ISLAMABAD: Pakistan immensely benefited through the Trade and Supply Chain Finance Programme (TSCFP) of the Asian Development Bank (ADB) for food and agriculture-related imports during the past 18 months.
TSCFP supported more than 1,900 food and agriculture-related imports valued at $2.3 billion to 10 countries in developing Asia, with most assistance going to Pakistan, Bangladesh and Vietnam, according to information released by ADB.
ADB says it has boosted its support to ease worsening food shortages in Asia and the Pacific by expanding assistance through its ‘Trade and Supply Chain Finance Programme to clear bottlenecks in the import of food and agriculture products.
To enhance its support, TSCFP has boosted risk limits on trade finance guarantees for food imports by $300 million. When combined with partner commercial bank co-financing of transactions under the expanded limits, the support can translate into around $500m of extra finance for food imports in the region.
The additional support will facilitate trade in food and goods such as fertilisers to promote food production, with the new limits allowing ADB to assume extra exposure in transactions with its partner banks to finance the import of these items. The new limits will be reviewed after a year.
“There is a growing food crisis that means more families are going hungry every day in developing countries in Asia,” said TSCFP Head Steven Beck. “Already, a significant share of our trade finance portfolio supports food security. But it is clear we need to do even more, as high inflation in food prices has eaten into existing global trade finance limits for food imports.
Meanwhile, the latest edition of ‘Asian Development Review’ of ADB says that climatic changes - as manifested in rising temperatures, varying patterns of rainfall, and increased and intensified flooding - are raising concerns for farmers and those dealing with the development of agriculture and food production in Pakistan.
The per capita availability of arable land and irrigation water is declining, while demand for food and industrial raw materials is on the rise. The prices of farm inputs in Pakistan - such as fertilisers, pesticides, farm machinery, and diesel - have experienced a tremendous hike, resulting in the high cost of farm production and consumers crying hoarse over the rising prices of food and other commodities.
The shortage of wheat production in the recent past, set against the domestic requirements of an ever-increasing population, has triggered price hikes, while imports strained the country’s foreign exchange reserves.
Published in Dawn, September 18th, 2022