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GEARING UP FOR CPEC (2016-17)AGRICULTURE SECTOR OF PUNJAB
22nd January 2019
What are we discussing today?
What is
CPEC?
What do Chinese want?
What do we want?
What are opportunities for
agriculture sector?
How can Punjab capitalize on
them?
What are we discussing today?
What is
CPEC?
What do Chinese want?
What do we want?
What are opportunities for
agriculture sector?
How can Punjab capitalize on
them?
ONE BELT ONE ROAD
Creation of a maritime road that links China’s port facilities with the African coast, pushing up
through the Suez Canal into the Mediterranean
Creation of an economic land belt that includes countries on the original Silk Road through
Central Asia, West Asia, the Middle East and Europe
What are we discussing today?
What is
CPEC?
What do Chinese want?
What do we want?
What are opportunities for
agriculture sector?
How can Punjab capitalize on
them?
What does China want – Overriding objectives
• Look for new growth drivers
• Capitalize on China’s domestic over capacity
• Direct Chinese capital for regional infrastructure
• Improve trade and relations with ASEAN, Central Asian and European
countries
Critical for Kashgar (Xinjiang)
BRI
CMREC
SREB
MSR
NELB
CCWAEC
CICPEC
CPEC
BCIMEC
Chinese objectives within agriculture sector
through CPEC
Technical cooperation and exchange
Investment in upstream and downstream industries
High grade cotton to secure textile value chains
Xinjiang Production and Construction Corps’ (Bingtuan) - an economic and paramilitary
organization in the Xinjiang Uyghur Autonomous Region
“agricultural production is large-scale, its degree of mechanization and technological content is
high, and water conservancy and other facilities are solid”
China - experience, technology and financing
Pakistan - favorable resources, labor force and market opportunities
What are we discussing today?
What is
CPEC?
What do Chinese want?
What do we want?
What are opportunities for
agriculture sector?
How can Punjab capitalize on
them?
What does Punjab want – Overriding objectives
Source: Punjab Agriculture Sector Plan
FARMER-CENTRIC SERVICE DELIVERY
PRIVATE SECTOR-LED GROWTH
ENHANCED PRODUCTIVITY
Instruments to achieve these objectives
Wider Access to
Requisite Inputs
and Knowledge
Efficient Access to
Market
Promoting New
Investment and
Access to Finance
Improving Quality
Standards
1 2 3 4
Source: Punjab Agriculture Sector Plan
How to approach CPEC?
Mapping Opportunity
Canvass
Digging Deeper
Looping in Private Sector
Designing Targeted
Interventions
Expanding the Canvass
1
2
3
4
5
What are we discussing today?
What is
CPEC?
What do Chinese want?
What do we want?
What are opportunities for
agriculture sector?
How can Punjab capitalize on
them?
Opportunity?
Paradigm Shift
1.3 billion people - Rising incomes,
consumption, urbanization
$1 trillion of food consumption in China every
year - Another $500 billion in 10 years
2012 – China surpassed USA to become the
world’s largest importer of agri products
Sales of packaged food almost quadrupled in
the last 15 years
Multinationals with long-term China plans
Pakistan's exports to the world in 2015 (HS codes up to HS24 - agricultural and agro-processed excluding cotton and
livestock-related products)
0
500
1000
1500
2000
2500
Cere
als
Edib
le f
ruit a
nd n
uts;
peel of
citr
us f
ruit
or
melo
ns
Sug
ars
and
sug
ar
conf
ect
ionery
Pro
duct
s of
the m
illin
g ind
ust
ry; m
alt;
starc
hes;
inu
lin; w
heat
glu
ten
Bevera
ges,
spir
its
and v
inega
r
Edib
le v
egeta
ble
s a
nd c
ert
ain
roots
and
tubers
Oil s
eeds
and
ole
ag
inous
frui
ts;
misce
llane
ous
gra
ins,
seeds
and f
ruit;
indus
tria
l or
medic
inal p
lants
; st
raw
…
Coff
ee, te
a, m
atÃ
© a
nd s
pic
es
Anim
al or
veg
eta
ble
fa
ts a
nd o
ils a
nd
their c
leava
ge p
roduct
s; p
repa
red
edib
le f
ats
; a
nim
al or
vegeta
ble
waxes
Pre
pa
rations
of
cere
als
, fl
our,
sta
rch
or
milk
; p
ast
ryco
oks' p
roduc
ts
Pre
pa
rations
of
vegeta
ble
s, f
ruit, nut
s or
oth
er
part
s of
pla
nts
Lac;
gum
s, r
esi
ns
and
oth
er
vegeta
ble
sap
s a
nd e
xtr
act
s
Resi
dues
and w
ast
e f
rom
the
food
ind
ustr
ies;
pre
pa
red
anim
al fo
dd
er
Mis
cellane
ous
edib
le p
repa
rations
Toba
cco a
nd m
anuf
act
ured t
oba
cco
subst
itute
s
Vegeta
ble
pla
itin
g m
ate
rials; vegeta
ble
pro
duct
s not elsew
here
speci
fied o
rin
cluded
Live tre
es
and
oth
er
pla
nts;
bulb
s, r
oots
and the lik
e; cu
t fl
ow
ers
and o
rnam
ent
al
foliage
Coco
a a
nd c
oco
a p
repa
rations
10 8 17 11 22 7 12 9 15 19 20 13 23 21 24 14 6 18
Export
Valu
e (
Million $
)
$4.062 billion
0
20
40
60
80
100
120
140
160
180
Cere
als
Bevera
ges,
spir
its
and v
inega
r
Edib
le f
ruit a
nd n
uts;
peel of
citr
us f
ruit o
rm
elo
ns
Lac;
gum
s, r
esi
ns
and
oth
er
vegeta
ble
sap
sand e
xtr
act
s
Resi
dues
and w
ast
e f
rom
the
food indus
trie
s;pre
pa
red a
nim
al fo
dd
er
Oil s
eeds
and
ole
ag
inous
frui
ts; m
isce
llaneous
gra
ins,
seeds
and f
ruit; in
dust
rial or
medic
inal
pla
nts
; st
raw
and f
odd
er
Edib
le v
egeta
ble
s a
nd c
ert
ain
roots
and
tubers
Vegeta
ble
pla
itin
g m
ate
rials; vegeta
ble
pro
duct
s not elsew
here
speci
fied o
r in
clud
ed
Sug
ars
and
sug
ar
conf
ect
ionery
Pre
pa
rations
of
vegeta
ble
s, f
ruit, nut
s or
oth
er
part
s of
pla
nts
Live tre
es
and
oth
er
pla
nts;
bulb
s, r
oots
and
the lik
e; cu
t fl
ow
ers
and
orn
am
enta
l fo
lia
ge
Coff
ee, te
a, m
atÃ
© a
nd s
pic
es
Pre
pa
rations
of
cere
als
, fl
our,
sta
rch
or
milk;
pa
stry
cooks' p
roduc
ts
Mis
cellane
ous
edib
le p
repa
rations
10 22 8 13 23 12 7 14 17 20 6 9 19 21
Pakistan's exports to the China in 2015 (HS codes up to HS24 - agricultural and agro-processed excluding cotton and livestock-
related products)
$303 million
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
Oil s
eeds
and
ole
ag
inous
frui
ts; m
isce
llaneous
gra
ins,
seeds
and f
ruit; in
dust
rial or
medic
inal
pla
nts
; st
raw
and f
odd
er
Cere
als
Edib
le f
ruit a
nd n
uts;
peel of
citr
us f
ruit o
rm
elo
ns
Resi
dues
and w
ast
e f
rom
the
food indus
trie
s;pre
pa
red a
nim
al fo
dd
er
Bevera
ges,
spir
its
and v
inega
r
Pre
pa
rations
of
cere
als
, fl
our,
sta
rch
or
milk;
pa
stry
cooks' p
roduc
ts
Edib
le v
egeta
ble
s a
nd c
ert
ain
roots
and
tub
ers
Sug
ars
and
sug
ar
conf
ect
ionery
Mis
cellane
ous
edib
le p
repa
rations
Pre
pa
rations
of
vegeta
ble
s, f
ruit, nut
s or
oth
er
pa
rts
of
pla
nts
Coff
ee, te
a, m
atÃ
© a
nd s
pic
es
Lac;
gum
s, r
esi
ns
and
oth
er
vegeta
ble
sap
s a
nd
extr
act
s
Live tre
es
and
oth
er
pla
nts;
bulb
s, r
oots
and
the lik
e; cu
t fl
ow
ers
and
orn
am
enta
l fo
liag
e
Vegeta
ble
pla
itin
g m
ate
rials; vegeta
ble
pro
duct
s not elsew
here
speci
fied o
r in
clud
ed
12 10 8 23 22 19 7 17 21 20 9 13 6 14
China’s total imports in 2015 (HS codes up to HS24 - agricultural and agro-processed excluding cotton and livestock-
related products – only those with Pakistan’s exports to China)
$76 billion
Distances matter for us too!
But why are we missing out on China?
Mapping the opportunity canvass
China Russia Mongolia STANs
Crops and
Sugar
Fruits
Vegetables
Others
Zoom in to find prospective
opportunities
Crops & Sugar
Fruits Vegetable
Zooming in!
Zooming in on crops and sugar!
Commodity Code Commodity Trade Value (US$)
1006 Rice 1,927,200,362
1701 Cane or beet sugar 234,355,718
5201 Cotton (not carded or combed) 105,593,504
Story of Rice!
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
0
500
1,000
1,500
2,000
2,500
3,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Export
s to
Chi
na in
thous
and
US$
Export
s to
the
worl
d in
mill
ion
US$
Pakistan's Rice Exports
Pakistan's exports to the world (million US$) Pakistan's exports to China (thousands US$)
Story of Rice!
Pakistan's total rice exports in 2015: $1.92 billion
-
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
Pakistan’s Top Export Partners for Rice 2015
Story of Rice!
China's total rice imports in 2015: $1.4 billion
0
100,000,000
200,000,000
300,000,000
400,000,000
500,000,000
600,000,000
700,000,000
800,000,000
China’s Import Partners for Rice 2015
RICE - What is happening?
Pakistan one of the top five world exporters of rice - $1.9 billion in 2016 represented 5% of global rice exports
Rice exports to China accounted for only 8% of this
China imported $1.4 billion rice
Pakistan’s share 11%; Rest Vietnam and Thailand
Non-favourable tariffs
China maintains a special low tariff of 1% on import of a quota but beyond this quota, rice imports are subject to a tariff of 65%
Asean countries enjoy preferential tariffs as a part of Asean-China FTA — 20% on non-basmati and broken rice and 50% on tariff in basmati rice
In case of Pakistan, no preferential tariff is applicable on any rice category
Story of Citrus!
0
50
100
150
200
250
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Pakistan’s Citrus Exports
Pakistan's exports to the world (million US$) Pakistan's exports to China (US$ thosands)
-
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
Afghanistan RussianFederation
United ArabEmirates
Indonesia Philippines Ukraine Saudi Arabia Kuwait Oman Sri Lanka
Pakistan’s Top 10 Export Partners for Citrus
Story of Citrus!
Pakistan's total citrus exports in 2015: $185 million
-
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
China’s Import Partners for Citrus 2015
Story of Citrus!
China's total citrus imports in 2015: $267 million
Are China’s fruit imports aligned with our
exports?
Commodity
CodeCommodity
Pakistan's
Exports ($)
China's Imports
($)
'0805 Citrus fruit, fresh or dried 184,793,000 266,894,000
'0804Dates, figs, pineapples, avocados, guavas, mangoes and mangosteens, fresh or dried 124,676,000 408,425,000
'0803 Bananas, incl. plantains, fresh or dried 20,647,000 772,943,000
'0810Fresh strawberries, raspberries, blackberries, back, white or red currants, gooseberries and ... 12,133,000 2,001,361,000
'0802Other nuts, fresh or dried, whether or not shelled or peeled (excluding coconuts, Brazil nuts ... 2,325,000 576,478,000
'0806 Grapes, fresh or dried 822,000 637,007,000
'0809Apricots, cherries, peaches incl. nectarines, plums and sloes, fresh 314,000 777,189,000
'0801Coconuts, Brazil nuts and cashew nuts, fresh or dried, whether or not shelled or peeled 205,000 180,709,000
'0808 Apples, pears and quinces, fresh 163,000 576,478,000
CITRUS - What is happening?
Pakistan has Category 1 status on the FTA for citrus,
meaning there is no tariff applied.
Popular citrus fruit imports in China are not amongst
the popular citrus exports of Pakistan
Non-tariff barriers have kept the exports from
Pakistan low, such as port of entry and
quarantine/SPS requirements
Digging deeper!Possible reasons we missing out on these opportunities
Tariff measures:
Negotiation of FTA should ensure that the tariffs faced by Pakistan are at least at par with those in other countries such as ASEAN
Non-tariff measures:
Technical measures such as high sanitary and phytosanitary (SPS) requirements compared to other export markets
Lack of mutual recognition of standards and certificates
Testing in China is considered to be time-consuming and complex
Physical access barriers – restrictions on ports?
Other reason
Competitiveness, capacity, quality, etc. – Role of Agriculture Department and Development Partners
What are we discussing today?
What is
CPEC?
What do Chinese want?
What do we want?
What are opportunities for
agriculture sector?
How can Punjab capitalize on
them?
How can Punjab leverage these opportunities?
CPEC Readiness
Aligning public investments
Designing new interventions
Informed through evidence
Advocacy for tariff and non-tariff barriers
Addressing market failures
Incentivize exports
Other options?
Institutionalizing public-private interface
Investor fora
CPEC agribusiness roadshows
Solidify Chinese commitments in up gradation
Institutionalizing this approach!
Mapping Opportunity
Canvass
Digging Deeper
Looping in Private Sector
Designing Targeted
Interventions
Expanding the Canvass
Beyond CPEC – Going Forward
China Russia Mongolia STANs
Crops and
Sugar
Fruits
Vegetables
Others
Newer markets (north and
south)
Products with little or no
exports
Leapfrogging newer
product categories in
growing segments
International Growth Centre
THANK YOU
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