‘Small, medium agri-businesses need govt help’

Updated 01 Aug 2020

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In Balochistan, around 29pc of agribusinesses and 34pc of the farmers need financial support from the government to help manage expenses.
In Balochistan, around 29pc of agribusinesses and 34pc of the farmers need financial support from the government to help manage expenses.

ISLAMABAD: Almost all the agricultural micro, small and medium-sized enterprises (MSMEs) in Sindh and Balochistan have been severely affected by the coronavirus pandemic and need urgent government help for their survival of their enterprises, according to a Covid-19 survey carried out by the International Trade Centre (ITC).

The Geneva-based ITC, a joint agency of UN and World Trade Organisation (WTO), is implementing a six-year ‘Growth for Rural Advanc­ement and Sustainable (GRASP) project desi­gned to reduce poverty in Pakistan by strengthening small-scale agribusinesses in Sindh and Balochistan.

The project, which started in 2019 with the funding of European Union, will complete in 2024.

In Balochistan, the survey identified that 29 per cent of agribusinesses, and 34pc of farmers want the government to provide a temporary wage subsidy to help them bear payroll expenses during the crisis. Similarly, 23pc of the former and 28pc of the latter called on their government to create standards for safe and hygienic transport channels to bring back workers while 14pc and 18pc highlighted the need to provide a security net to protect the agri-food sector against falling commodity prices.

UN survey shows MSMEs severely affected by Covid-19

Around 70pc of agribusinesses and farmers said they found it difficult to access information and benefits on policy measures taken to aid them whereas 29pc and 23pc respectively stated that temporary wage subsidy from the government would be most beneficial, among other recommended policies listed in the survey.

Majority of respondents said they urgently needed help under GRASP to form strategies to foster the survival of their enterprises. They also stated some other immediate needs including increasing input availability, market information dissemination, and support in accessing finance. Trainings in business and production management were also highlighted to improve their competitiveness.

The ITC survey identified that 28pc of agribusinesses and 29pc of farmers want the government to provide credit guarantee schemes to help cope with the crisis. Half of rural MSMEs in Sindh want the provincial administration to defer payments for inputs such as seeds, fertilisers, and feed.

Nearly one out of five farmers, and 18pc of agribusinesses want the government to build emergency food reserves or food banks to keep, thus providing a cushion of support on production levels of activity. A quarter of respondents wanted a security net in the form of protection against falling commodity prices.

Almost all the MSMEs in Sindh and Balochistan stated that their businesses operations had been affected by the pandemic, with majority of them being strongly affected. They also reported lower domestic sales, and difficulty in accessing inputs locally.

Majority of the surveyed MSMEs said they had temporarily shut down in addition to temporarily reducing employment, using their own savings, and, to a lesser extent, increased their marketing efforts to combat the pandemic challenges.

However, more than half of the MSMEs interviewed reported that they do not envisage the closure of their businesses. Of those that do, agribusinesses were more likely to see it happening within one month or less, whilst farmers estimated 3-6 months or more.

Almost all agribusinesses and farmers said they had adopted at least one action to counter the pandemic’s challenges. With respect to employment, most MSMEs acted by temporarily reducing employment. In terms of finance, the majority retreated by using up their own savings or borrowing from informal sources.

Some MSMEs also attempted to recover production by moving to new suppliers, and made an effo­rt to retain or improve sales by increasing their marketing efforts and developing online sales.

Projections indicate that agricultural will be severely affected by the economic impact of the pandemic. In Balochistan, 90pc of those employed in the sector are vulnerable to being laid off during the shutdowns. For Sindh, more than four million people are predicted to lose their jobs, while it is expected that 84.6pc of those employed in the province’s sector are vulnerable to redundancy.

Published in Dawn, August 1st, 2020