GLORIOUS countryside lies between Rahim Yar Khan and Bahawalpur. Travelling across six districts in Punjab, before a blazing summer sets in, I experienced endless fields of wheat waiting to turn golden, of freshly harvested mustard, acres of ripe sugarcane and sprawling mango orchards.
Far from the drudge and gloom of metropolitan Pakistan, economic privation, traffic snarls, extreme religion and the cricket World Cup agony, this is another Pakistan. Over a quarter of a century after the green revolution ended the rural economy is back in boom, this time on the back of rising prices. The feel-good factor is all around.
Burgeoning commodity prices are churning unprecedented amounts of cash through the farm sector. I pass tractor-pulled trolleys laden with sugarcane waiting outside sugar mills. The crushing season is in full swing. Meanwhile, the flour mills are still grinding away at last year’s surplus crop. This is an agro economy at serious work.
Alongside the cash economy, the place is also brimming with ideas, and with an entrepreneurial spirit. A young man I meet at Rahim Yar Khan’s chamber of commerce has an IT degree and owns an ice cream distribution business spawning an elaborate cold chain across three districts. He tells me that sales are surging because rural society is transitioning to modern desserts which are now more affordable than traditional sweets like mithai and khoya.
Meanwhile, he’s toying with the bigger vision of an electronic marketplace for agricultural produce. Live connectivity to grain mandis and markets for fresh produce and milk will empower farmers to obtain prices online and through their cellphones. He wants to materialise this and wants tips. I give him my two cents worth: study similar models, write a concept paper, galvanise partners around it, put in seed money and get the venture to mezzanine level.
For now the agricultural economy is growing more in value than in volume. As it does, it pulls in a rising demand for inputs. Fertiliser and agrochemical companies, some listed on the stock exchange are making record profits. Still, few find time to complain about rising input prices. With a population of 400,000, Rahim Yar Khan sports showrooms displaying cars, motorcycles and generators, fast food outlets and even private healthcare clinics.
Even then, not all the cash would appear to go into consumption. Pakistan now ranks amongst the world’s top 10 markets for tractors. Alongside, and despite constrained credit to agriculture, farmers are investing in agricultural implements, irrigation channels and farm modernisation.
In 2008, the cotton harvest was in crisis. Ginning factories had no power and could not operate. There were sellers, mostly small farmers but there were no takers. Un-ginned cotton is a perishable commodity and the farmers were receiving throwaway prices. “How have you overcome that problem?” I asked my host, a local businessman, the owner of a number of cotton-ginning factories, as he treated us to a lavish lunch.
“Simple”, he explains, “this year the ginners got together with the local utility company, Mepco. We’ve instituted a system whereby instead of intermittent hours of loadshedding we get it in one block of 12 hours. This way we can run the factory on one shift per day”. With that problem behind him he now wanted to move on; that is, to a pasteurised milk business.
As the green revolution tapered off, a poultry revolution began; in the late 1970s. Ever since, Pakistan has been gnawing away at broiler chicken and there’s no turning back. Today a dairy revolution is sweeping Pakistan. As the world’s fifth largest milk producer, the country can only process three per cent of its milk production. Sitting in his factory office in Khanpur — one could have been in any plush office in a metropolis — we open his wireless notebook and download a pre-feasibility study for a milk pasteurising business from Smeda’s website. We glean through it, and at a Rs160m capital outlay it looks doable for him.
The ‘go’ decision is made on the spot and my host asks me to recommend a good consultant.
In 2009, an NGO distributed young cattle on micro-credit to 1,000 small farmers and built an apex organisation to collect and market milk from these grass-roots. The Dutch consultant for the NGO informs me that a modern farmers’ cooperative model is now evolving. Such models have long been in vogue in Europe and indeed in several developing countries. Usually the extended supply chain ends at farmer-owned retail outlets — co-ops. Why hasn’t this concept gained traction in Pakistan?
Several of us seated around the conference table are unable to provide an intelligent answer until one of the NGO’s employee’s mutters something about biradari-based rivalries as the stumbling block. Indeed. After he hanged Bhutto, Ziaul Haq, to keep the PPP out of Punjab, had gone on to fragment politics in this province along biradari lines.
As I take off from Bahawalpur and four minutes into flight time, I look down to the spot where his C-130 must have come down. A glistening water channel is visible in the Sutlej over Khairpur Tamewali. This was a dry riverbed for the last several years. Until a year ago, water stress being brought on by rapidly depleting groundwater was a major concern. Now the aquifers have been recharged and as a post flood bonus from nature, soil deposition from floodwaters has enhanced yields.
And so Pakistan prepares to harvest another bumper wheat crop in 2011.
The writer is director general of the Punjab Board of Investment & Trade. The views expressed are his own. http://moazzamhusain.wordpress.com