Agriculture Development A Way Forward… Marketing & Processing Infrastructure 8 July, 2009

World Experience – Success Stories Chile Investment in Infrastructure Compliance Mechanism Interventions by Multinationals, Production Management & Technology, e.g. grapes Cooperatives Terms of Trade (FTAs, Bilaterals etc) India Investment in Infrastructure Institutional Framework Processing Industry Australia Investment in Infrastructure High Value Addition (variety) Production Management & Technology

Agricultural Productions Food Security – GDP Growth Drivers CommodityProduction (Million Tones) Horticulture (F&V)11.0Growth Driver Wheat23.0Food Security Rice5.4Food Security Maize3.1Food Security Total42.5 Source: Agri Statistics of Pakistan, MINFA 2008

Project Rationale 1. Food security (Effective intervention, food storage) 2. Integration in Value Chain System including Farm Inputs, Outputs and Agriculture Finance 3. Ensuring Farmer’s Profitability 4. Ensuring Right time, price, quality, quantity for Farm Supplies (seeds, fertilizer, pesticides etc.) 5. Reduction in Post-harvest losses (Currently 30%-40% for perishables and 15% for grains) 6. Implementation of Quality Standards – for access to premium markets

Farm Service Center Inputs Infrastructure Fertilizers Seeds Pesticides Diesel & Lubes Farm Services - Rental Farm Machinery Extension & Training etc Credit Agri Finance Support Services Inventory Credit Agriculture Financing ( Production & Capital Loans) Commodity Financing Grains Temp. Grain Storages (Silos) Bulk Handling Logistics Electronic Spot Market Certification Local Collection Point (Perishables) Pre Cooling units Transportation Extension & Training IT Private Sector & Village Based Farmers Organizations / Growers Large Scale Long Term Storages (Silos & Cold Stores) Perishables Cold Stores Sorting Platforms Grading & Packing Reefer Logistics Electronic Spot Market Certification Output Infrastructure

Common Infrastructure Input Provision, Output Handling/Storage and All Allied Services (Rs. In Million)(US$ in Million) 200 Agri. Service Centres Provision of Land (10 acres each), Office Building and Utilities (Water, Electricity, Gas, IT) Large Scale Storage Centres Provision of Land, Building and Utilities 4005 Electronic Spot Market MIS 1602 Network Planning Site Identification & SOPs 801 Total4,640 ( 4.6 Billion)58

Farm Supplies Infrastructure Estimated Cost Physical Infrastructure Billion Rs. US $ Million 200 Agri Service Centers Warehousing for fertilizer, seed pesticide etc Infrastructure for diesel & lubricant sale Farm Equipment Agriculture Credit Support Services Total

Grains Infrastructure Estimated Cost Physical Infrastructure Rs. In Million US$ in Million 2.00 Million Tons of Grain Storage & Handling Equipment Collection Points 25,000 Tons each for Short Term Storage 5 Long Term Storage Terminals 200,000 Tons each Bulk Handling Logistics System Total 13,600 (13.6 Bil) 170

Perishables Infrastructure Estimated Cost (Rs. in billion) (US$ in million) a) 1000 Collection points (including pre-cooling rooms) b) 40 Modern pack-houses (including cold storage facilities) c) 160 Vegetable sorting platforms (including cold storage facilities) d) 2 Reefers/container yards (with 200 containers & 50 CA containers each at Lahore & Karachi) e) 6 Food Testing Laboratories (in 6 production areas) f) 400 Retail Outlets Total

Proposed Investment Total Cost Rs Billion USD Million

Project Regulatory & Institutional Support Regulations and Policy Amendments in market legislation such as Market Committee Act Establishing National Grades & Standards (PakGAP) Pre-Shipment Inspection for Exports Operational Mechanism Public Private Partnership through formations of Companies - Private Sector lead Management 3 Distinct Businesses 1. Farm Supplies & Services 2. Grains; Trading, Logistics, Handling & Storage 3. Perishables; Primary Processing, Trading, Logistics, Handling & Storage Public Funds utilized towards Equity of Farmers Village Organizations / Growers

Project Status Pre budget meeting held at Planning Commission Deputy Chairman Planning Commission, MOS Finance and EAD, Minister MINFA, Minister Privatization Commission Project Approved for budget Pre budget meeting held with advisor finance Project approved for inclusion in budget Project of Rs billion included in budget with current allocation of Rs. 500 million

Project Status contd... Post budget meeting held with Deputy Chairman and Secretary Planning Commission PC-II approved. Rs million allocated for feasibility and PC-I On initiative of Deputy Chairman Planning Commission, meeting planned with CM Punjab to discuss project (date expected within this week)

Way Forward Develop feasibility and PC-I in collaboration with Stakeholders. (2 months) Business Plan – Project Structure & Network Planning (1 month) – Partnership Agreements (1 month) – Site Acquisition (3 months onwards) – Rollout (3 months onwards) – Completion (18 – 24 months)