CPEC and Agriculture
Introduction:
CPEC has been called a game changer and
has many aspects one of which is the agriculture component. The
CPEC plan reveals, thousands of acres of farmland will be leased out to Chinese
enterprises in Pakistan. Chinese enterprises will be allowed access to
large tracts of Pakistani farmland, either by lease or purchase. On that land,
they will allegedly be permitted to operate their own farms and processing
facilities, backed by robust capital grants and loans from Beijing and the
Chinese Development Bank. Keeping in view the fact that
agriculture sector accounts for around 20 per cent of Pakistan`s GDP and
employs over 40pc of the country`s labor force, both Pakistan and China have
agreed to enhance cooperation on agriculture under the China-Pakistan Economic
Corridor (CPEC),
China and Pakistan have an
agreement to promote the transition from traditional agriculture to modern
agriculture in the regions along the CPEC to effectively boost the development
of local agricultural economy and help local people get rid of poverty and
become better off, strengthen the up-gradation of agricultural infrastructure,
promote the construction of water saving modern agricultural zones, and
increase the development and remediation of medium and low-yielding land to
achieve efficient use of resources
Due to shortage of arable land and
freshwater resources in China, the country needs to import land-extensive crops
(such as wheat and rice) to feed its population. Further, with rising living
standards, the Chinese demand for agricultural imports is gradually moving up,
which is likely to create agro-based trade opportunities in countries having
substantial potential in agriculture produce. China`s demand for cotton yarn
and rice imports is met by the emerging economies of Asia, such as Pakistan,
Vietnam, Thailand and India.
The recent trade war between USA and
China will possibly hurt both parties but it does present opportunities to
others Chinese
imports from the US are mostly agricultural produce. Pakistan is a natural
agricultural country. Its climate and hard-working workforce are a blessing for
the nation. China faces a decreasing agriculture output per capita since there
is a rural to urban migration, economic growth has brought about significant
increase in family food budgets, urban wages are significantly higher than
rural wages, and the levels of demand are not being met with by domestic
sources.
Trade Balance between Pakistan and China:
Trade between Pakistan and China is
lopsided. To address this gap the agriculture potential can be utilized .The
low volume of trade between Pakistan and China is not reflective of the
economic size of two neighboring countries. This indicates there is a huge
untapped trade potential in both countries.
China is the world’s largest importer of agricultural
products. In 2015, China imported $160 billion worth of agricultural products.
However, Pakistan’s share in these exports was minuscule — less than half a
percentage point — despite having a large agrarian base and a shared border
with China. With a population of 1.3 billion people, China consumes almost $1
trillion worth of food every year. With increased urbanization and rising
incomes, Chinese consumption patterns are also changing, and demand for high
quality imported food items is growing at a pace much faster than population
growth. Therefore, the domestic consumption is expected to grow by another $500
billion in the next 10 years. it takes about one acre of arable land to feed an
average US consumer. With present population, China only has about 0.2 acre per
citizen, which is going to be far short of future requirements, considering the
evolving demand.
China, the world’s largest importer of
vegetables, gets 50 of these imports from the US and Brazil. In the world of
international trade, shorter distances can provide a strategic advantage
through lower transportation costs. But for perishable items like food, such
proximity can translate into yet another edge. During transit over long
distances, food items face higher risk of spoilage and contamination. Because
of this, not only additional cost is incurred for preservation and packaging
but often exporters have to make use of extra pesticides to increase shelf-life
of food. Pakistan, being China’s neighbor, therefore enjoys a unique advantage
and CPEC provides an unprecedented opportunity to capitalize on that.
Initiatives
already under way:
Various agricultural projects have been
initiated to get maximum benefit of the CPEC initiative, which include: Fruit
processing industry in Gilgit-Baltistan: The climate and fertile soil of
Gilgit-Baltistan offer ideal environment for producing fruits like apples,
peach, cherries, almonds, apricot, etc. According to an article published by
the Asian Development Bank, farmers in Gilgit-Baltistan produce over 100,000 tones
of fresh apricots a year. Setting up the fruit processing industry in the
region would help boost the country`s fruit exports.
Meat production and processing
facilities in KP: Setting up of meat production and processing facilities in KP
would help increase Pakistan`s meat exports to China, as well as, to
Afghanistan and Central Asian market. KP-China Sustainable Donkey Development
Program: To increase the donkey population in Pakistan so as to ensure
interrupted backward supply for export of live animals and raising income of
donkey breeders and traders.
Under CPEC, efforts are being
made to strengthen drip irrigation technology for water efficiency, strengthen
cooperation in the fields such as crop farming, livestock breeding, forestry
and food growing, and aquatic and fishery, with the highlight on technical
exchange and cooperation in the fields of development of comprehensive
agricultural production capacity, construction of farmland water conservancy
facility and agricultural products circulation facility.
The CPEC Agri sector is also
focusing on improving post-harvest handling, storage and transportation of
agricultural products and innovates in marketing and sales models, Improve
water resources operation and management, strengthen development of pastoral
areas and desert, and promote application of remote sensing technology.
The key cooperation areas focus
on strengthening production of agriculture inputs particularly pesticides,
fertilizer, machinery and support services including agriculture education and
research, collaboration in forestry, horticulture, fisheries and livestock medicines
and vaccines as well as strengthening production of horticulture products.
Rationale
of Intervention:
Pakistan
is among the top 10 producers of many crops such as rice, wheat, cotton,
sugarcane, milk, meat, mangos, chickpeas, and citrus fruits. But because of a
poor economy and lack of modern techniques and technology, it has not been able
to exploit its strength in the agriculture sector fully. However, China’s
experience in agriculture has been very successful, and the progress it has
made in this sector during the past four decades is amazing.
China
was facing food shortages just 40 years ago, but with its reforms in the
agriculture sector from 1978-84, it successfully turned shortages into
surpluses, and began exporting produce to other countries and generating
foreign exchange. China pulled around 500 million people out of poverty within
just six years of its reforms in the agriculture sector. Chinese scientists,
technologists and farmers worked very hard, developed new varieties and new
techniques, and the country modernized its farming patterns. Now Chinese
agricultural enterprises are mature, experienced and financially strong.
They
could enter Pakistan’s huge untapped huge market and make joint ventures with
local entrepreneurs to exploit the real potential of Pakistan’s agriculture
sector. This would help Pakistan’s economy to take off and would also be a good
opportunity for Chinese entrepreneurs to make good profits as well as
compensate for any disturbance caused by US export of agricultural produce
Coordination
Efforts:
Sino-Pakistan
Hybrid Rice Research Centre at Karachi University: Both countries have recently
initiated research to produce high-yielding and high-quality rice. Setting up a
rice research centre is a right step towards achieving the objective.
The basmati rice grown in Pakistan’s Punjab province is long and
slender-grained. It is aromatic, fluffy when cooked and, in classic Pakistani
dishes, pairs well with lentil and gravies made from chickpea flour and spices.
At market, it draws double the price, if not more, of non-basmati, long-grain
rice varieties.
In recent years, however, basmati revenues have slumped in
Pakistan amid low-yield harvests and uneven quality. At the Sino-Pakistan
Hybrid Rice Research Center in Karachi, Chinese and Pakistani
scientists are working to reverse this trend. Using state-of-the-art genetic
technologies, they are developing high-yield, high-quality, and pest-resistant
rice varieties, for both domestic sale and export.
The $1.3 million research facility is a harbinger of many
changes soon to come to Pakistan’s agriculture sector under the ambitious
development scheme known as the China-Pakistan Economic Corridor, or CPEC For agriculture, CPEC promises technology
transfers, infrastructure upgrades, and extensive cooperation between Chinese
and Pakistani farming enterprises.
A group of Chinese hybrid-rice researchers and
experts along with local scientists has visited more than 100 rice farms across
the country under the `Travelling Rice Seminar `initiative.
The travelling seminar was designed by Pakistan Agriculture Research Council
(PARC) and Chinese Yuan Longping High-tech Agriculture Company and aims to
boost hybrid rice cultivation in the country.
According
to Program Coordinator and Member Plant Science PARC Dr Anjum Ali, the experts
also visited research stations, agricultural universities and seed outlets of
different companies to exploit the cultivation of hybrid rice. The Chinese
experts travelled to Khyber Pakhtunkhawa, Punjab, Sindh and Baluchistan in
order to create awareness about the cultivation of hybrid rice among growers.
‘This was a month-long activity in which a group of hybrid rice researchers
from China comprising 12 scientists trained the local scientists, seed
producers and field extension departments of the provincial governments,` he
added.
He said the main aim of this joint initiative is to enhance per acre crop
productivity, increase profitability and produce surplus commodity for exports
enhancement. ‘In order to further enhance the local rice output, China and
Pakistan have decided to work together for conducting joint awareness programs
to adopt hybrid rice seeds,` he added.
The Chinese scientists trained 30 Pakistani agriculture scientists who were selected
from across the country. Dr Ali said the Chinese experts will also impart
training to the members of the provincial field extension departments on hybrid
rice cultivation. In addition, the activity will also help in capacity building
of local experts from all over the country in order to promote hybrid rice
techniques.
Road-shows and field visits were organized across rice-growing areas to address
issues and challenges faced in promotion of hybrid rice seed, he added. He
further said a revolutionary hybrid rice seed has been developed recently by
the Chinese researchers, which would help Pakistani farmers to enhance
significantly their per acre yield, hence the country would be able to export
more rice, he added
Challenges
Faced by Pakistan Agriculture:
Firstly, the fertility of soil is decreasing day by day. The
thickness of fertile layer of soil in Pakistan is more than 6 inches but the
average yield is lower than other countries where layer of fertile soil is only
4 inches; water wastage is very high in our country. The archaic method of
flood irrigation is still in practice in whole of the country which wastes almost
50 to 60 percent of water; owing to old methods of cultivation and harvesting,
Pakistan has low yield per acre that means the average crop in Pakistan is just
1/4th of that of advance states. Nepal,
India and Bangladesh, are using modern scientific methods to increase their
yield per acre. For this purpose, these states are using modern machines to
improve their yield; small farmers are increasing in our country as the lands
are dividing generation by generation. So, there are large numbers of farmers
who own only 4 acres of land. These small farmers do not get credit facilities
to purchase seeds, pesticides, fertilizers etc; water logging and salinity is
increasing day by day. As the storage capacity of the dams is decreasing so the
water availability per acre is also decreasing. Therefore, the farmers are
installing more and more tube wells to irrigate their crops. This is why
salinity is becoming the major issue in most parts of Punjab and Sindh; focusing
more on land, crops and yield problems the man behind the plough is always
ignored. While formulating the 5 or 10 years plan, no emphasize has been laid
on the importance of solving the problems of farmers. Most of the farmers are
illiterate, poor and ignorant.
Infrastructural problems:
Inadequate rail and road networks
are one area of concern.. Pakistan is also facing grain storage problems at
large scale throughout the country. The people often store their grains in
godowns, which cause time to time damage to the seed. Thus, hundreds of thousands
of tones of crops have to be stored in temporary facilities that afforded
inadequate protection and pilferage. The hazards may occur because of improper
ventilation, lack of control over temperature and humidity, high moisture
content in seeds, lack of control over rain due to broken walls, floors and
ceilings, spoil and un-cleaned godowns, lack of spray and fumigation etc. That
results in increase number of dormant seeds, sprouting and rotting, increase of
insect damage and bird contamination.
Cold storages:
All fruits and vegetables require specialized post-harvest
treatment, appropriate temperature and relative humidity for their storage.
Establishment of cold storage provides refrigerated storage and preservation
facilities for different fruits, vegetables as well as flowers. Special
licenses are required for food items like milk, meat etc & can be studied
in the. Because of technology advancements and logistic strategies, the cold
storage of perishable items has become an important stage in the distribution
between manufacturers / processors and retail locations. The cold storage will
ensure the increased availability and improved quality of high value perishable
fruits and vegetables for both export and local sale, which would otherwise perish
or deteriorate.
Value added Sector:
Livestock revolution enabled Pakistan to significantly raise
agriculture productivity and rural incomes in 1980s. Economic activity in
dairy, meat and poultry sectors now accounts for just over 50% of the nation's
total agricultural output. The result is that per capita value added to
agriculture in Pakistan is almost twice as much as that in Bangladesh and
India. Although Pakistan's value added to agriculture is high for its region,
it has been essentially flat since mid-1990s. It also lags significantly behind
developing countries in other parts of the world. For example, per capita
worker productivity in North Africa and the Middle East is more than twice that
of Pakistan while in Latin America it is more than three times.
Conclusions
Agricultural development
is one of the seven areas of cooperation under CPEC, wherein China is
specifically interested to explore areas like cotton productivity, efficient
irrigation and post-harvest infrastructure along the CPEC route, a gateway for
enhancing agriculture exports to China. Where infrastructure can undoubtedly
serve in allaying the bottlenecks in the agriculture sector, this progression requires economic and political reforms by the
government and private sector. The government should consider removing
tariff and non-tariff barriers for agricultural trade with China, renegotiating
the Pak-China Free Trade Agreement for better returns on its agricultural
exports. The private sector and
agriculture entrepreneurs should explore viable market opportunities and partnerships
in the Chinese market and with international firms. Most importantly, a modern
agricultural policy needs to be formulated to work in tandem with CPEC and
support the rights of the local farmers.
The
private sector and agri-entrepreneurs should become the trailblazer and start
exploring viable market opportunities in the Chinese market and forge
partnerships with international firms to get a foothold. The government and
private sector should jointly invest in research and development and
post-harvest technology to improve product variety and quality. Last, but not
the least, value chain expansion should be prioritized. Fruit processing, for
instance, can fetch greater value with far simpler SPS requirements and more
stable demand.
Update
During Prime Minister Imran Khan`s visit to China, Islamabad and Beijing
inked a few initial agreements on agriculture; on the basis of which detailed
frameworks of cooperation in the field of crops, livestock, fisheries and
forestry will be developed and implemented. Officials say that the Memorandum of Understanding (MOU) signed during Mr
Khan`s visit provides the basis for attracting Chinese investment and Chinese
technical assistance in all sub-sectors of agriculture.
`From strengthening the seed sector, increasing crop yield, modernising
livestock and fisheries and enlarging our forest cover, there is a long list of
areas in which Chinese funds and technical cooperation will be coming in,` says
a senior official of the Ministry of National Food Security and Research.
`Whereas it`s true that we`ll develop detailed frameworks for implementation of
the PakistanChina cooperation agreement, it`s wrong to assume that none exists
right now. A number of such frameworks are already in place since 2015 when the
CPEC master agreement was signed and implementation on them continues,` he said.
Officials, however, are tight lipped about the critical issue of land
acquisition in Pakistan by Chinese state-run or private firms for furthering
cooperation in agriculture. That was an important feature of the CPEC long term
plan.
Chinese companies have already been engaged in development of hybrid paddy and
wheat seeds in Pakistan. Sinochem Group Agriculture Division, for example, has
been running pilot projects at 200 sites in Pakistan including experimental
bases and local farms.
A hybrid rice variety developed and cultivated by a Pakistan rice research and
exporting company in collaboration with Yuan Long ping High-Tech Agriculture
Co, has already been exported to the Philippines. In the seed manufacturing industry, Syngenta Pakistan is aggressively
increasing its market share after China took over the Switzerland-based
Syngenta in the middle of 2017, industry officials say. it would be naïve to expect that Chinese investment will start pouring into
our agriculture sector automatically,` says a Sindh government official working
on the province`s long-term agriculture policy.
`Chinese companies that are already here are all working in active partnership
with local companies or federal or provincial institutions. They will continue
to take this relationship one-notch further every time they decide to increase
their level of cooperation. This effectively means we must prepare ourselves to
work with them,` he opined.
Sindh is about to unveil its agriculture policy for 2018-2030 and officials
working on it say that similar to Punjab, where Chinese and other foreign
companies have been actively engaged in agricultural development, Sindh also
wants to seek greater international cooperation.
About three years ago, the Pakistani and Chinese governments had identified a couple
of areas for cooperation in agriculture and China had promised to build
agriculture demonstration centres across Pakistan and supply seeds and
machinery to Pakistani farmers.
Authorities have so far not shared with the public how many of such demonstration
centres have been built and the arrangement under which the Chinese are
supplying seeds and agriculture machinery.
According to an MOU signed in this regard in October 2015, Pakistan was to use
Chinese capital, technology and experience to improve irrigation, reduce
post-harvest losses and enhance water use efficiency.
Officials with background knowledge of agricultural programmes under CPEC say
work is progressing on the above-mentioned and several other areas of
agriculture development and poverty alleviation. Currently it is difficult to say how much of the Chinese funding we can expect
in state grants and loans, and how much through foreign direct investment of
Chinese companies,` a federal government official explained.
Some projects like those of farm-to-market road networks that are connected
with storage, packaging and processing units, fall under infrastructure
development in CPEC wherein long-term state funding can rightly be expected.But both state-run Chinese institutions and companies will be involved in other
projects like construction of modern slaughter houses or pulses, tea and
oil seeds crop cultivation or deepening of agricultural research programmes
