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Agri-business needs more steps
By Siraj-ul-Hasan
The government, realizing the importance of privatization of
various public functions, has now picked up its string with
due vigour. Banking has been the first to feel its impact.
 The
process of bringing some businesses and industries from the
grip of public sector to the lap of the private sector was
initiated by the People's Party second government but the
thrust was half-hearted or hesitant.
In its own wisdom the IJI government came all out with
greater force and vigour to take this process beyond all
expectations, to its far most end, even certain age old
government functions and ancillary responsibilities were
transferred to semi-autonomous and private
bodies/organizations. The scope of this article being
limited to agriculture and allied activities.
The importance of the private sector playing its part
unhampered, judiciously and with provision of necessary
incentives in the areas of agro-business and agro-industry
has been long recognized by the policy makers.
That is why even in the days of the government controlled
sale/purchase of a number of commodities, including main
food grains (wheat and rice), sugar etc., the trading of a
large number of agricultural and livestock products was
freely allowed and was entirely in the hands of the private
enterprise.
These included coarse grains, spices and condiments, fruits
and vegetables, gur, gram and pulses, meat, milk and eggs.
Now, commodities like sugar, wheat, rice, oil seeds and
cotton have also been added to this list.
Their internal marketing has been deregulated and foreign
trade participation has also been permitted with encouraging
results. Private sector participates with the TCP in cotton
and rice export, as well as, in sugar and wheat import.
There is still much scope for broad basing the existing
agri-business in general, as well, as there is great
potential for bringing in new investment by the private
sector in many lucrative agri/industrial projects.
With all its shortcomings, Pakistan's agriculture has
progressed to a stage where further development may take
place with the rationalization of agri-business both
upstream and downstream.
Upstream operations include the supply of modern inputs and
field-oriented services while at the downstream, these are
handling, marketing, processing, grading, packaging,
storing, transporting of produce as well as establishing of
agri-industries. The present government is adopting a
supportive policy.
Yet, the private sector agribusiness establishment leaves
much to be desired. Barring fertilizers, textiles and sugar
agri-business (including agro-industry) is rather small and
fragmented.
Broadly speaking the constrains in the expansion of private
sector agri-business may be termed as (a) policy, (b)
procedural (c) financial (d) infrastructural (e) legal (f)
conceptual (g) technical (h) political and (i)
entrepreneurial. In order to bring home their implications,
a brief explanation is necessary:
(a) Policy constrains include various policies adversely
affecting or hampering agribusiness and the ari-industrial
establishment. There is a need to devise various policies
judiciously and objectively not just to place checks and
controls on agri-business projects, but to assist.
Particularly, policies on investment, industry, pricing,
foreign trade (export import), intellectual property
(parents and trademarks) should be well-conceived,
attractive and compatible with the international climate.
(b) Procedural constraints: The process and procedure of
seeking the government sanctions should be simple,
straight-forward and quick. Necessary guidance in this
regard may be provided through personal contracts rather
than by correspondence to avoid delays.
(c) Financial: Under this category difficulties fall in
obtaining credit from banks. Bureaucratic attitudes, high
mark-up rates and underassessment of collaterals are key
obstacles. Levy of taxes (income, excise sale, octroi
surcharges etc.,) should be realistic and equitable.
Inadequacy of the capital markets is one of the main
financial constrains.
(4) Infrastructural: Lack or inadequacy of infrastructural
facilities like water, gas, electricity, roads and
communications, is considered a great impediment in setting
up business and industry by the private sector,
particularly, in rural areas. The required, facilities may
be provided on top priority basis to encourage shy
investors.
(e) Legal: Rules, regulations and other legal measures
required to set discipline in the agri-business operations
should be supportive rather than prohibitive.
(f) Conceptual: Sometimes private agri-business, despite
having all sorts of facilities fails to succeed due to
conceptual defects in the very project. It is, therefore,
desirable if expert advice in formulating projects may be
provided to private sector at a nominal cost by the
government.
(g) Technical: Technical know-how in carrying out a
particular line of business or establishing a particular
type of industry successfully is a must. It is, therefore,
in the interest of private entrepreneurs themselves to hire
technical and professional personnel on reasonable wages
rather than pulling on with less qualified staff engaged on
lower pay.
(h) Political: It is obvious that if there was no political
peace, not only agri-business but all sorts of economic
activities would suffer.
(i) Entrepreneurial: Some businessmen and industrialists
themselves lack the qualities and approach of practical
entrepreneurship. In other cases corporate business
operations themselves are not carried out judiciously and in
a business like fashion.
INDUSTRY BREAKDOWN: An industry wise analysis
highlights some individual problems and remedies.
POULTRY INDUSTRY: Although our poultry industry has
developed to a great extent, it lacks stability. Sudden
outbreak of diseases or occurrence of other calamities
affects it adversely.
As a result, production and availabilities are reduced to
the detriment of both producers and consumers. Major
problems/constrains identified by experts are:
* Lack of effective disease control.
* Levy of taxes on income and duties on inputs.
* Absence of technical and professional guidance and
education for farmers.
* Poor quality of locally available feed ingredients.
*Infrastructural inadequacy: Possible solution to some
problems is briefly indicated below:
* The imposition of income tax and levy of duties may be
made as rational as possible. The high cost of imported
proteins required for feed mix, fails to improve the
nutritional value of feed due to low quality ingredients.
This affects the quality of poultry.
Strict measures are required for availability of better
quality ingredients of indigenous origin. The government
livestock extension personnel have no provision to come to
the rescue of the poultry farmers in times of outbreak of
disease.
As a result the country has seen a drop in number of poultry
farms by over 50 per cent. It is, therefore, not only
desirable but imperative to check or minimize the adverse
incidence of disease by taking necessary steps.
Courtesy: The DAWN
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