From Raja Bazaar to hi-end markets in the federal capital, the sale of imported, packed food products is on the rise. While their imports keep on increasing, the question is, why the local farmers or manufacturers are not coming forward in the business of producing value-added agro-based products like honey, vinegar etc.
Sellers confirm the fact that sale of imported agro-based products is moving upward. “The margins are fine, quality is good and the imported products coming from the US, Australia and Europe have very attractive packing,” said a manager at a Cash and Carry in Islamabad.
Similar views were expressed by shopkeepers in Rawalpindi who said that the marketing of foreign-based products is easy and the buyers are also much satisfied with the price-quality ratio.
Some of these packed food items are imported in the country while a vast quantity is brought in through smuggling from the Afghan Transit Trade.
If rising demand for such value-added agro-based products like honey, products of medicinal plants, natural vinegar etc exists, the question arises why majority of such items being sold in the markets are imported while all these products areproduced locally.
Traditionally, in our part of the world, the production and sale of many value-added food products, including honey, havebeen restricted to ‘hakeems.’ But, farmers can also enter this trade as is the case in Europe, Australia and the US where farmers are registering, packing and even exporting dairy products like butter and cheese.
In Pakistan none of these - hakeems, farmers and the small entrepreneurs - in rural economy are working to capture a market share in the value-added food sector even though it is not a particularly specialised or difficult field to enter.
For example, many of the products being imported from Europe, like some varieties of cheese, are not manufactured in large production units in Europe but by local communities which supply their produce in the local markets and the traders thenexport the surplus.
Part of the problem is a simple lack of awareness.
Talking to Dawn, the farmers belonging to Potohar region, central Punjab and Sindh expressed a total lack of awareness regarding value-added food items.
“Production is moving in this direction, but the transition is very slow or based on outdated models,” said Suleman Otho, whose family grows vegetables on a large scale in Tando Adam, Sindh. Otho explained that not many years ago, growers had serious trouble every second season selling tomatoes because of insufficient demand – but now buyers have emerged and many small ketchup makers buy the stocks in bulk.
Unfortunately, apart from the ketchup and a few other products, the value-added agro-food products sector has remained a back bencher in the country.
“The core business of farming itself has become difficult and most of us do not want to risk getting into new ventures,” said Zahid Hussain Shah, a farmer in Taxila. Furthermore, the decreasing area of agricultural land does not help: “There is agrowing demand for commercialising the agricultural land to make housing societies or for other development projects at places which used to be fields a decade back,” added Shah.
On the other hand, farmers in central and southern Punjab seem to be satisfied with high returns from cash crops and do not feel the need of venturing into unfamiliar businesses.
“One can make a profit of around Rs80,000 annually from one acre of agricultural land by simply growing cash crops,” said Chaudhry Bashir Sahi, a farmer in Gujrat district. “Such value addition is feasible in districts where cash crops are grown at limited scale such as in barani (rain-fed) areas,” he said.
Lack of interest in production of value-added agro-products might be lackluster attitude of the consumers who say that they have more trust and confidence on imported products rather than the local ones.
“Besides the superior taste or packing, we feel that the foreign-based brands are hygienic and have better nutrition value,” opined a scientist in a federal government department, “Here, we have only one known company making branded fruit vinegar and there are a number of unknown companies and how we can be sure that these are really fruit vinegar or synthetic ones?”
Consumers are also dissatisfied with a limited range of products of local brands. Only one significant brand is offering fruit vinegar in Pakistan, but they, too, have not been able to expand and have a diverse product lane.
However, this is merely a result of the value-added sector being underdeveloped. Chairman Pakistan Agriculture Research Council (PARC), Dr Iftikhar Ahmed blames government departments, farmers and the rural based entrepreneurs for not developing a strategy to promote local value addition in food.
He recommended that provincial agricultural departments needed to create awareness among farmers and encourage them to enter this non-traditional agro-market.
Furthermore, there is a need to establish and implement food quality standards in the country to win over the confidence of the consumers.
“There are no standards for honey or food colours in the country and no authority is practically enforcing them,” Dr Ahmed said and added, “Buyers feel shaky buying Pakistani products of unknown brands.”
Without standardisation, the country is flooded with all kinds of food products and producers who ensure good quality cannot compete with those making low quality products and selling them cheap in the markets.
These are all second steps though. First and foremost, government role in establishing this sector simply means providing financial support.
“The most important thing is to promote and develop local production of value-added food industry by offering loans and credits to rural entrepreneurs so that the industry and marketing network may be established,” stated Chairman Pakistan Agriculture Research Council.
Thus tapping into this underdeveloped market requires joint efforts between the federal and provincial government departments and the private sector to invest in production of such items and curtail the massive inflow of imported food products in Pakistan.