Rising Incomes in Agriculture Sector Boost Pakistan's Rural Economy

[Riaz Haq]

Since taking the reins of power almost three years ago, the coalition government in Islamabad, which is led by the Pakistan Peoples' Party, has been increasing the support prices of wheat and other agricultural commodities every year. This policy has had the following effects:

1. It is transfering the additional new income of about Rs. 300 billion in the current fiscal year alone to the ruling party's power base of landowners in small towns and villages, from those working in the urban industrial and service sectors.

2. It has driven up food prices dramatically for all Pakistanis, particularly hurting the poor people the most.

3. It has reduced government tax revenues because the agricultural income is not taxed by either the federal or the provincial governments, and resulted in growing budget deficits.

4. It has significantly increased demand for consumer and industrial goods and services in the rural areas.

5. It has forced the State Bank of Pakistan to maintain a tight monetray policy which is drying up the much-needed credit for the industries and the average consumers alike.

In 2008, the government pushed the procurement price of wheat up from Rs. 625 per 40 kg to Rs. 950 per 40 kg. This action immediately triggered inflationary pressures that have continued to persist as food accounts for just over 40% of Pakistan's consumer price index. According to State Bank of Pakistan (SBP) analysis, cumulative price of wheat surged by 120 per cent since 2008, far higher than the 40 per cent between 2003 and 2007. it is also many times greater than the international market price increase of 22 per cent for wheat in the same period. Similarly, sugar prices have surged 184 per cent higher since 2008, compared with 46 per cent increase during 2003-07.

The transfer of additional Rs. 300 billion to Pakistan's agriculture sector during the current fiscal year 2010-2011 by higher prices of agriculture produce and direct flood compensation to 1.6 million affected families at the rate of one hundred thousands rupees each will boost economic confidence in the countryside. It will generate rural demand for consumer items including consumer durables such as fans, TVs, motorcycles, cars, refrigerators, etc.

The big feudal landowners have been the biggest beneficiaries of the PPP's gift of high crop prices. However, the policy has helped small farmers as well, as shown by a recent survey reported by The Nation newspaper. The survey of 300 farmers in Sind's Sukkur district was conducted by Sukkur Institute of Business Administration for the State Bank of Pakistan (SBP). It has highlighted the following about district's rural economy:

1. In Sukkur district, majority of the farmers are subsistence farmers. 31 percent of them own less than 5 acres of land, and another 34 percent own up to 12.5 acres of land.

2. They spend an average of Rs. 1,611 a month on their children's education, with some of them spending up to Rs. 12,000 a month.

3. Wheat, rice, cotton and sugarcane are the major crops being cultivated by 93 per cent, 58 percent, 37 percent and 12 percent of the respondent farmers in that order.

4. 24 percent of them are also growing fruits including dates, mangoes and bananas.

5. 22 percent of the respondent own livestock.

6. About half (49 percent) use privately purchased seeds for wheat cultivation, 33 perecent use their own retained seed and 18 perecent use the seed purchased from Public Sector Seed Corporations.

7. On average, a farmer uses 96.73 Kg chemical fertilizer per acre with the maximum and minimum of 350 Kg and 40 Kg respectively. The average per acre cost of wheat production is Rs. 10,670.

8. All 300 farmers are using tractors for cultivation and preparing land for crops, and some are using tractors for fetching their crop produce to market.

Already, the upside of the government policy is that Pakistan's rural economy is being spurred by high crop prices that may help the GDP growth this year and next. Increased farm incomes are whetting the rural households' appetite for industrial and consumer goods in 2011 and beyond.



A key indicator of growing rural economy is the double digit increase in the sale of tractors. Millat Tractors Limited, the largest supplier of tractors in Pakistan, had record sales of 41,500 tractors in the calendar year 2010, an increase of nearly 11% over 37,537 tractors sold in 2009. Of these 41,500 tractors, a record 5000 tractors were sold in the month of Dec, 2010 alone, acording to The Nation newspaper. Millat sold 10,000 units under Benazir Tractor Scheme and 5,000 units under the Sindh government tractor scheme in the last fiscal year. Another 10,000 units were sold as part of the Punjab government scheme, 70 per cent of the units were sold, according to Dawn News.

Earlier, the sales of Fiat and Massey Ferguson tractors grew to 1,632 and 3,194 units in September 2010 from 537 and 3,100 in August 2010. The overall sales of these tractors rose to 13,931 during July-September 2010 as compared to 12,690 units in the same period of 2009, according to Dawn news.

Over 50 per cent of the motorcycles and 40-45 per cent of cars in Pakistan are purchased by people living in rural areas. Total car sales in July-September 2010(including Suzuki Bolan) rose by 12 per cent to 30,030 units as compared to 26,812 units in the same period of 2009, according to Pakistan Automotive Manufactureres Association PAMA). Furqan Punjani of Topline Securities said car sales are expected to reach 154,000 units by the end of June 2011.

In addition to rising demand for cars and tractors, there is also an upward trend in two-wheeler sales. The cumulative sales of motorcycles in July-September 2010 rose to 126,701 units from 105,862 units in the same period of 2009.

While it is good to see Pakistan's rural farm economy perk up, it is also important to recognize that the overall national economic outlook can not improve significantly unless the growing budget deficits and rising inflation are brought under control. And this will require the ruling feudal elite to pitch in by paying their fair share of income tax on their rising farm incomes. It is time for them to lead by example.

Related Links:

Haq's Musings

Pakistan's Exports and Remittances Rise to New Highs

Sugar Crisis in Pakistan

Pakistan's Rural Economic Survey

Pakistan's KSE Outperforms BRIC Exchanges in 2010

High Cost of Failure to Aid Flood Victims

Karachi Tops Mumbai in Stock Performance

India and Pakistan Contrasted in 2010

Pakistan's Decade 1999-2009

Musharraf's Economic Legacy

Copper, Gold Deposits Worth $500 Billion at Reko Diq, Pakistan

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[Riaz Haq]

Here's Daily Times on crop insurance for small farmers in Pakistan:

ISLAMABAD: The Pakistan Poverty Alleviation Fund (PPAF) has launched the first-ever indexed and hybrid weather micro-insurance products to facilitate and compensate small farmers in Pakistan.
Presided over by Securities and Exchange Commission of Pakistan Commissioner Muhammad Asif Arif, a simple ceremony to this effect was arranged at a local hotel, which was attended by representatives of State Bank of Pakistan, the World Bank, International Fund for Agricultural Development (IFAD), KfW, German Development Bank, UKAID, Tameer Microfinance Bank, National Disaster Management Authority, Pakistan Microfinance Network, government bodies, insurance companies and others.
Addressing the occasion, Arif said that micro-insurance stands at a critical juncture in Pakistan. He commended PPAF on for introducing revolutionary indexed crop and livestock insurance products in Pakistan. As regulator, he said, SECP has remained committed to promoting micro insurance in the country through research, introducing pivotal regulations and promoting a healthy policy environment.
PPAF Board of Directors Member Zubyr Soomro said that the need for micro-insurance has been felt over the years and it is the tipping point to upscale it. He said that we would have to make the most of this opportunity. He said that sincere efforts are needed to make micro-insurance sustainable.
In his remarks, PPAF Chief Executive Qazi Azmat Isa said that micro-insurance initiative is the result of close collaboration between PPAF and IFAD. He lauded the role of insurance companies and SECP as a regulator to make micro-insurance a success. He said that farmers are badly affected by climate change, fluctuation in the prices of their produce and poor quality of agri inputs. He said that micro-insurance would prove to be a vital instrument in fight against poverty.
State Bank of Pakistan Agricultural Credit and Microfinance Department Senior Joint Director Kamran Bakshi said that by launching indexed and hybrid weather micro-insurance PPAF has provided a unique platform to market leaders to serve the poor, particularly the farmers. He said that the focus must be on protecting the borrowers.
PPAF’s Senior Group Head Ahmad Jamal said that PPAF is committed to grassroots development and micro-insurance would prove to be one of the instruments to alleviate poverty. He said that PPAF would capitalise on its outreach so that maximum people could benefit from micro-insurance.
PPAF’s Financial Services Group Head Yasir Ashfaq highlighted that these products will lead the new era for micro insurance in Pakistan. He said indexed insurance products are easy to administer, transparent, innovative and significantly reduce any chances of moral hazard or fraud. He said PPAF envisions scaling up these products at a national level, preparing detailed indices for various districts with the support of stakeholders including government agencies, donors, MFIs and insurance companies.
The weather-indexed crop and ‘live-weight’ livestock insurance products have been designed by PPAF, with support from IFAD through a strategic partnership with SECP.
These products have been prepared in collaboration with Meteorological Department, Livestock Research Institute and are based on needs of small and marginal income farmers. PPAF has launched these products as a pilot in collaboration with local insurance companies in districts Khushab and Chakwal.
The pilot projects have received overwhelming response and showcased significant potential in providing efficient and transparent form of risk mitigation for small and marginal income farmers and livestock owners across the country.

http://www.dailytimes.com.pk/default.asp?page=2013\01\30\story_30-1-2013_pg5_9

[Riaz Haq]

Here's an ET Op Ed by LUMS' Professor Rasul Bukhsh Rais:

I have a serious problem with the cynic brigade that writes and comments on social, developmental and political issues along familiar lines. What is their familiar line? The Taliban are coming, extremism is on the rise, corruption is pervasive and life is miserable. This is a partial truth, not the whole truth. That nothing can change is a viewpoint that conflicts with history and the evolution of societies.

Cynicism in hard times like ours and in a climate of fear, insecurity and violence, sells and viewers and readers readily embrace the dark side of things rather than looking at what is bright and shining. The other issue is the habit of most of my colleagues and columnists to write from the comfort of their offices or homes. They tend to look at the big picture that gives a disturbing spectre rather than examining achievements at local levels, and by dedicated individuals and communities. If there is any meaningful and real change in Pakistan, it is taking place at these levels in every aspect of the social and economic life of this country. By missing details of development and positive change at the smaller scale, we may draw a big picture of a society and country that may not be in agreement with reality. This is what is unfortunately happening.

One of my social beliefs is that only by changing at the local level will Pakistan change for the better at the national level. The national in spatial terms is nothing but local. By often travelling through the villages, mostly in Punjab, I have seen thousands of positive contributions and developments that are neither documented nor narrated. Never has our regular cynic brigade opened its eyes and minds to what this change is and how it is becoming a catalyst for more and larger changes.

Let me share one man’s gigantic contribution at a government agricultural research farm in Bahawalpur. I had heard about Mushtaq Alvi for his collection of berries and date palm trees for some years. Last weekend, I had the opportunity to visit this fabulous farm, which may not be noticed from outside the walls. Mr Alvi, as a young man with his first job, started the plantation in 1985. He went to every place in Pakistan to collect the best local species of date palms, berries, mangoes, guavas and pomegranates. Today, he has 35 species of date palms, 20 of berries, 20 of mangoes and five of pomegranates, and almost every of guavas. Never has his search for new findings ended.

While the collection continues to expand, the farm has supported thousands of farmers and households that would like to have various species of these trees. Every season, thousands of berry plants and hundreds of date palms are distributed. Then there are private collectors of these trees that have developed their own farms and would like to sell plants to new farmers. Each new tree becomes a source for saplings leading to further proliferation.

Scientists like Mr Alvi and many of his colleagues may move on to other research stations or retire but what they have done is something remarkable. This is just one example of ordinary Pakistanis making a difference to society. Unfortunately, our media, commentators and pseudo intellectuals cannot lift their eyes from what is wrong in society and shift their attention, even for a moment, to what is right and working.

Recognition and celebration of achievements by individuals and communities encourages positive change, positive attitudes and stimulates energies for innovation and more contribution. While grieving about the many things that are troubling us, let us not ignore the pleasing side of changing Pakistan. Go out and see it.

http://tribune.com.pk/story/509088/changing-pakistan/

[Riaz Haq]

Here's a Nation news report on India's pervasive non-tariff barriers (NTBs):

India has one of the most restrictive trade regimes in the world, according to the World Trade Organisation (WTO).

Economists and WTO experts, quoting an annual report of the WTO, stated that the Indian government around seven years back initiated 191 safeguard actions compared to just 171 by China, a much larger economy. In fact, this was even higher than the number of actions initiated by the EU, also a much larger economic bloc.

And a new study conducted by the United States Agency for International Development (USAID) has revealed that India stands at the top in South Asian countries on the basis of trade restrictions imposed on neighboring countries, according to criteria set by the World Bank.

Experts pointed out that India is accused of using both tariff and non-tariff barriers to discourage imports from neighboring countries. It is no surprise, then, that trade between India and Pakistan is so skewed right now. The volume of trade is growing, but not in a way that seems to be of any real benefit to Pakistan. In 2006-07, Pakistan exported goods worth $342.9 million to India, against imports of $1.24 billion. In 2010-11, Pakistan’s exports to India had dropped to $264.3 million, while imports from India had surged to $1.74 billion.

Giving an example, sources said that if the MFN status is granted to India without completion of infrastructure at the Wagha border, the prices of goods coming from India, will double due to the choking of trucks and the purpose of cheaper goods supply to people will not be served.

Experts maintained that a level playing field must be created for Pakistan’s textile products relative to Indian products through implementing a uniform tax regime before the MFN status is granted to India.

The negative list lays restrictions on imports of 1,209 items from India, which includes 78 textile and apparel items. Pakistan’s farmers fear that there is not a single agriculture item on the negative list or the sensitive list of Pakistani imports from India, except Tobacco and its different forms.

Insiders claim that phasing out of the negative list or MFN status to India will not have any negative impact on Pakistani agriculture as only one item, i.e. Tobacco will suffer from the grant of MFN status to India.

Pakistan will have to be mindful of the pitfalls of allowing completely unfettered and unhindered imports from a much larger and much more developed economy. The USAID report suggests that Pakistan should actually enhance the sensitive list to protect the local industry and agriculture sector following granting MFN status to India.

This year will see some major shifts, with some local industries having to suck it up and see the end of their life inside the bubble of protectionism. This will bring benefits for the local consumer, who will have access to more choices and cheaper products.

But it will also bring in threats to other industries which do not have the same benefits, or are as developed as their counterparts in India.

For a long time the governments were always lacking political will to grant Most Favoured Nation (MFN) status to India but industrialists, traders and civil society activists continued to advocate increasing trade with India, saying this would be a great way to forge better relations and solidify peace overtures between the two nations.

Currently the trade volume between India and Pakistan is about $2.5 billion and it is expected that this can be enhanced to $8 billion in the next two years.

http://www.nation.com.pk/pakistan-news-newspaper-daily-english-onli...

[Riaz Haq]

Here's Daily Times on rising rice exports:

KARACHI: The total rice exports from Pakistan including basmati and non-basmati rice have risen above the $1 billion mark during seven months of this fiscal year (July 2012 to February 24, 2013), which in terms of weight stands at 2.142 million tonnes.

The full fiscal year’s export target of $2 billion seems achievable as up till now more than $1 billion exports have been met.

“Efforts of the Rice Exports Corporation of Pakistan to boost export of Pakistani rice has started yielding positive results as Tanzania has emerged as a potential market for Pakistan’s non-basmati rice,” said Rice Export Corporation of Pakistan (REAP) Acting Chairman Rafique Suleman. During the last seven months of the current fiscal year a total quantity of 95,349 metric tonnes has been exported to Tanzania, whereas last year during the same period the export was 25,484 metric tonnes.

It may be recalled that recently Pakistan’s rice export to China has marked an increase as record volume of non-basmati rice 72,623 metric tonnes to China worth $30 million in just one month (January 2013) was exported during the current fiscal year.

“China has become a major market for Pakistani non-basmati rice over the period of time, which
has greatly encouraged exporters of the commodity to accomplish further success in that territory.”

Similarly Pakistani rice export to countries like Sri Lanka and Kenya has also showed marked improvement.

Basmati rice is in great demand in Sri Lanka and Sri Lankan exporters are willing to import more basmati rice from Pakistan.

Suleman said that efforts are underway to push export of Pakistani rice to substantial level as it is fast gaining popularity across the globe, which is evident from the fact that it is currently exported to more than 100 countries.

Furthermore, exporters are also endeavouring to explore many new markets to enhance and increase the export and in this regard REAP chairman and vice chairman, and leading rice exporters visited Gulfood, Dubai (February 25 to 28, 2013) to explore new business opportunities and promotion of Pakistani basmati rice.

He thanked the commercial sections of Pakistan in East African Countries and especially High Commissioner for Pakistan in Tanzania Tajammul Altaf for his efforts for the promotion of Pakistani rice exports into East African countries. As per the official statement of Tanzania Ministry, they will be able to cover the consumption by local production up to 2018. Altaf informed on phone that last year the total imports from Pakistan were worth $50 million and this year we have achieved $100 million.

http://www.dailytimes.com.pk/default.asp?page=2013\03\02\story_2-3-2013_pg5_13

[Riaz Haq]

Here's a PakistanToday report on raising wheat yield in Pakistan:

American scientists and Pakistani wheat experts are collaborating to increase Pakistan’s wheat harvest and ensure greater prosperity to farmers nationwide.
A bi-national team of scientists, sponsored by the US Department of Agriculture (USDA), met in Faisalabad last week to evaluate wheat varieties for disease-resistance, according to a statement issued by the US Embassy.
In order to determine which wheat varieties will perform best in Pakistan’s unique ecosystem, US and Pakistani researchers studied the effects of heat and other types of environmental stress on the different varieties of wheat that can be planted in Pakistan.
USDA, through its Wheat Productivity Enhancement Project (WPEP), currently helps evaluate 60 wheat varieties planted in 115 wheat trials throughout Pakistan. In order to increase the quality of this joint research, last week USDA also provided Pakistani research institutions specialized wheat planting and harvesting equipment. The new machines, which replaced equipment over 25 years old, will allow scientists to study more wheat varieties each year and more rapidly improve Pakistani farmers’ harvest yields.
“Wheat is critical to the food security of both Pakistan and the United States,” said USDA Plant Health Advisor Ian Winborne after a ceremony at Ayub Agricultural Research Institute (AARI) celebrating the handover of the new equipment. He added, “Lasting links between Pakistani and US scientists can help improve and protect agricultural harvests in both our countries.”
WPEP facilitates scientific collaboration between USDA, the International Maize and Wheat Improvement Center (CIMMYT), and Pakistan’s national wheat programs. WPEP funds scientific exchanges to develop, introduce, and test disease-resistant wheat varieties; improve agronomic practices; and upgrade research capacity in Pakistan.
This initiative is just one part of a comprehensive US economic growth assistance program which includes expanding irrigation by more than 200,000 acres near the Gomal Zam and Satpara dams; constructing more than 1,000 km of roads to connect communities and facilitate trade; modernizing dairy farms in Punjab; and launching private equity investment funds to help small and medium businesses grow.

http://www.pakistantoday.com.pk/2013/03/20/news/profit/us-pakistani...

[Riaz Haq]

Here's a Bloomberg story on Pakistan govt's politically motivated decision to export more sugar:

A shipping subsidy and lower excise tax linked to the export of as much as 1.2 million metric tons of sugar by Pakistan may lead to low inventory and high domestic prices, a unit of the U.S. Department of Agriculture said.

The decision by Pakistan’s Economic Coordination Committee of the cabinet and the Federal Board of Revenue “is being heavily criticized as a politically motivated move by the government to garner support from the sugar industry in the upcoming elections,” the USDA’s Foreign Agricultural Service said in a report posted today on its website.

Stockpiles may drop to a “precariously low level” of 400,000 tons, down from an average of 1 million tons in the past five years, according to the report.

On March 6, the coordination committee approved an inland freight subsidy of about $18 a ton on exports of as much as 1.2 million tons after previously setting the quota at 895,000, according to the report. The federal excise duty on domestic sales was lowered to 0.5 percent from 8 percent to provide an increased incentive to export, according to the report.

“The government efforts to increase the competitiveness of Pakistani sugar in the international market by means of providing direct payment to millers for export could be a violation” of World Trade Organization obligations under an agriculture accord, according to the report.

The government of President Asif Ali Zardari became the first civilian administration to complete its full term. General elections are scheduled for May.

http://www.bloomberg.com/news/2013-03-25/pakistan-sugar-policy-may-...

[Riaz Haq]

Here's how PPP boasts of its record of the last 5 years, as reported by PakistanToday:

The Pakistan People’s Party on Saturday released a 29-point report on its five year performance, highlighting major achievements during the period.
It makes special mention of the constitutional reforms, particularly the 18th, 19th and 20th amendments which provided provincial autonomy, transfer of presidential powers to parliament, smooth installation of caretaker governments and striking down of president’s power to dissolve the assemblies.
Munir Ahmad Khan, the PPP in-charge policy and planning cell, presented the report before the media at a press conference. He said that credit goes to the PPP for ensuring independence granted to the Election Commission of Pakistan.
Khan also came up with a list of important decisions and steps taken by the PPP government to mitigate sufferings of the people despite terrorism in the country.
In this regard, he mentioned a record increase in wheat production, increase in salaries of govt officials up to 158 percent, disbursement of Rs 70 billion among 7.5 million deserving families through the Benazir Income Support Programmed and financial help to 135,000 deserving people by Pakistan Baitul Maal.
On steps taken by the government for economic revival, Khan cited the Pak-Iran agreement on the gas pipeline, agreement with China on Gwadar Port, increase in foreign exchange reserves from $6 billion in 2008 to $16 billion in 2013, increase in export from $18 billion in 2008 to $29 billion in 2012, boost in stock market from 5,220 points in 2008 to 18,185 points in 2013 and reduction in interest rate from 17 percent in 2008 to 9 percent in 2013.
He believed that these measures would help improve the economy and ameliorate the people.
Talking about the measures taken to increase production of electricity, the PPP leader told reporters that the PPP-led government added 3,600MW of electricity to the system besides initiating additional work on Mangla and Tarbela dams for increase of 4,500MW in the system.
The previous government, he added, also got $3.5 billion for Basha Dam, initiated Neelum-Jhelum, Gomal and Satpara dams and Thar Coal project to get electricity from coal besides Jamphar project to get electricity out of air.
He said further the PPP government also reinstated thousands of government servants who were dismissed during the last 13 years and also regularised thousands of contract employees.
Among steps taken by the government for welfare of the masses, Munir Khan listed resumption of trade union activities, distribution of shares among 500,000 industrial workers, cheep tractors to farmers through Benazir Tractor Scheme, increase rural economy from 50 billion in 2008 to 800 billion rupees in 2013.
He said Faisalabad-Multan Motorway and construction of thousands of kilometres of roads.

http://www.pakistantoday.com.pk/2013/03/30/news/national/ppp-releas...

[Riaz Haq]

Here's a Nation newspaper report on US help for Pak agriculture:

“Since the 1950s, the United States has been working to support agriculture in Pakistan by introducing the orange and helping to double the country’ wheat production. Today, we continue our support because improving crop yields protecting food sources from disease and boosting milk production will increase incomes of the farmers which would ultimately strengthen Pakistan’s prosperity, US ambassador said addressing a gathering of government officials, researchers and farmers during his visit to the National Agriculture Research Center (NARC) here on Wednesday.
Ambassador Olson said that the US government is committed to help the small farmers of Pakistan through projects that enhance agricultural productivity.
The introduction of this wheat variety helps protect Pakistan against UG 99 a dangerous wheat disease in the region that poses a threat to country’ farming community, he claimed.
Olson added that US government has provided new harvesting machine to support the Wheat Productivity Enhancement Project and also is also providing specialized training opportunities to Pakistani wheat scientists to fight against wheat diseases.
While talking on the occasion, Dr. Muhammad Imtiaz, Country Liaison Officer for the International Maize and Wheat Improvement Center, noted that without disease-resistant varieties of wheat experts estimate that Pakistan’s annual wheat harvest could be reduced by 50 percent if when UG 99 arrives.
“Agriculture contributes 21 percent to the GDP of Pakistan and employs 45 percent of the labor force, making it one of the most significant economic drivers of Pakistan,” Dr. Imtiaz said.

http://www.nation.com.pk/pakistan-news-newspaper-daily-english-onli...

[Riaz Haq]

Here's a National Geographic story on sustainable farming in Pakistan:

Zacky Farms, just outside Lahore, is the brainchild of Zafar Khan, a Caltech-educated software engineer who runs one of the most successful information technology companies in Pakistan named Sofizar. What started off as a recreational venture is now a side-business supplying sustainably produced organic milk, vegetables and meat to nearby Lahore suburbs. The farm is modeled on a cyclical model of minimal wastes and multiple product usage. The cows are fed pesticide-free oats, clover and grass and their manure is used to fuela biogas plant which runs the dairy facility. In an era of electricity load-shedding, such an alternative source of energy at a local industrial scale is immensely valuable to replicate as a development path. The residue of the biogas is used to fertigate the fodder fields and vegetable tunnels, which along with green manuring obviates the use of fertilizers. Free-range chickens grace the fields and there is even a fish farm on site. Zafar and his Ukrainian-born wife are committed to sharing their experiences with other farming entrepreneurs in the country.

Further south in a more rural and remote part of Punjab, famed writer and erstwhile lawyer, Daniyal Mueenudin, maintains a mid-size farm which is exemplifying other kinds of innovations. The farm does not boast ecological farming practices, apart from tunnel farming that can help with land conservation and humidity control. However, Daniyal has changed the social landscape of his area through implementing a “living wage” for all his employees. Noting the high level of inequality in Pakistan’s hinterland, the Yale-educated former director of the university’s Lowenstein Human Rights Clinic, is practicing what he preached. He also owns a farm in Wisconsin and could have a comfortable life in the States but his social obligations keep him ensconced in Pakistan for most of the year.

Raising the wage several-fold for works and farm manager, and also offering bonus incentives for performance, has led to positive competition that can help to erode the feudal levels of income disparity which exist in this part of Pakistan. At the same time, Daniyal is also committed to providing new livelihood paths for the agrarian workers as automation reduces farm employment in some areas. He has has fully funded a school and provided a merit-based scholarship for advanced degrees to students from the nearby village. One of the children from this school (the first in her family to even go to school) is now making his way through medical school in Lahore!

Zafar and Daniyal’s stories of commitment to constructive farming for social and ecological good may appear to be outliers but they are catching on and provide hope to a country which is all too often shadowed by despair. In the suburbs of Islamabad, tax incentives and planning rules to encourage farming by urbanites are leading to a growing culture of reconnecting with the land in residential farms. In rural areas, the disaster caused by the floods of 2010 brought forth numerous aid agencies with new ideas for sustainable farming. The Pakistani diaspora, often known in the West for professions ranging from taxi-driving to engineering, may well find opportunities for reconnecting to their land in far more literal ways. With growing commitment from land-owners it just might be possible to use the existential shock of recent natural disasters that have befallen the country into a proverbial opportunity for positive change.

http://newswatch.nationalgeographic.com/2012/02/23/farming-pakistan/

[Riaz Haq]

The trend of online shopping has witnessed rapid growth recently with several retail market portals springing up.
But, a recent increase in their penetration into far-flung areas has also boosted future prospects of the e-commerce market. What used to be limited to metropolitan cities has now spread to semi-urban and rural areas of the country. This is another potential market not only for shopping portals but also for fast moving consumer good (FMCG) companies, due to better availability of internet facilities throughout the country.
Online shopping portal, Daraz.pk, claims that online shopping websites have penetrated into the rural areas. In a recent survey, they revealed that around 48% of all orders placed in the first six months of 2014 were outside of Pakistan’s biggest cities – Karachi, Lahore and Islamabad.
“Half the world’s population will have internet access by 2017, showcasing the potential of e-commerce in the future,” said Daraz.pk co-founder Muneeb Idrees. “It is also expected that the number of mobile-connected devices will surpass the number of people. These statistics represent the expanding ecosphere of e-commerce.”
Established in August 2012, Daraz.pk is a project of Rocket Internet, the world’s largest incubator. The portal is currently offering over 400 brands in 200 cities across Pakistan. After the initial success, other venture capital firms took notice and starting initiating contact with local businessmen in the industry to fund entrepreneurs.
The website gets receives their highest number of orders (six per cent) from Ghotki, a semi-urban area in Sindh. The highest basket size across the country was from Lala Musa in Punjab, doubling the average order size of Lahore.
“In general, more than half our orders are from outside Karachi, Lahore and Islamabad,” said Idrees. “People in smaller towns have access to social media and television. They learn about new products, but don’t have malls in their cities to buy these products.”
The e-commerce market in Pakistan is estimated at around $25-30 million, in comparison to the total retail market of approximately $42 billion. Internet availability, along with introduction of branchless banking through cellular technology, has done wonders for the market.
According to estimates, branchless banking transactions have witnessed a growth of 327% during 2011-13. Daraz.pk is one of the few businesses utilising mobile commerce in Pakistan with great numbers. The management said that 20% of the transactions of the portal take place via mobile phones.
FMCG giant Unilever recently entered in an agreement with Daraz.pk to use its marketing reach all over Pakistan for its beauty and personal care products. The management thinks that this deal could be vital for the retail industry as previously no FMCG had seriously looked into the e-commerce sector. http://tribune.com.pk/story/749770/e-commerce-online-shopping-makin...