$2bn US investment in farm sector likely

ISLAMABAD: The United States will make an investment of $2 billion in the agriculture sector of Pakistan over a period of five years (2010-2014) to address impending water crisis to help the country improve profitability of agricultural markets. 
 
The country’s agricultural sector which affects the livelihood of 60 per cent of the population uses 90 per cent of Pakistan’s water, according to the ‘Pakistan Assistance Strategy Report’ of the State Department.
In an analysis, the report says the management of the Indus Basin Irrigation System, which sustains the agricultural sector, is reliant on water flows from diminishing Himalayan glaciers and is so inefficient that half the water is lost to seepage.


To avoid potential disruption in rural incomes and food supplies from this pending water crisis, Pakistan urgently needs investments in storage, canals and irrigation services to improve water management.

“High impact, high visibility US agriculture programmes will likely to include rehabilitation and expansion of irrigation to help make Pakistan’s agricultural sector more stable and profitable,” the report says.

Assistance will be implemented primarily through provincial irrigation departments, thus helping build long-term capacity at the sub-national government level to manage water in a sustainable fashion.
In addition, Pakistan’s agricultural sector was missing major revenue-generating opportunities and self-sustaining export potential because of its poor storage infrastructure, the strategy report notes.

Less than eight per cent of Pakistan’s produce is exported due to inadequate cold storage facilities. Citing an example in this regard, the report pointed out that an estimated 35 per cent of Pakistani mango crop rots before reaching any market place.

US experts were exploring investments in cold storage facilities that will leverage private sector capital investment and increase the opportunities for exports of mango, citrus and other horticulture. Such investments would help stabilize the country’s rural economy, the report hopes.

The report says while the United States’ infrastructure support will focus first on energy and agriculture programmes, subsequent years of funding were intended to also support activities in transport, health and education, such as roads in the border region, a state-of-the-art trauma centre in a vulnerable area or a centre of excellence in a major university, which will serve a concrete need and were indicative of the US long-term commitment to help improve the lives of the Pakistani people.

The report explains that these efforts will not substitute for ongoing investments in social services and capacity development, but rather will provide visible symbols of US efforts intended to address immediate needs of the Pakistani people and to promote the country’s economic growth, security and stability.

The US government has appointed Robin Raphel as economic assistance coordinator in Pakistan to closely supervise all assistance to the country to coordinate the expanding assistance programmes.

In this regard, additional US staff has been requested to manage an expanded programme operating more through Pakistani institutions and in provincial capitals.

The report reveals that additional operational funding will be required to support the additional staffing. Related investments in office and residential infrastructure and transportation were being identified.

Given the paramount role, Pakistan’s provincial governments play in designing, managing and implementing programmes, US government staff will be both in Islamabad and Peshawar, Karachi and Lahore.

As the lead and largest manager of assistance funds among the US government agencies, USAID in particular will significantly increase its project management, legal, financial management, and procurement staff.
According to the report, Pakistani officials at all levels will have the opportunity to provide input into civilian assistance planning.

A US inter-agency team spent weeks in Islamabad between October and November to review the assistance strategy and met key officials of the government at federal and provincial levels.

The report stated that procedures were currently being developed with the government at both the national and provincial levels for channelling resources through governmental agencies with the capacity to implement programmes effectively. Implementation letters for the provincial governments have been drafted and were under review.

In the meantime, the USAID Mission in Pakistan has also begun conducting pre-award surveys of governmental and non-governmental institutions that will likely be recipients of US assistance resources.