Agriculture Ministry warns of food price hikes

The Ministry of Agriculture warns that food prices are likely to rise by up to 17% by the end of the year. A ministry study of global cereal prices found that rising commodity prices in recent months will likely continue and could reach 50% by the end of the year.

The survey said that the worrying rise in prices for cereals will directly affect prices for milk, poultry, and eggs, which use these cereals. The ministry expects the price of milk to rise by 13% and a 14% rise in the price of chicken and turkey, and a 17% rise in the price of eggs by the end of 2012.

It is doubtful whether the social protest leaders will accept this explanation, but the Ministry of Agriculture blames the weather and droughts that have destroyed crops around the world for the rise in prices for crops. Volatile agriculture commodities markets, as well as the use of crops for biofuels, which has reduced food crops, have also boosted prices for cereals.

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Eat Broccoli & Spinach for Stronger, Healthier Bones

Two new studies show that eating foods rich with Vitamin K, found in green leafy vegetables such as broccoli and spinach, as well as cereals and vegetable oils, is linked with greater bone density and reduced bone loss in early post-menopausal women.

The two studies were both conducted at Scottish universities, and show that Vitamin K may be good for your bones.

The first study was conducted in Aberdeen, Scotland, and included women aged 49 to 54. Here researchers found that higher levels of vitamin K are associated with higher bone mineral density.

The second study took place in Dundee, Scotland. This study showed that women who had vitamin K, vitamin D, and calcium had significant and sustained increases in bone density.

The researchers suggest that the benefits may be achievable simply through increased dietary intake of vitamin K, rather than through vitamin supplements.

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Fund for agriculture disasters on track

By Wassim Mroueh BEIRUT: Agriculture Minister Hussein Hajj Hasan said Friday that he would soon announce the establishment of a disaster fund for the agriculture sector, half of which is to be funded by the government. The minister also explained that he was looking for markets to compensate for declining exports to neighboring Syria, where an uprising is now in its 15th month.

“We will soon announce its [the fund’s] establishment, after one or two months; we are now authoring the bylaws,” Hajj Hasan told The Daily Star in an exclusive interview.

The minister said that the government would provide half of the funds while the rest would be raised from subscriptions to be paid by farmers.

The fund will provide financial compensations to farmers suffering losses from natural disasters.

Currently, these compensations are paid by the Higher Relief Committee which operates under the prime minister’s office.

However, not all farmers are receiving compensations, as no funds were allocated to farmers in the south for damages their crops incurred as a result of a storm which hit the country in 2010.

“Former Prime Minister Saad Hariri decided that only grape farmers in the Bekaa and fishermen would get compensations [after the 2010 storm],” Hajj Hasan said.

“Listen, chaos will continue until we establish this fund, and it will be formed,” he added.

Regarding Hajj Hasan’s efforts to enroll farmers in the National Social Security Fund, the minister said no good news was on the immediate horizon.

He explained that the move requires a decision by the Labor Ministry and the entire Cabinet.

The Cabinet, Hajj Hasan continued, understands the need for farmers to join the NSSF. “But I cannot give you a date as to when this will happen.”

Another concern for the minister is securing markets for agriculture produce to replace the Syrian market, as demand for Lebanese products has dropped sharply in Syria due to the ongoing uprising against Syria’s President Bashar Assad. Syria happens to be Lebanon’s sole land outlet for agricultural exports.

“We are continuously looking for new markets ... all options are open [for transportation means], we are now transporting products to Iraq and getting ready to enter the Libyan market ... but you know the [regional] situation is difficult,” he said.

“Syria was the destination of 30 percent of Lebanon’s agricultural exports,” the minister added.

He said this number had dropped due to the depreciation of the Syrian currency and the general security situation in the neighboring country.

Hajj Hasan said he was working on resolving a transportation problem which hindered an initiative by Iran to import 5,000 tons of Lebanese oranges. “I think it is resolved,” he said.

The minister said he would hold a meeting with Public Works and Transport Minister Ghazi Aridi Wednesday to discuss means to reduce transport costs, which skyrocketed after a decision by the Aridi’s ministry to limit the export of goods to Lebanese trucks.

Hajj Hasan dismissed as “untrue” claims that regulations by the ministry on the use of pesticides and fertilizers were only being implemented on Lebanese produce and not on agricultural imports, making it harder for Lebanese produce to compete.

“We are implementing these regulations on imports. We just introduced them in an agreement we made with Egypt to import Egyptian apples and cherries,” he said.

“We are also closely monitoring potatoes exported from Egypt,” he said.

As for calls by some farmers to ban Syrian olive oil imports, which are creating fierce competition for Lebanese olive oil producers, Hajj Hasan believes such demands are unrealistic.

“First, Syrian olive oil enters Lebanon in line with the Greater Arab Free Trade Area,” he said. “Second, if I make a decision to ban Syrian olive oil imports, how will I still export via Syria?” he asked.

“We can work on the quality and ... marketing of our olive oil [to face competition],” he said.

Hajj Hasan added that his ministry was going ahead with plans to subsidize agricultural produce.

He said the government had already paid LL193 billion in subsidies in 2012 for cereals, fodder, agricultural exports, olive oil, fishermen and tobacco, as well as compensations for farmers whose crops had suffered damage due to natural disasters.

Hajj Hasan also said it was necessary to grant agriculture more independence by forming independent agriculture chambers in each governorate.

However, since such a move is not supported by other parties in the Cabinet, the minister is working on boosting the agriculture sector within the current Chambers of Commerce, Industry and Agriculture.

Hajj Hasan said his ministry was strongly supporting Integrated Pest Management, which involves combating pests through means that ensure favorable economic, ecological and sociological consequences.

He said the ministry was now spending LL4 billion to support IPM, and that farmers were responding in an “excellent manner.”

“We used to spend zero liras on this.”

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Food Processing and Value Addition

Processing of food is of enormous significance for Pakistan's development because of the vital linkages and synergies that it promotes between the two pillars of the economy, namely Industry and Agriculture. This growth of the Food Processing Industry will bring immense benefits to the economy, raising agricultural yields, meeting productivity, creating employment and raising the standard of very large number of people throughout the country, specially, in the rural areas. Economic liberalization and rising consumer prosperity is opening new opportunities for diversification in Food Processing Sector. Liberalization of world trade will open up new vistas for growth. The Food Processing Industry has been identified as a thrust area for development.

APPROACHES TO FOOD PROCESSING IN PAKISTAN

In contrast to the described approach adopted in industrialized countries, food processing in most developing countries (including Pakistan) involves very basic and sometimes crude approaches. The food and its allied products industry is considered Pakistan's largest industry, and is believed to account for 27% of its value-added production, and 16% of the total employment by the manufacturing sector About 75% of the rural-based food manufacturers are in the so-called informal sector. This informal economy is unregulated and finds difficulty in accessing essential raw materials and other resources especially finance skills, knowledge and management. Marketing and quality (especially hygiene) standards are especially lacking. Employment pays low wages and uses the skills of the most ill-educated.

THE FOOD PROCESSING SECTOR AND AGRICULTURE RAW MATERIAL

Food processing involves any type of value addition to the agricultural produce starting at the post harvest level. It includes even primary processing like grading, sorting, cutting, seeding, shelling packaging etc. this sector involves the processing of following heads.

Fruits and Vegetables

Pakistan's climate is suitable for the production of various horticultural crops. Punjab dominates the production of both fruits and vegetables, accounting for 63% and 60% respectively. Citrus and Mango are two important fruits which are consumed either fresh or used for juice manufacturing. Together these two fruits in Punjab alone account for 48% of all fruit produced in Pakistan. Balochistan produces the second largest volume of fruit, mainly apple and dates. For vegetables, again Punjab dominates with the production of potato. Little has changed in production technology, harvesting practices, packaging and post harvest care within the horticulture industry over the last decade. As a result the industry has been unable to establish itself in export markets or indeed to significantly improve the volume of output. The lackluster performance of the horticulture industry in Pakistan is due to inadequate harvesting and post-harvest procedures and poor infrastructure, especially cold storage.

Genreally fruits and vegetables are consumed as fresh. There is a small fruit and vegetable processing industry, which is concentrated around the major cities. Sind province is famous for best quality of dates. There are only two date processing plants in Khairpur city and is an enormous potential for the date processing plants. There are 25 small and medium industrial units, having an estimated capacity of 45,000 mt (metric tons), engaged in the production of squashes, jams and jellies, pickles and a meager quantity of canned fruits and vegetables. In the view of value-addition, production of canned fruits is estimated at 15,000 mt; jams, jellies and marmalades at 2,000 mt; pickles and sauces at 10,000 mt and syrup and squashes at 18,000 million bottles. Most of the producers of these products are based in the urban areas. Approximately 30 fruit juice and pulp processing plants with an installed capacity of 500,000 mt per annum are engaged in the production of fruit juices and fruit drinks.

Cereals

Wheat is Pakistan's largest food grain crop, and accounts for about 40% area under cultivation. It is estimated that about 80% of the farmers in Pakistan cultivate the wheat. Punjab is the largest rice-producing province with 60% of rice planted area followed by Sindh with 32%. Only a small proportion of rice is traded internationally, by far the most is consumed in producing countries. As a result the world price of rice can move within a wide range from year to year adding instability and uncertainty to the market. Different value added products could be made from the cereals like biscuits, Starch Glucose, Cornflakes, Malted Foods, Vermicelli etc. The basic quality of the flour which as stated is relatively poor, the smaller manufacturers cannot afford to include the necessary additive to fortify the flour that make the product into a useful part of the diet. In this respect the PFMA( Pakistan Flour Mills Association) has joined with the government to work on a program that does encourage the fortification of flour.

As for as rice is concerned Pakistan enjoys a natural comparative advantage in basmati rice production which has an assured market in several foreign countries. This has led to the growth of rice processing industries which fulfill the quality requirements of the foreign customers.

Oil seeds and vegetable oils

Pakistan was self-reliant in edible oils during 1947 to 1960. The import of edible oils started in 1960. During 2006-07, domestic production of edible oil was 0.855 million tons. The major oilseed crops include cottonseed (478,000 tons), rapeseed/mustard (63,000 tons), sunflower (249,000 tons) and canola (65,000 tons). The import in 2006-07 has reached 2.55 million tones. During this period, 2.201 million tons of edible oil was imported and 0.349 million tons edible oil was recovered from imported oilseeds. The total availability of edible oil from all sources amounted to 3.405 million tons (GOP, 2006-07). Despite the fact that Pakistan is overwhelmingly an agrarian economy, it is unable to produce edible oil sufficient for domestic requirements and substantial amount of foreign exchange is spent on the import of soya bean and palm oil. The imports constitute about 70 per cent of total consumption mainly palm oil from Malaysia and soybean from US of worth $731.0 and $32.2millions, respectively. Translated in terms of foreign exchange it comes to colossal amount, which is a heavy drain on our already afflicted national economy.

Sugarcane
Sugar is the second most important cash crop in Pakistan after cotton. Government of Pakistan has been heavily involved in the sugar industry, regulating mill construction, trade and prices, and influencing farmers' crop decisions in various ways. Pakistan grows about one million hectares of sugarcane, more than all other cane producing countries except Brazil, China, Cuba, India and Thailand. Punjab accounts for about 65% percent or about 650,000 ha of the area under sugarcane. Other producing areas include Sindh which accounts for about 30% percent of sugarcane land, the Northwest Frontier Province (NWFP) about 10%, and Balochistan which accounts for less than 1%. Pakistan's sugarcane yield averages about 46 tons per hectare, well below the world average of above 60 tons, and below neighboring India's yield of 65 to 70 tons. There is overcapacity in the sugarcane industry that leads to loss of profitability for the individual mills, some of which have closed. Overcapacity resulted from favorable market conditions that encouraged investment

Meat and Poultry

The domestic livestock population is about 23 million cattle, 25.8 million buffalo, 25 million sheep and 53 million goats. Livestock accounted for about 39 percent of agricultural value added and about 9.4 percent of GDP. Net foreign exchange earnings from livestock products and by products like meat, skins, hides etc is about 11 percent of the overall export earnings of the country. Meat products are usually available in the form of frozen packed mainly in the fresh form in Pakistan. Frozen meat products and sausages is an emerging area in meat processing in Pakistan. Mostly meat is consumed in the countryside or via small-scale slaughters in the urban areas. There are very few large-scale animal slaughterhouses and meat packing factories. In this respect, Pakistan is probably one of the world's least efficient users of livestock resources since home-based slaughtering generally does not make most efficient use of the by-products.

Milk and Dairy

Pakistan claims to be the fifth largest producer of milk by volume in the world. Average daily production of milk is about 130 million liters. Analysis for Pakistan found that the most livestock net income comes from local cows, buffalo, and bullock. These animals account for 80 percent of net annual per capita livestock income. Major value added dairy products which are commonly consumed in Pakistan are Whole Milk Powder, Skimmed milk powder, Condensed milk, Ice cream, Butter and Ghee. The strategic development of the dairy industry is being managed by the Ministry of Industries, Productions and Special Initiatives as one of the key sectors for development of dairy sector on priority basis. A Strategy Working Group (SWOG) was set up in 2004. The SWOG includes members from prominent stakeholders in the industry who are working together voluntarily to identify issues and propose a strategic framework. SMEDA has provided support and facilitated the group. In addition, the Pakistan Dairy Development Company "Dairy Pakistan" was registered as an independent not-for-profit company to further refine sector strategy and design, implement initiatives identified for the development of the sector.

THE VALUE CHAIN IN FOOD PROCESSING

The food processing industry in Pakistan faces a number of critical challenges which includes :

• Post harvest losses due to lack of storage and transport infrastructure Integrating the individual food factories with backward and forward linkages
• Ignorance from quality management systems
• Lack of coordination links with academia, industry and research organizations
• Weak regulatory system
• Lack of investment in the supply chain
• Unequipped food analysis laboratories
• Inefficient market structure
• Lack of adequate trained manpower
• Rural poverty and malnutrition

Rules for maximizing value addition in food chain in Pakistan

Agriculture :

High productivity of the desired raw material must be determined which is the need of the food industry. A demand driven approach must be followed.

Intermediate processing :

High standards of post harvest handling and storage facilities are critical. It is essential that intermediate processors have close understanding and relationship with the final manufacturers. In order to reduce the cost and for the consistent availability of good quality raw material it is recommended that the processing facilities should be installed near the source of the raw material.

Food Manufacturing :

Food manufacturers have some issues as follows :

• Inability to manage raw material supply
• Higher inputs cost and poor labor skills
• Poor financial support for R&D
• Poor technical choices and a lack of innovation
• Poor safety standards

THE POLICY AND STRETGY

The Policy will seek to create an appropriate environment for entrepreneurs to set up Food Processing Industries through The government's Agricultural Policy focuses on :

• Sustainable food security
• Increasing productivity
• Commercial agriculture
• Income diversification
• Export orientation
• Simplification of food laws

STRATEGY :

The key policies and strategies of the Government of Pakistan related to food processing technologies are as follows :

• Agriculture will be diversified into high-value crops. Special emphasis will be laid on growing fruits and vegetables for the export market. The private sector will be encouraged to establish processing, grading, packaging, refrigeration and storage, etc., through provision of liberal credit.
• Strengthening the process of agricultural modernization by increasing productivity through vertical expansion, diversifying agriculture into high- value crops, and improving the pricing, marketing, grading and distribution systems to improve farmers' income.
• Fruits and vegetables processing and preservation plants and export companies will be established in growing areas of these commodities.
• Post-harvest handling and preservation of fish catch will be improved by providing chilling/refrigeration system in the traditional boats through the financial assistance of Small and Medium Enterprises Development Authority (SMEDA).

FUTURE PROSPECTS :

A reasonable work has been done in Pakistan on secondary processing of agricultural produce, however, the area of primary processing of agriculture produce is not yet developed, therefore, tremendous potential exists in this area.

• The key low-cost technologies needed are as follows :
• Seed / grain drying, aeration and storage technology
• Application of extrusion technology in cereals
• Rice drying technology for obtaining higher head rice yield
• Efficient dal (pulses) processing technology
• Rice par-boiling technology
• Apricot and dates drying and processing technology
• Modified atmosphere technology for fruits and vegetables
• Pre-cooling technology for fruits and vegetables
• Cool stores for potatoes, citrus, and apples
• Fruits and vegetables cleaning, grading, and packing technology
• Small-scale fruit juice technology for the remote fruit growing areas

SUGGESTIONS :

• Focus on agro- based processed products rather than fresh crops
• Development of linkages between industry and research organizations
• Development of specific agro-processing zones
• Focus on brand building
• Awareness among consumers
• Improving process efficiency and decreasing losses
• Need a stronger information base for farmers

Dr. Faqir Muhammad Anjum and Ali Asghar

Courtesy Agrihunt.com

FAO: World Cereal Production Increases in 2012

GLOBAL - The FAO’s first forecast for world cereal production in 2012 points to a one per cent (or 27 million tonnes) increase from 2011 to a new record of 2,371 million tonnes. Increases are expected for coarse grains and rice, while wheat may decrease.

Total cereal utilisation is anticipated to expand by 1.4 per cent in 2012/13, to 2,357 million tonnes, with feed utilisation growing fastest and food consumption keeping pace with population. On the other hand, growth in industrial use of cereals for the production of biofuels is likely to stall after several years of strong gains.

Based on these early prospects for world production and utilization, world end-of-season cereal stocks for crop years closing in 2013 could increase to 524 million tonnes, roughly nine million tonnes, or 1.7 per cent, higher than their opening levels. This is not expected to result in any signifcant variation in the global stocks-to-use ratio, which is estimated to remain stable at roughly 22 per cent.

Among the major cereals, world carryovers are forecast to decline for wheat while increasing for coarse grains and rice. The forecast rise in inventories of coarse grains could still leave its stocks-to-use ratio at a precariously low level of 14.3 per cent, up marginally from 2011/12.

World trade in cereals in 2012/13 is forecast to reach 295.5 million tonnes, slightly higher than in 2011/12. This increase mostly concerns maize, supported by rebounding supplies, more than offsetting an anticipated contraction in wheat, while rice trade is forecast to remain stable.

The FAO Cereal Price Index averaged 224 points in April 2012, down nearly two per cent from March, with all cereals showing weakness, amid favourable supply prospects. In April, wheat prices on average were roughly 21 per cent, maize 15 per cent and rice four per cent lower than the corresponding month last year.

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