Pakistan and India trade to be promoted by protecting rights of stakeholders

Trade between Pakistan and India should be promoted by protecting the rights of stakeholders particularly the growers. It was recommended by the roundtable conference titled "improving economic governance in agricultural sector through trade liberalisation between Pakistan and India" arranged at the University of Agriculture Faisalabad.
The recommendation was made by the UAF Vice Chancellor Professor Dr Iqrar Ahmad Khan while Lahore University of Management Sciences (LUMS) Pro Chancellor Syed Babar Ali, MNA and Parliamentary Secretary Rana Afzal, Farmers Association Pakistan President Tariq Bucha and other progressive farmers were present on the occasion. While informing the audience about recommendations, the Vice Chancellor suggested the identification of the seasonal window for the commodities.
He quoted the examples of potato which has peak season in August and September in India and in Pakistan it has the peak season in October and November. The conference also recommended that trust deficit between the two countries needs to be bridged through dialogue. The strengthening of the domestic production market is also essential to tap the potential of the sector.
The Vice Chancellor said India is the big market of around one billion of the people. He said the trade with the seasonal window would open up new chapter of progress. He also sought the policy interventions in this regard to flourish the sector in Pakistan. He said India is providing the highest subsidy on the electricity. Even in the Indian Punjab, the subsidy on tube wells is amounting to Rs 1trillion. Syed Babar Ali said we need to tap the potential in flourishing the agricultural sector by promoting the state-of-the-art technologies in the country.
He said China has made tremendous work in the garlic. Our country can do the same. We have to get the benefit from others experience. He said 70 percent of the population is directly or indirectly linked to the agricultural sector that must be strengthened. He also suggested setting up entrepreneurship cell at the UAF in order to equip the youth with the skill and to transform the knowledge into goods and services.
MNA Rana Afzal said the Government is making all-out efforts to strengthen the agricultural sector in the country. He said the recommendations to be made before the government. He said agriculture is the backbone of our economy, contributing 21 percent in the Gross Domestic Product. Tariq Bucha urged the government to take the tangible steps to address the issues of the farming community. He said at least ten percent of the budget must be allocated for the agricultural sector. He said in the process of trade policy formulation, the farmers must be taken on board. ORIC Director Professor Dr Asif Ali, Dr Abdul Ghafoor, Dr Waseem Ahmad, Dr Mubashair Mehdi, Director Ayub Agriculture Research Institute Dr Abid Mehmood, Aiwan-e-Zarat President Dr Sadique Naseem and others also attended the meeting.

Source: Business Recorder

India’s move on rice to hurt Pakistan

Wednesday, July-17-2013  Mubarak Zeb Khan

Ahead of the next World Trade Organisation (WTO) ministerial meeting, India has begun aggressive lobbying to get legal shelter for subsidy on rice exports to the world market, a move likely to affect Pakistan’s rice exports.

The issue of seeking more protection for Indian rice exports came up during the G-33 countries recent consultations in Geneva as part of the proposals on agriculture reforms for Bali meeting to be held in December.

“Pakistan is in the middle ground with China and Indonesia, which are in favour of enlarging the green box subsidies — non-prohibited subsidies — but no exemption to trade distorting support”, a trade official told Dawn.

India is seeking huge flexibility to distort rice production and trade in the name of food security, but trade experts says it will take away food security of rest of the small countries whose farmers depend on the production and export of rice.

As a result of trade distorting subsidies in India, Pakistan has already lost its market share in rice exports to India in the last couple of years owing to subsidised Indian exports to the world market.

Pakistan lost its position because of the aggressive exports from the stocks maintained by Food Corporation of India, a state-owned organisation.

Pakistan exported rice worth $1.756 billion in July-May period in 2012-13 as against $1.908bn over the corresponding period last year, reflecting a decline of over seven percent.

The impact of the trade distorting subsidy was not limited to Pakistan’s exports of rice because Thailand and Vietnam were also no more the first two exporters of the world as this position was taken over by India. India has already taken number one position in exports by releasing stocks which are highly subsidised.

“Indian stocks are much higher than what they need. The result is that government warehouses were over utilised and finally the stocks are exported at subsidised prices,” the source further said.

Contrary to this, government of Pakistan came out of the business of rice export two decades ago and the rice exports have become a steady source of foreign exchange for the country and the whole business was carried out the private sector.

Experts says it was a need of the time, that Islamabad should uphold WTO disciplines to protect Pakistan rice exports worth 2bn dollars and invest in research, pest eradication, storage, improvement in yield and develop varieties which consume less water.

G-33 proposal is demanding exemption from domestic support (aggregate measurement of support) on this assumption that it is minimally trade distorting and it is linked with the food security of the country. The objective of stock holding programs is to ensure food security of your own population.

India has recently passed an ordinance on food security which is nothing short of a government takeover of the two major commodities (wheat and rice).

India is already a big exporter of these commodities; they have had bumper crops and are seeking additional flexibility from the WTO to subsidise these commodities in the name of food security.

Production of these two commodities is highly subsidised in India, further policy space would mean that it will have adverse impact on the food security of other smaller developing countries, which may not be very big exporters but will lose their market share due to subsidised Indian exports to the world market.

Such an exemption is possible for a product which has shortage in the country and food security needs of the population are heavily dependent on that product.

In case of rice, India is the largest exporter of rice therefore any exemption of rice will always be trade distorting.

It will have huge impact on the food security of other countries whose farmers earn money through exports or by selling to domestic market.

“If WTO provides any flexibility to India for distorting market it will be a huge mistake and will have very negative impact on food security of the world,” the experts suggested, adding: “We should go for sustainable production. They must fix their policy and follow market mechanism. WTO is about markets, it cannot support government takeover of the whole production, distribution, warehousing, exports etc.”

An official of the commerce ministry said Pakistan is a member of G-33 and supports food security for all. “We encourage countries to invest in research and rely on investment and agrarian reforms rather than trade distorting subsidies for food security,” the official commented.

These are green box subsidies and ensure level playing field for every one, the official added.

“We will lose our competitiveness if additional flexibilities are given for distorting trade and production of rice. Such an undermining of the WTO rules would have a severe impact on the livelihood of poor farmers in Pakistan,” the official added.

Source: Dawn News

Indian farmers are draining Pakistan’s waters

FAISALABAD: The Director of the Water Management Research Centre (WMRC) at the University of Agriculture Faisalabad (UAF), Prof Dr Allah Bakhsh, has expressed deep concern over what he says is the excessive pumping of water by farmers on the Indian side of Punjab. Dr Bakhsh says that excessive pumping is lowering the water table in India, causing water from the Pakistani side to flow to Indian Punjab.

While speaking here at a seminar and workshop on agricultural technologies, he warned that Pakistan’s water storage capacity is abysmally low at 30 days, compared with 120 days in India, 200 days in China and Australia and 500 days in the US. He was of the view that only option left with Pakistan is to increase the crop yield per unit of land and per unit of water consumed.

The two-day seminar had been organised by WMRC and the UAF’s Department of Irrigation and Drainage, and attended by Australian Deputy High Commissioner Paul Molloy, UAF Vice Chancellor Prof Dr Iqrar Ahmad Khan, Dr Tri Nguyen Quang from the Dalhousie University in Canada.

One of the speakers pointed out that India and Pakistan witnessed 20 and 10 billion cubic metres of water depletion respectively during the last six years, out of the 68 billion cubic metres of available surface water. “We are inefficient in using water, fertiliser, horsepower, human capital and other inputs,” he said; adding that: “If the country keeps the same practice, we will soon see a large segment of the population facing food insecurity.”

Talking about precision agriculture, Molloy said that precision farming implies a management strategy to increase productivity and economic returns with a reduced impact on the environment, by taking into account variability within and between fields. He was of the view that precision farming on a regional level is one way to apply this approach to small-farm agriculture, and may also promote the development of rural areas.

Source: The Express Tribune

Textile ministry joins farmers in denouncing trade with India

By Zafar Bhutta

Published: November 22, 2012

The Ministry of Textile Industry now says that the future of local industry seems bleak because of the “hasty” decision to open Pakistani markets for Indian textiles.

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ISLAMABAD: After Pakistani farmers’ recent lobbying to prevent imports of agricultural produce from India, the Ministry of Textile Industry, too, seems to be getting cold feet ahead of the liberalisation of trade between the two estranged neighbours. Its apprehensions over the import of Indian textiles have surfaced hardly a month before the government is expected to phase out its negative list for goods tradable with India.

The Ministry of Textile Industry now says that the future of local industry seems bleak because of the “hasty” decision to open Pakistani markets for Indian textiles. It claims that allowing imports at reduced rates under the Most Favoured Nation (MFN) regime will swallow up the domestic textile sector.

Echoing similar concerns first raised by farmers on imports of India’s agricultural produce, the ministry says that the Indian textile industry enjoys “huge” subsidies and tariff protection, which will lead to imbalances in the market and affect Pakistani farmers. It has argued that India and Bangladesh have realised the importance of the textile sector in their economic development, growth of exports and generation of employment and therefore protect their industry. The ministry says that Pakistan should also protect its textile sector, which it fears will be “destroyed” after the entrance of Indian goods into domestic markets.

“We have still not been able to export more than $272 million worth of goods to India, whereas India has exported around $1.5 billion worth of commodities to Pakistan, being allowed 1,900 tariff lines,” the textile ministry said in its comments on trade with India after the grant of the MFN status. It added that Pakistan exported only $45 million worth of textile products to India in 2010, whereas India exported $566 million worth of textile products to Pakistan while the negative list was still in force.

Under the South Asian Free Trade Area (Safta) agreement, tariff rates are to be held between 0%-5% on all products not on a country’s sensitive list. Initially, Pakistan had 1,183 tariff lines on the sensitive list, out of which 293 pertained to textile products. Recently, the Ministry of Commerce whittled the sensitive list by 20% and the sensitive list now contains only 242 textile tariff lines. The Ministry of Textile Industry is worried that there is no indication that India or Bangladesh have done the same, or intend to do so.

“Almost all textile lines in which Pakistan has export potential are itemised in India’s sensitive list. Other than this, India has kept high non-ad valorem duties on most textile products (around 700 tariff lines) which form barriers to Pakistan’s exports,” the textile ministry cautioned. The textile ministry also alleged that India’s multilayered tariff system damages Pakistan’s export prospects to the country.

“India has huge state-owned textile mills and cotton trade. India has also banned the export of cotton, which results in lowering the cost of cotton for Indian textile industries and losses for Pakistani importers of cotton,” the textile ministry additionally noted.

The textile ministry has said that a tariff level for trade with India should be computed scientifically to ensure optimal rates. The ministry also warned that as far as trade defence mechanisms are concerned, Pakistan may have laws in place, but the country has limited experience in handling anti-dumping measures and limited resources to implement protective policies.

“A highly-skilled, well-budgeted and resourceful organisation, along with an organised domestic sector, may take years to develop. Till such time, there will be no mechanism available for the defence of the domestic sector,” the textile ministry says.

It also claimed that the private sector lacks the capacity to initiate or develop a strong case to invoke trade defence laws on the basis of a decrease in capacity utilisation and or loss in domestic market share, as no reliable data has been maintained as far as local production and sales is concerned. Recourse to such data is an important requisite for any kind of defensive action under the World Trade Organization’s laws.

On the other hand, the Indian textile industry – which is the second largest in the world – is enjoying a large protected domestic market, which ensures economies of scale, said the ministry. It said it fears the opening of borders will just increase the outreach of Indian textiles under the umbrella of SAFTA tax regimes.

Published in The Express Tribune, November 22^nd, 2012.

Indian tomatoes flooding Pakistan

Lured by high profits, Indian traders are flooding the Pakistan market with tomatoes, affecting domestic supplies and pushing up prices back home. Truck loads of tomatoes sourced from Delhi and Nashik are entering Pakistan through Attari-Wagah border in Amritsar daily, traders said.

“As many as 80-90 trucks of tomatoes (each carrying about 16 tonnes) are crossing Attari-Wagah border every day,” Rajdeep Singh Uppal, vice-president, Amritsar Export Association said. This has been happening for over two weeks, he said, adding that the trend is expected to continue for a month. Rajendra Sharma, a member of Delhi agriculture marketing board, said supply of tomatoes to Pakistan is one of the reasons for continued high retail prices of the vegetable in Delhi at Rs 20-25 a kg.

Rajendra Chug, general secretary of Delhi’s Azadpur market (Asia’s biggest vegetables & fruits market) said that on average 10-12 trucks laden with tomatoes are heading for Pakistan everyday.

Uppal and C ug said rush of tomatoes to Pakistan is triggered by relatively high prices there because of damage to the crop due to floods in the key producing Sindh region. Chug said the Indian tomato is selling between Rs 25-30(Indian currency) a kg in Pakistan. The price of the same vegetable inDelhi stood from Rs 8-15 per kg in wholesale, traders in the Azadpurmarket said. Uppal said Indian tomato is selling for around USD 350-400(Rs 17,850-Rs 20,400) per tonne in Pakistan. Ajit Shah, president ofMumbai based agriculture export association said around 100-125 tonnesof tomatoes from Nashik is finding its way to Pakistan by road throughWagah.

R P Gupta, director, NHRDF (established by agri- cooperative Nafed for research and improving productivity of agri crops) said tomato production reaches a high level in the Nashik district of Maharashtra between September and October. It is also the only region during the period to produce the staple vegetable. Key tomatoes producing regions like Nashik, Pune and Ahmadnagar provide the supplies to the entire northern region including Delhi during the period, Gupta said. The mild climate in the region during this period is best suited for cultivation of tomatoes, the NHRDF (National Horticulture Research and Development Foundation) director said. Nearly 2,000 tonnes of tomatoes are arriving in Pimpalgaon market yard daily, Gupta said.

Source: timesofindia.indiatimes.com

Indian tomatoes flooding Pakistan

Lured by high profits, Indian traders are flooding the Pakistan market with tomatoes, affecting domestic supplies and pushing up prices back home. Truck loads of tomatoes sourced from Delhi and Nashik are entering Pakistan through Attari-Wagah border in Amritsar daily, traders said.

“As many as 80-90 trucks of tomatoes (each carrying about 16 tonnes) are crossing Attari-Wagah border every day,” Rajdeep Singh Uppal, vice-president, Amritsar Export Association said. This has been happening for over two weeks, he said, adding that the trend is expected to continue for a month. Rajendra Sharma, a member of Delhi agriculture marketing board, said supply of tomatoes to Pakistan is one of the reasons for continued high retail prices of the vegetable in Delhi at Rs 20-25 a kg.

Rajendra Chug, general secretary of Delhi’s Azadpur market (Asia’s biggest vegetables & fruits market) said that on average 10-12 trucks laden with tomatoes are heading for Pakistan everyday.

Uppal and C ug said rush of tomatoes to Pakistan is triggered by relatively high prices there because of damage to the crop due to floods in the key producing Sindh region. Chug said the Indian tomato is selling between Rs 25-30(Indian currency) a kg in Pakistan. The price of the same vegetable inDelhi stood from Rs 8-15 per kg in wholesale, traders in the Azadpurmarket said. Uppal said Indian tomato is selling for around USD 350-400(Rs 17,850-Rs 20,400) per tonne in Pakistan. Ajit Shah, president ofMumbai based agriculture export association said around 100-125 tonnesof tomatoes from Nashik is finding its way to Pakistan by road throughWagah.

R P Gupta, director, NHRDF (established by agri- cooperative Nafed for research and improving productivity of agri crops) said tomato production reaches a high level in the Nashik district of Maharashtra between September and October. It is also the only region during the period to produce the staple vegetable. Key tomatoes producing regions like Nashik, Pune and Ahmadnagar provide the supplies to the entire northern region including Delhi during the period, Gupta said. The mild climate in the region during this period is best suited for cultivation of tomatoes, the NHRDF (National Horticulture Research and Development Foundation) director said. Nearly 2,000 tonnes of tomatoes are arriving in Pimpalgaon market yard daily, Gupta said.

Source: timesofindia.indiatimes.com

Pakistan may Start importing Indian Tractors next year

Unlike a lot of industries, the local tractor industry is not war of opening of trade with India. In fact, it is looking forward to it. Universal Traders are in talks with an Indian counterpart to start importing tractors to Pakistan once the negative list is phased out and trade with India opens up next year.

Escorts Limited and Universal Tractors of Pakistan will collaborate next year to import 7,500 tractors. It is interesting that the two companies have been working together since 2003. However because of the ban on imports from India, these tractors were being imported from sister concerns of the Indian company from Norway and the US, at much higher cost.

The two companies are now hopeful that with the removal of the negative list tractors will be legally imported from India which will also help in combating smuggling.

The tractors will not be imported as a CKD and assembled in Pakistan. The assembly plant was commissioned under the tenure of former prime minister Shaukat Aziz and is already at an advanced stage of completion. Rajiv Kumar, Head of Exports at Escorts Limited spoke to The Express Tribune said that his company is already exporting to over 60 countries. Kumar also said that the company was initially set up in partnership with Ford in the 1960s. Ford left India in 1996 and since then the company is a full-fledged Indian enterprise. The company started off with an annual production of 20,000 tractors which has now gone up to 80,000. Basically this means that an Escorts tractor is manufactured every four minutes. The total Indian market for tractors is 650,000 a year.

Kumar also said that where Indian tractors would prove beneficial in overcoming the shortfall in the demand for tractors in Pakistan, there was no reason why Pakistani tractors could not make a foothold in the vast Indian market. He also spoke about the possibility of assembling in Pakistan for further onward exports.

Managing Director of Universal Tractors Pakistan, Muhammad Iqbal told The Express Tribune that they had imported 100 Indian tractors since 2003 through their European and American enterprises. He further said that once the negative list was phased out they planned on importing 28,500 tractors over the next three years. Iqbal also said that with the shortfall in demand of 20,000 tractors annually in Pakistan, imports from India would benefit agriculture. He said that Indian tractors were not more expensive than local tractors and would become even cheaper after local assembly.

Iqbal said that at present Pakistan needed 650,000 tractors immediately. He also said that the transport of tractors would be cheaper because of easy access from Wagah border.

Published in The Express Tribune, December 15th, 2012.

Pakistan may Start importing Indian Tractors next year

Unlike a lot of industries, the local tractor industry is not war of opening of trade with India. In fact, it is looking forward to it. Universal Traders are in talks with an Indian counterpart to start importing tractors to Pakistan once the negative list is phased out and trade with India opens up next year.

Escorts Limited and Universal Tractors of Pakistan will collaborate next year to import 7,500 tractors. It is interesting that the two companies have been working together since 2003. However because of the ban on imports from India, these tractors were being imported from sister concerns of the Indian company from Norway and the US, at much higher cost.

The two companies are now hopeful that with the removal of the negative list tractors will be legally imported from India which will also help in combating smuggling.

The tractors will not be imported as a CKD and assembled in Pakistan. The assembly plant was commissioned under the tenure of former prime minister Shaukat Aziz and is already at an advanced stage of completion. Rajiv Kumar, Head of Exports at Escorts Limited spoke to The Express Tribune said that his company is already exporting to over 60 countries. Kumar also said that the company was initially set up in partnership with Ford in the 1960s. Ford left India in 1996 and since then the company is a full-fledged Indian enterprise. The company started off with an annual production of 20,000 tractors which has now gone up to 80,000. Basically this means that an Escorts tractor is manufactured every four minutes. The total Indian market for tractors is 650,000 a year.

Kumar also said that where Indian tractors would prove beneficial in overcoming the shortfall in the demand for tractors in Pakistan, there was no reason why Pakistani tractors could not make a foothold in the vast Indian market. He also spoke about the possibility of assembling in Pakistan for further onward exports.

Managing Director of Universal Tractors Pakistan, Muhammad Iqbal told The Express Tribune that they had imported 100 Indian tractors since 2003 through their European and American enterprises. He further said that once the negative list was phased out they planned on importing 28,500 tractors over the next three years. Iqbal also said that with the shortfall in demand of 20,000 tractors annually in Pakistan, imports from India would benefit agriculture. He said that Indian tractors were not more expensive than local tractors and would become even cheaper after local assembly.

Iqbal said that at present Pakistan needed 650,000 tractors immediately. He also said that the transport of tractors would be cheaper because of easy access from Wagah border.

Published in The Express Tribune, December 15th, 2012.