RICE SECTOR IN TURMOIL– NEEDS LONG TERM MEASURES
Unfortunately even when there is a bumper crop or there is a crop failure there are serious issues because there is no homework on the part of the ministries of agriculture or commerce and there is no integrated efforts nor co-ordination to overcome situations. There is no comprehension and the government is wise after the event. The prime minister (PM) Nawaz Sharif realized the fall in prices and convened a meeting of the ministers and secretaries after the situation became critical and announced support.
UNISAME appreciated the PM’s concern but it is expected of the agricultural ministry to forewarn the PM about the demand and supply situation and its predicament.
President UNISAME Zulfikar Thaver lamented that the government is not in a position to anticipate situations and prepare for unfavourable situations in advance, this year despite the floods in some Punjab rice growing areas there is an handsome crop but due to no buying from Iran and lower Indian prices the rice exporters of Pakistan are sitting hand on hand. The SMEs are the worst affected. The SMEs have been eliminated from rice exports. 90% of the exports is done by 10% of the exporters who are big exporters and 10% of the exports is done by 90% of the SME exporters.
The growers are also in turmoil as due to increased prices of farm inputs their cost of production has increased and because of no demand from the exporters the prices have fallen below the cost level.
He said we invited the attention of the government to develope payment system with Iran but due to lethargy the matter remained pending. India developed a system and buys oil from Iran and in return was exporting grains to Iran till the import of rice was allowed. Now again when the Iranian government will open imports of rice India will be in a position to renew its exports to Iran.
The other reason why the prices have fallen in Pakistan are that the Indian prices are lower than Pakistan by about US Dollars fifty in superior varieties and by about US Dollars 20 in coarse rice because in India there is subsidy for the growers and farm inputs are subsidized.
There are no restrictions on the export of blended rice in India and Indian shippers sell the rice under their own brands whereas in Pakistan the SME rice exporters of basmati rice have to get their consignment approved by the Quality Review Committee (QRC) which is an hurdle and shipments are delayed due to uncalled for pre-shipment inspection by a body declared futile by the ministry of commerce (MOC) but yet not closed. The MOC resolved to close the QRC but not closing it for reasons best known to them.
The government has not made reasonable efforts to promote the rice industry. The parboiling plants are closed in Sindh since last couple of years. No new varieties have been developed. No value addition programmes have been devised. No efforts have been made to promote the steamed rice plants. India is exporting pre-cooked rice, vitaminized rice and promoting their basmati brands all over the world.
UNISAME had advised the Trade Development Authority of Pakistan (TDAP) to hold basmati festivals in Europe, USA and Canada but in vain. India is selling to these countries big quantities and in fact in all the super markets the Indian brands are prevailing. It is very unfortunate that although our super basmati rice is far superior than Indian basmati in length, look and taste Pakistan has remained behind.
Since the PM has now taken interest he should ensure long term policies rather than short term measures and address the issues from the farm level moving on to exports. As short term measures are not going to be of any real help.
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