KARACHI
Pakistan is losing billions of rupees every year due to lack of warehouses to store millions of tonnes of perishable agricultural items, including grains, fruits and vegetables.
According to State Bank of Pakistan (SBP), the cash-strapped country’s 10 to 35 percent of agriculture produce perishes annually under the head of post-harvest losses.
A high-level meeting at State Bank observed that the country could save billions of rupees through the development of storage capacities to curtail post-harvest losses. The meeting estimated that the losses were more than 10 percent for grains and 30-35 percent for fruits and vegetables.
The Ministry of National Food Security and Research data shows that the country’s output of wheat, rice and maize in fiscal years 2012 and 2013 stood 34.1 million tonnes. Breaking it up means that the country produced 24.2 million tonnes of wheat and 5.536 million tonnes of rice in FY13 and 4.27 million tonnes of maize in FY12.
Applying this figure to the SBP’s 10-35 percent post-harvest losses would show that the country’s annual losses on account of the above three crops stands at 7.6 million tonnes, 2.42 million tonnes wheat, 0.55 million tonnes of rice and 0.42 million tonnes of maize.
Official quarters have long been concerned about the country’s below-average wheat productivity, around 2.7 tonnes per hectare.
“More worryingly, yields have been stagnant during the past several years,” observed the central bank in its recent report on the country’s economy.
Further, the country’s losses under the head of fruits and vegetables also stand huge. The country’s yearly production of fruits and vegetables, reportedly, is in excess of 12 million tonnes, of which, the SBP estimated that 35 percent gets wasted annually.
In a joint advisory on fruit and vegetables, the International Finance Corporation (IFC) and SBP observed that Pakistan had not been able to cash the horticulture segment of its economy as much as its potential.
“At national level the country suffers high harvest losses due to careless harvesting, rough handling, inadequate transportation and poor storage,” the world body viewed.
The SBP-quoted 35 percent losses form over 4.2 million tonnes of the perishable food items that include citrus, mango, dates, apples, banana , apricot , grapes, guava, peach, pears, pomegranate, tomato, potato, onion, garlic and chillies.
The SBP meeting said, “Pakistan produces around 30 million tonnes of grains including wheat, rice and maize but the storage capacity provided by the federal and provincial food department is only for around 5 million tonnes.”
Consequently, it said that Pakistan’s agriculture sector was suffering from a “compounded problem” of a lack of infrastructure and market structure for agriculture produce.
“The resulting inefficiencies impact all market participants and keep the sector away from becoming competitive,” concluded the meeting chaired by SBP Deputy Governor Saeed Ahmad.
The meeting, according to the SBP, decided to formulate a working group on the development of warehouse receipt financing that would comprise representatives from the country’s leading conventional and Islamic banks, IFC and ACE Control and Expertise Global (Pvt) Limited.
The SBP deputy governor told the meeting that the development of commodities’ physical trade and marketing system was inevitable for improving performance of the agricultural sector.
He said the working group would serve as a platform for all stakeholders to identify bottlenecks and devise strategies to establish a mechanism for warehouse receipt financing in the country.