Despite a lack of an efficient seed supply system, new varieties of seeds, and technical capacity of farmers as well as inadequate resources for seed systems, Pakistan has harvested a record potato crop with the help of favourable weather throughout its life cycle and a notable increase in its acreage this season.

Punjab contributes 80 per cent of the national potato production. The acreage in the province registered a 36pc increase — from 545,000 acres to 740,000 acres — with a corresponding increase in production, which the final survey said was 7.73 million tonnes against 5.68mt of last year.

This coupled with the easing of Covid-19 restrictions in many countries made the exporters, as well as growers, expect a good increase in their sale proceeds. The reopening of the Russian market, which had been closed due to the ongoing war with Ukraine, has boosted the morale of the exporters because it is considered one of the high-end markets by Pakistani standards. Iraq, Iran and Afghanistan are also good destinations among the more than 33 countries where Pakistan exports potatoes.

However, the imposition of the e-form condition by the State Bank of Pakistan (SBP) for exports to Russia has dashed all these hopes to the ground.

Using empty CPEC containers returning to China for potato exports may net the country $2 billion by saving on freight costs

“In the absence of a formal banking channel, how could the authorities expect us to meet the e-form condition? The SBP should have first ensured the opening of formal links with Russian banks before imposing the e-form condition and banning our non-formal sales proceeds collection system,” says a bewildered exporter. Requesting not to be named, he alleges that authorities earlier harmed their business by ‘renting out’ to the European Union the containers arranged for Russian and Central Asian States’ markets and now this new ‘trouble’ has been created for them.

He says the e-form condition had also been imposed for trade with Iran but its impact is limited since the introduction of a barter trade system at the Taftan border as a local non-formal arrangement. Since Russia and the Central Asian states don’t share borders with Pakistan, it is difficult to introduce a Taftan-like arrangement there, he bemoans.

He says that the exporters have written a letter to the Ministry of Commerce months ago informing the authorities that their payments were stuck in Russia and Ukraine since the start of the war between the two states. The officials were told that the payments were stuck particularly due to sanctions on Russia causing liquidity problems for the exporters.

If the war prolongs, the issue of payment will deepen and hence require some form of financial mechanism to resolve it, the letter forewarned, hoping that the issue will be resolved on a priority basis to extend relief to the anxious exporters so they can focus on the primary objective of exports’ enhancement.

Endorsing the views, Punjab Potato Research & Development Chairman Chaudhry Maqsood Ahmad Jutt regrets that the federal government is ignoring their repeated pleas for facilitating the traders both at the national and international level to enable them to earn more precious foreign exchange. The condition of remitting the export proceeds within 120 days under the e-form scheme is aggravating the problem with no end to the Russia-Ukraine war in sight.

He says that there is also a lukewarm response from the Commerce Ministry vis-à-vis potato exports to neighbouring China though Chinese diplomats have in meetings with local businessmen expressed willingness of their country for the imports.

The annual Chinese potato consumption stands at 6.0mt. A proposal to use containers transporting material for various China-Pakistan Economic Corridor projects that go back empty for potato exports has been forwarded to the federal government over 1.5 years ago but a formal response is still awaited. The availability of these comparatively cheaper containers may easily earn Pakistan $2 billion per annum in potato exports, Mr Jutt claims.

Pakistan imports potato seeds worth $400 million mostly from Holland which imports potatoes for the consumption of its population but not a single kilo from Pakistan. The Potato Research Board chief calls for adding the clause that the country supplying the seeds will have to purchase potatoes of an amount equal to that of the seed import bill.

This will not only help counter the import bill burden on the exchequer but also avert financial losses the growers face because of a glut of the produce in the local markets, he argues. Chinese potato seed is equally good and Islamabad may enter into a ‘barter’ trade system with Beijing as well — importing potato seed from there and exporting back potato produce to it — he argues.

The exporters are also irritated by the hassle they have to face for getting the Certificate of Origin issued from a far off place like Karachi, while 60pc of the total crop is produced in the four districts adjoining Lahore, namely Kasur, Okara, Pakpattan and Sahiwal. “The authorities have been approached repeatedly for setting up an office for the purpose in the potato producing zone but to no avail,” says Potato Growers Society President Mian Muhammad Siddiq. The landed property of the Tobacco Research Centre in

Sahiwal may be utilised for this purpose and potato crop research as tobacco has not been cultivated in the area for decades, he says.

Mr Jutt seeks a five-year policy for potato export and recalls that a five-member committee had been formed by the former advisor to the prime minister on commerce Abdur Razzak Dawood more than a year ago with no follow-up since then. He also calls for the establishment of a federal Potato Development Board on the pattern of the Tobacco Development Board so that the stakeholders in potato crop don’t have to rush from one department to the other to get their issues resolved and all their problems are solved under a one-roof facility.

Published in Dawn, The Business and Finance Weekly, May 9th, 2022



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