According to the Pakistan Institute of Development Economics, 40-50 percent of our root crops and vegetables, 20-30 percent of meat, dairy and fish products, and 30 percent of cereals are wasted every year while the country ranks 99 out of 136, worse than Mali and Tanzania on the Global Hunger Index.
Lack of access to healthy food means 12 percent of the population is malnourished and 38 percent of the children under 5 are stunted. Inadequate physical and mental development lowers labor productivity and causes additional spending on healthcare programmes, both impacting the economy negatively in the longer run.
Lastly, the United Nations projected the country’s population to hit 330 million by 2050, so it’s critical to reform our dinged-up agriculture supply chain which is anything but efficient.
First of all, imperfect crop production practices result in low-quality products in the first place which are often affected by disease or other irregularities, lowering the shelf life. After that, the majority of farmers still lack the necessary tools and training to carry out the harvesting.
The indigenous agri-engineering industry is entirely nonexistent, and both farmers nor the state can’t possibly afford the imported harvesting tools on a mass scale. The farmers’ storage practices are old and inefficient while the cold storages are expensive as well, in addition to being old and inefficient.
According to a report, there is a need to develop storage facilities for 16 MMTs of wheat, 4.4 MMTs of rice, 4 MMTs of maize, and 3 MMTs of potatoes. The Competition Commission of Pakistan had also urged the State Bank of Pakistan (SBP to ease the financing for storage facilities.
The transport of commodities from the farm gate to the markets is done on carriers that have never been food-grade certified in their lifespan. The improper harvesting, handling, and transporting damages the produce and lowers the shelf life. Lastly, there is no concept of value addition and processing of vegetables, cereals, and dairy products.
Tazah Technologies co-founder Abrar Bajwa while speaking to ProPakistani said that there is no silver lining in all of this as the whole supply chain needs fixing. Abrar, whose company is working on digitizing the Agri-Value Chain and connecting international buyers and sellers through another vertical, highlighted that transportation facilities need to be improved while mini cold storages should be built near farm gates to enhance the shelf life of the produce.
He also pointed out the dearth of processing and value addition to reducing perishability as there is a need to develop its market first to encourage the private sector. Tazah Technologies is also working on the Maize output market which is connected to a multitude of industries like poultry and livestock feed, beverages, and corn oil.
Inefficiency exists across the entire agriculture value chain, beginning from the seed sector, Muhammad Mustafa, co-founder of Easyfreh Technologies, said while talking to ProPakistani.
Easyfresh is a B2b startup linking farmers with retailers across the country and ultimately increasing efficiency by eliminating the stakes of the middleman. Mustafa argued that farmers are forced to buy poor quality seeds due to the lack of financial resources while the fertilizer and irrigation practices are also the least efficient.
Talking about processing and value addition, he highlighted the lack of domestic demand for processed food (jams, jellies, canned food, etc.) as the primal cause of lower investor interest in the sector. He also pointed out the higher domestic production costs which render locally processed food costlier than even imported items.
The production technologies of all cereal and crops need to be optimized to raise quality and increase the shelf life. The development in the research institutes needs to be done as per export markets and consumer choices instead of focusing on yield enhancement alone.
The food processing industry is not developing at the desired pace as it’s a risky business with a hard-to-capture market while the investors can see tons of other problems to solve and better investment opportunities to capture. SBP needs to lay out the financing for the startups through private banks to develop the food processing industry.
Government involvement is also necessary to protect the companies from market-wide observed adulteration in food commodities and take severe criminal actions against actors involved in playing with people’s health.
It’s a much-needed measure to incentivize the private sector to venture into this market as the government should act as an enabler in the end, the improvements will come when dozens of companies would be in healthy competition to process agricultural commodities but the people involved in adulteration and selling out-dated and lower quality produce easily undercuts the competitors who play by the rules as everyone knows that our legal system has got better things to do than jailing culprits selling anything in the name of food.
According to World Bank Data, Pakistan’s per capita income is only next to Afghanistan and Nepal while the production, sorting, and marketing of both processed and raw commodities with higher quality is likely to increase the end price and that’s where masses in Pakistan are either reluctant or are completely unable to step in and pay extra money for that higher quality.
Lastly, there is a total mismatch between the supply and demand in local vegetable markets, rendering prices low with an oversupply around harvesting times and ridiculously high before that and later on in the season. In addition to the higher input costs, no effective regulatory mechanisms in place, and multiple middlemen between farmer and consumer, this is another major reason for both the higher market prices and vegetable and fruit wastage.
Although the local dealers and agents keep track of the area-wise demand to manage supply accordingly but that whole process is not even remotely efficient enough to handle our current market size. There is a huge need & potential for both the public and private sectors to develop solutions to streamline this inconsistent supply and demand.