I welcome the distinguished Trade and Agriculture Ministers from the 19 member Cairns Group of countries. I am pleased that the Cairns Group accepted Pakistan's invitation to come to the city of Lahore located in the Punjab province it the heart of our agriculture industry.
Agriculture dominates the Pakistan economy accounting for 22 percent of GDP. It continues to grow and provides an important source of new jobs in Pakistan. almost 70 percent of our exports are agro-based. Because of its dominance, agriculture must contribute in a major way to Pakistan's economy in order for it to meet its goals in job creation, poverty reduction, improved consumer incomes, food security and rural development.
Pakistan has introduced substantial reforms and de-regulated much of Pakistan's economy over the past few years. Agriculture is no exception. Tariffs have been reduced, export agencies for cotton and rice have been disbanded, and subsidies have been reduced. These reforms create the basis for new growth opportunities in agriculture. A successful Doha Round would immediately translate into substantially improved prices, incomes and employment for Pakistan agriculture. It will also enable Pakistan to concentrate on its areas of strength in agriculture especially labour intensive agricultural production and food processing.
The Government of Pakistan is investing in its agriculture to enable it to take advantage of trade opportunities in a more market-oriented global agriculture. Irrigation projects, road construction and rural development are very visible examples of these investment. Less visible, but more important, is the investment in our people. We are expanding our agriculture extension advisory service and re-shaping it to better meet the needs of our producers. We are increasing our agricultural research budget, but making it more market driven and rewarding our brightest scientists.
The successful conclusion to the Doha Round will also enhance the climate for new private sector investment in the agriculture sector and especially in agri-business. We are expanding our programs to provide agricultural credit to our small farmers. At the same time, we are encouraging foreign capital to bring new technology and skills in our marketing and food processing system.
One example of foreign investment is the establishment of a largest milk processing plant located in Punjab, which is the largest in all of Asia. This plant provides an opportunity for hundreds of small dairy farmers to join a milk collection system.
These small farmers can now meet international quality standards for milk. Through the advisory assistance provided by the company, animal health has been improved and strict quality control measures have been introduced in each of these farms. Importantly, these dairy farmers now get regular payments for their milk. This example illustrates that with a successful outcome from the Doha Round, Pakistan could become an exporter of certain dairy products.
Pakistan welcomed the invitation to join the Cairns Group in 2005. As a result of its reforms, and the new policy direction for agriculture, Pakistan felt that its objectives for the outcome of the Doha Round were consistent with the vision of he Cairns Group. Since joining the Cairns Group, Pakistan has actively participated to advance negotiating positions for a more market-oriented global agriculture, while protecting the small farmers.
The occasion of the Cairns Group Meeting has brought many of the Agriculture and Trade Ministers from 19 countries to Pakistan. Pakistan is using this opportunity to improve the formal relationships between our countries. Pakistan expects to sign bilateral agreements with the government of Argentina, Brazil and Chile on a wide range of technical agriculture production and trade issues. I am looking forward to a very productive outcome from the discussion among the Cairns Group Ministers during their stay in Pakistan.
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