The document summarizes the key takeaways from a webinar on improving value addition and export potential in Pakistan's horticulture sector. It identifies several issues hindering the sector's development, including lack of access to financing for small farmers, need for new seed varieties suited for processing, slow approval of new seeds, high costs of production and losses. It suggests increasing efficiency by reducing costs, improving yields, investing in infrastructure like cold chains, and developing farmer skills and cooperatives. The document also recommends that the government provide fiscal incentives to encourage food processing and FDI, and develop an FDI policy focused on horticulture to attract the right investments. Over-regulation by the government was identified as another bottleneck.

1. WebinaronImproving
theValueAdditionand
ExportPotentialofthe
HorticultureSectorin
Pakistan

2. Accesstofinanceandcreditisahurdleinupgradingon-farmtechnology.Amajorityofsmall
scalefarmersoperateundertheshare-croppingsystem,anddonotownthelandtheyworkon.
Withoutlandasacollateral,theiraccesstoinstitutionalfinanciallendersislimited.Byadopting
innovativemodels,suchasusingproduceascollateral,newfinancingopportunitiescanbecre-
atedforfarmers.
FINANCIALACCESSANDFISCALINCENTIVES
Addingnewvarietiesgearedforprocessingandexportisarequisite.Pakistandoesnotgrow
theappropriatevarietiesofhorticulturecommoditiessuchaspotatoes,tomatoesandcitrus,
neededtoproducevalue-addedproductssuchasfries,starch,ketchupandcitrusrespectively.
Concertedeffortsarerequiredbothinlocalresearchandbyimportingnewseedvarietiesto
widenPakistan’sindustrialapplicationandaddressglobaldemand.Knowledgeregardingvarie-
tiesshouldbedisseminatedateverystageofthehorticulturevalue-chain.
Seedsandplantapprovalsareachallenge,whichhindervalue-addition,investmentsand
exports.Ittakesatleastafewyearstohavenewseedvarietiesapprovedformainstreamappli-
cationinagriculture.Downstream industrialinvestmentscannottakeplaceuntiltherequisite
seedvarietiesareapproved.Thereisaneedtospeed-uptheprocessofintroducingnewvarie-
tiesintothecountrysoinvestmentsinprocessingfacilitiesareexpedited.
BETTERSEEDSANDHIGHYIELDINGVARIETIES
ThePakistanBusinessCouncilhaspublishedastudytitled,‘UnderstandingtheBottle-
necksandOpportunitiesinValue-AddedExportsofFruitsandVegetables’.Thestudy
examinesthevalue-chainofhorticulturecommoditiesandproductsinPakistanand
highlightsfactorsimpedingproductivityatthefarmlevel,opportunitiesforimproving
availablemarketsystemsandqualityrelatedmechanisms,andidentifiespossibleinter-
nationalmarketsforexportingfreshandprocessedfruitsandvegetables.
PBCincollaborationwithSDPI,co-hostedawebinaronimprovingvalueadditionand
exportpotentialinPakistan’shorticulturesectoron22ndJuly,2020,anchoredaround
thefindingsofPBC’sstudy.ThespeakersfromPakistan’sfoodindustry,academiaand
thegovernmentcontributedtheirperspectivestothediscussion.Thewebinarresulted
insuggestionsfromthespeakerswhichwillinformtheimplementationoftherecom-
mendationsgivenbyPBC’sstudy.Thekeytakeawaysfromthewebinarare:
1

3. 2
Exportsoforganicproducepresentsanopportunitytodiversifyexportsofcommoditiesand
destinationsfromPakistan.Thereispotentialforhighvalueorganicallycertifiedcommoditiesin
internationalmarketswhichoffersanopportunityforPakistaninthefuture.Smallandmedium
sizedcompaniescontributetoexportingorganicproducts.Adifficultyinascertainingthemarket
sizeandexportsfororganiccommoditiesisthatitisclubbedunderthesameHSCodeasaregu-
larcommodityexport.
Inordertoachievecompetitiveadvantageininternationalmarkets,costsofproduction
havetobedecreasedandyieldsimproved.Thehighcostofproductionatfarm level,low
yields,hightransportationandprocessingcostsmakesitchallengingforPakistantoattaincom-
petitiveadvantage.ToimprovePakistan’shorticultureproductivity,itisnecessarytoreduce
post-harvestlosses,investincoldchaininfrastructure,usereefertrucksfortransportation,
reduceprocessingcostsandmeetinternationalcompliancestandardsforhorticulturecommodi-
tiesandproducts.
INCREASINGEFFICIENCYANDEXPORTS
Increasingvalue-addedhorticultureexportsofproductsandcommoditieswillrequiremanu-
facturingindustrytoworkwithfarmersindevelopingskillsatthefarmlevel.Pakistan’shorti-
culturecommoditiesareoftenplacedinquarantineorfailtomeetexportcriteria.Toovercome
thischallenge,andforfoodprocessorstomeetendproductspecificationsandqualitystandards
ofinternationalmarkets,horticulturecommoditieswithpre-definedqualitycriteriawillhavetobe
suppliedbyfarmers.Therefore,itisimportantforindustrytoworkwithfarmersandeducatethem
ongoodagriculturalpracticesrequiredtoproducehorticulturewhichcanbeutilizedinfoodpro
cessing.
Developingcooperativeswillhelpstrengthenthefarmercommunities.Agriculturalcoopera-
tivesallowfarmerstohavebettermarketaccessandprices.Theyfacilitateknowledgedissemi-
nationatthefarmlevelandmakeiteasiertoundertakeextensionservices.Furthermore,they
allowfarmerstoaccesscreditfromfinancialinstitutionsduetosocialcollateral.Theimpactofcor-
poratefarmingonproductivityandvarietyofoutputvs.thepotentialdislocationofsmallfarmers
needscarefulevaluation.Modelsofsuccessfromelsewhereintheworldshouldbeexplored.
ONFARMSKILLS
Fiscalincentivesshouldbeprovidedbythegovernmenttoencouragefoodprocessingand
promoteinternationalinvestments.Downstreaminvestmentsbylargemultinationalcompanies
resultsintechnicalknowledge and up-gradationofthe entire value-chain.Pakistanhas
witnessedanimprovementinmaizeandpotatoproductionduetothisphenomenonthrough
RafhanandPepsirespectively.Toencourageinvestmentsinhorticulture,thegovernmentshould
providetaxincentiveswhichfacilitateinvestmentsbyfoodprocessingcompaniesindeveloping
supplychainsforsourcinglocalproduce.Similarly,topromotepreservationandprocessingof
horticulturehorticulturecommodities,andimproveinternationalcompetitiveness,taxesonpackagingand
machinerymaybereduced.

4. 3
Excessivegovernmentregulationactsasbottlenecktoproductionandexports.Over-regula-
tionbythegovernmentreducesinvestmentsbytheprivatesectoranddetersdevelopmentofa
conducivebusinessenvironment.
AFDIpolicyframeworkfocusedonhorticultureisneededtodevelopthesector.Pakistan’s
ForeignDirectInvestment(FDI)policydoesnotdifferentiatebetweendifferenttypesofFDI.Aside
fromafewexceptions,mostoftheFDIisnotinagricultureorinexport-orientedsectors.Thegov-
ernmentneedstofocusondevelopinganFDIpolicywhichattractstherightkindofinvestment.
Adynamicandcomprehensiveplanshouldbedevelopedwhichadequatelymeetsmarket
demandandchangingconsumerpreferences.
Thereporton“UnderstandingtheBottlenecksandOpportunitiesinValue-AddedExports
ofFruitsandVegetables”,isaccessibleonthefollowingweb-link:
https://www.pbc.org.pk/research/understanding-the-bottle-
necks-and-opportunities-in-value-added-exports-of-fruits-and-vegetables/
ENABLINGGOVERNMENTREGULATION

5. 4
ANNEXURE-I
PANELISTS

6. 5
ANNEXURE-II
PARTICIPANTS

7. 6

8. 7