Now that the trade relationship between India and Pakistan is on a fast track, and the two countries are in the process of reducing the ‘negative lists’ , it is time to reflect on the implications of a liberal border trade with Pakistan. While potato and onion growers appear to be positively inclined, citrus growers, especially those in Punjab and Rajasthan are feeling threatened by the superior quality and price competitiveness of their Pakistan counterparts. As the transit from Pakistan becomes easier, plums, pears, apricots, peaches, grapes, pomegranates and dry fruits from Afghanistan will also affect the Indian producers, though the Indian consumer will be happier on getting better quality at competitive prices. The duty structure on these commodities will being to play an important role, and will be the subject of intense negotiations,, but once the system is in place it offers great scope for collaboration and partnerships , not just on the agriculture trade side, but also in terms of developing integrated value chains – from the establishment of Tissue Culture labs to Hi – tech nurseries, cold chain infrastructure and refrigerated transport logistics , aggregation and branding – and in many of these Indian agribusiness organizations may have an edge on account of their exposure to a wider and more variegated market.
It must be acknowledged at this point that adequate homework has still not been done in terms of understanding the competitive edge of the several commodities which Pakistan produces. Unlike the Agmarknet which gives a fairly clear idea about production data and market arrivals, this columnist’s web search has not been able to get to any single website to address these issues. Unfortunately our libraries are not well stocked with books on agriculture production systems in Pakistan – or for that matter, other South Asian countries as well, and this lacunae that needs to be addressed immediately. It must however be acknowledged that the trade organizations have done better. FICCI has an understanding with its counterpart body in Pakistan, and over the next few weeks, it would be interesting to see how these bodies work together to find out trade complementarities. It is true that India is emerging as a major supplier of cotton to Pakistan textile mills, but the full potential needs to be understood.
The agriculture sector in India should welcome this move, as this will also pave way for better co-ordination on food and agricultural policies for the SAARC region and many of the issues faced by this region, especially India and Pakistan are common. Just as the EU has got together to prepare a common standard with regard to their imports, India and Pakistan have to take the lead to prepare a joint position with regard to ‘production protocols’. Europe imports its rice from India and Pakistan, but when it comes to imposing standards, it does so unilaterally without any reference to the prevailing agronomic practices, land holding patterns and the socio economic and cultural constructs in which production takes place. Therefore while it is all right to insist on ‘traceability of honey’ , and ‘identification of production fields ’ to ensure consumer safety, in actual practice these are difficult propositions to implement as bee keeping is done by the poorest families, and most production of rice is on the lands of marginal and small holders. Just as each country in Europe invokes the EU when it wants to reject a consignment, the time has come for South Asia to set forth its set of conditions with regard to export inspection protocols and dispute redressal. Likewise it would be better if the standards laid down by FSSAI are discussed in bi lateral and multilateral forums in South Asia so that as a region on can take cudgels on behalf of the producers.
Therefore the opening of India Pakistan trade must be followed with a series of dialogues on its implications on agriculture. Rather, the focus should be on how agriculture should leverage the opportunities that emanate from this opening. Apart from collaboration among the agriculture research institutions and agribusiness co-operatives and organizations, the dialogue should extend to issues like new technologies ( farm mechanization, micro –irrigation, protected cultivation, tissue culture labs, irradiation facilities,) institutions ( farmer producer companies, weather based insurance products, credit through joint liability groups, warehouse receipts ) and business to business collaboration . Thus if established Basmati brands from India pick up their rice from Pakistan or the leading honey processors pick up raw honey from Pakistan and leverage their marketing skills to give better price to the Pakistan farmer, it should be an engagement which has the potential of making all sides happy. This proposition is valid for Pakistan agribusiness groups as well. Thus if a Pakistan trader wants to pick up onions directly from Nasik for the UAE market, it should be encouraged for it gives the Indian farmer a better price.
Last, but not the least, once the trade relations between India and Pakistan are on an even keel and farmers see positive gains in terms of an expanded market, there is a very real possibility of thinking in terms of a Common Agricultural Policy, and preparing a common position with regard to UN agencies like the FAO. The Agriculture Ministers of SAARC are likely to meet in Dhaka after a few weeks, and if all goes well, some of these themes can be taken up for discussion. It may be mentioned here that most SAARC agriculture summits have focused on collaborative research and extension issues: the focus can now shift meaningfully to co-operation in trade and transit, which alone will ensure higher incomes for the farmers.