ISLAMABAD: Recent inclusion of the agriculture sector in the long term plan of China Pakistan Economic Corridor (CPEC) provides Pakistan an opportunity to significantly reduce its huge trade deficit of around $9 billion with China by exporting more value added agriculture products to tap China’s growing demand of food commodities.
Under the project, China would transfer its technology to Pakistan to increase per acre yield of various crops and to add more value to the agriculture products.
The CPEC plan envisages significant development of the agriculture sector of Pakistan – an often-overlooked area amidst the developments being made in the energy, infrastructure, and industrial sectors of the country, said an annual report titled “State of Economy 2017-18” launched by State Bank of Pakistan (SBP).
Pakistan can enhance its exports through various CPEC initiatives and by tapping into the growing import dependence of China. In agriculture sector, out of China’s global food imports of around $99.6 billion, Pakistan’s share is only around 0.37 percent (roughly $ 0.4 billion).
According to the report, the Ministry of National Food Security and Research (MNFSR), in its 2018 Food Security Policy, envisages the development of nine agricultural development zones along the CPEC.
By encouraging innovation, entrepreneurship, and collaboration, the zones could serve as platforms to develop clusters and infrastructure to nurture emerging rural businesses in an effort to produce commodities deemed exportable to China.
These commodities include cereals, dairy, eggs, meat, honey, tobacco, seafood and fruits, and others.
Meanwhile, sources in the Planning Ministry relayed that major progress is expected during the visit of Prime Minister (PM) Imran Khan to China next month where the two countries may sign a legal framework agreement under the corridor to bring investment in the sector and exporting surplus produce to feed the growing Chinese population.
Chinese Ambassador to Pakistan, Yao Jing during a press briefing also indicated that China was eagerly waiting for PM Imran’s first visit when a number of projects under CPEC related to the agriculture sector would be finalized.
He also said China was eager to invest more in Pakistan and buy more from the country to enhance its economic development.
The report further added that in the crop sector, focus is emphasised on increasing the use of modern machinery and synthetic fertilizers to enhance yields, while food storage, and processing zones would be constructed to reduce significant post-harvest losses.
Similarly, the building of cold storage stations and meat processing plants is also being planned to enhance productivity of livestock and fisheries sectors besides making their output more competitive in the international market.
These developments hold the potential to not only boost the agriculture output of the country but also to narrow the trade imbalance between China and Pakistan by expanding food exports to the former.
The report pointed out that due to the growing demand of processed food in China, the country has been planning to bring investment into the agriculture sector in all the countries along its broader Belt and Road Initiative (BRI).
China has so far invested $3.4 billion in agriculture sectors abroad. It intends to develop various food processing and storage stations across BRI economies to mitigate price fluctuations and increase supply of food products for the domestic market.
Development of the agriculture sector under CPEC can also serve as an opportunity to modernize the processing segment of the agriculture sector.