing streak due to depreciation in rupee despite strong demand from African countries.
India’s 5% broken parboiled variety rates edged lower to $363-$367 per tonne this week from last week’s $367-$371.
The Indian rupee was trading near a record low on Thursday, raising exporters margins from overseas sales.
“Demand has been slowly improving from African countries. Prices are moderating due to the weak rupee,” said B V Krishna Rao, president of the Rice Exporters Association (REA). India’s rice exports in 2019 fell 18.1 % from a year ago to their lowest in eight years, government data shows, as demand from key Asian and African buyers moderated.
Meanwhile, Bangladesh could miss its target of 20 million tonnes for the “Boro” summer variety rice crop this season, as many farmers who were upset about low prices switched to other crops, insiders said.
Copyright Reuters, 2020
CCP SAYS SUGAR CRISIS COULD HAVE BEEN AVERTED IF ITS SUGGESTIONS IMPLEMENTED
By SOHAIL SARFRAZ on March 18, 2020
The government could have avoided the recent sugar crisis if it had implemented in time some of the recommendations framed by the Competition Commission of Pakistan (CCP) in its opinion issued to the federal and provincial governments in April 2018.
The recent sugar crisis saw the government and millers at odds over the cost and end price of sugar, while the farmers were raising their voice to get their dues in time.
A solution to these issues was provided by the CCP in its opinion, which is awaiting implementation by the federal and the provincial governments.
The CCP’s opinion was issued after consultation with the stakeholders in an open hearing on 25 January 2018.
The opinion addressed all the pertinent issues that have been causing repeated sugar crisis in the country, and suggested important measures to address these issues.
The recommendations could have been effectively used to avoid the shortage/hoarding of sugar in peak demand seasons, and the issue of payment of dues to the farmers.
Price floor: In respect of price floor, the CCP opined that the provincial governments should ideally not fix price floor of sugarcane and let the market determine price based on supply and demand.
Price floors should only be imposed for limited periods in situations where food security is gravely threatened.
According to the CCP, if a price floor needs to be imposed, the government must be careful, while calculating the cost that it takes to produce sugarcane by ensuring detailed field visits and rely on firsthand knowledge, duly acknowledging the divergent conditions and factors prevalent in different areas, in the interest of accuracy.
More importantly, the opinion said that the pertinent government departments at the federal and provincial levels must ensure that they have an independent way of forecasting the production of sugarcane in any proceeding season and its impact on the total supply of sugar in the country vis-à-vis its demand, so that this consideration is built into estimation of any potential price floor for sugarcane.
In addition to the cost of a commodity, the value of the commodity held by the buyer in light of the laws of supply and demand must also be considered to ensure that the seller or the farmer gets his price.
In either of the foregoing suggestions the pertinent government department must have an independent mechanism of collecting information and should not be relying on data available with the PSMA or any other stakeholder with vested interest in the process.
While fixing the price of sugarcane, price floors or any applicable support price of other crops, such as cotton, must also be considered, so as not to discourage the farmers of those crops to grow them.
Cotton crop feeds an important industry of textile and requires a lot less water than sugarcane, and its growers must not be discouraged from growing cotton, the opinion said.
The opinion said that whenever the provincial government arrives at a price floor, the government must ensure that it pays the farmer its due.
Any policy regarding determination of price floor for sugarcane must take the emphasis away from weight and shift it to quality, so that farmers have an incentive to shift towards more efficient methods and be rewarded accordingly.
Farmers producing higher quality sugarcane must be paid a premium against farmers, who grow relatively inferior product.
This will also help in reducing the overall production cost for sugar.
Review of legislative framework: The CCP strongly recommended that provincial governments review the legislative framework under which the sugar sector operates.
The Sugar Act is severely outdated and does not serve any purpose in the contemporary times.
All provincial governments should review legislation to limit government intervention and bring it in line with the recommendations given above.
Any revised or new legislation should encourage principles of free market.
The CCP further viewed that research and development (R&D) is the cornerstone of any efficient industry.
It appears that the lack of R&D has prevented the sugar industry from realising its potential (both export and local) particularly at the farm end, where there appears to be no efforts to introduce more effective seed varieties, and indigenize them to produce superior quality sugarcane for long-term benefit.
The CCP suggested R&D in yield and quality, bringing efficiency in the mills’ processes and making the manufacturing process more efficient and cost productive to making the most efficient use of the by-products.
With regard to the role of government with respect to exports, the CCP opined that, in addition to the R&D measures to reach our export potential, the concerned government departments must also be very vigilant regarding the existing stocks of sugar in the country.
“There is need for active forecasting with regard to the quantities of sugar that will be produced in any upcoming season vis-à-vis its demand and up-to-date knowledge of prevailing prices of sugar internationally, so that a timely and effective export strategy can be adopted, based on actual facts on ground,” the CCP said.
Shortage of sugar: Regarding any artificial shortage of sugar supplies on the retail/wholesale or mills’ end, the CCP viewed that the government through the TCP may maintain certain amount of reserves of sugar as a check/deterrent for any such market manipulation.
“Ideally market forces must be allowed to operate freely, and so this must be done very sparingly, if at all needed, as the scenario thus described, is less likely to sustain in current circumstances, where owing to excess supplies and lack of export channels, the market is very likely to correct itself within a short period of time. However any such reserve, apart for being a deterrent may also be considered for export at an opportune time, in the event of international prices of sugar rising at any point in time,” the opinion said.
Lastly, the CCP recommended that the government may consider setting up a committee comprising all the pertinent government departments dealing with the sugar sector at federal and provincial levels (such as provincial food departments, research departments whether attached or independent, provincial cane commissioners, Agriculture Policy Institute, Ministry of National Food Security and Research, Ministry of Commerce and Trade Corporation of Pakistan).
The committee should also include representatives of farmers and mill owners to coordinate effectively in aligning their objectives and be able to deliberate over a workable long-term plan based on the CCP’s recommendations for making the sugar sector internationally and locally competitive.
With the CCP’s recommendations, the sugar sector can be made an economically efficient sector, catering to the welfare of its stakeholders as well as consumers in the longer term.
Copyright Business Recorder, 2020
DESPITE COVID-19 FEARS, WHEAT PROCUREMENT DRIVE TO START PER SCHEDULE
By Rizwan Asif Published: March 18, 2020
LAHORE: Amid growing concerns related to the widespread coronavirus outbreak and to ensure the availability of flour in the province during these difficult times, the Punjab government has decided to stick to the schedule that was earlier fixed for the official wheat-procurement campaign.
To this end, all procurement centres will be made functional on March 25 while the provisions of bags and supplies to farmers will begin from April 5. Arrangements for handwash and hand sanitisers will be made mandatory across all 382 procurement centres to protect workers against the virus.
Speaking to The Express Tribune, the Provincial Minister of Punjab for Food Sami Ullah Chaudhary said that coronavirus is a pandemic, so steps should be taken to tackle the situation before it gets too late.
“Considering the threat of the virus, the federal and provincial governments have taken some unusual steps because millions of farmers visit the procurement centres to sell wheat,” he said. “We have, therefore, decided to commence the wheat procurement drive in accordance with the schedule and it will not be delayed.”
He added that arrangements for taking necessary precaution against the coronavirus will be strictly ensured at all the centres.
Sources added that every visitor walking in the procurement centres will have to wash their hands, while the buildings will also be sterilised regularly. Per an estimate, nearly 500,000 people will visit the government centres during the wheat procurement drive. Moreover, the food department has also fixed a target of procurement for all districts of Punjab.
A few constituencies recommended senior government officials to change the schedule of the wheat procurement drive, however, the chief minister and chief secretary of Punjab rejected the idea, saying that to prevent farmers from facing financial issues and to keep the availability of flour plentiful and stable, the schedule of the wheat procurement drive will not be changed.
Food Department Secretary Punjab Waqas Ali Mehmood has issued a circular for safety measures to prevent the spread of coronavirus, according to which, special cleanliness arrangements should be made at all the procurement centres and offices of the food department while disinfectants would also be sprayed regularly.
“Handwashing arrangements would be made both at the entrance and exits of every centre and staffers will be instructed to maintain suitable distance with visitors,” he said. “All the staff members will wear masks while on duty.”
The government has also fixed a procurement target for all districts of Punjab. The biggest target has been fixed for the Bahawalpur Division where 70 procurement centres have been set up along with a procurement target of 753,000 tonnes of wheat. For Multan, the target is 684,000 tonnes of wheat across 45 procurement centres, 650,000 tonnes across 44 procurement centres of Dera Ghazi Khan, 535,000 tonnes across 45 procurement centres in Gujranwala, and 476,000 tonnes in Sahiwal, to name a few.
Published in The Express Tribune, March 18th, 2020.
ECC SURPRISED AS MINISTRY SUDDENLY WITHDRAWS REQUEST FOR SUGAR IMPORT
Khaleeq Kiani March 19, 2020
ISLAMABAD: Amid rising prices, the Ministry of Industries and Production on Wednesday withdrew its request for sugar imports at the last moment leaving the Economic Coordination Committee (ECC) of the Cabinet to approve a couple of technical supplementary grants.
The meeting presided over by Adviser to PM on Finance and Revenue Dr Abdul Hafeez Shaikh also approved payment of Rs1.696 billion by the Pakistan State Oil (PSO) to Port Qasim Authority in 10 years.
Informed sources said the industries ministry had moved a case to the ECC for duty and tax-free import of 300,000 tonnes of sugar to check rising prices in the country despite the fact that sugarcane crushing season was currently in full swing.
Just before the ECC meeting formally began, cabinet secretary reported that the industries ministry had withdrawn the summary, an official told Dawn. No reasons were officially given but informed sources said an announcement by the federal cabinet on Tuesday that it had inducted a representative of the Inter-Services Intelligence in a committee probing the sugar price hike compelled the Industries Division not to pursue sugar import when crushing season was in progress.
In the last week of February, PM Imran Khan had constituted a committee comprising senior representatives of Federal Investigation Agency, Intelligence Bureau and Anti-Corruption Establishment, Punjab to investigate reasons behind sugar price hike in the middle of crushing season and suggest if anybody was behind the price manipulation or cartelisation and identify culprits.
The meeting took up the request from Ministry of Maritime Affairs (MMA) for the recovery of outstanding wharfage of Rs1.696bn on import of LNG by the PSO and directed that outstanding amount be paid in 10 equal installments without interest over a period of next ten years as recommended by a committee led by Minister for Economic Affairs Hammad Azhar.
However, on the request of the MMA, the ECC modified recommendations of the committee to the extent that in January 2023 a committee would review the circumstances and suggest any possibility for early repayment of the remaining sum. The MMA had been demanding full disbursements along with late payment surcharge within the tenure of the current government i.e. 2023.
However, the decision was taken on the recommendations of the committee constituted under chairmanship of economic affairs minister which found it unfair to charge mark up to a public sector organisation whose own receivables had gone beyond Rs350bn most of which from the public sector.
The ECC also approved a Technical Supplementary Grant of Rs4.152bn for the Federal Board of Revenue (FBR) from the World Bank-funded Pakistan Raises Revenue Programme to meet the mandatory and inevitable expenditures for the achievement of disbursement-linked indicators and supplement budgetary resources for expenditures in this regard.
The ECC also directed FBR chairperson to give a detailed briefing on the initiative to the ECC in the next meeting. Another technical supplementary grant worth Rs44.447 million was also approved by the ECC for Islamabad Capital territory (ICT) to execute “National Programme for Improvement of Watercourses Phase-II in ICT for productivity enhancement of wheat, Prime Minister’s Initiative for Save the Calf, Calf Feedlot Fattening in Pakistan and Development of Backyard Poultry in ICT”.
The meeting was apprised by the Ministry of Overseas Pakistanis & Human Resource Development Task Force on Overseas Employment and Welfare of Overseas Pakistanis.
In February 2019, the ECC had constituted an inter-ministerial task force under the chairmanship of special assistant to PM to look into the issues of overseas employment and make recommendations in consultation with relevant stakeholders.
The meeting was told that measures had been taken to identify trades and skill sets in demand to meet the requirements of international job market and develop a centralised technical education certification and verification system and improved regulatory mechanism for curbing sub-standard certifications and helping provincial TEVTs in developing their skill development capacities.
It was reported that arrangements had also been made for developing a mechanism for sharing data among various agencies concerned at the federal and provincial levels on employment opportunities and available skills.
Published in Dawn, March 19th, 2020
8.57M COTTON BALES REACH GINNERIES, ARRIVALS DOWN BY 20PC
APP March 19, 2020
MULTAN: Seed cotton (Phutti) equivalent to 8.57 million or 8,571,261 bales has reached ginneries across Pakistan till Mar 15, 2020 registering 20.36 percent shortfall compared to corresponding period of last year.
Out of total arrivals, over 8.56 million or 8,564,040 bales have undergone the ginning process, according to a fortnightly report released to media by Pakistan Cotton Ginners Association (PCGA) here Wednesday.
Arrivals in Punjab were recorded at 5.09 million or 5,097,282 bales and over 3.47 million or 3,473,979 bales in Sindh.
Total sold out bales were recorded at over 8 million (8,067,803) bales including 8,009,137 bales bought by textile mills and another 58,666 bales by exporters.
Exactly 503,458 bales were still lying with the ginneries as unsold stock.
Sanghar district of Sindh continued to remain on top with cotton arrival figures of over 1.13 million or 1,136,840 bales while Rahim Yar Khan and Bahawalnagar districts of Punjab stood second and third with cotton arrival figures of 1.1 million (1,107,357) bales and 1.04 million or (1,045,166) bales respectively.
The report does not include cotton arrival figures from districts of Kasur and Sargodha.
Total 16 ginning factories were operational in the country including four (4) in Sindh and twelve (12) in Punjab.
Fortnightly flow of cotton bales for second fortnight of Mar 2020 was recorded at 5,885 bales.
PTI govt to levy sales tax on actual sugar import price
By Shahbaz RanaMarch 19, 2020
ISLAMABAD: The federal government on Wednesday decided to charge sales tax on imported sugar at its actual price and withdrew a summary for the import of 300,000 tons of the commodity – the two decisions that may further strengthen monopoly of sugar barons.
The Federal Board of Revenue (FBR) also issued a notification aimed at bringing changes in the sales tax regime for the imported sugar. Through a Statutory Regulatory Order, the FBR abolished the minimum import price of $725 per ton of sugar for the purpose of calculating 17% sales tax.
Now, the 17% sales tax will be worked out on the basis of cost, insurance & freight (CIF) value of imported sugar plus the applicable customs duty. This will increase the sales tax on every kg of sugar as compared to the old fixed $725 per ton.
Although international sugar prices have started falling due to the overall crash in markets caused by COVID-19, the imported sugar will become expensive once the prices return to normal levels.
Sugar trading has become a sensitive topic after about a 35% increase in its prices. The federal cabinet on Tuesday approved the inclusion of a representative of a prime intelligence agency in a joint investigation team probing the hike in prices.
The federal government has so far remained unable to break the nexus between hoarders and millers and its inaction has instead strengthened their hands.
The Economic Coordination Committee (ECC) of the cabinet on Wednesday was set to take up a summary for the import of 300,000 tons of sugar. But as the meeting began, the cabinet secretary informed the ECC that the summary had been withdrawn by the Ministry of Industries and Production.
The Ministry of Industries had recommended the ECC to allow import of 300,000 tons of white sugar through the private sector without taxes and duties subject to the condition that no financial support would be provided to importers by the federal and provincial governments and the import quota would be implemented and monitored by the State Bank of Pakistan (SBP) on a first come, first served basis.
A day before the ECC meeting, Pakistan Sugar Mills Association met with Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh. It was the second time in as many months that the ECC either opposed the import of sugar or did not take up the summary.
Last month, the ECC banned the export of sugar but turned down a proposal for the import of commodity that Prime Minister Imran Khan had approved in January as a measure to arrest the skyrocketing prices of the sweetener.
Sugar prices increased by 32% to Rs80 per kg last week over the same period of last year, according to the Pakistan Bureau of Statistics (PBS).
The Ministry of Overseas Pakistanis and Human Resource Development presented a report of the task force on overseas employment and welfare of overseas Pakistanis.
The ECC had constituted the inter-ministerial task force in February last year to look into the issues of overseas employment for Pakistani manpower and make recommendations in consultation with relevant stakeholders.
The task force has identified the trades and skill-sets in demand in order to meet requirements of the international job market, develop a centralised technical and vocational education and training (TVET) certification and verification system, and improve the regulatory mechanism for curbing substandard certifications and helping provincial TEVTAs in developing their skill development capacities.
Its recommendations include developing a mechanism for sharing data among NAVTTC, employment bureaus and promoters of employment opportunities and available skills, efficient provision of e-passport, NICOP, POC to overseas Pakistanis and addressing issues of overseas Pakistani schools.
The ECC directed the task force to come to the ECC a month after the budget and brief it on the overall progress on the measures taken by the committee for the welfare of overseas Pakistanis.
The ECC also approved a technical supplementary grant of Rs4.2 billion for the FBR from the Pakistan Raises Revenue Programme to meet the mandatory and inevitable expenditures for fulfilling the project conditions.
The ECC, on the issue of recovery of outstanding wharf age charges of Rs1.7 billion on the import of liquefied natural gas (LNG) by PSO, directed that the outstanding amount would be paid in 10 equal instalments without interest over a period of next 10 years. However, in January 2023, a committee will review the circumstances and suggest any possibility for early repayment of the remaining sum.
Published in The Express Tribune, March 19th, 2020.
Ban on wheat MOVEMENT to help achieve procurement targets
The Newspaper’s Reporter
ISLAMABAD: Ahead of wheat harvesting season, Ministry of National Food Security and Research on Thursday proposed restrictions on intra-district movement of wheat crop and ban on private sector from procuring the crop until public sector targets are achieved.
The meeting, chaired by Minister for National Food Security and Research Makhdoom Khusro Bakhtyar reached a consensus on stopping wheat procurement by feed millers, rice mills and ginners.
The wheat procurement target for Passco has been set at 1.8 million tonnes, while Punjab will procure 4.5m, Sindh 1.4m, Balochistan 1m, and Khyber-Pakhtunkhwa 0.45m.
The government has already approved minimum support price of Rs1,400 per 40kg.
The meeting was informed that 1,162 wheat purchase centres have been established throughout the country and district administrations in all provinces have been ordered to take strong legal action against hoarders.
Punjab and Sindh governments will begin public procurement of wheat from Mar 25 subject to weather conditions. The procurement will be done on first-come-first-serve basis.
Food Security Minister Bakhtyar directed the officials at the meeting to devise daily or weekly monitoring procedures to evaluate procurement targets and asked them to follow directions given by the Economic Coordination Committee related to intra-provincial agreements defining the quantity and price of wheat crop so that cost-sharing among the provinces can be rationalised.
He said that there is sufficient supply of wheat and wheat flour across the country and government is also going to procure heavily during the coming wheat harvesting season. There is no need to panic as reports from food ministers and representatives of food departments regarding supply of flour and wheat in all provinces have been satisfactory, he added.
It was decided that another meeting will be held in the first week of April to review arrangements made by all provinces to assure their procurement position.
The meeting was attended by Ministry of National Food Security and Research Secretary Dr Muhammad Hashim Popalzai, agriculture ministers of Punjab and Khyber-Pakhtunkhwa and Pakistan Agriculture Storage and Services Corporation (Passco) managing director besides secretaries of food departments from Punjab, Sindh and Khyber-Pakhtunkhwa.
Published in Dawn, March 20th, 2020
REAP CHIEF URGES GOVERNMENT TO DOUBLE TERM OF ERF
Rice Exporters Association of Pakistan (REAP) has urged the government for enhancing the term of export refinance facility (ERF) scheme given to the rice exporters from 180 days to 360 days, enabling them work smoothly and with peace of mind.
‘Due to outbreak of coronavirus in certain countries, our members are facing issues of delayed shipments, delayed payments, cancellation of their future export orders as well as substantial increase in the cost of freight,’ said REAP chairman Shahjahan Malik in a letter addressed to the Adviser to PM on Commerce Abdul Razzak Dawood.
Shahjahan further said that these issues are being faced particularly in China, Saudi Arabia, UAE etc. Keeping in view these issues the term of the ERF should be doubled to enable the Pakistani rice exporters to repay the finance obtained from the banks in time, he added.
Talking to Business Recorder here on Thursday, he said that terms of both type of export refinance facilities should be enhanced. Under ERF-I scheme; exporters obtain finance for a specific consignment while under ERF-II, exporters are provided finance for one year and they have to double their past export figures in that specific time.
Malik said that they are receiving more export orders this year because of panic buying in the wake of coronavirus. These are slightly 10 per cent higher but to manage these demands exporters are in need of finance. He was of the view that the textile sector is given all the incentives and facilities but rice which is second highest foreign exchange earners for the country is always ignored and neglected.
To a question, REAP chairman said that the picture of rice export is very rosy as during the first eight months of current fiscal year, exports have shown 15 per cent hike, especially in export of Basmati. However, he regretted that figures of production of rice crop are the same as was in the corresponding period so efforts have to be made for production of more export surplus.
Replying to another query whether ban on transportation would hit the rice exports, he hoped that movement of essential items would not be banned as it may also create shortage of commodities in the market for domestic requirement.
He said that they had met about 10 times to the adviser to the PM on Commerce Abdul Razzak Dawood to discuss various impediments blocking growth of rice exports from Pakistan. “We are aiming to double the rice crops in next five years but it will need full backing by the government and producing more export surplus,’ Shahjahan Malik concluded.
Copyright Business Recorder, 2020
PROCUREMENT OF WHEAT TO KICK OFF IN SINDH FROM MARCH 25
In order to meet the wheat procurement target of 8.25 million tons fixed by the federal government for 2019-20 at an estimated cost of Rs288.75 billion, procurement of the commodity will start in Sindh from March 25.
A senior official of the Ministry of National Food Security and Research (NFS&R) said that the Sindh Food Department and the Pakistan Agriculture Storage Services Cooperation (Passco) will start wheat procurement in Sindh.
He said that a meeting presided over by the Federal Minister for National Food Security and Research, Makhdoom Khusro Bakhtyar, held through video link, informed that procurement of wheat in Sindh will start on March 25.
The official said that Minister for Agriculture, Livestock, Fisheries and Cooperatives Punjab Malik Nauman Ahmed Langrial and Minister for Agriculture Khyber Pakhtunkhwa Mohib Ullah Khan attended the meeting, while Minister for Agriculture Balochistan Zmarak Khan Achakzai and Minister for Agriculture Sindh Muhammad Ismail Rahu did not attend the meeting.
However, senior officials of the food departments of Sindh and Balochistan attended the meeting, he said. The meeting was also attended by the Federal Secretary NFS&R, Dr Muhammad Hashim Popalzai and Managing Director (MD) PASSCO Imran Nasir Khan.
He said that the meeting was informed that 1,162 wheat purchase centers had been set up across the country, and the district administration in all the provinces had been ordered to take strong legal action in order to curb the hoarding.
Wheat will be purchased at the minimum support price (MSP) approved at Rs1,400 per 40-kg. The officials said that the meeting also decided that procurement of wheat by feed millers, non players like rice mills and ginners should be disallowed. The minister directed to devise daily or weekly monitoring procedure to evaluate procurement targets.
He also suggested to follow directions given by the Economic Coordination Committee (ECC) with respect to intra-provincial agreements defining the quantity and price of the wheat crop, so that sharing of cost by all the provinces should be rationalized.
The minister said that there was sufficient supply of wheat/flour in the country and the government was also going to procure heavily in this season. Meanwhile, the Pakistan Meteorological Department (PMD) forecasted more rains in the upcoming days. Another westerly wave is likely to enter Pakistan on Friday that will intensify on Sunday.
Under the influence of this westerly wave, rains are expected in the country in the coming days, such as isolated rain thunderstorm with gusty winds (a few hailstorm) is expected in north Balochistan (Quetta, Zhob, Qila Abdullah, Qila Saifullah, Pishin, Musa Khail), Khyber-Pakhtunkhwa (Chitral, Dir, Swat, Kohistan, Mardan, Peshawar, Charsadda, Nowshera, Waziristan, Mohmand, and Bajaur), Islamabad and upper Punjab (Rawalpindi, Jhelum, Chakwal, Attock, Mianwali, and Khushab) on Friday/Saturday.
Copyright Business Recorder, 2020
VALUE OF $725 PER MT FIXED ON IMPORT OF SUGAR WITHDRAWN
The Federal Board of Revenue (FBR) has withdrawn value of $725 per metric tons (MT) fixed on the import of sugar and now 17 percent sales tax would be applicable on the actual value of the commodity at the import stage.
The FBR has amended SRO 812(I)/2016 through an SRO 233(I)/2020 issued here on Thursday.
Under SRO 812(I)/2016, the FBR had fixed value of domestically produced and imported sugar from September 2, 2016. The value of domestically produced sugar was fixed at Rs 60 per kg and the value of imported sugar was fixed at $725 per metric tons.
The FBR has abolished this fixed value of $725 per MT on the import of the commodity.
Official sources told Business Recorder here on Thursday that the values of sugar were fixed on import and domestic stages for the purpose of assessment of sales tax. When the fixed value of $725 per MT has been withdrawn, the sales tax would be charged on the actual value of the imported sugar. The value has been reduced which would ultimately result in rationalization of sales tax at the import stage.
The meeting of the Economic Coordination Committee (ECC) of the Cabinet held on March 18, 2020 did not discuss the issue of sugar import as Ministry of Industries had withdrawn the summary.
In exercise of the powers conferred by first proviso to clause (46) of section 2 of the Sales Tax Act, 1990, the Federal Board of Revenue is pleased to direct that the following amendment shall be made in its Notification No S R O 812(I)/2016, dated the 2nd September, 2016, namely In the aforesaid Notification, in the Table, in column (1), serial number 2 and corresponding entries relating thereto in columns (2) and (3) shall be omitted.
Copyright Business Recorder, 2020