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CPEC opens avenues for agriculture: FPCCI

Updated September 02, 2017

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PESHAWAR: The Federa­tion of Pakistan Chambers of Commerce and Industry (FPCCI) Regional Chair­man on Horticulture Exports, Ahmad Jawad has said that the China–Pakis­tan Economic Corridor (CPEC) provides Pakistan a godsend to increase its agriculture exports to China.

China is the world’s largest importer of agricultural products, and Pakistan has to grab its due share through revisiting the Free Trade Agreement (FTA) between the two countries.

In a statement issued on Friday, Mr Jawad said that “in 2015 China imported $160 billion worth of agricultural products. However, Pakistan’s share in these exports was minuscule - less than half a percentage point - despite having a large agrarian base and a shared border with China.”

With a population of 1.3 billion people, China consumes almost $1 trillion worth of food every year. With increased urbanisation and rising incomes, Chinese consumption patterns are also changing, and demand for high quality imported food items is growing at a pace much faster than population growth. Domestic consumption is expected to grow by another $500 billion in the next 10 years.

According to a FPCCI official, it takes about one acre of arable land to feed an average US consumer. With the present population, China only has about 0.2 acre per citizen, which is going to be far short of future requirements, considering the evolving demand.

He also said the world is therefore keenly focusing on China, with international conglomerates and food giants making long-term China plans. They expect the country is going to be the biggest growth driver in future.

Similarly China, the world’s largest importer of vegetables, gets 50 of these imports from the US and Brazil. “In the world of international trade, shorter distances can provide a strategic advantage through lower transportation costs. But for perishable items like food, such proximity can translate into yet another edge.

The official also added that during transit over long distances, food items faced higher risk of spoilage and contamination. Because of this, not only additional cost is incurred for preservation and packaging but often exporters have to make use of extra pesticides to increase shelf-life of food. “Pakistan, being China’s neighbour, therefore enjoys a unique advantage and CPEC provides an unprecedented opportunity to capitalise on that,” he said.

Mr Jawad further mentioned that agricultural development is one of the seven areas of cooperation under CPEC, wherein China is specifically interested to explore areas like cotton productivity, efficient irrigation and post-harvest infrastructure along the CPEC route. However, Pakistan’s agriculture sector priorities vis-à-vis CPEC would remain unclear.

The government’s primary role should be to remove tariff and non-tariff barriers for agricultural trade with China. “CPEC has set the stage to renegotiate Pak-China Free Trade Agreement and Ministry of Commerce should demand better tariffs for its agricultural exports,” said Mr Jawad.

Furthermore, he said there was a need to rationalise sanitary and phytosanitary restrictions, food and safety inspection requirements and standards.

The private sector and agri-entrepreneurs should become the trailblazers and start exploring viable market opportunities in the Chinese market and forge partnerships with international firms to get a foothold.

Published in Dawn, September 2nd, 2017