Money Matters

Cropping cooperation

By Majyd Aziz
Mon, 05, 16


Pakistan and Sri Lanka have a strong bilateral relationship, which is broad based and focused on many aspects such as trade, investment, sports, education, as well as defence. There is a need to upgrade this relationship and go for joint ventures, technology transfers as well as common global marketing strategies, and partnerships. The Free Trade Agreement (FTA) has not been a pragmatic success, primarily because of the limited scope of products traded by the two SAARC nations. The expected giant leap has not materialised and this has dampened the enthusiasm that was envisaged after the implementation of the FTA.

There is a need to strategise and revisit the FTA so for future real time success. Agriculture is one very essential sector that would enhance bilateral trade and investment figures and would open new vistas of mutual and beneficial cooperation. Many high demand crops being sourced globally can be produced locally so that emphasis is on import substitution as well as catering to the requirements of regional partners.

Soybean is considered as a potential food crop for the protein needs as well as for oil requirements in this region. It is used in the food industry for flour, oil, margarine, cookies, biscuit, candy, milk, vegetable cheese, and many other products.

Soybean is now accepted as an essential commodity and thus it is imperative that the region depends on maximum self-production rather than relying mostly on imports from various countries. Pakistan and Sri Lanka are well placed to accord priority to soybean cultivation.

In Pakistan, soybean is ideal during crop rotation, especially between the sowing and harvests of rice and cotton in irrigated areas and wheat in rain fed areas. This would enable the farmers to have a profitable alternative crop by utilising the gap between two harvests.

Likewise, this exercise is also important for the Sri Lankan farmers. Sri Lanka is considered as the pioneer in soybean among developing countries, and initiated soybean cultivation keeping in mind the concept of food for the people and then cater to the livestock.

Both Pakistan and Sri Lanka are end-users of soybean since this agricultural product is ideal for human consumption as well as a potent animal feed. The characteristics of soybean allow farmers and livestock owners to increase milk production and develop a healthy and high-yielding animal. Consequently, the demand for soy meal has moved from the usual 5-7 percent to 10-15 percent.

Pakistan is heavily dependent on soybean imports from Argentina, Canada, and USA, to name a few major exporters. The annual imports in 2015 were a little less than 600,000 tons, a gigantic jump over 2014 when imports were just around 10,000 tons. The consumption of soybean in Pakistan is nearly 2,000 tons per day and the demand is increasing with the rise in livestock population.

Sri Lankan imports of soybean in 2015 were 220,000 tons indicating a growth rate of nearly 16 percent over the previous year. At present, the global prices for soybean are more than $1,000 per ton excluding freight charges of up to $60 per ton.

The distressing fact is that at present the Pakistani farmers are diverting from planting soybean and instead depending on other alternate crops. This strategy is restricting them from taking advantage of the opportunities available to maintain viable options of sowing and cultivation.

Sri Lanka, however, has developed a feasible framework by utilising soybean to produce soy food items that cater to the domestic market, and have an export potential. This is the marked difference in both the countries. There is considerable Sri Lankan government support for using soybean for human consumption while farmers in Pakistan are not being encouraged to enhance production of soybean.

There is a ray of hope for the revival of soybean cultivation in Pakistan. According to reports, Pakistan Agricultural Research Council (PARC) has endeavoured to introduce technological innovation by planting seed multiplication blocks of soybean varieties on 270 acres and distributing seeds to the farmers.

The objective is to reduce the cost of production of soybean and enable profitability for farmers. This project for developing high yielding seed varieties, along with technology orientation programmes for farmers, may encourage them to change their lack of interest in soybean.

Sri Lanka initiated the Sri Lanka Soybean Development Programme in early 1970s to introduce new high-yielding soybean varieties. Soybean production research was enhanced at the Central Agricultural Research Institute (CARI) and three other research stations.

The goals were to increase the production of soybeans in Sri Lanka on a sustained and permanent basis, to increase the supply of high-quality edible protein and oil for home consumption, to satisfy the domestic needs for protein rich feed for cattle and poultry and to minimise feed imports, to increase exports, generate more employment in rural areas, reduce imports of food products, and increase the per capita income of small farmers.

The contrast between the fundamental approach of Sri Lanka and Pakistan is very evident. The growers, with the support of technical experts and government, are taking advantage of the available facilities and incentives for increasing the production. In Pakistan, there is relatively less governmental and technical support to develop the soybean sector and the farmer is constrained and unable to take the initiative.

Since demand for soybean is on a rise, it is proposed to take up soybean as a bilateral initiative by both countries to develop synergies that would, in the long run, reduce foreign dependence by a sustained and substantial increase in local production. Moreover, since Sri Lanka is promoting soy foods, it is also a worthwhile opportunity for soy food manufacturers to establish an export market in Pakistan.

In future, the Sri Lankan soy food exporters can broaden their base by entering into agreements of joint ventures or technology transfers with their Pakistani counterparts in order to popularise it and encourage farmers to cultivate soybean. There should be a formidable cooperation mechanism between PARC and CARI and other such institutions for innovation and development of new seeds and farming techniques. This could then be further expanded around the region.

Pakistan and Sri Lanka need to cooperate with each other in handling food security as this is the most crucial issue for developing countries. This would also lead to substantial success of the FTA and, like defence, coconut, and of course, cricket; it would forge a deep-lasting bilateral relationship in the true SAARC sense.

The writer is Founding Chairman Pakistan Sri Lanka Business Forum