Dr Zulfiqar Ahmad Gill and Asif Maqbool
It is the era of competition and technological advancements. Agriculture commodities and industrial products are being traded in a state of stiff competition. Only those products are now acceptable in the international markets, which are good in quality and available at competitive prices.
In the context of WTO rules, our agriculture sector is facing a tough time and serious threats. One of the major concern is the trade-related aspects of the Intellectual Property Rights (TRIPs) Agreement. The owners of patented products have the exclusive right on the use of their products. Farmers are not allowed to use the patented products like seeds without the consent of the owners. Another hindrance in exports is the application of sanitary and phytosanitary (SPS) measures. The export of fisheries sector is restricted on the pretext of health and hygiene and raw cotton on the charges of excessive use of pesticides.
The pesticide application on fruits and vegetables carries the risks for exports of citrus, mangoes, dates, banana and potato. Another cause of concern is the increasing use of non-trade barriers by developed nations. They invoke environment, labour and human rights issues to restrict exports.
The trade potential is severely limited by low level of production capacity. If all trade barriers are addressed and markets made available, a number of other factors will continue to limit our trade.
First, there is the issue of poor quality of products caused by low level of technology and lack of quality control. Clearly, the problem of quality of agricultural products begins at the farm level, where much intervention is required, ranging from selection of seed variety to farming methods and management practices.
Traders are not used to trading on standards as most of them sell their products in the domestic markets, where the standards are not applied as a norm.
Second, production capacity is restricted by high production costs, which escalates as a consequence of high energy charges, poor infrastructure (transportation, transaction, storage) facilities, inefficient bureaucracy, red tape and costly loans.
Third, the low level of marketability of agro-products arise from lack of sophisticated preservation and storage equipments and technology, poor processing and packaging skills.
The WTO regime offers a number of opportunities to expand our export base and diversify our export markets. The most rewarding opportunities are likely to come in those products where the country enjoys a comparative advantage
. Pakistan is unique in producing Super Basmati, Sahiwal Cow, Nili Ravi Buffalo and medicinal herbs, etc. and can exploit this advantage by getting these products registered under Geographical Indications (GIs) , a part of TRIPs Agreement. However some difficulties can arise when the developing countries translate their commitments into concrete trading opportunities. Even then the agreements leave a margin of interpretation that allows the introduction of protectionist measures by developing technical expertise.
Policy Options: Pakistan should effectively implement the WTO Agreements and should try to reap maximum benefits from the trade regime. Following actions can further strengthen the current initiatives taken by the government to meet the global challenges.
* Much more should be invested on research and development activities for the development of new varieties and efficient production systems. There is an urgent need for the establishment of standardised high-tech laboratories for testing the quality of inputs and outputs.
* Timely and cheap access of farmers to various agricultural inputs like improved seed and fertilisers should be ensured. Seed storage infrastructure should be developed for easy access of seeds to the farmers.
* Improve standards to avoid action under Sanitary and Phytosanitary (SPS) Measures (SPS), Technical Barriers to Trade (TBT), etc. by improving and upgrading quality of products.
* Upgrade storage, packaging, grading, procurement and delivery systems and entrepreneurial capabilities of stakeholders . * Different varieties of plants and animal species and traditional pharmaceutical and herbal knowledge need to be registered to take full advantage of them. All valuable export brands like Basmati rice, varieties of mangoes, oranges, etc need to be protected under different provisions of TRIPs agreement.
* Market information system should be strengthened to provide information to all stakeholders and bring co-ordination in agricultural markets.
*Appropriate policies are required to keep our costs of production at competitive level. This is essential for reaping maximum benefit from those products where we enjoy comparative advantage in world markets.