Basmati rice, essentially an export crop, is not getting the needed priority from relevant authorities to boost its foreign sales. They think that the Rice Exporters Association of Pakistan is better placed for the job.
The Reap, true to its commercial spirit, is more concerned with maximising exporters’ profits rather than taking long-term view of export business and preparing domestic ground for it. The profits are routinely maximised with domestic price crash, managing cheap supplies, and by often dumping the commodity abroad at the cheapest possible rate.
The strangest of all, however, is the behaviour of the Punjab government – an exclusive and proud owner of the Basmati gene pool and production area. On its behalf, the federal government is fighting a legal battle with India that only certain area in central Punjab has got the attributes necessary for producing basmati – commonly known as geographical indications. Despite this ownership claim, legal fight to protect prized possession, – over 60 per cent of crop sells abroad
There are other areas, which, like rice export, fall in the federal government’s jurisdiction, like commerce and investment. But the Punjab government not only created parallel departments, but also signed international agreements. It also hosted an international conference to attract foreign investment into the province. One wonders, if the Punjab government can take all such measures, why it has so far hesitated to promote rice exports – chalk out a strategy to create domestic infrastructure, encourage brand development and quality standards.
Perhaps, it is the time to change the paradigm. Punjab should jealously guard the production against international and domestic claimants – other federating units. Why should its exports be anyone else’s business? Punjab should be leading the effort.
Such an effort must start with creating domestic quality standards. Export is essentially an extension of domestic market. If there is no quality assurance in domestic market, there would hardly be any sustainable growth in export business. Thus, it is essential to see what international buyers demand and adjust things accordingly.
It requires a long training programme for farmers and traders, creating the required infrastructure, refining markets and ensuring quality produce. But someone has to take that proverbial first step of this long journey. The federal government did not, the provincial government must.
The Punjab government needs to realise that it has to compete with Indian exporters and also create a niche in the parboil market.
Fortunately, every one accepts powerful attributes of Pakistani basmati, and its potential to compete in the world market. The increasing export is thus more of a matter of creating right linkages and backwards integration with farms and farmers. The Punjab government, with the help of other stakeholders, needs to strategise such long-term measures.
Above all, the provincial government needs to concentrate on brand development, where others – the federal government, the Reap and individual exporters – have not done much so far. In the absence of a brand, rice exports from Pakistan would remain hobbled to their current level. Its absence has also become counter productive: Pakistani basmati is being used by others to develop and strengthen their brands – there are reports that Pakistani basmati is being purchased by people in other countries and sold with their own band. It hurts everyone involved in rice export from Pakistan. It only means meagre payments for farmers, small margins for exporters and less foreign exchange for the country.
Finally, the Punjab government must either find ways or influence the federal government to keep some kind of minimum export price (MEP) on rice. It is the only way to bring some sense into the export market. The federal government kept the MEP for four months only during 2008. Since then, it is free for all.
In the absence of MEP, the exporters sell at cheaper rates. In order to feed cheap exports, they engineer domestic price crash and hurt farmers. The Indian experience shows that the MEP helps. It has been keeping the MEP for the last two years, and seen its exports doubling from 1.2 million tons to 2.4 million tons.
During the same period, Pakistan also saw its exports increasing substantially, but value decreased by half. The MEP can certainly be lowered or hiked as per fluctuations in international market, but Pakistan must keep a reference price to ensure some kind of stability in rice trade.
Punjab is expecting a better crop this year despite floods. The growers saved the crop from flood, blight and leaf curls. It increased their investment on the crop and hopes for better price. With a carry-over of one million tons, the country might end up having 5.5 to six million tons of rice with an exportable surplus of around three million tons. If timely steps are not taken, the country would have yet another year of cheap exports and domestic price crash.
The Reap, true to its commercial spirit, is more concerned with maximising exporters’ profits rather than taking long-term view of export business and preparing domestic ground for it. The profits are routinely maximised with domestic price crash, managing cheap supplies, and by often dumping the commodity abroad at the cheapest possible rate.
The strangest of all, however, is the behaviour of the Punjab government – an exclusive and proud owner of the Basmati gene pool and production area. On its behalf, the federal government is fighting a legal battle with India that only certain area in central Punjab has got the attributes necessary for producing basmati – commonly known as geographical indications. Despite this ownership claim, legal fight to protect prized possession, – over 60 per cent of crop sells abroad
There are other areas, which, like rice export, fall in the federal government’s jurisdiction, like commerce and investment. But the Punjab government not only created parallel departments, but also signed international agreements. It also hosted an international conference to attract foreign investment into the province. One wonders, if the Punjab government can take all such measures, why it has so far hesitated to promote rice exports – chalk out a strategy to create domestic infrastructure, encourage brand development and quality standards.
Perhaps, it is the time to change the paradigm. Punjab should jealously guard the production against international and domestic claimants – other federating units. Why should its exports be anyone else’s business? Punjab should be leading the effort.
Such an effort must start with creating domestic quality standards. Export is essentially an extension of domestic market. If there is no quality assurance in domestic market, there would hardly be any sustainable growth in export business. Thus, it is essential to see what international buyers demand and adjust things accordingly.
It requires a long training programme for farmers and traders, creating the required infrastructure, refining markets and ensuring quality produce. But someone has to take that proverbial first step of this long journey. The federal government did not, the provincial government must.
The Punjab government needs to realise that it has to compete with Indian exporters and also create a niche in the parboil market.
Fortunately, every one accepts powerful attributes of Pakistani basmati, and its potential to compete in the world market. The increasing export is thus more of a matter of creating right linkages and backwards integration with farms and farmers. The Punjab government, with the help of other stakeholders, needs to strategise such long-term measures.
Above all, the provincial government needs to concentrate on brand development, where others – the federal government, the Reap and individual exporters – have not done much so far. In the absence of a brand, rice exports from Pakistan would remain hobbled to their current level. Its absence has also become counter productive: Pakistani basmati is being used by others to develop and strengthen their brands – there are reports that Pakistani basmati is being purchased by people in other countries and sold with their own band. It hurts everyone involved in rice export from Pakistan. It only means meagre payments for farmers, small margins for exporters and less foreign exchange for the country.
Finally, the Punjab government must either find ways or influence the federal government to keep some kind of minimum export price (MEP) on rice. It is the only way to bring some sense into the export market. The federal government kept the MEP for four months only during 2008. Since then, it is free for all.
In the absence of MEP, the exporters sell at cheaper rates. In order to feed cheap exports, they engineer domestic price crash and hurt farmers. The Indian experience shows that the MEP helps. It has been keeping the MEP for the last two years, and seen its exports doubling from 1.2 million tons to 2.4 million tons.
During the same period, Pakistan also saw its exports increasing substantially, but value decreased by half. The MEP can certainly be lowered or hiked as per fluctuations in international market, but Pakistan must keep a reference price to ensure some kind of stability in rice trade.
Punjab is expecting a better crop this year despite floods. The growers saved the crop from flood, blight and leaf curls. It increased their investment on the crop and hopes for better price. With a carry-over of one million tons, the country might end up having 5.5 to six million tons of rice with an exportable surplus of around three million tons. If timely steps are not taken, the country would have yet another year of cheap exports and domestic price crash.
No comments:
Post a Comment