Impact of Indian Agriculture Policy on Pakistani Rice Exports

Karachi: Pakistan’s rice export is facing a declining trend of rice export due to cutthroat competition in international market. Rice holds an important position in agriculture sector of Pakistan and internationally Pakistan is fourth largest producer after China, India and Indonesia. This sector brings more than US$ two billion of foreign exchange every year in the country.

This was stated by President Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Zakaria Usman in his press statement.

President FPCCI showed a serious concern and said that the subsidy from Indian Government to rice exporters has seriously affected the rice exports of Pakistan. As the international prices of agricultural products is declining, but the export of rice from Pakistan is decreasing in term of quantity also during the last three months. Pakistan’s rice export volume has declined during the last three month (July to September) from US$ 363 million compared to the last year same period of US$ 404 million.

Zakaria Usman further stated that FPCCI has repeatedly informed the government and stakeholders about the subsidy on rice by Indian government in the name of food security. We have highlighted the consequences of Indian policy and its impacts on Pakistan’s exports.

FPCCI has informed the Ministry of Commerce, Ministry of Finance and stakeholders through various letters and Press Releases, but no action/reaction was taken from concerned departments as well as Ministry of Commerce. Millions of farmers relying on rice cultivation as their major source of employment. The Indian step is currently hurting directly millions of Pakistani farmers who are already facing various challenges due to past two consecutive floods in Pakistan. This may create serious food insecurity for Pakistan in future.

He urged the Government of Pakistan to oppose the demand of subsidy by India from WTO which is highly trade distorting step.

Being the member of WTO, Pakistan always supports Free Trade, liberalization and market competition.

He further stated that Pakistani exports will not be in a position to compete Indian exporters because government of Pakistan cannot provide subsidies to the producers because of International Monetary Fund conditionalities. He demanded the zero rated facility and other fiscal and administrative measures in favor of rice exporters. In May 2014, FPCCI has released a report on the ‘Political Economy of Subsides’ where early warning has been issued about the declining trends in Pakistani exports. This report was sent to policy makers and all concerned departments.

Zakaria Usman has indicated that policy makers should understand the economic wisdom behind the suggestions and recommendations of FPCCI. In recent past FPCCI has recommended several policy measures regarding economic vision 2025, infrastructure development, foreign investment, and fiscal policy. A comparison of fiscal targets set by the government in federal budget and the FPCCI’ shadow budget indicates that government has recognized the FPCCI’s estimates.

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