ISLAMABAD: The paradigm shift in international socio-economic scene in the wake of events, like the global economic crisis, has put agriculture in the spotlight, and with current declining commodity prices internationally, there is now an invariable need to diversify crops and livestock production in Pakistan, Finance Minister Ishaq Dar said on Tuesday.

The government is promoting innovative and sustainable agriculture to make Pakistan competitive, Dar said while speaking at an international conference on ‘innovative agricultural financing,’ organised by the State Bank and the Food and Agriculture Organisation (FAO).

The government, he said, is taking measures to increase agricultural production, ensure food security and promote pro-poor agricultural growth.

“We are taking steps to improve production yields, introduce modern farm-mechanisation, increase better market access, and integrate farming with diverse markets through value chains to ensure that the benefits are passed down to farmers,” Dar said.

To achieve these goals, availability of timely financing is critical, the finance minister emphasised.

Pakistan, he said, needs to develop hedging mechanism through futures market to manage interests of farmers, processors and banks in a relatively volatile price environment of commodities.

“This is part of my vision to develop a strong commodity trading market in Pakistan, and integrate it with local and global financial markets.”

He said that various innovations introduced by the government, including warehouse receipt financing (WHR), value chain financing, Islamic agriculture models and automation of credit appraisal processes would help creating price transparency and encourage private sector investment in the commodity sector.

These would help revamp the obsolete agri-commodity management system prevailing in Pakistan, necessary for ensuring food security and reducing commodity waste.

Minister for National Food Security and Research Sikandar Hayat Khan Bosan said that with current levels of productivity, it is becoming increasingly difficult for the sector to feed the country’s population as well as to compete in the world markets.

Lack of resources, poor investment in inputs due to the lack of credit availability, old management techniques and the absence of modern technology are some of the key issues that need to be addressed to increase the productivity and growth of the sector, he said.

FAO Representative Patrick T. Evans said that agriculture financing in Pakistan is limited with low percentage of finance going to the sector in relation to the needs and to its contribution to the country’s GDP.

State Bank Governor Ashraf Mahmood Wathra highlighted SBP’s policy framework for enhancing the flow of financial services to rural agriculture sector.

Published in Dawn, April 29th, 2015

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