Opinions, Rice

Industry Status can lead to 30 percent increase in Rice Exports: REAP

LAHORE – The Rice Exporters Association of Pakistan (REAP) has asked the government to declare the rice sector as an industry and provide it all incentives in line with other five zero rated export sectors. The step to declare rice sector an industry would benefit with 30 percent higher exports (additional $500 million) by saving post-harvest losses (20 percent) and increasing exports to high-valued destinations by 30 percent.

REAP chairman Samee Ullah Naeem said that government’s support and investment in holding foreign exhibitions should be made a policy to brand Pakistani basmati rice the world over.

“The second largest export-oriented sector of rice, with its more than $2 billion annual export, is still striving for its recognition as an industry. The fragmentation in supply chain partners, including farmers, millers and exporters poses a bigger challenge. The issue at farm levels poses threat for export destinations while the local millers that handle 70 percent of paddy, are ignorant of good milling and storage practices which deteriorates the grain quality, resulting in lower export,” he said.

REAP chairman observed that the competing countries, including Thailand, India, USA, Brazil, had recognised their rice sector as an industry that benefitted with the formulation of policies to increase yields at farm levels and improvement the quality for exports.

He said that the current fragmentation of sector is a barrier to development. He said that declaration of rice sector as an industry would help in the formation of consolidated policy that will help in the integration of all supply chain stakeholders into one chain.

Industry is the production of goods and services within an economy, which is divided into three categories, including prime (extractive), secondary (manufacturing) and tertiary (services). In developed economies, the agriculture falls into primary (extractive) form of industry where agriculture inputs and mechanics are engaged for achieving high yielding agricultural outputs.

“The rice sector has all parameters to fall into “food industry” wherein the purpose is to raise crop yields through mechanised farming and to improve sanitary and phytosanitary standards for its marketing into developed high revenue economies,” he added.

He said that the process of finished rice starts from paddy procurement. The paddy is procured and dried and then kept under silos for effective storages. The paddy is then cleaned, husked, polished, graded and then packed for exports. The value-addition of rice ranges from 100% to 140%. The paddy of basmati is procured at $450/ metric ton while it is exported at around $1000 PMT. The long grain paddy is procured at $200 PMT and is exported at $400 PMT. Some of the rice like parboiling and steaming are exported at around $1200 PMT.

He said that Pakistan’s share in overall basmati export has gradually decreased compared to India, mainly due to the bigger crop size in the neighboring country, and government support to farmers to keep growing the variety while focusing on crop yield with subsidized inputs.

Samee Ullah said that India is more organised, while in Pakistan individual millers try but remain inconsistent either due to lower international prices, product quality and lack of support from the government to establish brand image.

He believed that a diverse product range, including the export of rice, would help Pakistan tap international markets and increase its foreign exchange earnings. He said that Pakistani rice has been exported to more than 100 countries of the world, expressing the hope that this trend will continue with the same zeal in future.

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