TASK FORCE TO IMPROVE COMPETITIVENESS OF THE HORTICULTURE SECTOR FORMED:

csf

Islamabad, July 12 – A meeting to make the horticulture sector in Pakistan more competitive was held today at the Ministry of Finance. Dr. Salman Shah, Advisor to Prime Minister on Finance, Economic Affairs, Revenue and Statistics chaired the meeting.

Dr. Salman Shah informed the stakeholders that the horticulture sector needs financing, which can support private sector activity. He also said that the private sector and the banking sector should work more closely, so they can be a part of this initiative. He further said that the success of this initiative will only be gauged if we see some innovative projects from the private sector. The Advisor to the PM also emphasized the importance of having an action plan based approach for the sector

The meeting was attended by the key stakeholders in the horticulture sector, including representatives from the Ministries of Food Agriculture and Livestock, Commerce, Science & Technology, Industry and Health. The Board of Investment along with other private sector representatives from banking, bio-technology and leading horticulture exporters also attended the meeting. The stakeholders? agreed to establish a Task Force for Horticulture Finance & Competitiveness (TFHF&C).

The Task Force also agreed to declare the Horticulture sector as an industry and the Board of Investment will be moving a summary for the necessary action soon.

The meeting was called by the Ministry of Finance to provide a common platform for all the stakeholders to discuss and develop a common strategy for the horticulture sector in Pakistan.

Briefing the participants, Salim Iqbal Jhagra, Additional Secretary of the Ministry of Food, Agriculture and Livestock, that his ministry is working with the Asian Development Bank to carryout studies to develop the provincial horticulture policies by the end of this year.

Speaking on the occasion, Abdul Malik, Director Marketing of Union Fruit Export Private Limited, who was representing the Horticulture exporters, emphasized the need for cold storage facilities, especially at the ports. He also said that there is a dire need of training for the laborers in this sector. ?We have to streamline and improve the shipping lines to improve the competitiveness of

The Horticulture sector?, he further said that the horticulture associations should be involved in this process as well. The suggestion of Muhammad Sadiq, CEO of Arif Overseas Traders, who was also repenting the private sector exporters, asked the government that to remove the freight subsidy on horticulture exports. He was of the opinion that this amount should be used for exploring new markets and other marketing related activities.

The Competitiveness Support Fund, a joint initiative of the Ministry of Finance and the United States Agency for International Development (USAID), through its recently completed study on the ?Policy Analysis on the Competitive Advantage of the Food Processing Sector in Pakistan?, proposed an Action Plan for the Government of Pakistan to improve the competitiveness of the horticulture industry.

The Action Plan proposed a Task Force approach, based on the finding, that many agencies are involved in the industry and that much good work is already being undertaken. However there may be a duplication of effort. Government?s resources may not be used efficiently. Equally, a small effort and more coordination could move the industry past a ?tipping point?. The finding also identifies, Finance as an essential factor required to move the industry forward.

Many of the elements, to make the industry competitive, are in place that would enable the Pakistan?s horticulture industry to become a world-class industry if more focused and targeted efforts backed by finance are made. Speaking on the occasion, Dr. Salman Shah said that ?Pakistan has to integrate its? horticulture industry into the global food supply chain and today?s meeting has prepared us to be better equipped to take up this task?.

The world horticulture market is valued at $80 billion to which Pakistan contributes an annual $130 million. Only about 16% of fruits are being processed, although, this activity offers great opportunities to augment volume of value added products using modern technology. The fruits and vegetables exported in fresh form attract discount prices because exporters are unable to provide adequate grading and packing. Pakistan?s horticulture export industry?s share in the world market has risen steadily from about 5% in 1991 to 12% (value 2004). The potential markets for the Pakistani exporters have been identified in Europe and the Middle East.

It was agreed that the Ministry of Finance will provide the Chair for the Task Force with the support of a small Secretariat provide by the Competitiveness Support Fund (CSF). The Secretariat would operate in close coordination with the main operational agencies working under the line ministries like, the Pakistan Horticulture Export Development Board, Agribusiness Development & Diversification Project, Agricultural Support Fund, SMEDA and PISDAC?s Horticulture SWOG.

The Task Force for Horticulture Finance and Competitiveness (TFHF&C) will act as a steering committee. An implementation committee, chaired by the Ministry of Food Agriculture and Livestock will coordinate with the sub-committees on finance, infrastructure, regulations and standards, processing and production & marketing as well. The sub-committees will be coordinated through an implementation committee, head by the Ministry of Food, Agriculture and Livestock. Dr. Salman Shah also asked the CSF to include more representations from the private sector, especially from the processing and supply chain side.

The principal findings of the CSF study were the identification of harvest losses upto 25 to 40 percent, the industry exports only about 5% of total harvest, relatively low export price, great difficulties in maintaining quality at the destinations, high air transport cost as compared to low profit margins, inadequate international market information, lack of research & training opportunities and lack of implementation on the available information.

It was agreed that the next meeting of the Task Force will be held in two weeks, where the implementation committee will present the structure of the sub-committees to the Task Force in coordination with the Ministry of Food, Agriculture and Livestock.

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