Need for olives

It has been recently reported that the government is trying to convert Chakwal valley into an olive valley. For this purpose, two million olive plants will be distributed in Punjab over the next five years while an olive oil preparing factory is already functional in the region.

Pakistan’s water starved economy is dependent on water intensive crops such as sugarcane and rice (for more information read “Water scarcity and agri-export woes”, published on June 19, 2018). Olive trees are hardy plants with roots so extensive and strong that in time of drought they can survive by drawing water from deep within the earth. They are also able to produce olives for hundreds of years enabling the return on investment for setting up olive trees to be reasonably high and sustainable.

A report by SMEDA estimates that on average, an olive plant produces 20 to 35 kg of fruit per year which contain more than 12 percent oil content. Olives can be sold at the rate of Rs.73 per kg and oil can be sold at Rs. 500 per litre. Estimates suggest that the current there are 8 million wild olive trees present in different provinces, which if drafted and converted for olive production could present a potential of earning of $1 billion annually.

Since an olive plant requires at least 5 years before it can start bearing fruit, it is not feasible for farmers to opt for olive trees on their own. To promote its cultivation, the Punjab government has given a 70 percent subsidy on watering and cultivation and a 60 percent subsidy on installation of drip irrigation systems. The agricultural department has also promised to purchase olives so that farmers can sell their produce immediately.

However, this is not the first time an attempt has been made to create an olive valley. In 2016, Punjab government tried to create an olive valley in Potahar over 15,000 acres of land with a project cost of Rs 2.8 billion. Similarly, Pakistan Economic Survey FY18 lists olive forests in Punjab as part of its Green Pakistan Program, which is an initiative to revive forestry and wildlife resources to make the country more environmentally resilient. However, there has been little evidence of progress or results.

Though the government is providing some support for olive production, it also provides more lucrative assistance to main stream crops such as rice, sugar, wheat and cotton in the form of support prices and subsidies. There is little incentive for farmers to shift to the more prudent, profitable and long term sustainable production of olives. Yet, this shift needs to be made at least in part to decrease pressure on Pakistan’s water resources, decrease the edible oil import bill and tap into the lucrative Middle Eastern market that has high olive oil demand.