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Agri-business needs more steps         
By Siraj-ul-Hasan

The government, realizing the importance of privatization of various public functions, has now picked up its string with due vigour. Banking has been the first to feel its impact.

Agri-business needs more steps The process of bringing some businesses and industries from the grip of public sector to the lap of the private sector was initiated by the People's Party second government but the thrust was half-hearted or hesitant.

In its own wisdom the IJI government came all out with greater force and vigour to take this process beyond all expectations, to its far most end, even certain age old government functions and ancillary responsibilities were transferred to semi-autonomous and private bodies/organizations. The scope of this article being limited to agriculture and allied activities.

The importance of the private sector playing its part unhampered, judiciously and with provision of necessary incentives in the areas of agro-business and agro-industry has been long recognized by the policy makers.

That is why even in the days of the government controlled sale/purchase of a number of commodities, including main food grains (wheat and rice), sugar etc., the trading of a large number of agricultural and livestock products was freely allowed and was entirely in the hands of the private enterprise.

These included coarse grains, spices and condiments, fruits and vegetables, gur, gram and pulses, meat, milk and eggs. Now, commodities like sugar, wheat, rice, oil seeds and cotton have also been added to this list.

Their internal marketing has been deregulated and foreign trade participation has also been permitted with encouraging results. Private sector participates with the TCP in cotton and rice export, as well as, in sugar and wheat import.

There is still much scope for broad basing the existing agri-business in general, as well, as there is great potential for bringing in new investment by the private sector in many lucrative agri/industrial projects.

With all its shortcomings, Pakistan's agriculture has progressed to a stage where further development may take place with the rationalization of agri-business both upstream and downstream.

Upstream operations include the supply of modern inputs and field-oriented services while at the downstream, these are handling, marketing, processing, grading, packaging, storing, transporting of produce as well as establishing of agri-industries. The present government is adopting a supportive policy.

Yet, the private sector agribusiness establishment leaves much to be desired. Barring fertilizers, textiles and sugar agri-business (including agro-industry) is rather small and fragmented.

Broadly speaking the constrains in the expansion of private sector agri-business may be termed as (a) policy, (b) procedural (c) financial (d) infrastructural (e) legal (f) conceptual (g) technical (h) political and (i) entrepreneurial. In order to bring home their implications, a brief explanation is necessary:

(a) Policy constrains include various policies adversely affecting or hampering agribusiness and the ari-industrial establishment. There is a need to devise various policies judiciously and objectively not just to place checks and controls on agri-business projects, but to assist.

Particularly, policies on investment, industry, pricing, foreign trade (export import), intellectual property (parents and trademarks) should be well-conceived, attractive and compatible with the international climate.

(b) Procedural constraints: The process and procedure of seeking the government sanctions should be simple, straight-forward and quick. Necessary guidance in this regard may be provided through personal contracts rather than by correspondence to avoid delays.

(c) Financial: Under this category difficulties fall in obtaining credit from banks. Bureaucratic attitudes, high mark-up rates and underassessment of collaterals are key obstacles. Levy of taxes (income, excise sale, octroi surcharges etc.,) should be realistic and equitable. Inadequacy of the capital markets is one of the main financial constrains.

(4) Infrastructural: Lack or inadequacy of infrastructural facilities like water, gas, electricity, roads and communications, is considered a great impediment in setting up business and industry by the private sector, particularly, in rural areas. The required, facilities may be provided on top priority basis to encourage shy investors.

(e) Legal: Rules, regulations and other legal measures required to set discipline in the agri-business operations should be supportive rather than prohibitive.

(f) Conceptual: Sometimes private agri-business, despite having all sorts of facilities fails to succeed due to conceptual defects in the very project. It is, therefore, desirable if expert advice in formulating projects may be provided to private sector at a nominal cost by the government.

(g) Technical: Technical know-how in carrying out a particular line of business or establishing a particular type of industry successfully is a must. It is, therefore, in the interest of private entrepreneurs themselves to hire technical and professional personnel on reasonable wages rather than pulling on with less qualified staff engaged on lower pay.

(h) Political: It is obvious that if there was no political peace, not only agri-business but all sorts of economic activities would suffer.

(i) Entrepreneurial: Some businessmen and industrialists themselves lack the qualities and approach of practical entrepreneurship. In other cases corporate business operations themselves are not carried out judiciously and in a business like fashion.

INDUSTRY BREAKDOWN: An industry wise analysis highlights some individual problems and remedies.

POULTRY INDUSTRY: Although our poultry industry has developed to a great extent, it lacks stability. Sudden outbreak of diseases or occurrence of other calamities affects it adversely.

As a result, production and availabilities are reduced to the detriment of both producers and consumers. Major problems/constrains identified by experts are:

* Lack of effective disease control.

* Levy of taxes on income and duties on inputs.

* Absence of technical and professional guidance and education for farmers.

* Poor quality of locally available feed ingredients.

*Infrastructural inadequacy: Possible solution to some

problems is briefly indicated below:

* The imposition of income tax and levy of duties may be made as rational as possible. The high cost of imported proteins required for feed mix, fails to improve the nutritional value of feed due to low quality ingredients. This affects the quality of poultry.

Strict measures are required for availability of better quality ingredients of indigenous origin. The government livestock extension personnel have no provision to come to the rescue of the poultry farmers in times of outbreak of disease.

As a result the country has seen a drop in number of poultry farms by over 50 per cent. It is, therefore, not only desirable but imperative to check or minimize the adverse incidence of disease by taking necessary steps.

Courtesy: The DAWN

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