FAO INVESTMENT CENTRE COUNTRY HIGHLIGHTS FAO INVESTMENT CENTRE Pakistan - Priority Areas for Investment in the Agricultural Sector
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Pakistan Priority areas for investment in the agricultural sector FAO INVESTMENT CENTRE COUNTRY HIGHLIGHTS FAO INVESTMENT CENTRE Pakistan - Priority areas for investment in the agricultural sector Pakistan Priority areas for investment in the agricultural sector Martin Burton Water Resources and Institutional Development Expert Turi Fileccia Senior Agronomist, FAO Aidan Gulliver Senior Economist, FAO M. Kalim Qamar Agricultural Extension Reform Specialist Ayesha Tayyab Microfinance Expert COUNTRY HIGHLIGHTS prepared under the FAO/World Bank Cooperative Programme Food and Agriculture Organization of the United Nations The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations (FAO) or the World Bank concerning the legal or development status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The mention of specific companies or products of manufacturers, whether or not these have been patented, does not imply that these have been endorsed or recommended by FAO or the World Bank in preference to others of a similar nature that are not mentioned. The views expressed in this information product are those of the author(s) and do not necessarily reflect the views of FAO or the World Bank. All rights reserved. FAO encourages reproduction and dissemination of material in this information prod- uct. Non-commercial uses will be authorized free of charge, upon request. Reproduction for resale or other commercial purposes, including educational purposes, may incur fees. Applications for permission to reproduce or disseminate FAO copyright materials, and all queries concerning rights and licences, should be addressed by e-mail to: Director Investment Centre Division Food and Agriculture Organization of the United Nations (FAO) Viale delle Terme di Caracalla, 00153 Rome, Italy or by e-mail to: [email protected] © FAO 2012 Photo on the cover, ©FAO/Asim Hafeez Pakistan - Priority areas for investment in the agricultural sector TABLE OF CONTENTS Acknowledgements iv Acronyms v Executive Summary viii 1 Agricultural research and extension 1 2 The seed sector 20 3 Water resources 30 4 Rural finance 90 Annexes 133 References 144 ACKnoWleDGements This report is the result of a joint cooperation between the World Bank and the Food and Agricultural Organization of the United Nations (FAO). It provides an overview of priority areas for investment in the agricultural sector of Pakistan, which include (i) agricultural research and extension; (ii) the seed sector; (iii) water resources; and (iv) rural finance. Its main findings were presented at the ‘International Roundtable on Agriculture and Water Resources Management’ in Islamabad, Pakistan on March 8-9, 2011. The main authors of this report include: (i) ‘Transforming agricultural research and extension’ by M. Kalim Qamar, Agricultural Extension Reform Specialist. (ii) ‘Streamlining for a demand-driven seed sector’ by Messrs. Bekzod Shamsiev, Senior Agriculture Economist, World Bank; Turi Fileccia, Senior Agronomist, FAO; James Stanelle, International Seed Industry Expert, WB; Jitendra Srivastava, Principal Agriculturalist, World Bank; Aqlaq Hussain, National Seed Expert; Thomas Osborn, Senior Officer, FAO. (iii) ‘Participatory water resource management’ by Martin Burton, Water Resources and Institutional Development Consultant. (iv) ‘Rural Finance’ by Ayesha Tayyab, Microfinance Expert. The authors would like to thank Olaf Verheijen, Consultant, and Aidan Gulliver, FAO Senior Economist, for their contributions to this paper. The authors would also like to thank Claudio Gregorio, Chief, Near East, North Africa, Europe, Central and South Asia Service, FAO’s Investment Centre Division, for his review and overall support and guidance. The opinions expressed in this report are the sole responsibility of its main authors. v Pakistan - Priority areas for investment in the agricultural sector AcronYms AAs Amelioration Associations ABRI Agricultural Biotechnology Research Institute ADB Asian Development Bank AI Artificial Insemination AKIS Agricultural Knowledge and Information System APFMIS Andhra Pradesh Farmers’ Management of Irrigation Systems ASCs Amelioration Service Cooperatives AWB Area Water Boards CABB Center of Agricultural Biochemistry and Biotechnology CCA Cultivable Command Area CIB Credit Information Bureau CIF Community Investment Fund CMP Crop Maximization Project CNA National Water Commission DAAS Danish Agricultural Advisory Services DASM Department of Amelioration Scheme Management DAWE Department of Amelioration and Water Economy DGBs Drainage Beneficiaries Groups DSC Development Support Centre DSi I&D Department DWR Department of Water Resources EDI Economic Development Institute FAO Food and Agriculture Organization FDI Foreign Direct Investment FOs Farmer Organizations FSC&RD Federal Seed Certification and Registration Department FY Financial Year FYP Five-Year Plan GCA Gross Command Area GDP Gross Domestic Product I&D Irrigation and Drainage ID Irrigation Department v IDMT Irrigation and Drainage Management Transfer IFAD International Fund for Agricultural Development IFPRI International Food Policy Research Institute IMT Irrigation Management Transfer IMU Irrigation Management Unit IPD Provincial Irrigation and Power Department ISF Irrigation Service Fee ISTA International Seed Testing Association IWMI International Water Management Institute LSO Local Support Organization LTD State-owned Limited Company M&E Monitoring and Evaluation MAF Ministry of Agriculture and Food MFB Microfinance Bank MFI Microfinance Institution MoAF Ministry of Agriculture and Forestry MOM Management, Operation and Maintenance MWRRA Maharashtra Water Resources Regulatory Authority NARC National Agricultural Research Center NBC National Bio-safety Committee NBFI Non-Bank Financial Institution NGO Non-Governmental Organization NIAB Nuclear Institute for Agriculture and Biology NIBGE National Institute for Biotechnology and Genetic Engineering NIGAB National Institute for Genomics and Advanced Biotechnology NRSP National Rural Support Program NWFP North-West Frontier Province O&M Operation and Maintenance OECD Organisation for Economic Co-operation and Development OIP On-Farm Irrigation Project OIP-2 Second On-Farm Irrigation Project PARB Punjab Agricultural Research Board PARC Pakistan Agricultural Research Council PBR Plant Breeders’ Rights PID Public Irrigation Department v Pakistan - Priority areas for investment in the agricultural sector PIDA Punjab Irrigation and Drainage Authority PIDAs Provincial Irrigation and Drainage Authorities PIM Participatory Irrigation Management PPCBL Punjab Provincial Cooperative Bank Limited PSC Punjab Seed Corporation R&D Research and Development RA Regular Authority SCWRLI State Committee for Water Resources and Land Improvement SECP Securities and Exchange Commission of Pakistan SIDA Sindh Irrigation and Drainage Authority SLRs Limited Responsibility Societies SME Small and Medium Enterprise SMS Subject Matter Specialists SSC Sindh Seed Corporation STED Science and Technology for Economic Development SU Support Unit SWMO Sindh Water Management Ordinance TC Territorial Constituency TIL Truth-in-labeling TIPAN Transformation and Integration of Provincial Agriculture Network UPOV International Union for the Protection of New Varieties of Plants VERCON Virtual Extension, Research and Communication Network VO Village Organization WB World Bank WUA Water Users Association ZTB Zarai Taraqiati Bank v EXECUTIVE SUMMARY Introduction Pakistan has great potential in agriculture. About 27 percent of the total 79.6 million hectares of the country is under cultivation. Agriculture contributes about 24 percent of the GDP and employs 47 percent of the labour force. Most subsectors of agriculture have either remained static or have declined during the last three decades, with the exception of livestock. Therefore, there is considerable scope for improvement in production and in the processing of primary output. The World Bank, working in partnership with local and international collaborators, including the Investment Centre of FAO, has identified key areas that require priority interventions if the agricultural sector is to address the challenges of rural poverty, and maximize its contribution to export growth and national development. These areas are: • Agricultural research and extension • The seed sector • Water resources • Rural finance This document outlines in detail the rationale for an intervention as well as the possible investment areas to support the Government of Pakistan in each subsector. Potential interventions that the Bank could champion are summarized below for each of these areas. The Bank appreciates that it is important that it work closely with all relevant stakeholders, and in particular, the National Agriculture Forum, in addressing the bottlenecks that are impairing the growth prospects of Pakistan’s agricultural sector. Agricultural research and extension The agricultural research system in Pakistan is weak. Agricultural extension services are outdated and agricultural universities operate in relative isolation from research and extension institutions. v Pakistan - Priority areas for investment in the agricultural sector Specific interventions that the Bank could support in the enhancement of Pakistan’s agricultural research