Islamabad, 11 August -- The Sub-Committee on Infrastructure (SC-I) of the Task Force on Horticulture Finance and Competitiveness met today under the chairmanship of Mr. Mushtaq Malik, Secretary of the Board of Investment, at the committee room of the Board of Investment. The meeting was attended by the representatives of the various relevant ministries, concerned provincial departments and the companies specializing in Agri-business and marketing.

The aim of the Sub-Committee on Infrastructure (SC-I) is to help the Task Force achieve its goal by ensuring that all relevant actions are taken in developing needed infrastructure to facilitate the production, post-harvest handling, storage, transport, processing and export by sea, land and air of the products of horticulture.

Speaking on the occasion, Mr. Mushtaq Malik said, “We need to develop an integrated approach to make the horticulture sector more competitive and infrastructure is the key element to improve competitiveness”. He informed the sub committee members that the SC-I will work with the stakeholders in horticulture, in the financial sector, and in related industries and sectors e.g., transport, wholesale and retail marketing, food processing etc. to coordinate and facilitate initiatives currently being taken to develop infrastructure for agriculture and specifically horticulture. Where necessary the Sub-Committee will identify areas that require further intervention and liaise with the relevant line ministries, agencies and institutions to bring these about.

He further informed the members that in order to achieve the aims and goals of the Task Force, the Sub-Committee will review the aspects of the rural infrastructure and other aspects of infrastructure, including transport and communications, which most significantly impacts on the horticulture sector. The SC-I will identify the major investors both in the public and private sector for investments in the supply chain infrastructure of the horticulture sector. He also informed the members that the committee will review the current and proposed projects that most significantly impact on horticulture. It will also review the large-scale infrastructure of Pakistan’s roads, railways, border crossing points, ports and airports etc. and will indicate the main areas for improvement with regard to horticulture marketing. Mr. Malik also said that “the committee will also review the micro-infrastructure including aspects of on-farm and primary off-farm storage and transport”.

The SC-I identified the core areas and issues impacting the competitiveness of the Horticulture sector in Pakistan. The meeting confirmed that the horticulture industry required major support in the area of infrastructure. This included particularly transport (e.g., dedicated refrigerated trucks, rail cars and containers), space on aircraft and improved connectivity with international markets.

The SC-I also noted that there were disparities between the infrastructure in Punjab where facilities were generally good and the other provinces. The committee recognized the need for a national approach that can link production in remote areas with main markets.

The SC-I will also be including its recommendations on the financing requirements for the Infrastructure projects, where more private sector and public-private partnerships will be encouraged. Soft infrastructures in the form of improved technology transfer, building knowledge at the farm level and developing access to market information were also identified as priority areas to be included in the National Horticulture Policy and government’s plans for the sector.

The Sub-Committee on Infrastructure will submit the findings of the meeting to the Implementation Committee for a final review of the Task Force on Horticulture Finance and Competitiveness. Dr. Salman Shah, Advisor to the Prime Minister on Finance, Economic Affairs, Revenue and Statistics will make the presentation to Prime Minister on improving the financing for the horticulture sector to improve its competiveness.

The Competitiveness Support Fund (CSF) was earlier tasked by the Ministry of Finance to undertake a comprehensive study entitled “The Competitive Advantage of the Food Processing Industry: Focus on Quality, Safety and Standards”. The study proposed an Action Plan for the Government of Pakistan to improve the competitiveness of the horticulture industry.

The Action Plan proposed a Task Force approach, based on the finding, that many agencies are involved in the industry and that much good work is already being undertaken. However there may be a duplication of effort. Government’s resources may not be used efficiently. Equally, a small effort and more coordination could move the industry past a “tipping point”. The finding also identifies, Finance as an essential factor required to move the industry forward.

The Ministry of Finance provides the Chair for the Task Force with the support of a small Secretariat provided by the Competitiveness Support Fund (CSF). The Secretariat operates in close coordination with the main operational agencies working under the line ministries like, the Pakistan Horticulture Export Development Board, Agribusiness Development & Diversification Project, Agricultural Support Fund, SMEDA and PISDAC’s Horticulture SWOG.

Competitiveness Support Fund (CSF) is a joint initiative of the Ministry of Finance, Government of Pakistan and the U.S. Agency for International Development (USAID). Support for CSF is part of the $1.5 billion in aid that the U.S. Government is providing to Pakistan over five years to improve economic growth, education, health, and governance.

The Task Force recommendations would also compliment Government’s strategy on the National Trade Corridor initiative, which is envisioned to create a growth-facilitating infrastructure. This will revamp the whole transport sector including ports, roads, railway, aviation etc. The framework takes a holistic and integrated approach to reduce the cost of doing business in Pakistan by improving the trade and transport logistics chain and improving Pakistan’s over all competitiveness.

To improve the competitiveness of the economy, Prime Minister, Shaukat Aziz has earlier announced that roads are a major part of the National Trade Corridor (NTC) and all 115 ongoing projects pertaining to roads and highways costing Rs 415 billion will be completed by 2014. All these efforts are expected to help increase Pakistan’s exports from US$ 17 billion in 2007 to around US$ 250 billion by 2030. The infrastructure development initiatives will ultimately facilitate in decreasing the cost of doing business through improvements in the trade logistics for the horticulture sector as well.

Speaking on the occasion, Senior Advisor to the Competitiveness Support Fund, Mr. Geoff Quartermaine Bastin, briefed the members that the Special Economic Zones may have a role to play in the development of the horticulture

industry; the SC-I will work with CSF’s consultants in this area to identify SEZ’s that offer particular benefits to the industry. He further said that the work of the SC-I will be conducted in the context of a National Policy for Horticulture being developed by MinFAL. The institutional aspects of the industry will be considered with each agency identified and its role clearly established.

The SC-I will report to the Task Force Implementation Committee via the Secretariat established under the Ministry of Food Agriculture and Livestock and will liaise closely with the Competitiveness Support Fund in its day-to-day activities. Due to the importance of finance and the role of the commercial banks, the Task Force was placed under the Ministry of Finance to enhance the finance and competitiveness of the horticulture sector.

The world horticulture market is valued at $80 billion to which Pakistan contributes an annual $150 million. Only about 16% of fruits are being processed, although, this activity offers great opportunities to augment volume of value added products using modern technology. The fruits and vegetables exported in fresh form attract discount prices because exporters are unable to provide adequate grading and packing. Pakistan’s horticulture export industry’s share in the world market has risen steadily from about 5% in 1991 to 12% (value 2004). The potential markets for the Pakistani exporters have been identified in Europe and the Middle East.

The Competitiveness Support Fund has been created to support Pakistan’s goal to have a competitive economy by providing input into policy decisions, working to improve regulatory and administrative frameworks and enhancing public-private partnerships within the country. CSF also provides technical assistance and co-financing for initiatives related to entrepreneurship, business incubators and private-sector-led initiatives with research institutes and universities that contribute to creating a knowledge-driven economy.

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