Pakistan’s agriculture sector and CPEC

Pakistan should seek Chinese support in initiating a seed breeding programme for major crops, especially cotton and wheat

Looking back at the history of economic cooperation under the first phase of China-Pakistan Economic Corridor (CPEC) one notes two important points. First, that Pakistan could have better negotiated the terms of business with the Chinese private sector for energy projects and second, that CPEC is so far a predominately demand-driven initiative from Pakistan’s perspective.

Unlike Bretton Woods institutions, China does not prescribe a panacea to its borrowers, rather it asks them to identify their priorities.

The PML-N had formed government promising an end to power shortages outage. The energy sector and road infrastructure were therefore its priorities for the first phase of CPEC.

Deciding that manufacturing was not going to be the sector where Pakistan would have a surplus to export to China or other members of the Belt and Road Initiative (BRI), Prime Minister Imran Khan asked for closer cooperation in the agriculture sector during his maiden visit to China in November 2018. The Chinese government agreed to cooperate. Thus, cooperation in agriculture sector was one of the areas mentioned in the Memorandum of Understanding (MOU) signed between President Xi and Premier Khan during that visit.

Building on that MoU the two countries signed a comprehensive framework agreement for agricultural cooperation in May 2019. The goals set in the agricultural framework agreement would be achieved over the next five years. These cover extension services, remote sensing and geographical information system and food processing and pre- and post-harvest handling.

The agreement also covers storage of agricultural produce, genetic resources of crops, livestock and poultry, selection and breeding of new breeds of animals and new varieties of plants, feed for fisheries and aquaculture, research and development of new high-yield varieties, precision agriculture and pest and disease control.

A separate MoU on combating foot and mouth disease (FMD) in livestock was the third signed during President Xi’s visit to Pakistan. FMD has been hindering the export of meat and livestock from Pakistan. China agreed to provide technical assistance and support for establishing FMD free zones. This would help Pakistan venture into China’s $12-15 billion meat market.

Islamabad and Beijing signed an MoU for enhanced bilateral cooperation in science and technology, and agriculture during President Alvi’s visit to China in March 2020. This MOU led to the creation of two more joint working groups, one on science and technology and the other on agriculture under CPEC (taking the total number of joint working groups to 10).

The most recent MoU outlines future cooperation but most importantly it is a living document and can be amended according to the need and changing dynamics.

The two countries have agreed to build a centre for sustainable pest management in plants in Pakistan, focusing on all-round plant protection cooperation, including monitoring and early warning technology, research and development, mutual recognition of standards (thus paving the way for enhanced food exports from Pakistan to China), personnel training and emergency prevention and control.

The agriculture sector has been facing a chronic policy-and-investment neglect. This is partly due to its reduced contribution to the GDP. It is also due to rapid urbanisation at the cost of cultivable lands and the fact that a majority of the farmers (owners of small landholdings) have no means to get policy maker’s ear.

The MOU signed in March 2020 between Pakistan and China, amidst Covid-19 outbreak rightly focused on addressing some of the multi-dimensional problems that Pakistan’s agriculture sector is facing.

Ninety percent of dietary requirements of 220 million inhabitants of Pakistan are met through domestic production. Amidst Covid-19 the food supply chain remained largely intact.

The MOU signed in March 2020, amidst Covid-19 outbreak rightly focused on addressing some of the multidimensional problems that Pakistan’s agriculture sector is facing.

Besides providing technical assistance and support to enhance the research and scientific capacity and capability in Pakistan, China will provide scholarships to Pakistani students for studying agriculture in China. (Currently 28,000 Pakistani students are studying in China in various disciplines). This will be an important opportunity for future agricultural researchers to gain a firsthand knowledge of Chinese experience of ensuring food security for its 1.4 billion plus population.

Under the MOU China will establish several agricultural research laboratories according to Pakistan’s needs. Access to state-of-the-art equipment in these laboratories would enable Pakistani scientists to bridge the theory-practice gap.

Technological cooperation to enhance the capacity and capabilities of the existing institutes for research is another area of cooperation. China has also agreed to an exchange programme to share and build on each other’s capabilities.

Enhanced people-to-people contact through exchange visits will play a pivotal role in implementing various provisions of this MOU.

The MOU also envisages that China will assist Pakistan in building a certification and inspection capacity for agriculture and livestock products. This will enhance the country’s capacity to implement the sanitary and phytosanitary (S&P) requirements (health and hygiene standards needed to be met for exporting agricultural products), tha are likely to get tougher on account of Covid-19. A failure to meet S&P requirements might erode Pakistan’s niche in agriculture as far as exports are concerned.

Pakistan needs substantial investment in agricultural supply chain management. We lack quality storage and transport facilities, especially cold storage facilities and refrigerated transport to handle perishable food commodities, especially meat and dairy products. Acquiring these facilities would play a key role in determining the fate of agri-trade, both in domestic and international markets.

In one of the next joint working group meetings, Pakistan should also seek Chinese support in initiating a seed breeding programme for major crops, especially cotton and wheat. Currently we have a stagnant and compromised yield. The Chinese hybrid drought-and-disease-resistant seeds should be tried in Pakistan to develop seed varieties suited to our conditions.

Amidst Covid-19, we have successfully tested and tried e-commerce for many goods and services. However, most of the commodities and services traded through e-commerce have an urban base. China has enjoyed great success in using the concept of “crowd buying/team buying” in online agricultural markets. Linking agricultural producers to consumers would reduce the manipulative role of middle men in agricultural supply chain. This is another area where Pakistan can learn from China.

Finally, Pakistan should dedicate one of the special economic zones to food processing and value addition. Chinese food and beverage manufacturing groups should be invited invest in that zone. This will link us with Chinese agricultural supply chain. Also, both import substitution and export earnings from value-added farm-products would help reduce the current account deficit.

There are big ifs and buts about the potential benefits from China-Pakistan agricultural cooperation. These pertain to follow-up and implementation of MOUs. An MOU is only as good as its follow-up. In this case, we need a well prepared and informed follow-up so that our representatives may negotiate a win-win deal.

Dr Abid Q Suleri heads the Sustainable Development Policy Institute (SDPI)

Shakeel Ramay is head of SDPI’s China Study Centre. They tweet at @abidsuleri and @ShakeelRamay, respectively

Pakistan’s agriculture sector and CPEC