Boosting agriculture-based exports

President Musharraf has unveiled a five-point export strategy that lays special emphasis on developing agriculture-based products, to revitalise Pakistan's export sector.
The announcement of the strategy by him at the stone-laying ceremony of Lahore Expo Centre marks a seminal move towards diversification of the country's export sector to tap its huge potential. Pakistan's agricultural and dairy exports remain a virgin territory that can yield rich dividends in terms of foreign exchange earnings.
The new strategy puts fresh focus on the signing of free trade agreements with the Latin American, Far Eastern and Middle Eastern countries, which will add a new dimension to Pakistan's traditional export sector. Pakistan's trade representatives abroad will henceforth be activated to improve their performance.
The new strategy puts particular emphasis on modernising infrastructure, aside from value addition of products, especially the dairy products. Cheese, for instance, carries a vast export growth potential. Fruit export and fruit processing is yet another domain that is to be tapped. It will also open new avenues of job creation in rural areas, which can play a role in controlling rural-urban migration, and aid government's efforts to achieve poverty alleviation.
Despite the progress achieved by the industrial sector, agriculture remains Pakistan economy's largest sector that employs about 47 percent of the country's total work force.
However, this otherwise impressive figure is much less than 60 percent that was the share of agriculture in labour force in 1963-64. Further, agriculture's share in our GDP stands at about 24 percent, which demonstrates its crucial importance, as it had stood at 53.2 percent of the GDP in 1949-50. The downturn clearly needs to be reversed.
The performance of Pakistan's agriculture sector has remained unsatisfactory largely because of the traditional methods of cultivation practised by a majority of farmers. Natural disasters like floods and pest attacks have also played a role in hampering growth of this crucial sector of Pakistan's economy. Agro-industry is an extended arm of agriculture, which contributes about 23 percent to the GDP.
However, the value-added of the processing industry contributes only eight percent of the total food production. Agro-industries help in strengthening the farm sector and also in stabilising the rural economy. Approximately 70 percent of Pakistan's foreign exchange earnings come from the sale of agricultural products such as cotton, rice, fruits and vegetables.
And this has stimulated the demand for the provision of raw materials, equipment and services to the agro-based industries, mainly in the cotton textile industry, which is the largest industrial sub-sector in the country.
Export of fruit, vegetables and dairy products presents another useful avenue, which should be efficiently tapped to earn additional foreign exchange. It has been estimated that 30 to 40 percent of fruit and vegetables in Pakistan go to waste because of lack of proper preservation and processing units.
This deficiency has also hindered the process of value-addition, adversely impacting the country's export potential in fresh farm and fruit sector. Pakistan is the sixth largest producer of oranges in the world, with a production of 2.1 million tons per annum. Further, kinno export is another lucrative area.
In the field of dairy products, our cheese and butter have a competitive edge in the international market because of their good quality. Apple is another cash crop that needs hi-tech equipment for packaging, polishing and storage. And the use of irradiation plants, set up in Lahore and Karachi, can enhance the shelf life of our fruits and vegetables.
As the development of agro-industries can make agriculture more lucrative, commercial banks should provide a higher quantum of finances to the sector. Exports of dairy products provide yet another virgin avenue that needs to be fully utilised to establish Pakistan's hold in the international market. At the same time, the government should build macroeconomic stability to attract local and foreign investment.
We have to diversify our exports to earn more foreign exchange, which we badly need. The Lahore Expo Centre, when completed, will surely serve as a useful display centre to showcase Pakistan's export potential.