Lahore, 27 October -- The third meeting of the Sub-Committee for Horti-business Finance was held here today. The meeting was chaired by Javed Malik, Additional Secretary, Ministry of Finance to develop the guideline for financing projects in the horticulture sector. The Sub-Committee is part of the Task Force on Horticulture Finance and Competitiveness.

The Task Force has been established under the auspices of the Ministry of Finance and chaired by Dr. Salman Shah, Advisor to the Prime Minister on Finance, Economic Affairs, Revenue and Statistics. The Competitiveness Support Fund (CSF) acts as the secretariat and provides technical support to the Task Force, which aims to increase exports of horticultural produce from the current level of approximately $170 million to one billion dollars by 2012.

The Competitiveness Support Fund (CSF) is a joint initiative of the Ministry of Finance, Government of Pakistan and the United States Agency for International Development (USAID), to reposition Pakistan’s economy on a more competitive global footing.

The Task Force decided to establish four Sub-Committees under the Implementation Committee, chaired by the Secretary of Ministry of Food Agriculture and Livestock to report to the Task Force on Horticulture Finance and Competitiveness.

Chairing the meeting, Javed Malik said, “Finance is considered as an essential but under-emphasized issue in horticulture. There is a need to develop effective policy tools to link finance to innovation and competitiveness and identify innovative projects in the Horticulture sector”. The work of the Sub-Committee on Horti-business Finance will provide the catalyst for on-going and planned interventions and assist in the development of the guidelines for this aspect of the industry, said Javed Malik.

At an earlier meeting in September this year, the Task Force was informed that a few crucial steps needed to be taken to improve the financial situation of the sector. These extend to developing a set of banking guidelines so that commercial banks can develop products tailored for producers and exporters and reducing interest rates to help the sector remain competitive in international markets and introduce a partial credit guarantee scheme.

The Sub-Committee decided to further develop these findings into concrete proposals. The meeting was attended by stakeholders including representatives of horticulture exports, senior officers of the commercial banks and the State Bank of Pakistan.

The world horticulture market is valued at $80 billion to which Pakistan contributes an annual $170 million. In Pakistan only about 16% of fruits are being processed, although, this activity offers great opportunities to augment volume of value added products using modern technology. Pakistan’s horticulture export industry share in the world market has risen steadily from about 5% in 1991 to 12% in 2004. The potential markets for Pakistan’s exports have been identified in Europe and the Middle East.

The Competitiveness Support Fund (CSF) was 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”. Following this study, CSF undertook more specific work on horticulture, a sub-sector of agriculture accorded national priority by the Government of Pakistan.

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.