Pakistan has rich agriculture potential which constitutes the largest sector of county’s economy. It accounts for 21 % of GDP and is a primary source of raw material to downstream industry and therefore contributes substantially to Pakistan’s exports besides absorbing more than 40 % of employment. The exports of agriculture products all around the world fetches over 625 million US dollars of foreign exchange

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3. 3
2013-Russian Ban on Pakistan’s
Agriculture Products – Causes and Consequences
Tabassum Naveed MSc I.R. 3rd

4. Sunday, October 27, 2013
Thursday, October 03, 2013
Ban on import from Oct 1, 2013 by Russian authorities
Pakistan likely to face
$160-$170m loss in fruit, vegetable exports
By Tanveer Sher
KARACHI: Pakistan is likely to face $160 to $170 million worth loss of fruits and vegetables export
orders during the current year from Russian exporters following rejection of a request of the Pakistani
government.
Violation of quarantine rules by
Pakistani exporters
Russia places ban on agri imports from
Pakistan
By Tanveer Sher
KARACHI: Russian government has placed temporary
ban on import of Pakistani agriculture products
4
Wednesday, November 02, 2013

5. Sequence of Presentation
5
Recommendations
Consequences
Russian Ban History
Trade Relations
Agriculture Potential

6. Statement of Problem
Agricultural products constitute 21% of
total exports of Pakistan. However
international quality control regime is
impeding sustained growth of Pakistan's
exports. The ban by Russian government
on Pakistan’s agricultural exports posed
a serious threat to economy. The
situation warrants in-depth study of
causes of ban, analysis of situation and
suggesting response strategy.
6

7. Pakistan Agriculture Potential
Pakistan has rich agriculture potential
which constitutes the largest sector of
county’s economy. It accounts for 21 %
of GDP and is a primary source of raw
material to downstream industry and
therefore contributes substantially to
Pakistan’s exports besides absorbing
more than 40 % of employment. The
exports of agriculture products all
around the world fetches over 625
million US dollars of foreign exchange.
7

8. Pakistan’s Agro Export Potential
•21 % of GDP
•40 % Employment
•Exports earn over 625 million USD
8(Source: Pakistan Bureau of Statistics)
Pakistan Agriculture Potential

9. Billion US$
Balance of Trade
19.05
17.69
19.29
24.81
23.62 24.52
39.97
34.82 34.71
40.41
44.91 44.95
-
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
45.00
50.00
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Exports Imports
9(Source: Pakistan Bureau of Statistics)

10. Agriculture Export Destinations
24%
17%
15%
14%
8%
7%
5%
USA
China
UAE
Afghanistan
UK
Germany
Bangladesh
(Source: Pakistan Bureau of Statistics)

11. • Pakistan and Russia had some minor trade disputes in the
past including;
• Reluctance on part of Russia to sign FTA(Free Trade
Agreement)/PTA(Preferential Trade Agreement) as
Russia earlier committed to sign PTA, proposed by
Government of Pakistan after signing WTO but later it
declined on the pretext that it has already entered into
Customs Union with Kazakhstan and Belarus.
• Pakistan and Russian sides have long persisting
overlapping claims against each other and in the same
context National Bank of Pakistan on the instructions of
government of Pakistan had to freeze $14 million account
owed to Russian state corporations.
11
Pak-Russia Trade Relations

12. Pakistan – Russia
Major Imports/ Exports
S# Imports
1 Iron
2 Paper
3 Crude Rubber
4 Non Ferrous metals
5 Wheat
6 Corriander Seed
7 Paper Board
8 Steel manufacturers
S# Exports
1 Cotton
2 Fruits
3 Vegetables
4 Rice
5 Finished Leather Goods
6 Sports goods
7 Surgical Items
8 Cutlery
12

13. Exports Flow to Russia
52.4
83.4
98.6
105.7
119.2
183.5
189.6
0
20
40
60
80
100
120
140
160
180
200
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
US $ in Millions
13(Source: Pakistan Bureau of Statistics)

14. Ban History
• In year 2007, Russian government imposed first ban
on Pakistan’s agro products on account of
Quarantine (it is a regime preventing intrusion of
diseases from other countries) issues which was lifted
on Nov 2007, a MUTUAL COOPERATION PROCEDURE
AGREEMENT was signed between Russia and
Pakistan assured to make full compliance to the
Russian and international quality standards.

15. Recent Ban
 The ban was imposed after a series of unattended
complaints regarding presence of quarantine items in rice
and golden nematode in potatoes.
 Since 2008, 4 major complaints were sent to the
Ministry of National Food Security & Research in which
Russian government showed serious concerns.
 Feb 2012 Russia's Federal Service for Veterinary and
Phytosanitary Surveillance (FSVPS) wrote letter to
Pakistani authority to express their enxiety over presence of
nematode in potatoes and likely quarantine objects in citrus
products.
 An alarming aspect was that most of the potatoes
consignments which were found infected had the
certification by Department of Plant Protection, a
subsidiary of Ministry of National Food Security & Research.

16. Warning Letter by FSVPS
16
 Potatoes’ consignment
had golden nematode
which is detrimental for
Russian market
 Referred to four
unattended complaint
letters sent in year 2008,
2009, 2010 & 2011

17. In September 2013, FSVPS placed a notice on its website
regarding imposing ban on Pakistani agro products w.e.f
1st October, 2013 which went unnoticed
1st October, 2013 - Department of Federal Service for
Veterinary & Phytosanitary Surveillance (FSVPS), Russia
imposed ban on Pakistan’s agricultural products
Ban was attributed to violations of international and
Russian Quarantine & Phytosanitary Regulations on rice
and potatoes
Ban ompopsed on all agricultural products
17

18. Analysis of Situation
Russian market is perceived to have a huge potential for Pakistani
exports particularly fruits and vegetables
Pakistani kinos are on high demand in Russia and being
used for making juices as mix content with Vodka drinks.
The ban caused loss of approx. $ 55 million for Kinos and $
24 million for potatoes.
The ban imposed on all agro items, overall it deprived off
Pakistan from 160-170 million US dollars foreign exchange.
Processed Food & Meat exports sectors will remain
untapped 18

19. • Ministry of Commerce in the case under consideration, miserably failed to
play any worthwhile role instead it confined itself to an isolation and left the
matter into the hands of Ministry of National Food Security & Research. Its
role was in total contrivance to one of the cardinals of its marketing
mandate i.e. collection of better commercial intelligence. In the case under
consideration, the INTELLIGENCE KNOCKED AT THEIR DOOR BUT MINISTRY
KEPT ITS EYES SHUT.
• Phytosanitary and Quarantine issues have assumed prime significance in
international trade spectrum. Unfortunately, In Pakistan no tangible efforts
are seen on ground despite prospects of capitalizing foreign funding. A Lab
has been established at Karachi but failed to implement second phase i.e.
hiring human resource.
• Certification of products without due processing exposes weak regulatory
framework which invited embarrassment at international forum.
Analysis of Situation

20. Russian authorities are quite strict on quality control standards.
2012, Similar kind of ban was imposed on India due to presence
of pest in rice and oil seeds. Indian government reacted very
fast and sent two members delegation to Russia on 9th day of
receiving complaints and managed to resolve it in 4 months’
time. They also invited Russian delegation to India and arranged
inspection to the cultivation sites and assured full compliance.
Likewise they didn’t let the ban to be imposed on any other
item which had no symptoms of contamination.
Russian Trade Attitude
RSVPS issued a warning to Netherlands on presence of
quarantine objects on food items which was immediately
addressed by up gradation of their quality standards in line with
Russian standards. Netherlands Ambassador took keen interest
in the matter and managed it in 45 days.

21. Competators in Russian Market
• Egypt, Morocco, Spain, Israel, Holland,India and France.
• They will definitely grab Pakistan’s market share due to the void
created on account of ban.
• Russia, Kazakhstan and Belarus are signatories’ to Customs
Union. On occasions, the consignment destines to Russia,
reaches at Belarus from where it is transported to Russia by
road while a portion of it, consumed in local market as well. It is
quite likely that Belarus and Kazakhstan may also follow the suit
and our Government end up in loosing additional 12 million US
dollars per annum.

22. Consequences
 Since the ban attributes to health reasons, it has a social
dimension as well. It may shatter the confidence of consumers
in those markets. Once an agro-product is labeled for being
contaminated, the consumers may not like to prefer it if
alternative option is available.
 Apart from international trade perspective, the ban has serious
domestic implications. Thousands of people employed in agro-
sector and export industry may lose their jobs which may
increase the poverty and ultimately lead to rise of crimes.
 Closure of international market means more supply in local
market and hence price would drop significantly due to which
farmers will suffer.

23. Recommendations
23
Bilateral Dialogue - Inviting Russian Delegation
Inquiry to be conducted by Ministry of National Food
Security & Research against fake Phytosanitary
Certificates
Capacity Building of Quarantine and Phytosanitary
Establishments and installation / Implementation of
Weeboc system.
Pakistan- Russia Business Forum be
Re-activated

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