ISLAMABAD, July 13 (IMI) The Asian Development Bank (ADB) and the Government of Pakistan have launched a $24 million Agribusiness Support Fund (ASF) to develop agribusiness in Pakistan. Signing the agreement for the fund was Peter Fedon, ADB Country Director in Pakistan, and Hashim Khan Hoti on behalf of the Government.
ASF will provide farmers with technical and managerial services on a grant basis to improve their productivity and competitiveness in horticulture, livestock, dairy production, processing, and marketing. “Improved agribusiness is essential to maintain and expand export markets for agricultural products and it will certainly contribute to increased economic growth and rural employment," Mr. Fedon says.
The agreement is part of an ADB Agribusiness Development Project, which focuses on increased agricultural productivity and improved marketing for the agriculture sector. The project will corporatize the agriculture sector and also help formulate a national agribusiness policy and provincial horticulture policies to meet international agricultural product standards.
ASF is a not for profit company under the project, which is being executed by the Ministry of Food, Agriculture and Livestock. It is a public-private partnership that is primarily financed by ADB. The fund will be based in Lahore and expects to commence grant funding by September 2006.
The project covers all areas of Pakistan with about 2,000 agro-enterprises in both the formal and informal sectors expected to benefit over five years.
ASF will help increase access to agribusiness finance and revise and update the agribusiness regulatory framework, upgrade testing and certification facilities for seeds, nurseries, and crops and strengthen technical training.
Further, as a result of technical assistance provided, some financial institutions are expected to develop dedicated agribusiness finance functions. These could benefit an additional 10,000 agro-enterprises, including up to 12,500 farmer entrepreneurs, by improving access to finance, and providing significant jobs and income generating opportunities, conservatively estimated at 100,000 person-years of permanent employment.
Agribusiness enterprises range from micro-scale village based operations to large-scale nationally recognized companies. Small and medium-scale agribased enterprises in the informal sector employ an estimated 1.5 million people. As the smaller enterprises are labour-intensive and generally located in or close to rural areas, the potential for direct and indirect (through linkages to farms) growth and job generation is much greater than for large firms.