September 08, 2014 – Wajid Mumtaz Paracha – BR Report –
Pakistan being an agro-based economy has natural abundance of all agricultural products including food items. Rice is the third largest crop after wheat and cotton. It is grown over 11% of the total cropped area. Rice is a high valued cash crop and is a major foreign exchange earner. It accounts for 9% of value addition in agriculture and 1.3% in GDP. Pakistan grows enough high quality rice to meet both domestic and international demand. It exports around 3.5 million ton per annum.
Different varieties of rice grown in Pakistan are Super Basmati, 1121 Basmati, D-98 Basmati, IRRI-9, IRRI-6 and KS-82 etc. Pakistan is primarily known for its aromatic rice ie super basmati and 1121 Basmati. Two of these varieties of rice dominate the market. Basmati is mainly grown in Punjab and IRRI in Sindh and parts of Punjab. In 1987-88, Government of Pakistan allowed export of rice in the private sector. Before that Rice Export Corporation of Pakistan was exclusively handling export of rice from Pakistan. RECP was the sole rice procurement agency in the country while PAASCO procured very small quantities and the rest was obtained by private sector for local consumption. The private sector rice trade was mainly comprised of rice traders, sellers and growers. Their main concerns were the varieties approved for growth and their respective support price prior to harvest in September through December.
After rice exports were allowed to the private sector, a new body of people emerged in the shape of rice exporters. The rice exporters had no platform from which to interact with the government. They had new and different set of problems to mitigate/combat such as marketing of rice globally, correcting systematic deficiencies that emanated from a monopoly procurement system with politically inspired support prices coupled with politically priced overseas sales of bulk quantities at low prices. The private sector participation in the rice industry in Pakistan has brought massive investments in the processing and storage of this product. One of the results of these investments is the export of rice (polished/sortexed and broken) in to the African & European markets, which is set to grow and bring more value to Pakistan rice customers.
In 1988-89 Rice Exporters Association of Pakistan (REAP) came into existence and started interacting with the Ministry of Commerce and Ministry of Food Agriculture and Livestock and also with the Planning Division of the Government of Pakistan.
In 1992 realising the absence of any national rice standards, REAP played a pivotal role in establishing the Pakistan Rice Standards with the Pakistan Standards Institution for the first time in the history of Pakistan.
In 1992 REAP also played host to the Arabian Gulf Co-operative Council which included government buyers from Saudi Arabia, Kuwait, Oman, U.A.E., Bahrain and Qatar. For the first time since private sector was allowed rice exports they made a sale of 36000 tons. In 1996-97 REAP once again performed its responsibility by negotiating with European Commission alongside our Ambassador at Belgium and obtained abatement in import duties of 250 ECU/ton on super and/or Kernal Basmati Brown Rice. Since then Pakistan captured 60,000 tons out of the total market size of about 120,000 tons replacing India as the only source of Basmati in this market.
In 1998-99 REAP became a registered body with the Director Trade Organisation Ministry of Commerce. REAP membership became compulsory for all rice exporters. Now, total number of REAP members is over 1500 spread all over Pakistan. We are a democratic organisation and every year managing committee members are elected by the general body. This managing committee then strives relentlessly for the betterment of trade and is very active in taking up issues relating to rice exports.
REAP is very active and conscientious regarding issues that might impede rice exports. From time to time action plans were proposed by REAP on various issues that were causing problem in rice exports. Some of the problems on which REAP sent action plans were milling machinery import problems, limited rice research prevailing, less varieties of rice being grown in the country, poor marketing and so on and so forth. Whether these issues pertain to domestic problems, government policy or international issues REAP through its managing committee and members has always been pivotal in resolving all such matters.
Ever since exports were allowed to the private sector, REAP members, starting from scratch in 1998-99, managed to export above 4 million tons of rice amounting to over 2 billion dollars from Pakistan in 2009-10.
REAP has accomplished creditable task of bringing growers, millers and traders of rice crop on one platform and has created mutual harmony, understanding and affection among each other. REAP leadership has organized number of seminars to educate people involved at each stage of rice. These seminars have greatly helped understanding of latest techniques and solutions of bottlenecks faced. This spirit-de-crop has resulted in production of high quality basmati in province of Sindh.
Agriculture is the mainstay of our economy and our financial stability depends on better yield. In spite of adverse geopolitical conditions, REAP has exceeded rice export target for this financial year. REAP is playing a positive role ensuring that rice crop continues its contribution in the revenue earning which is the lifeblood of our economic development. REAP and Pakistan as a nation we take pride in being the only Non Government regulated rice industry. REAP has always strived for the betterment of its members in particular and Pakistan Rice exports in general.