'Start thinking about alternative cropping patterns,' Counsellor for Agricultural Affairs, US Embassy Islamabad

Last week, BR Research sat down with David Williams, the Counsellor for Agricultural Affairs at the US Embassy in Islamabad. What ensued was an interesting discussion on the USDA's involvement in our country, how it is helping us, and what are some of the challenges that are being faced in the agriculture sector, with particular emphasis on wheat.
David joined the USDA's Foreign Agricultural Service in 1989 and his previous overseas assignments include four-year tours in New Delhi, Mexico City, Dubai, and Mumbai. Below are edited transcripts.
BR Research: Tell us a little bit about the USDA's presence in Pakistan.
David Williams: USDA currently has a number of programs aimed at developing the agricultural sector in Pakistan. These can be put in three major categories:
The first category is animal and plant disease control. USDA is partnering with the United Nations' Food and Agriculture Organisation, the Government of Pakistan, and provincial governments to better control the spread of Foot and Mouth Disease and PPR, a disease that affects smaller animals like goats. Both diseases are responsible for serious production and economic losses among the rural poor in Pakistan. We have plant disease programs aimed at controlling the spread of wheat rusts and Cotton Leaf Curl Virus. These are diseases that affect crop productivity globally, and Pakistan is playing a key scientific role in the research to develop better controls.
The second category is public sector capacity building. Here USDA is collaborating with local partners and the federal and provincial governments to develop an online course that will train officials throughout Pakistan in regulatory procedures for exporting and importing animals, plants, fruits, and vegetables. Another project focuses on helping the governments of Sindh and Punjab to utilise satellite and weather information to better forecast crop size.
The third category relates to water and soil. We are working with a number of local partners on programs to develop extension services to help farmers increase organic matter in soil and use fertilisers more efficiently. We also have a program that is showcasing technologies associated with using water more efficiently. Another effort is focused on creating a dialogue among researchers and officials in Pakistan about ways to increase water-use efficiency and water capture for agriculture. As part of the water sector, we also have a program with the American Soybean Association to promote the use of soybean meal in fish feed, specifically in the production of Tilapia in fresh water ponds.
We just concluded a project in Balochistan where we built or refurbished nearly 10,000 metric tons of cold storage and introduced simple procedures to improve harvesting techniques for perishable crops like grapes, apples, and cherries. The farmers and wholesalers who are now using the technologies estimate that their post-harvest losses have dropped by 25 percent. The project also provided ice machines and insulated boxes to the fishermen in Gwadar port who also report about a 25 percent reduction in post-catch losses. The project also collaborated with Tameer Bank to establish a micro credit program at two branches in Balochistan.
BRR: Your office produces a lot of public reports. What is their purpose?
DW: Every month, the USDA publishes a snapshot of the global commodity situation. It tends to be considered the neutral source against which private commodity companies judge their estimates. As field officers abroad, part of our job is to analyse the agricultural situation in a country and report on what we see happening. Nearly all of our analysis is public and available on the internet within three days.
Forecasting crops and trade patterns is a critical part of food security planning, gauging food inflation, and anticipating trade flows. The project that we have in Sindh and Punjab is to utilise satellite and weather data to predict crop size and the effect on trade and prices.
BRR: Tell us a little bit about the wheat productivity enhancement program.
DW: The wheat productivity enhancement program plugged Pakistan into a global effort to combat what is known as wheat rust - a fungus that is carried over the air currents around the world and can dramatically lower wheat yields.
The idea is to identify resistance in various countries to that fungus and implement it in breeding programs around the world.
They have identified resistance; PARC is now working to better identify and incorporate that resistance into some of the local wheat varieties. It will take a while, but it will be very beneficial for Pakistan.
BRR: Wheat yields in Pakistan are low. What are some of the ways to improve it?
DW: One of our programs is focused on getting farmers to utilise fertilisers properly. There is a tendency to over-apply fertilizer, or apply the wrong fertilizer at the wrong time. That affects yields.
With the world's largest integrated irrigation system, a nice climate, the ability to grow two crops annually, and dedicated sources of water, Pakistan's yields should be much higher. It really gets down to management practices and quality of seeds.
BRR: Is the right seed too expensive? Is it out of farmers' purchasing power? Or is it sheer lack of awareness?
DW: There are currently no genetically modified seeds in wheat. This is due in part to the current regulatory environment of seeds. You have a 1976 Seed Act in Pakistan that for the most part limits participation in the seed sector and development of new varieties to the public sector. And so you have not had as extensive an involvement on the part of the private sector in the development of seeds.
You have got a plant reader's rights act that is also awaiting passage. You also have a bio safety law, which relates more to bio technology, and would re-establish the federal government as the primary regulator of the biotech seed sector.
BRR: There are varying statistics on how much wheat is procured and how much goes into the open market. Can you shed some light on this?
DW: We estimate 50 percent of farms consume wheat themselves; 25 percent goes to the private sector, and 25 percent is procured.
BRR: What are your thoughts on the wheat regulatory environment?
DW: Pakistan has effectively set a price floor through its wheat procurement program. Flour millers only purchase about a quarter of the crop and eventually have to purchase wheat from government stocks at the established government sale price, a price that is currently much higher than international prices for wheat.
When stocks are high, as they were in the months prior to the current harvest, the price floor, set by the procurement price, makes Pakistani wheat uncompetitive in international markets. Millers and traders are unable to export excess stocks outside of Afghanistan and possibly some of the SAARC countries.
BRR: About crops in general, warehousing is an issue. Is it regulatory structure that is limiting development in warehousing? If there is demand, what is limiting the private sector from setting up facilities to reduce storage losses?
DW: It is incentives and capital. What we are talking about is the logistical infrastructure for food, whether it is grains, fruits, or vegetables. Investment in this sector is driven by incentives. The ability to store fruits and vegetables for longer periods of time and take advantage of higher prices as markets fluctuate is the key to improve returns for farmers and lowering post-harvest losses. The cold stores that we built in Balochistan are demonstrating that now.
However, someone along the marketing chain has to see sufficient incentive to invest in the sector. It could be farmers who form co-operatives, wholesalers, or end users. What I have seen in other countries, it is the retailers who have the capacity to offer premiums for quality and drive change along the marketing chain. It can be a slow process, but it is already happening here in Pakistan if you look at the restaurant sector, Pakistan's fruit and vegetable exports, and the early development of the food processing and retail sectors.
BRR: Who would own that storage?
DW: It could be farmers via a co-operative, wholesalers, retailers, or logistics companies. Generally, the cost of storing, if done right, is more than recouped. By and large, the food marketing system in Pakistan has not changed a great deal for quite a while. People are still selling fruits and vegetables in open-air markets.
It gets down to capital, to having your food economy shift away from a traditional open-air food marketing system. However, until that end user says 'I'm willing to pay a premium,' the incentives are not there.
BRR: Are there enough end users? Sixty percent of the population is still living below $2 a day.
DW: I agree. It is very hard to make all the investments in quality up gradation and build a supply chain trying to attack post-harvest losses if you do not have a buyer who is willing to pay more. What is the incentive to build a cold storage, buy a fleet of refrigerator trucks, buy a warehouse if, when I go to the mandi, the guy still offers me x for my produce - same as the guy who picked it up and threw it on the bullock cart? Whether it is export markets or the domestic market, once incentives are introduced, the system will begin to evolve
BRR: Do we need to be worried about climate change?
DW: You have late monsoon rains, flooding 4 out of the past 5 years. Before, floods of that magnitude occurred once every 7-8 years or more. You have these late winter rains now later and later in the season that were not there before. I am not an expert on climate change but within Pakistan, there does seem to be recognition that the weather is behaving differently than it has in the past. Heavy rains at the wrong time can affect yields. You have to start thinking about alternative cropping patterns.