Saad Haroon is the Head of Asia Group for Syngenta, a global leader in agricultural science and technology, in particular, seeds and crop protection products.

Haroon’s association with Syngenta goes back almost two decades, when he joined the company in 2004 as Regional Project Manager for Asia Pacific Crop Protection business. Since then, he has served in several leadership roles, including Head of Marketing; and Strategy & Business Development in China; Head of Global Corn Portfolio based out of company’s HQ in Basel, Switzerland; Head of Seedcare for APAC.

Since 2019, Haroon is serving as Head of Asia Group, which includes Pakistan, Bangladesh, Philippines, Thailand, Malaysia, Laos, Cambodia, and Myanmar. Currently, in addition to his role as Head of Asia Group, he is also serving as Acting General Manager for Pakistan business. Haroon began his career with ICI Pakistan in 1997, and served with the company for over six years. He holds an MBA from INSEAD.

Since 2019, Haroon is serving as Head of Asia Group, which includes Pakistan, Bangladesh, Philippines, Indonesia, Singapore, Laos, Cambodia, Vietnam, and Myanmar. Currently, in addition to his role as Head of Asia Group, he is also serving as Acting General Manager for Pakistan business. Haroon began his career with ICI Pakistan in 1997, and served with the company for over six years. He holds an MBA from INSEAD.

BR Research (BRR): For the readers unfamiliar with Syngenta, could you walk us through company’s footprint in Pakistan?

Saad Haroon (SH): Our business in Pakistan is based on the same structure as globally. Syngenta Pakistan provides Crop Protection solutions, which includes pesticides such as herbicides, insecticides, and fungicides. We also sell corn seeds, vegetable seeds and looking at rice seeds where we offer trustworthy quality.

Syngenta Pakistan is one of the largest agriculture inputs provider in Pakistan for Crop Protection and seeds businesses.

BRR: What is your estimate of market size and respective share of various major players in the crop protection and seed segments?

SH: Within the crop protection – that is pesticides and chemicals space - Pakistan is a reasonable sized market. It is difficult to have accurate figures, however, our estimate is that the market size for crop protection may be around $400 – $500 million annually. I emphasize that this is only an estimate, as there are many undocumented players, whose share in value is difficult to determine.

Globally, the three largest players have a share of up to 70 – 80 percent within crop protection/pesticides segment. In Pakistan, top four players – which includes FMC, in addition to Syngenta, Bayer, and Corteva, - would approximately be two-third. This too is an estimate based on our internal research.

BRR: What do you believe are the greatest challenge facing agriculture sector in Pakistan today?

SH: Climate Change. We at Syngenta strongly believe that Pakistan’s farming sector can no longer divorce itself from the consequences of climate change. And that message pervades throughout our business across the globe. Let me share few examples.

Consider that last two years, Thailand witnessed the greatest drought in its living memory. This was followed by flooding in some parts earlier this year, which has had a severely adverse multiplier effect on the country’s agricultural output.

Similarly, Australia often faces recurring drought spells every 2-3 years. When I joined this business nearly two decades ago, the rule of thumb was that Australia faces a drought every five years. The frequency has increased up to two to three years in recent times.

Experts have predicted that regions such as in Vietnam and Bangladesh could become inundated with sea water by 2050, due to rising sea levels, which is in turn caused by rise in temperatures leading to irreversible melting of ice. Farmers in those regions will no longer be able to grow crops, as it is extremely difficult to grow any crops in saline water. BRR: How do you foresee climate change impacting agricultural productivity in Pakistan?

SH: Pakistan is already witnessing extreme variability in weather patterns, where monsoon seasons have alternated between heavy rain and droughts between 2019 and 2020.

As Pakistan’s population grows, it is predicted that land productivity needs to grow significantly while improving yields and output. Meanwhile, farm-land is reducing due to fast-paced urbanization. This will be difficult to achieve without use of technology and improving access to know how and resources for farmers.

Pakistan needs to simultaneously find ways to increase the profitability of farmers, while identifying ways to sustainably grow its agricultural output; reduce climate change impact; reduce greenhouse gas emissions; and improve per acre productivity. All at the same time. These are pretty big challenges, and will require cross-industry, cross-value-chain, public-private partnerships on urgent basis if we want to get ahead of the curve.

Remember, agriculture sector contributes up to 24 percent of total greenhouse gases globally. The top sources of this are cattle, and the methane releases from soil. They are already ways to reduce gas emissions from livestock. Similarly, methods employed in cover crop agriculture can help reduce amount of methane release from soil or zero till farming techniques. However, a concerted effort needs to be made to adopt such solutions on large scale where it can have the desired effect, and slowdown the rate of climate change.

The top solution to these multitude of challenges is technology, which already exists in various forms today. However, those technological solutions need to be brought to farmers more effectively.

BRR: Popular wisdom suggests that no one understands the unique challenges of farming better than farmers, even if they may lack literacy (as it is defined conventionally). What kind of knowledge do you believe farmers in Pakistan currently lack of the challenges faced by them?

SH: Let me give one example. The six-inch soil right below the surface is known as soil biome, where all the nutrients are present. Conventionally, farmers are not aware of the value of the biome, simply because agricultural extension services provided traditionally have not focused on this area.

BRR: What sort of cross industry actionable steps need to be taken immediately to resolve these challenges?

SH: Let’s first understand the basics of business. Grower is an entrepreneur unlike any other, in that he takes a lot of risk at the beginning of crop cycle, with little to zero visibility around the expected economic return other than estimates based on assumptions.

Unlike other value chains, most small and mid-sized growers today lack a supporting ecosystem, storages, access to financing, and access to markets. At the beginning of crop cycle, the grower is incurring cost each time he buys seeds, fertiliser, water or any other input; without quite knowing what level of productivity, output, prices, or profit, he will be able to achieve.

And unlike other industries and value chain, not only has no meaningful improvement taken place in reducing growers’ risk over past two decades, growers’ risk has only become exacerbated due to the adverse impact of climate change.

These challenges are so significant that no one player – not even big players such as Syngenta - can solve these problems on their own. The ecosystem of regulators, financial institutions, and large-scale buyers (from within the value chain) needs to come together to resolve them.

BRR: How can Syngenta leverage its existing footprint within Pakistan to bring the requisite solutions?

SH: Syngenta has a network of 850 franchises called Naya Savera which exclusively sells Syngenta products. Our company maintains quality control on these franchises, while the grower receives the trust and promise of access to genuine products from our franchises.

The Naya Savera was started in 1998 and today sells products for various field crops such as wheat, rice, and maize, although predominantly the business has historically been concentrated in cotton.

Naya Savera was a first of its kind franchisee model within agricultural sector, and has also been featured in the seminal textbook ‘Principles of Marketing’ by Philip Kotler. Since then, the model has successfully been copied elsewhere in many countries such as Bangladesh, and is now being emulated in Mexico as well.

Naya Savera franchises are based out of all major agriculture markets in Pakistan. Although Syngenta Pakistan only has around four hundred direct employees, the franchisees are also part of the Syngenta family.

We thus have a substantial footprint within Pakistan’s agricultural space, which is equitably distributed across geography and regions. Syngenta Pakistan can leverage this franchisee network to bring to market technological solutions, but needs cross-industry partnerships, as well as public-private partnerships to make that happen beyond its core.

BRR: What sort of solutions can be marketed through the franchisee model?

SH: As I emphasized earlier, the biggest challenge faced by growers as entrepreneurs is that they lack complete visibility on what price and output they are going to achieve at the end of crop cycle, which on average goes up to six months for major field crops. Similarly, while vegetables are shorter duration crops, they require greater investment. The lack of visibility over future price and output adversely impacts farmer’s willingness to make investment in his crop.

We believe a cross section of multiple industries should build a solution that attempts to resolve this problem. For example, some global food companies do it for potatoes (purchased as raw material for chips), but it needs to be scaled up to other crops, especially field crops and vegetables. For this to happen, the value chain and the public sector needs to come together.

Once farmers know the minimum price they may receive, the investment decision will shift from a cost minimization lens to profit maximization framework, which is where you can achieve productivity maximization, ultimately raising output level.

BRR: Have any solutions been implemented elsewhere around the world that could be replicated in the local space?

SH: Central to the investment decision is access to financing. We already know that farmers don’t have collateral, and their biggest asset is the crop itself.

In Bangladesh, Syngenta has a network of approximately 12,500 retail outlets, which have an intimate knowledge of growers through their purchase history. This is extremely valuable information and predicts reasonably well their payment patterns and risk of default.

So, we build a model where banks who sought to advance micro credit to farmers asked us to assist us with non-collateral, cash flow based financing. By leveraging data from our retail outlets, and subsidized credit from the government, banks were able to advance unsecured working capital loans to growers at reasonably low rates compared to market of up to 9 percent per annum.

The most impressive element of this model is that no credit guarantee was provided either by the government or Syngenta. Instead, banks advanced credit to a network of local independent agents – call them banks’ franchisees if you will – who essentially functioned as risk takers and advanced credit to growers in exchange for a commission.

Back in Pakistan, although efforts are being made to offer access to credit to formalized players in agriculture sector, the solutions are currently concentrated in areas such as structured storage facilities. This is not to say that it is only for the government to create an enabling atmosphere. The private sector, including financial institutions, need to step in, and build something similar.

BRR: Do you believe the role of arthi/middlemen needs to be eliminated in order to ensure access to credit for growers?

SH: On the contrary, I believe that Pakistan already has a readymade substitute of ‘independent agents of banks’ available in the form of arthis/middlemen. Rather than eliminating the role of arthis, it needs to be formalized so the usurious practices can be minimized, while arthi brings his intimate knowledge of the landscape, and farmers’ payment/business practice to better inform the credit decision by the financial institution.

The problem common to both arthis as well as some formal sector players is that the farmer continues to bear an undue share of risk without proportionate profit sharing. When market price of cotton goes up, even though buyer records inventory gains, farmer continues to receive the contractual price only, meaning he is trading away his upside in return for a guaranteed price.

In order to ensure stickiness of growers – and to dissuade them from reneging on the contract by selling in open market when price is high, buyers and aggregators need to bring in a profit sharing mechanism.