Pakistan is basically an agriculture-based country and the large proportion of population formally or informally depends on this sector for their livelihood. Currently the agriculture sector accounts for a quarter of the GDP but significantly contributes to labor creation by providing employment to more than 44 percent of the labor force.
This sector performs its central role by providing food for the people, feed for animals and raw material to the industry as well. At the same time, agriculture is also a major market for industrial products. In the past, this sector was considered a family business conducted in a traditional way. Now under the current circumstances, where globalisation is a popular economic phenomenon, this sector is also becoming commercialised and has become a lucrative investment avenue for businessmen. As a result, many industrialists in Pakistan are shifting towards agribusiness.
Food security is one of the biggest issues because food is becoming scarce and as a result prospects for agribusiness are increasing gradually. Agribusiness is defined as the business activities related to agricultural products which will add value, create synergy in the production process, import-export of agricultural products and redistribution of the product starting from the farmers to wholesalers then retailers and ultimately to consumers. As such strategic management of agribusiness is required so that core competencies can be created and proper supply chain management along with vertical and horizontal co-ordination is ensured. This situation will help develop a system with enough food supply to ensure welfare of all stakeholders.
In our country, agribusiness is operated by both private and public enterprises which are performing the marketing functions like assembling, manufacturing, storage, and distribution of farm products. The country's agro-industry comprises of various operations making it the largest industry of the economy in terms of value added and creation of labor opportunities thereby having a strong pro-poor inter linkages. The manufacturing sector is mainly concentrated on food, beverages and textiles industries which together account for a significant proportion of the total value addition in the economy.
Agribusiness is one of the most challenging businesses today. Pakistan depends largely on agribusiness because agriculture still plays a dominant role in the economy. Increasing productivity in agriculture may be transformed into a more sustainable economic development scenario by strengthening agribusiness, efficient utilisation of natural resources and improved code of conduct for the organisations involved in the business processes. Pakistan can sustain long run macroeconomic stabilisation by reducing deficit between demand and supply and achieving economic progress, and reducing unemployment and mass poverty through proper development and implementation of agro-business. The growth of this business may also help improve the balance of trade position of the country.
While Pakistan is a major producer of several key agricultural commodities, the sector continues to suffer from major inefficiencies due to international trade barriers, limited access to credit, poor trade policy, export and import taxes on raw material, bureaucratic practices, high transportation costs, poor quality raw materials, lack of support facilities and shortage of professional managers. Although the government has taken some important steps towards investing in and modernising key sectors such as dairy and horticulture but more investment is still needed in the country's overburdened infrastructure. The expansions in many agricultural products, which can potentially become major export crops and foreign currency earners, are hindered by poor transportation and power shortages, which are persistent concerns in Pakistan.
Agribusiness may have a brighter future in Pakistan if the country can avail the opportunity and overcome the above mentioned shortcomings. The situation can be improved by creating of conducive environment for business and offering a level-playing field for small scale agribusiness ventures, strengthening of resource supplies and support institutions in the rural areas, provision of needed investment in infrastructure and other public goods, inculcating requisite skills among agribusiness managers, creating entrepreneurs, ensuring competitive products, stimulating local investors, promoting human resource development and establishment of agro processing zones or industrial parks to expedite and promote export of agricultural products.
Currently the government has taken some productive steps in the right direction by developing Agribusiness Development and Diversification Project, Agribusiness Support Fund, Livestock and Dairy Development Company, Punjab Agricultural Marketing Company and Pakistan Horticulture Development and Export Company. Although these steps are adding value to agribusiness but still there is need to introduce more pro-active policy reforms. In this context, many other potential agricultural products may be considered a productive avenue for investment and policy reforms.
In nutshell, it is concluded that agribusiness in Pakistan may be taken as a driving force towards development but this dream can be achieved only through proper planning and implementation of policies. In this regard, both public and private sectors will have to work jointly by sharing responsibilities and mutual co-ordination. This, in turn, will lead to a situation in the country which will ensure welfare for all stakeholders by ensuring food security and raising income level. This will also promote a positive image of Pakistan in the international community.
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Number and Value of Agro-Based Industries in Pakistan
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(Million Rs)
Industry Number Value of
production
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Dairy Products 10 10877
Vegetable Ghee 56 43962
Refined Sugar 62 55585
Canning of fruits & vegetables 10 1516
Wheat & grain milling 300 27475
Textile manufacturing 1063 320932
Leather manufacturing 82 18655
Fertilizer 9 25925
Pesticides 15 4102
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Total (all agro based industries) 2861 720343
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