Agriculture The performance of agriculture remained weak ... · Web viewThe net income per kg was Rs2.75, 1.27 and 0.73 for respective vegetables in case of farmers near to market,

BOARD OF INVESTMENTGOVERNMENT OF PAKISTAN

PAKISTAN

AGRICULTURE SECTOR

BOI

CONTENTS

Sector Overview..............................................................................................................................................2

Budget 2006-07 Highlights for Agriculture Sector......................................................................................4

Agri - Exports.................................................................................................................................................5

Investment Policy for Corporate Agriculture Farming..............................................................................6

Sector over the Last Five Years....................................................................................................................8

Agriculture......................................................................................................................................................9

Crop Situation..............................................................................................................................................9Major Crops..........................................................................................................................................10Minor Crops..........................................................................................................................................12Other Minor Crops................................................................................................................................12

Farm Inputs................................................................................................................................................13a) Fertilizer:...........................................................................................................................................13b) Improved Seed..................................................................................................................................14c) Irrigation:..........................................................................................................................................14d) Agricultural redit:.............................................................................................................................15

Forestry.........................................................................................................................................................16

Livestock and Poultry..................................................................................................................................17

Livestock....................................................................................................................................................17Poultry:......................................................................................................................................................19

Initiatives for Poultry Industry..............................................................................................................20Fisheries.........................................................................................................................................................20

Investment Opportunities............................................................................................................................23

Summer Vegetables...................................................................................................................................23Alove Vera Processing..............................................................................................................................23Seed Processing Unit.................................................................................................................................25

Annexure.......................................................................................................................................................28

Sector Overview

Agriculture is the single largest sector of the economy. It contributes 24 percent of the GDP, employs 48.4 percent of country’s workforce and is a major source of foreign exchange earnings. About 68% of the population lives in rural Pakistan and depends upon agriculture for sustenance.

The average annual growth rate of agriculture during 1990s was 4.5%. The highest growth rate of 11.7 percent was achieved in 1995-96 mainly due to increase in cotton, gram, milk and meat production. The sector touched the lowest negative growth rate of 5.3 percent in 1992-93 mainly due to decrease in cotton and sugarcane production. The major crops as wheat, cotton, rice, sugarcane and maize account for 41% of value added and minor crops 10% in overall agriculture. Livestock has emerged as an important sub-sector of agriculture. It accounts for 37.5% of agriculture value added and about 9.4% of the GDP. Similarly, fisheries play an important role in national income through export earnings Government has identified agriculture as a priority area for addressing problems of unemployment, poverty alleviation and for fostering economic development. The agricultural policy focuses on sustainable food security, increasing productivity, commercial agriculture, imports substitution, income diversification and export orientation.

In procurement of agricultural commodities, the role of private sector is being emphasized leading to public-private sector partnership. The institutional services as agricultural research and extension are geared to raise productivity and profitability of the farmers and address issues faced by the farming community at field level. The services in agricultural marketing are being renovated. It is planned to establish new markets in areas where marketing structure is weak. Attempt is being made to remove market imperfections and provide an enabling environment for farmers to market their produce at reasonable prices. A special focus is being made to establish a network of quality testing laboratories in public sector for grains, livestock diseases and products, fertilizer and agro-chemicals, residue testing and strengthening of plant and animal quarantine services.

The performance of agriculture remained weak this year as it grew by only 2.5 percent, as against 6.7 percent of last year and the 4.2 percent target for the year, with major crops and forestry registering a negative growth of 3.6 percent and 5.7 percent, respectively. Agriculture, this year was subjected to adverse weather conditions. Major crops, accounting for 32.5 percent of agricultural value added, depicted a negative growth of 3.6 percent as against an impressive 17.8 percent growth of last year. Besides measuring from a high base of last year, major crops registered a decline primarily on account of a 13.0 percent less production of cotton (12.4 million bales as against 14.3 million bales last year) owing to adverse weather conditions. Sugarcane is another major crop which registered a negative growth of 6.2 percent (from 47.2 million tons to 44.3 million tons). Rice and maize, the two other major crops, however performed well with rice production increasing by 10.4 percent and maize production was up by 27.3 percent. Despite the impressive performance of these two crops, they failed to compensate the decline inproduction of cotton and sugarcane. Wheat production remained more or less at last year’s level with a marginal increase of 0.4 percent (21.7 million tons as against 21.6 million tons). Livestock with almost 50 percent contribution in agriculture has been the only saving grace as this sector grew by 8.0 percent, as against 2.3 percent of last year and hence took the overall agricultural growth to a positive side.

Furthermore, during the current fiscal year (2005-06), the availability of water for Kharif 2005 (for the crops such as rice, sugarcane and cotton) has been 5.5 percent more than the normal supplies and 19.8 percent more than last year’s Kharif. Excessive winter rainfalls, (January – March 2005) along with melting of snow on mountains top were responsible for higher than normal availability of water during Kharif 2005. The water availability for Rabi season (for major crop such as wheat) was 17.3 percent less than the normal availability but 29.8 percent more than last year’s Rabi.

Budget 2006-07 Highlights for Agriculture Sector

A Program of Rs.7.8 billion is being introduced to increase the incomes of the farmers in 13,000 villages. The Program will start from 1000 villages in 2006-07. This will create jobs in rural areas.

A Public-Private Partnership in dairy sector development with Rs.3.6 billion has been launched. This Company will set up 1200 Model Dairy Farms and will establish 2950 farms for raising livestock. This project will enhance rural incomes.

The production of dairy products is now exempt from Sales Tax. The dairy and livestock equipments are exempt from custom duty and sales tax. The custom duty on the packaging material of dairy products has been reduced to 5 percent. This will help promote dairy sector in rural area.

Drip irrigation and sprinklers technology are being introduced in agriculture with Rs.15.0 billion.

Rs.7.0 billion is being spent in 2005-06 for lining of 15,000 canals. Rs.6.0 billion will be spent in 2006-07 for the same. As a result, the loss of canal water will be reduced by 25 percent.

Rs.5.5 billion will be spent on katchi Canal in 2006-07. The government is constructing Katchi Canal with Rs.22 billion in Balochistan. This will bring revolution in agriculture in Balochistan.

Rs.10 billion is allocated for the initial work on big dams in 2006-07. The government has provided Rs.5.0 billion subsidy on fertilizer in 2005-06. In 2006-07, Rs.12.3 billion subsidy will be provided to keep the price of fertilizer at affordable level for the farmers.

To enhance the agricultural productivity the government is launching National Agricultural Research Program with Rs.2.5 billion. The machinery for agriculture, horticulture and Floriculture will be exempt from custom duty.

Machinery for promoting fisheries will be exempt from custom duty. Custom duty is reduced from 60 percent to 30 percent on refrigerated vans. Exemption from custom duty on new and used agriculture tractors in CBU conditions.

Special incentive package in the shape of reduced tariff rates for poultry industry has been proposed.

All these measures will help enhance agricultural activities in the country. This will increase the incomes of the farmers.

Agri - ExportsExports were targeted at $ 17 billion or 18.1 percent higher than last year. The exports of primary commodities were up by 22 percent; prominent among those are exports of rice (33.6%), fish and fish preparation (30.2%) and fruits (20.6%). Exports of textile manufactures grew by 19.2 percent; prominent among those are exports of bedwear (58.4%), readymade garments (31.0%), cotton yarn (29.4%), cotton cloth (16.5%) and towels (12.0%). It is encouraging to note that exports this year have been largely quantity driven and with firming up of the price of exportable, Pakistan’s exports may rise substantially in the medium terms. During the first nine months (July-March) of the current fiscal year, over 88 percent increases in exports are driven by quantity (quantity effect) and the remaining 12 percent are due to the increase in unit values of exports (price effect).

Pakistan's exports are highly concentrated in few items namely, cotton, leather, rice, synthetic textiles and sports goods. These five categories of exports account for 74.5 percent of total exports during the first nine months of the year with Cotton manufacturers alone contributing 58.4 percent, followed by leather (6.1%), rice (6.9%) and synthetic textiles (1.2%). Pakistan’s exports are also highly concentrated in few countries. The seven countries, namely USA, Germany, Japan, UK, Hong Kong, Dubai and Saudi Arabia account for 50 percent of its exports. The United States is the single largest export market for Pakistan, accounting for 27 percent of its exports followed by the United Kingdom, Dubai, Germany and Hong Kong.

Investment Policy for Corporate Agriculture Farmingi. Only such local and foreign companies will be entitled to Corporate Agriculture Farming that

are incorporated in Pakistan under the Companies Ordinance, 1984.

ii. There is no upper ceiling limit on land holding for CAF by amending relevant laws. The size

of the proposed corporate farm may be left to be determined by the prospective investor.

iii. Agriculture Income Tax, regime applicable in provinces, on income from agriculture, would

be applicable to Corporate Agriculture Farming.

iv. Tax relief in shape of Initial Depreciation Allowance @ 50 % of machinery cost is allowed to

set –off provincial AIT.

v. Labor laws may not be presently applicable to Corporate Agriculture Companies. Due to

special circumstances of the agriculture sector however appropriate labor laws be developed

for this sector within five year.

vi. Import of agriculture machinery and equipment is exempted from Custom duty and Sales Tax.

vii. Machinery items for wheat/ grain storage and cool chain are importable at Import duty @ 0

%.

viii. Wherever possible, state land may either be sold or leased to the investors for 50 years,

extendable for another 49 years. Preference in this respect will be given to cultivatable

wastelands, which is otherwise fit for cultivation.

ix. Transfer of land for CAF will be exempted from duty.

x. 100% foreign equity is allowed. ( in the CAF )

xi. No Government sanction required undertaking CAF except registration with BOI.

xii. Exemption of the dividends (of CAF companies) from tax.

The areas of Investment for Corporate Agriculture Farming (CAF)

i. Land development / reclamation of barren land, desert and hilly areas for agriculture purpose

and crop farming.

ii. Reclamation of water Front Areas/ Creeks.

iii. Crops, Fruits, Vegetables, Flowers Farming / Integrated Agriculture (Cultivation and

processing of crops).

iv. Processing of agriculture products.

v. Modernization and development of irrigation facilities and water management.

vi. Plantation/ Forestry.

vii. Dairy, small ruminants (sheep, goat) and other livestock farming.

Sector over the Last Five Years

Factors Units 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05

Cropped Area Million Hectares

22.74 22.04 22.12 21.85 22.94 22.51

Seed Distribution 000 Tonnes 146.76 193.8 191.57 170.02 178.77 218.12

Water Availability Million Acre Feet

133.28 134.77 134.63 134.48 134.78 135.68

Fertilizer off-take 000 Nutrient Tonnes

2,823 2,964 2,928 3,020 3,222 3,693

Supply of Agi. Credit Rs. in Million 37,667 44,489.4 52,446.3 58,918.7 73,560.0 108,733

Tube wells Numbers 541,839 545,569 680,473 762,902 941,752 954,842

Production of Tractors Numbers 35,038 32,553 24,311 27,101 36,059 44,095

Production of Major Crop 000Tonnes 106012 98167 99217 106567 10991 -

Production of Fruit 000Tonnes 4,069 4,169 4,126 3,933 4,161 4,138

Production of Meat 000Tonnes 1,957 2,015 2,072 2,123 2,188 2,271

Milk Production 000Tonnes 25,566 26,284 27,031 27,811 28,624 29,472

Fish Production 000Tonnes 655 62 655 562 566 580

Total Forest Production 000Tonnes 670 736 726 823 918 912

Source: Ministry of Food, Agriculture & Livestock

AgricultureOver the last five years agriculture growth has witnessed mixed trends. In the years (2002-03 to 2004-05), better availability of irrigation water had positive impact on overall agricultural growth and this sector exhibited modest to strong recovery.

Agriculture Growth (Percent)Years Agriculture Major Crops Minor Crops

2000-01 -2.2 -9.9 -3.2

2001-02 -0.1 -2.5 -3.7

2002-03 4.1 6.9 0.4

2003-04 2.3 1.9 4.0

2004-05 6.7 17.8 3.0

2005-06 (P) 2.5 -3.6 1.6

P = Provisional Source: Federal Bureau of Statistics

Crop SituationThere are two principal crop seasons in Pakistan, namely the "Kharif", the sowing season of which begins in April-June and harvesting during October-December; and the "Rabi", which begins in October-December and ends in April-May. Rice, sugarcane, cotton, maize, mong, mash, bajra and jowar are “Kharif" crops while wheat, gram, lentil (masoor), tobacco, rapeseed, barley and mustard are "Rabi" crops. Major crops, such as, wheat, rice, cotton and sugarcane account for 90.1 percent of the value added in the major crops. The value added in major crops accounts for 35.2 percent of the value added in overall agriculture. Thus, the four major crops (wheat, rice, cotton, and sugarcane), on average, contribute 31.7 percent to the value added in overall agriculture. The minor crops account for 12.3 percent of the value added in overall agriculture. Livestock contribute almost 50 percent to agriculture – much more than the combined contribution of major and minor crops (47.5%).

Production of Major Crops (000 Tons)

Years Cotton (000bales) Sugarcane Rice Maize Wheat

2001-02 10,613(-1.1)

48,042(10.2)

3,882(-19.2)

1,664(1.3)

18,226(-4.2)

2002-03 10,211(-3.8)

52,056(8.3)

4,478(15.3)

1,737(4.4)

19,183(5.2)

2003-04 10,048(-1.6)

53,419(2.6)

4,848(8.3)

1,897(9.2)

19,500(1.6)

2004-05 14,265(45.3)

47,244(-15.2)

5,025(3.6)

2,797(46.3)

21,612(10.8)

2005-06(P) 12,417(-13.0)

44,312(-6.2)

5,547(10.4)

3,560(27.3)

21,700(0.4)

P: Provisional. (July – March) Source: Economic Survey 2005-06*: Figures in parentheses are growth rates

Major Crops

a) Cotton:Cotton is not only an export-earning crop but also provides raw material to the local Textile Industries. It accounts for 8.6 percent of the value added in agriculture and about 1.9 percent to GDP. The area and production target for cotton crop during the current fiscal year were 3247 thousand hectares and 15.0 million bales, respectively.

Area, Production and Yield of Cotton

Year Area Production Yield

(000) Hectare

% Change (000)Bales % Change Kgs/Hec % Change

2001-02 3116 6.5 10613 -1.1 579 -7.22002-03 2794 -10.3 10211 -3.8 622 7.4

2003-04 2989 7.0 10048 -1.6 572 -8.0

2004-05 3193 6.8 14265 42.0 760 32.9

2005-6 (P) 3096 -3.0 12417 13.0 682 -10.3

P: Provisional. (July – March) Source: Economic Survey 2005-06

b) Rice:Rice is an important food cash crop. It is also one of the main export items of the country. It accounts for 6.1 percent of the total value added in agriculture and 1.3 percent to GDP. Area and production target of rice for the year 2005-06 were set at 2533 thousand hectares and 5000 thousand tons, respectively. Area sown for rice is estimated at 2620 thousand hectares – 3.4 percent higher than the target and 4 percent higher than last year.

Area, Production and Yield of RiceYear Area Production Yield

(000) Hectare

% Change (000)Bales % Change Kgs/Hec % Change

2001-02 2114 -11.1 3882 19.2 1836 -9.12002-03 2225 5.2 4478 15.3 2013 0.6

2003-04 2461 10.6 4848 8.3 1970 -2.1

2004-05 2419 2.3 5025 3.6 1995 1.2

2005-6 (P) 2620 4.0 5547 10.4 2117 6.1


c) Sugarcane:Sugarcane crop serves as a major raw material for production of white sugar and gur. Their share in value added of agriculture and GDP are 3.4 percent and 0.7 percent respectively. For 2005-06, the area under sugarcane crop was targeted at 955 thousand hectares as against 966 thousand of last year.

Area, Production and Yield of SugarcaneYear Area Production Yield

(000) Hectare

% Change (000)Tons % Change Kgs/Hec % Change

2001-02 1000 4.1 48042 10.2 48042 5.92002-03 1100 10.0 52056 8.3 47324 -1.5

2003-04 1074 -2.4 53419 2.6 49738 5.1

2004-05 966 -11.8 47244 -15.2 48906 -3.8

2005-6 (P) 907 -6.1 44312 -6.2 48856 -0.1


d) Wheat:Wheat is the main staple diet of the people of Pakistan. It contributes 13.7 percent to the value added in agriculture and 3.0 percent to GDP. Area and production target of wheat for the year 2005-06 were set at 8415 thousand hectares and 22.0 million tons, respectively.

Area, Production and Yield of Wheat

Year Area Production Yield

(000) Hectare

% Change (000)Tons % Change Kgs/Hec % Change

2001-02 8058 -1.5 18226 -4.2 2262 -2.72002-03 8034 -0.3 19183 5.2 2388 5.6

2003-04 8216 2.3 19500 1.6 2375 -0.5

2004-05 8358 1.7 21612 10.8 2586 8.9

2005-6 (P) 8303 -0.7 21700 0.4 2614 1.1


Minor Crops

a) OilseedsThe major oilseed crops include cottonseed rapeseed/mustard, sunflower and canola etc. The total vailability of edible oils in 2004-05 was 2.764 million tons. Local production stood at 0.857 million tons which accounts for 31 percent of total availability while the remaining 69 percent was made available through imports. During 2005-06 (July to March) local production of edible oil is provisionally estimated at 0.809 million tons. During the same period 1.269 million tons of edible oil was imported and 0.216 million tons edible oil was recovered from imported oilseeds.

Area and Production of Major Oilseeds Crops

Crop 2004-05 2005-06 (P)

Area Production (00Tons)

Area Production

(000 Acres) Seed Oil (000 Acres) Seed Oil

Cottonseed 7979 4770 536 7660 3980 478

Rapeseed/Mustard

601 203 64 578 188 59

Sunflower 780 569 205 850 595 214

Canola 288 144 52 323 162 58

Total Oil 857 809P: Provisional. (July – March) Source: Economic Survey 2005-06

Other Minor Crops

The production of all the pulses namely masoor, mung and mash are down by 13.5 percent, 12.6 percent and 9.8 percent respectively during 2005-06. The main reason for decline in production of all these pulses as compared to last year has been the short fall of respective area of these crops, which declined by 17.8, 15.2 and 23.7 percent respectively.

Area and Production of Other Minor CropsCrops 2004-05 2005-06(P) % Change in

production Area(000 hectares)

Production (000 tons)

Area(000 hectares)

Production (000 tons)

Masoor 48.8 25.9 40.1 22.4 -13.5Mung 245.4 25.9 207.9 113.6 -12.6Mash 45.2 130.0 34.5 16.5 -9.8Patato 110.5 18.3 124.7 1662.7 -17.9Onion 122.3 2024.9 145.9 2275.9 29.0Chilles 38.4 90.4 59.4 121.9 34.8


Farm Inputsa) Fertilizer:Fertilizer is one of the basic inputs of agriculture and its timely availability is very crucial for agricultural production. The fertilizer off-take is increasing at a brisk pace and will increase further in the medium term.

Production and Off-take of Fertilizer (000 N/tons)

Year Domestic Production

% Change

Imports % Change

Total % Change

Off-take

% Change

2001-02 2286 -0.5 626 8.1 2912 1.2 2929 -1.2

2002-03 2315 1.3 766 22.4 3081 5.8 3020 3.1

2003-04 2539 9.7 764 -0.3 3303 7.2 3222 6.7

2004-05 2718 7.1 785 2.7 3503 6.1 3694 14.6

2005-06(P) 2132 5.3 1002 77.7 3134 2982 21.1 2982


b) Improved Seed

Certified seed plays a pivotal role in boosting agricultural production both in market oriented and subsistence farming. Certified seed in Pakistan is limited to wheat, cotton, paddy as major crops besides maize, gram, pulses fodder and oilseeds as well as minor crops. The Federal Seed Certification & Registration Department regulates quality during the flow of seed from the breeder to the growers. The Department performs its functions through seventeen Seed Testing Laboratories and Field Offices, established in various ecological zones of the country.

c) Irrigation: It is well-known that an efficient irrigation system is a pre-requisite for increasing agricultural production since water is a basic input for agriculture. It provides food security against the vagaries of nature and enables the cropping intensity to be increased. Despite the existence of good irrigation canal network in the world, Pakistan still suffers from wastage of a large amount of water in the irrigation process.

Canal Head Withdrawals (Below Rim Station) Million Acre Feet (MAF)

Provinces Kharif (Apr-Sep)2004

Kharif (Apr-Sep)2005

% Change

Rabi(Oct-Mar)2004-05

Rabi(Oct-Mar)2005-06

% Change

Punjab 30.33 36.43 20.1 11.54 16.40 42.1

Sindh 25.65 31.18 21.6 10.41 12.13 16.5

Baluchistan 2.18 2.16 -0.9 0.72 0.89 23.6

NWFP 0.96 0.99 3.1 0.48 0.64 33.3

Total 59.12 70.75 19.8 23.15 30.06 29.8

Source: Economic Survey 2005-06

Government has given top priority to the development of water resources in order to uplift the agro-economy on the national level which will be achieved by maximizing crop production, through progressively increasing surface water supplies and conserving them using the latest technologies available and protecting land and infrastructure from water logging, salinity, floods and soil erosion. The main objectives are overcoming the scarcity of water through augmentation and conservation means i.e. by construction of medium and large dams and by efficient utilization of irrigation water, restoring the productivity of agricultural land through control of water logging, salinity and floods.

Water Sector Projects under Implementation

Projects Location Cost(US $m)

Storage(MAF)

Area Under Irrigation ( Acres)

Completion Date

Gomal Zam Dam NWFP 214 1.17 183086 April, 2009

Greater Thal Canal* Punjab 500 - 1534000 June, 2008

Rainee Canal* Sindh 229 - 412000 September, 2008

Kachi Canal* Balochistan 538 - 713000 December, 2008

Mirani Dam Balochistan 98 0.30 33200 September, 2006

Sabakzi Dam Balochistan 17 0.02 6680 December, 2006

Raising of Mangla Dam (30 ft)

AJ & K 1000 2.90 - September, 2007

Satpara Dam Multipurpose

Skardu 35 0.08 15536 June, 2008

Diamer Basha Dam N.A & NWFP

6500 6.40 - 2015-16

Kurram Tangi Dan NWFP 290 0.914 360000 June, 2009


Upon completion, the above-mentioned projects will provide a quantum jump in agricultural growth, necessary to sustain an overall real GDP growth of 7-8 percent in the next few years. Higher agricultural growth would also help in alleviating poverty.

d) Agricultural Credit:Agricultural credit provides financial resources to the farming community particularly, for the purchase of primary inputs like fertilizer, seed, pesticides, machinery, equipment etc. Government considers it an important instrument for achieving higher production and attaches high priority to ensure its timely availability to the farmers. Credit requirements of the farming community have shown an increasing trend over the years.

Supply of Agriculture Credit by Institutions (Rs. In million)

Year ZTBL Commercial Banks Cooperatives Domestic

Private Bank

Total

Rs. Million % Change2000-01 27610.2 12055 5124.2 - 44789.4 12.82001-02 29108.0 17486.1 5273.7 578.5 52446.3 17.12002-03 291270.2 22738.6 5485.4 1421.0 58918.7 12.32003-04 29933 33248.0 7653.0 2702.0 73560.0 24.82004-05 37409 51310.0 7607.0 12407.0 108733.0 -2004-05

(July-Mar)25197.6 35391.7 5641.3 7680.2 73810.8 -

2005-06(July-Mar)

29027 46973.0 4181.0 10980.0 91161.0 23.5


ForestryPakistan has 4.01 million hectares covered by forests, which is equivalent to about 5 percent of the total land area. Eighty-five percent of this is a public forest, which includes 40 percent coniferous and scrub forests on the northern hills and mountains.

Pakistan being a forest deficient country is facing timber and fire wood shortage to the tune of about 29 million cubic meters. There is need to increase the area under tree cover not only to meet the material needs of the growing population but also to enhance the environmental and ecological services being provider by the forests. During the year 2005-06, forests have contributed 139 thousand cubic meters of timber and 305 thousand cubic meters of firewood as compared to 183 thousand cubic meters of timber and 336 thousand cubic meters of firewood in 2004-05. In order to motivate people to plant more trees and to highlight the importance of forest, tree planting campaigns are organized twice a year in spring and monsoon seasons. During spring and monsoon season year 2005, 97.657 million saplings (spring 67.003 million and monsoon 30.654 million were planted

Total Forest Area (million hectares)Province Area

Punjab 0.48

NWFP 1.33

Sindh 0.84

Balochistan 1.36

Total 4.01


Livestock and Poultry

Livestock

Livestock sector contributes almost 50 percent to the value addition in the agriculture sector, and almost 11 percent to Pakistan’s GDP, which is higher than the contribution made by the crop sector (47.4% in agriculture and 10.3% in GDP). The role of livestock sector in the rural economy of Pakistan is very critical as 30-35 million rural population of the country are engaged for their livelihood. Within the livestock sector, milk is the largest and the single most important commodity. Despite decades of neglect, Pakistan is the fifth largest milk producer in the world. The total value of milk produced is higher than the value of two major crops, that is, wheat and cotton.

Livestock Population (Million No.’s)Species 2001-02 2002-03 2003-04 2004-05 2005-06 (E)

Cattle 22.8 23.3 23.8 24.2 25.5

Buffalo 24.0 24.8 25.5 26.3 28.4

Sheep 24.4 24.6 24.7 24.9 25.5

Goat 50.9 52.8 54.7 55.6 61.9

Camel 0.8 0.8 0.7 0.7 0.7

Horses 0.3 0.3 0.3 0.3 0.3

Asses 3.9 4.1 4.2 4.2 4.3

Mules 0.2 0.2 0.3 0.3 0.3

E: Estimated Source: Economic Survey 2005-06

ProductionProducts Units 2001-02 2002-03 2003-04 2004-05 2005-06 (E)

Milk (000 Tons) 27031.027811.0

28.624.0 29438.0 31294.6

Beef (000 Tons) 1034.0 1060.0 1087.0 115.0 1174.4

Mutton (000 Tons) 683.0 702.0 720.0 739.0 782.1

Poultry Meat

(000 Tons) 355.0 370.0 378.0 384.0 462.5

Wool (000 Tons) 39.4 39.7 40.0 40.2 40.7

Hair (000 Tons) 19.3 19.9 20.7 20.7 23.2

Boanes (000 Tons) 339.4 347.6 356.2 365.1 384.0

Fat (000 Tons) 126.5 129.7 132.9 136.3 143.5

Blood (000 Tons) 42.9 44.0 45.2 45.2 49.0

Eggs Million No’s 7679.0 7860.0 8102.0 8529 9057.0

Hides Million No’s 7.9 8.2 8.4 8.4 9.1

Skin Million No’s 39.3 40.3 42.4 42.6 45.2


Poultry:

Production of Commercial Poultry and Poultry Products

Production Units 2004-05 2005-06(E)

Day Old Chicks Million No’s 372.0 386.5

Layers Million No’s 22.7 23.2

Broilers Million No’s 292.1 303.9

Breeding Stock Million No’s 6.8 6.9

Poultry Meat (000 Tons) 384.0 463.0

Eggs Million No’s 4992.0 5107.0


Initiatives for Poultry Industry

A new “Livestock Development Policy” has been approved by the Prime Minister in principle. It addresses legal framework and development strategies and action plan for farmers using livestock as supplementary source of income groups and development of small and medium enterprises (SME) and large businesses. The policy will bring radical changes in the current livestock production system and help in exploitation of potentials of livestock sector.

Two private sector led companies namely “Livestock and Dairy Development Board” and “Pakistan Dairy Development Company” have been established to increase the pace of development in livestock sector. Board of Directors of these companies includes all stakeholders.

Import of dairy and livestock machinery/equipment, not manufactured locally, is allowed duty free subject to certification by Ministry of Food, Agriculture and Livestock.

To provide access to credit to small holders, micro credit schemes have been initiated through commercial banks i.e. Zarai Taraqiati Bank . Punjab Cooperative Bank and Punjab Small Industries Corporation for distribution of loan. Government of Punjab has disbursed approx. Rs 2.0 billion under the budget 2004-05 for small and medium term projects. Federal Government is further working with stakeholders and other scheduled banks to facilitate credit to livestock farmers.

In order to organize dairy sector, cooperative milk production/collection system is encouraged and milk processors have reported 35 percent increase in milk collection than the previous year.

Establishment of slaughterhouses and temporary quarantine station are encouraged is private sector. Six slaughterhouse and temporary quarantine stations have been established in the private sector.

In the wake of Avian Influenza, 12 laboratories in different poultry concentrated areas have been established/equipped for surveillance’ diagnosis. A central laboratory at National Agricultural Research Centre, Islamabad has been especially developed to address Avian Influenza surveillance and monitoring. So far during the last one year, it has analyzed more than 28000 samples from poultry and more than 700 samples from migratory birds. The Ministry of Food, Agriculture and Livestock is constantly monitoring the situation on daily basis.

FisheriesFishery as a sub-sector of agriculture plays a significant role in the national economy and towards the food security of the country, as it reduces the pressure on demand for mutton, beef and poultry. It is also considered to be the principal source of livelihood for the communities inhabitating at the long coasts of Sindh and Balochistan as well as along the major rivers, lakes and dams. It contributes, on an average, about 0.3 percent to the total GDP and 1.3 percent to agricultural. It has been estimated that about 400 thousand fishermen and their families are dependant upon the fisheries for their livelihood.

Marine Fisheries Department (MFD) is responsible for management, development and sustainable exploitation of the fisheries resources in exclusive economic zones. MFD provides intelligentsia to fisheries sector and as a result, the primitive small-scale fishery has developed to a modern fishery industry through use of sustainable methods. By implementing effective quality control measures, Pakistan is now exporting fish and fishery products to 61 countries including US, Japan and other important countries. The emphasis is to enhance production of fish and shellfish to reduce pest harvest losses to increase seafood export earnings, to improve quality control service and to upgrade the socio-economic conditions of the fishermen.

Government of Pakistan is taking a number of steps to improve fisheries sector. Number of initiatives are being taken by Federal and Provincial Fisheries Department which inter alia include construction of coastal highways, strengthening of infrastructure, introduction of aquaculture in coastal area, improvement in freshwater fish culture facilities, strengthening of extension services, introduction of new fishing methodologies, development of value added products, enhancement of per capita consumption of fish, upgradation of socio-economic conditions of the fishermen’s community etc.

Investment OpportunitiesSummer Vegetables Vegetables are generally grown in two seasons i.e. summer and winter. Selection of summer vegetables is carried out depending upon their concentration in different areas of the Punjab. The feasibility is confined to the Punjab province only for three summer vegetables (bitter gourd, muskmelon and tinda gourd) which are found in Faisalabad, Rahim Yar Khan, Leiah, Khanawal, and Bahawalpur.

Cost of Seed In case of near to market the cost of seed was Rs984.85, Rs167.13 and Rs335.64 for bitter gourd, tinda gourd and muskmelon, respectively. While in case of far from market, the cost of seed involved was Rs890.30, Rs171.44 and Rs361.08 for the respective vegetables.

Costs involved in the purchase application of farmyard manure were Rs369.54, Rs111.98 and Rs182.71 for bitter gourd, tinda gourd and muskmelon, respectively on the basis of near to market, while in case of far from market the costs involved in applying the farmyard manure were Rs389.54, 249.28 and 98.68 for the respective vegetables

Fertilizer Cost The cost involved in applying fertilizer by near to market was Rs1830.88, Rs524.92 and Rs2569.82 for tinda gourd bitter gourd and muskmelon respectively. While in case of far from market the above cost was Rs2190.26, Rs594.24 and Rs2110.26 for these three vegetables. Sufficient and timely irrigating a crop improves the yield per acre of any crop.

Profitability Gross income from the cultivation of summer vegetables was higher on farms near to market as compared to those far from the market. The net income per kg was Rs2.75, 1.27 and 0.73 for respective vegetables in case of farmers near to market, while in case of farmers far from the market the net income per kg was Rs2.33, 0.59 and 0.32.

Suggestions: Following recommendations are made for increasing the yield of summer vegetables:

Summer vegetable cultivation needs proper amount of irrigation water at different stages Vgetable growers use the inorganic nutrients below the recommended level Vegetables are sensitive to diseases and insects attacks. Diagnosis of disease and insect attack at

the right time is the foremost element in crop management practices

Alove Vera Processing

Aloe is one of the oldest healing plants known to mankind. It is even described in the bible for its healing properties. Hundreds of Scientific Research Papers describe the activities of Aloe Vera taken internally or applied externally to the skin or hair. These Research Papers include, but are not limited to the following nutritional uses: A natural cleaner, powerful in penetrating tissue, relieving pain associated with the joints and muscles, bactericidal, acts as a strong antibiotic, virucidale when in direct contact for long periods, fungicidal, anti-inflammatory, instrumental in increasing circulation to area, breaks down and digests dead tissue, and moisturizes tissues.

Target MarketThe target market for the project would be Pharmaceutical and Cosmetic Industry.

PROJECT INVESTMENT

COST RUPEES

Capital Investment 43,305,500

Working Capital Requirement 1,889,986

Total Investment 45,195,486

RECOMMENDED PROJECT PARAMETERS

Capacity Human Resource Location

3,600,000 AloeLeaves per annum

50 Raiwind Road, Lahore

Financial Summary

Project Cost IRR NPV (Rs.) Payback period

45,195,486 26.45% 14,559,388 4.66 years

Seed Processing Unit(Wheat & Rice)

Seeds are the foundation of human and animal life on earth-the foods we eat, the fiber we wear, and most of the products we use in our daily life, are created from a seed. There is no substitute for a quality seed as quality seed is essential for growing quality crops, which ultimately results in a better quality of life.

Capacity of the Project 5 ton Seed per hourAvg. 2000 tons per season (6 month)

Total Project Cost 8.79 million

Working Capital 8.9 million

Man Power Required 17

Project ReturnIRR 24.89 %

Pay Back Period 4.5 years

Net Present Value Rs 28,884,419.00

Key Success Factors

There are a number of factors which contribute towards the success of a project. In case of the project of Seed Processing Unit, some of the Key Success Factors are as follows:

The seed must be free from inert material, weed seed and seed of other varieties and crops; have safe moisture content; have high germination and vigor; and be relatively free of damage and disease. The seed must also be treated, bagged and labeled properly.

The harvested seed must be dried to the level of safe moisture content. This is to reduce physiological activity and damage from storage fungi and insects.

Generally, seed has contaminants of various kinds when it comes into the processing plant, especially if it has been harvested with an improperly adjusted combine or thresher or threshed directly on the ground. Cleaning can be done because seeds differ in length, width, thickness, density, shape, surface texture, color, affinity for liquids, and electrical conductivity, but the most commonly used characteristics are seed size and density. Cleaning increases the seed quality by improving physical purity and germination. That means that inert matter must be removed.

After the seeds are treated, they are bagged, labeled and stored. Bagging and labeling should be done so that the content of the bag can be guaranteed to farmers purchasing the seed.

Seeds should be stored under conditions, which maintain seed quality. The ambient conditions and the storage period will determine the type of storage that is required.

Relative humidity and temperature are very important. High relative humidity and high temperature reduce the viability of seed.

All seed plants should have an internal seed-quality control system. Laboratories to assess quality before and after processing and to monitor the efficiency of the different processing machines are essential.

Other Investment Opportunities in Agriculture Sector

Cattle Farming & Meat Processing(See Annex-I for Land Availability)

Investment Areas: Development of Infrastructure, machinery, tech. etc.Target Investors: Local, China, Saudi Arabia, UAE, Oman, OIC Countries, E.U.

Dairy Farming

Investment Areas: Farms to be developed near major cities for local consumption and exports as well

Target Investors: Local, China, Saudi Arabia, UAE, Oman, OIC Countries, E.U.

Fisheries

Investment Areas: Technology, Trawlers to be developedTarget Investors: Local investors and investors from OIC Countries, China

Horticulture

Investment Areas: Fruit Processing & Packaging & Exports of Fruits, DatesTarget Investors: Local, China, Saudi Arabia, UAE, Oman, OIC Countries

Source: Pakistan Dairy Association Corporate Agriculture Farming

Seed Production

Cold Chains

Agro Processing Industry

Annexure

Project Studies and Pre-Feasibilities Available

Sector / Projects

Project Cost (mill. Rs)

Capital Cost (mill Rs.)

Working Capital (mill. Rs)

Land (Sq. ft)

Work Force Capacity IRR % Payback

(Years)

1 Agriculture Livestock & Fisheries 2 Live stock Industry

3 Abattoir (Slaughterhouse) 20.23 18.17 1.14 66000 2750

animals/day 52.79% 3.13

4 25-Animal Dairy Farm 1.5 0.1 0.18 370,262 5 250 liters/day 22.00%

5 50-Animal Dairy Farm 2.94 0.19 0.28 32 acres 7 552 liters/day 30.00% 5.5

6 Broiler Farm (7500- Birds) 0.41 0.06 0.34 7830 2 7500 birds /

clock 43.03% 3.94

7 Layer Farm (5000-Birds) 0.35 0.06 0.29 10718 2 8463 eggs 34.69% 6.84

8 Calve Fattening Farm 0.89 0.63 0.26 6510 5 390 calves p.a 35.66% 4.26

9 Shrimp Farming 21.35 4.55 13.24 871200 19 251.06 kg

10 Cut Flower Farm (Rose) 1.27 0.09 0.5 217801 7 4538 flowers 27.00% 3.59

11 Flower Shop 2.01 0.1 0.59 217801 11 3028 flowers 68.00% 2.15

12 Seed Processing (Wheat &Rice) 17.69 8.79 8.9 8 Kanals 17 2000 tons/

season 24.89% 4.5

13 Greenhouse (Fresh Cut Roses) 9.76 9.16 0.6 10

Kanals 13 25000 Plants 190%

Food 14 Sea Food Industry15 Fresh Fruits & Vegetables Industry16 Frozen Foods Industry

17 Kinnow Processing 18.87 3.8 11.27 6575 34 80 tons 50.06% 2.04

18 Milk Pasteurization 13 10.29 2 9000 5 72000 Liters/day

19 Animal Casing Processing 3.34 2.29 1.05 1500 19 500 hanks /

shift 31.17% 6.69

20 Mango Processing 21.4 16.12 4.12 44000 44 3 Tons / day 18.00% 2.55

ANNEXURE - IANNEXURE - I

PUNJAB

LAND AVAILABILITY POSITION

Land in compact blocks of 500 acres and more has been reserved for corporate farming in districts

Muzaffargarh, Rajanpur, Bahawalpur and D.G. Khan as under: -

District Tehsil Revenue Estate Area availableMuzaffargarh Kot Adu

Sadiqabad23 blocks of 500 acres

-do- -do- Azizabad 2 blocks of 500 acres-do- -do- Mustafabad 2 blocks of 500 acres

Rajanpur RajanpurAsni i) 2,647 acres

ii) 2,080 acres

-do- -do-Patti Kalan Miran Khas 1,296 acres

-do- -do-Rakh Machka Pacca 1,036 acres

-do- RojhanRakh Kotla Hassan 504 acres

Bahawalpur YazmanChak NO. 96/DB 500 acres

D.G. Khan D.G. KhanShadan Lund Chak Ladan 2,612 acres

-do- -do-Dalana Patti Tomi 2,500 acres

-do- -do-Dalana Patti Bhuchery i) 1,412 acres

ii) 1,212 acres

-do- -do-Gazzi 1,812 acres

Total: - 31,111 acres

In addition to this, 6.6 million acres of land is available in Cholistan of which 2 million acres is relatively

plain but it can be developed only if canal water is made available. Sub-soil water is either saline or too

inadequate for irrigation. There are also problems of infrastructure and other logistics.

The Board of Revenue, Punjab has identified a compact block of 25,000 acres for corporate farming in

Cholistan. The Irrigation Department has intimated that there is acute shortage of canal water suggesting

the mode of overcoming the problem through development projects.

ANNEXURE - IIANNEXURE - II

SINDH


Area Location Kind of land

Availability of water Lease period proposed

Annual lease rate proposed

REVENUE DEPARTMENT2,000-00 acres (Sukkur Barrage)

Deh Pharyaro Taluka Nara

Cul

tivab

le Under ground water is kalarish at 100 ft. depth

30 years renewable by 20 years more

Rs. 1,000/- per acres plus 20% annual increase

1,584 Acres (Kotri Barrage)

B Nos. 1158 to 1256 Deh Ahmed Rajo No.3 Taluka Shaheed Fazil Rahu, Distt:Badin. C

ultiv

able Under ground water is

kalarish30 years renewable by 20 years more

Rs.1,000/- per acres plus 20% annual increase.

1,472 Acres (Kotri Barrage)

B.Nos. 2173 to 2218 & 2287 to 2332. Deh Ahmed Rajo No. 6 Taluka Shaheed Fazil Rahu Distt. Badin. C

ultiv

able Barrage water can be

made from Girhari Distry which is at the distance of 5 miles.

30 years renewable by 20 years more

Rs.1,000/- per acres plus 20% annual increase.

Total: 3,056-00FOREST DEPARTMENT

11,975 Acres

Matiari Riverine Forest (Distance 25 K.M. from Hyderabad along National Highway near Matiari Town. C

ultiv

able Water lifting from

River or through Tubewells

Can be leased out for longer period (To be negotiated)

On agreed rate of joint venture.

9,792 Acres. Riverine forest situated in distt. Thatta (50 K.M. from Hyderabad and Thatta both).

Cul

tivab

le Lifting from Indus River or from Sapa Irrigation minor pass

Can be leased out for longer period (To be negotiated)

On agreed rate of joint venture.

Total: 21,767-00AGRICULTURE DEPARTMENT

3,018 Acres Farm at Lodhhra in Distt. Shikarpur

Cul

tivab

le Water is available Permanent joint venture

1,00,000 per acres (Cost)

Grant total of available land. 29,841-00 Acres1. Badin open Jail area

2. Nahersar, Mirpur Khas.

SINDH

NWFP


S.# Name of SeedFarm

Location Total Area(Acres)

Cultivated area (acres)

1.Govt. Seed Farm, Rakh Manghan D.I. Khan 884 673

2. Govt. Seed Farm, Rakh Zandani

D.I. Khan 1,133 757

3. Govt. Seed Farm, Ratta Kulachi D.I. Khan 500 450

4. Govt. Seed Farm, Rakh Band Kural

D.I. Khan 994 500

5. Govt. Seed Farm, Nar Hafiz Abad, Serai Naurang

Bannu 62 60

6. Govt. Barani Farm Hangu 47 40

7. Govt. Seed Farm, Bahadur Khel Karak 84 56

8. Govt. Seed Farm, Jamra Takht Bhai, Mardan

120 77

9. Govt. Sugarcane Multiplication Farm

Harichand, Charsadda

75 65

10. Govt. Seed-Cum Demonstration Farm

Haripur 50 UnderDevelopment

Total: 3,949 2,678

30

BALOCHISTAN

LAND AVAILABILITY POSITIONAvailable State Land in Balochistan for CAF

S.No Location of Land Size of Plot/ Area in Acres Intended Use of Land

1.

District Lasbella

Dairy Farming, Agriculture Farming, Industrial

Estate, IT Park, Conventional Centers

Tehsil Sonmiani 165,459

Tehsil Dureji 81,178

Tehsil Liari 381,505

Tehsil Lakhara 126,637

2.

District KhuzdarAgriculture Farming, IT Park

Tehsil Khuzdar 22,471

Tehsil Karakh 4,487

3.

District Chagai

Agriculture Farming, Industrial Estate, IT parks,

Marble Factory, Mines & Mines & Development

(Granite, Copper, Ironore, Chromite)

Tehsil Dalbandin 209,322Tehsil Nokundi 192,521Tehsil Taftan 26,350Tehsil Chagai 83,201

4. District Pishin Agriculture Farming, Dairy Farming, IT Parks,

Industrial EstateTehsil Pishin 7,874

5.

District kalat

Agriculture Farming, Dairy FarmingTehsil Surab 9,866

Tehsil Mangchar 682

6.District Kila Abdullah Mines & Mineral Development, Dairy Farming, IT

ParksTehisil Kila Abdullah 27,922

7.District Awaran

Agriculture Farming, Dairy FarmingTehsil Awaran 20,577

8. District LoralaiOstrich Farming, Agriculture Farming

Tehsil Dukki 16,000

9.District Gwadar 40,000 Construction of Shopping Malls, Offices/ Residential

Plazas, 4-5 stars Hotels. Conventional Centers,

Recreation Centers, Establishment of IT Parks, Tehsil Gwadar

Tehsil pasni

31

Industrial Estates, Fisheries Development.Tehsil Ormara

Agriculture farms in Balochistan for Public Private Partnership

S.No Name of Farm Area in Acres Location, District1. A.D.I 1,185 Khanpur, Naseerabad2. Seed Farm Gidder 1,469 Surab, Kalat3. Seed Farm Gidder 3,519 Gadahwa, Jhal Magsi4. Coconut farm 200 Uthal, Lasbela5. Seed Farm 273 Usta Mohammad, Naseerabad6. Katvi Farm 400 Katvi, Lorali7. Sariab Farm 280 Mastung, Mastung8. Model Farm 480 Gulu Shehar, Sibi9. Kalu Killa Farm 200 Kalu Killa, Killa Siafullah10. Agriculture Research Sub

Station400 Turbat, Turbat

11.Agriculture Research Fruit Experiment Station Wayaro Farm

166 Wayaro, Lasbella

32

1. HARNESSING THE CULTIVABLE WASTE LAND

PROSPECTS Pakistan has a total geographical area of 79.6 million hectares. Of this 9.1 million hectares land is cultivable waste. Cultivable waste is that cultivated farm area which is fit for cultivation but was not cropped. The reasons may be lack of water availability, lack of interest, financial resource constraints to buy proper equipment and inputs for cultivation of crops, remote areas from the villages/cities, etc. Cultivable waste area is almost half of the cultivated area. Hence development of this area is not only better for investment but also have potential to contribute to increase in agricultural production.

About half of the cultivable waste area is in the province of Balochistan Province. Break up is as follows:

CULTIVABLE WASTE AREA (MILLION HECTARES)

Pakistan 9.14 Punjab 1.74 Sindh 1.45 NWFP 1.08 Balochistan 4.87

Cultivable waste land in Balochistan is mainly in the Kalat Division followed by Quetta, Nasirabad and Makran Divisions. In Punjab, cultivable waste area is mainly in the Divisions of D.G. Khan, Bahawalpur, Rawalpindi and Lahore. In Sindh, cultivable waste area is located in Hyderabad, Mirpur Khas, Sukkur and Larkana Divisions. In NWFP, cultivable waste area is located in D.I. Khan, Hazara and Kohat Divisions.

PRODUCTION ASPECTS Pakistan's climate is conducive to grow a variety of crops, vegetables and fruits. Major crops produced are wheat, rice, cotton, sugarcane, maize, gram, onion, potato, rape and mustard seed, and sunflower. Major fruits produced include apple, dates, citrus, mango, grapes and guava.

Once the cultivable waste lands are developed, there are bright prospects that production of all the above crops could be started. The requisite technology, manpower and inputs to produce the crops is already available in the country.

MARKETING ASPECTS Pakistan is deficit in food production and approximately Rs. 84 billion (US$ 1.9 billion) is spent annually on import of wheat, edible oils, pulses, tea and other food products. Thus there is

33

ANNEXURE - IIIANNEXURE - III

already available market for these products in Pakistan. There is also potential for exports particularly of cereals, vegetables and fruits.

2. OFF-SEASON VEGETABLE PRODUCTION

PROSPECTS Demand for off-season vegetables is tremendous and it has vast market in side the country and out side in-Middle East and Europe.

Pakistan has technical know-how to produce off-season vegetables. Trained manpower is available and the required greenhouse structure/material is also available. It does not require very sophisticated greenhouses.

Vegetables such as tomatoes, cucumbers and sweet pepper can be produced. This work can be started on a small piece of land near cities where it has market and can also be exported promptly.

Temporary greenhouses can be built using polyethylene sheets and bamboo or iron bars, or pipes. Water supply is assured through tubewells.

PRODUCTION ASPECTS Production technology is not so complicated. All fertilizers and inputs are available locally. Labor is cheap and readily available. Supervisory technical staff is also available. Training of staff can be provided and other technical assistance can be sought from National Agricultural Research Centre, Islamabad.

Land is available on reasonable rates which can be taken on lease or can be bought as per requirements. Off seasons vegetable production project can be started at small level in the beginning and expanded further as a when required. Initially it is suggested to start the project on 5 acres given the provision for expansion up to 25 acres.

MARKETING ASPECTS Perishable vegetables will be marketed or exported immediately after harvest. However, short term transit storage will be required quite often which will be done at the farm in cold rooms.

To encourage export of fresh vegetables, a scheme of 25 percent freight subsidy on export of fresh vegetables is in vogue. This scheme is operated by the Export Promotion Bureau, Government of Pakistan. The expected investors can also make use of this scheme and export to foreign markets as much as they could.

3. SUNFLOWER HYBRID SEED PRODUCTION

PROSPECTS Pakistan is deficit in edible oil production. About 67 percent of total requirement is imported. Sunflower is an important oilseed grown in Pakistan. During 1997-98, sunflower was grown on 98 thousand hectares in 1997-98 and target for 1999-2000 is to grow sunflower at 162 thousand hectares. Sunflower hybrid seed had advantage upto 30 percent of yield production over open pollinated seed. This is why the farmers prefer to use hybrid seed and pay a high rice.

PRODUCTION ASPECTS

34

Pakistan has production technology and inbred lines to produce this seed. Oilseed Programme of National Agricultural Research Centre, Islamabad will assist the investor to set up the production system also provide seed of inbred lines as per the requirements of seed company.

The seed can be produced in Sargodha, Bhalwal, D.G. Khan and Hyderabad districts on irrigated lands during autumn season. The crop is planted in the last week of July and first week of August and is harvested in the first and second week of November. After breaking of dormancy by storing it for 50 days, the seed is ready for sale in first week of January.

A seed company can start its business by producing 50 or 100 tonnes of seed and gradually raise the level of production upto 200 tonnes and 500 tonnes. The seed company would require to establish a small infrastructure in Pakistan for seed processing, seed storage and seed marketing. Some core technical manpower would be needed for the supervision of seed production, storage and marketing. All seed could be produced on farmers field through contract farming or by acquiring land on lease and contracting out all the field operations.

MARKETING ASPECTS A good seed crop can product 300 to 350 kg processed and treated seed per acre. The cost of production of one kg seed comes to about Rs. 150 to 170. It includes cost of seed production, transportation, processing, treating, packing, storage, overheads and marketing costs. The seed is sold to farmers for Rs. 250 to Rs. 300 per kg. In this way, the profit margin is Rs. 100 to Rs. 130 per kg of seed.

The market for hybrid seed already exists in the country. The farmers growing sunflower prefer to use hybrid seed in order to get better productivity per unit and hence they are willing to pay more price for hybrid seed as compared to other seeds. Thus, there will be no marketing problem.

4. DEHYDRATION OF VEGETABLES

PROSPECTS At present dehydrated vegetables have demand from army, Pakistan International Airlines, Railways and hotels. Some units with limited capacity for dehydration of onion, potatoes and cauliflower are operating in Pakistan. Some dehydrated vegetables like garlic powder has utility in certain pharmaceuticals. Apparent household demand for dehydrated vegetables is also limited. The general consumers have not yet been exposed to the product. Hence there exists a considerable suppressed demand for selected dehydrated vegetables like onion, garlic, potato, bitter gourd, cauliflower, etc. It is only matter of introducing the products to the consumers markets.

It is important to record that exports of dehydrated vegetables will be commercially more profitable than processing for local market. Middle Eastern and European markets are to be explored for export potentials.

PRODUCTION ASPECTS During 1997-98, the production of onion was at 1.1 million tonnes, potato at 1.4 million tonnes, garlic at 0.08 million tonnes and cauliflower at 0.2 million tonnes. These are mostly consumed in fresh form. The plant for dehydration of these vegetables could be established at vegetable growing areas like Peshawar, Lahore, Faisalabad, Sahiwal, Sargodha, Multan and Hyderabad.

The main products would be hydrated vegetables and by-products processing wastes. The conversion ratio of the vegetables into dehydrated form is as follows: CONVERSION RATIO

Onion Potato Garlic Cauliflower

35

Raw material11

6 5 15

Finished products 1 1 1 1

Waste Vegetable peeling.

MARKETING a) Domestic: Demand already exists with the defence forces, Pakistan International Airlines and hotels. Consumer demand will have to be created through marketing techniques.

b) Export: There is a great demand for the export of dehydrated vegetables to the Middle Eastern and some Europe markets.

5. TOMATO PASTE PRODUCTION

PROSPECTS Pakistan produces about 0.3 million tones of tomato annually. During the peak season tomato sells at low prices due to larger supplies resulting in less return to growers. About 10 to 20 percent of production is wasted due to defective marketing system and inadequate processing facilities. Sale price of tomato paste in local market indicated that this activity is financially viable if proper marketing arrangements are made.

Presently a quite few companies including M/s Mitchell's Farms are producing tomato paste. The annual production capacity of all the companies together is also limited.

PRODUCTION ASPECTS Tomato paste plant can be established in the main tomato growing areas of Hyderabad (Sindh province), Quetta (Balochistan province), Parachanar (NWF province), Faisalabad and Multan (Punjab province). The main raw material, viz.; tomato and other utilities required would easily become available in these areas. The main product would be tomato paste and by-product would be peels and seeds convertible into animal feed. The conversion ratio of tomato to tomato paste is 8:1.

MARKETING ASPECTS Tomato is very popular vegetable. It is used in fresh form in almost all the recipes. Its price fluctuates very much. At the harvest season price is at the lowest while at the off-season prices rise to a very high level. The consumer generally look for a substitute. Tomato paste could serve as substitute. Apart from this, tomato paste needs to be introduced to consumers and market will have to be created through marketing techniques.

36

6. SOLVENT OIL EXTRACTION FROM RICE BRAN

PROSPECTS Production of Rice (paddy) is estimated to be about 6 million tonnes and based on about 10 percent recovery of rice bran, 0.6 million tonnes of rice bran is available. The oil contents in rice bran is 15 to 17 percent. The existing oil extraction capacity in Pakistan is limited and as such a large quantity or rice bran is either used in poultry feed or exported.

The inedible oil extracted from rice bran is an important raw material in the manufacture of soap, washing powder, etc. Pakistan is importing tallow and during 1977-98, 62 thousand tonnes of tallow was imported at Rs. 1.4 billion for the manufacture of soap. This is an import substitution project and establishment of such unit will help save foreign exchange on the import of tallow.

PRODUCTION ASPECTS Punjab and Sindh provinces are producing a large part of total rice produced in Pakistan. Rice bran, which is the main raw material, is easily available in these provinces. Other raw material will be Hexane (solvent). Main product would be crude oil while by-product will be rice bran meal.

Other related information is as under:

Rice bran is available at very low price Project will operate 200 days during a year Consumption ratio of Hexane is 4 gallons per tonne of rice bran. The plant can also be used for oil extraction from oilseeds such as sunflower, soybean

and cotton seed, etc. Bran of parboiled can produce edible grade oil

MARKETING ASPECTS It is good and cheap substitute of tallow for manufacture of soap and washing powder. Animal tallow is imported to meet the domestic demand for the same. Hence market for the crude oil produced is readily available in Pakistan and can easily be sold to soap factories. Apart from this, the product can also be exported to foreign countries.

7. PRODUCTION OF MUTTON THROUGH RAISING SHEEP AND GOATS

PROSPECTS Pakistan has large livestock inventory i.e. cattle 21.1 million, buffaloes 21.4 million, sheep 23.8 million and goats 44.2 million and has great potential for enhanced production provided feed shortages are overcome; improved health coverage is made available; and price controls are removed. In order to save feed for better feeding the animals, a policy of enhancement of productivity per unit animal is being pursued. Therefore, apparently the number of animals are surplus to the requirement of the country. The marketing system is also obsolete. Steps are in hand to improve the marketing structure.

Large areas of land in the districts of Bahawalpur, Bahawalnagar, Rahim Yar Khan, Larkana, Jacobabad, Shikarpur and Khairpur are under developed and not being utilized effectively. It is

37

estimated that more than 10,000 acres of land is available for sheep and goat raising in these districts.

PRODUCTION ASPECTS Large area of land in the districts of Bahawalpur, Bhawalnagar, Rahim Yar Khan, Larkana, Jacobabad, Shikarpur and Khairpur is still under developed and not being utilized effectively. It is estimated that more than 10,000 acres of land is available for sheep and goats raising in these districts. These areas have good potential for dairy products.

Large area of land in the districts identified above is still under developed and is not being utilized effectively. It is estimated that more than 10,000 acres of land is available for sheep and goats raising in these districts. These areas have good potential powder and other dairy products.

MARKETING ASPECTS In order to exploit livestock resources it is proposed to set up dairy units. The estimated cost for setting up dairy farms of 10,000 heads of sheep/goat is about Rs. 120 million capital cost (cost of land, shed, sheep/goat, etc.) and Rs. 5 million recurring cost (cost of grazing, concentrates, etc).

Mutton is expensive than beef in Pakistan because consumers have a preference of mutton over beef. Hence a large market for mutton already exist in the country. However, there is also a need for proper and hygienic marketing of mutton. If this is done, the product will be readily salable.

There are also bright prospects of export of mutton to Middle East where most of the meat comes from Australia. Pakistan, being an Islamic country, will be preferred by the Middle Eastern Islamic countries for import of mutton because of the way of slaughtering of animals.

8. FISHERIES SECTOR

PROSPECTS Pakistan is blessed with rich fishery resources available in the Exclusive Economic Zone (EEZ) of Pakistan spread over an area of about 250,000 sq km. Pakistan has a coast line of about 1,100 km along the coast of Sindh and Balochistan provinces. Pakistan's total marine production is estimated at 0.4 million tonnes which can be further enhanced to a considerable extent.

The total export from fishery sector during 1997 was US$ 172 million which needs to be further enhanced. Pakistan fishery being of diversified in nature has considerable opportunities for attractive foreign investment. The following specific areas are identified:

DEEP SEA FISHINGF OPERATION There is wide scope for the exploitation of meso-palegic resources reported to be in abundance in Pakistan's water and their further processing/canning on board. Exploitation of tuna and tunalike species through tuna longliner has also prospects.

ACQUACULTURE SECTOR (SHRIMP CULTURE) In Pakistan although preliminary experiment through pilot shrimp culture had started by public and private sector, but some faced many difficulties, but commercial viability of the operation has been proved. However, private sector is hesitant to make investment due to environmental and technical difficulties. The area earmarked for shrimp culture is located in the western side of the Indus deltic creek.

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It has been observed that the salinity in seawater and in sub-soil areas is increasing. In order to dilute the seawater during period of high evaporation, there is a need to have ample supply of fresh water. There is need to establish a hatchery for shrimp. It is economically not viable to base the industry on imported seeds due to high mortality in transportation and also high costs involved. Bangladesh, which also had no shrimp culture before 1970's, is now one of the important country where shrimp aquaculture has got real boast in the past ten years. Their example can be followed.

PROCESSING OF FISH The expansion in the processing of fish is probably the most important area which needs private sector's involvement. At present, a major part of the food fish is either consumed locally or salted dried for export. With the exception of local consumption and small quantity of frozen and chilled fish exported to European countries and Middle East, a bulk of the fish is salted, dried and exported to Sri Lanka at very low prices. Majority of the fish catch instead of being exported, is converted into fish meal. Important food fish species like tuna, sailfish, marlins, groupers, dolphinfish, catfish, sharks and various carangoids are not considered as good foodfishes, therefore, therefore, these are exported to Sri Lanka in dried form.

There is ready market for these fish especially for fillets, steaks and in form of consumer packs in may be parts of the world. Private sector may invest in this processing sector. Processing for value added fish products such as breaded, fermented, ready to cook, semi cooked and smoked products are probably the most important. It may be added that value added products from Asia (especially South East Asian Countries) are readily accepted in Japanese, European and American markets. Pakistan can also penetrate in these markets with its value added products.

9. ANIMAL FEED

PROSPECTS Use of balanced feed after genetic capability of a breed is considered second most important factor to exploit potential yield of milk and meat. In view of the long felt need, the University of Agriculture Faisalabad set up a small feed mixing unit to supply feed to dairy farmers. The commercial feed gave very good results as compared to traditional feed, i.e. cotton seed cake. Encouraging results of this attempts by the University prompted private sector entrepreneurs to set up new cattle feed mills. Some of them could not compete with the traditional feed bacause of quality. However, the pilot unit set up by the University continue working.

PRODUCTION ASPECTS The feed mill units are to be established near areas where dairy and livestock farming are already developed like Karachi, Lahore Sahiwal, Faisalabad and Gujranwala. The utilities required are already available in these locations. Raw material will be cotton seed cake, rape seed cake, rice bran, rice polish, wheat bran, maize oil cake, molasses, etc. Other raw material required include salt, bonemeal, urea, mineral supplements packing materials etc. These items are locally available in abundance. The main product will be cattle feed. Conversion ratio will be 1:1. Machinery for feed mills is locally available from Gujranwala. Machinery can also be imported.

MARKETING ASPECTS What is mostly needed is to produce quality feed and put in efforts to introduce the same to the dairy farmers and common farmers who also happen to be small dairy farmers. The cost of milk production is going to be reduced if balanced feed is practiced by the dairy farmers. Replacement of traditional feed, however, is going to take place gradually. For this purpose, the farmers will have to be made aware of importance of highly nutritive and balanced animal feed.

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The market for feed thus will have to be created within the country and prospects are bright for its export.

10. FRUIT JUICE, PULP & PASTE PLANTS

PROSPECTS In recent years there is growing consciousness of the necessity of fruit juices in the country as they are a source of vitamins and mineral which are essential for the health. Nutritive value of fresh fruits is better than the processed but due to their perishable nature regular supply of fresh fruits throughout the year is not posible. Supply of fruits particularly in off-seasons can only be regulated by processing them into various products.

Pakistan is producing a variety of fruits which include apples, citrus, mangoes, banana, dates, apricot, guava, pears, fig, almond and peaches. Due to inadequate processing and storage facilities, large quantity of fresh fruits (10 to 15 percent) is spoiled in harvesting and marketing operations. These losses can be minimized by creating adequate processing facilities. The popular fruit juice could be of apple, mango/guava and citrus. The pulp and paste projects could be for mango, dates and bananas, etc.

PRODUCTION ASPECTS Pakistan is producing large quantity of apples, citrus, mangoes. During 1997-98, citrus production was at 2.0 million tonnes, mango at 0.9 million tonnes, apples at 0.6 million tonnes and guava at 0.5 million tonnes.

Citrus, mango and guava are mostly produced in Punjab province. Mango is also a major fruit in Sindh province. Apples are mostly (85 percent of total production) produced in Balochistan province. As such Citrus Juice Extraction plants could be established in Punjab. Mango/Guava Nectar Processing plants could also be set in Punjab and Sindh provinces where raw material will easily be available. The apple juice extraction plants could be established in Balochistan province where apple is produced and easily available.

The main products could be straight fruit juices and fruit concentrates. By-products will be peel oil and procesing wastes convertible into animal feed and compost. Conversion ratio is expected to be 1.6 to 2.5:1.

MARKETING ASPECTS Products and the by-products can find place in the domestic as well as foreign markets. It depends on the investors how marketing compaign is launched and products introduced in the local as well as foreign markets. It is, however, estimated that the main products could find a big market in the Middle East countries.

11. PRODUCTION OF FURFURAL & ETHANOL FROM SUGARCANE BY PRODUCTS

PROSPECTS Sugarcane is one of the Pakistan's major cash crop. It is produced on about 1 million hectares and production volume is 53 million tonnes. Total cane crushed in sugar mills was 41 million tonnes in 1997-98. Bagasse is the fibrous residue of the juice extraction process. It amounts to

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25-30 percent of the cane weight and appears to be the most economic source of furfural presently available.

Furfural is used primarily as a solvent and as a source of furfural alcohol for making foundry core binder resins. Key intermediates made from petroleum and natural gas liquids used in nylon and urethane fibre production have taken furfural's previously most important market. Furfural is also one of the important solvents used in petroleum refining and need special attention and consideration.

The entire demand of furfural is met through imports. The major user for the furfural is Oil refining industry. With its expansion, the demand for furfural will be going up. The demand for acetic acid is also largely met through imports.

PRODUCTION ASPECTS

The project has the following main features:

1. New technology for Pakistan2. Import substitution with potential for export 3. A value added project

The plant will have to be imported and can conveniently be located near sugar mills, e.g. Mardan, Hyderabad, Faisalabad, Sargodha, Sahiwal and Bahwalpur. The main raw material will be sugarcane bagasse; its availability is ensured as most of the bagasse production is being consumed by the sugar mills for internal energy generation. Other raw materials required will be sulfuric acid. The main product will be furfural and by-products will be acetic acid, lightenls (methyl acetate). Conversion ration will be 12:1.

MARKETING ASPECTS The production of furfural and acetic acid will provide substitution for import of these chemicals. Market for main as well as by-products is already available in Pakistan. The domestic demand is expected to increase with the expansion in the capacity of oil refineries as Pakistan is trying to discover more oil reserves. Since the main users will be industries and not the consumers, heavy advertisements will not be required in this case.

In case there is slow demand in the country due to any reason, the furfural could be exported. In this connection, potential foreign markets for the products can be explored.

12. PRODUCTION OF PAPER BOARD

PROSPECTS There are various types of paper boards like duplex board, flueting board, box board, card board, etc. Which are used for a wide range of purposes. Paper boards are mainly used as stationary items and for moulding boxes for packing cigarettes, garments, cosmetics, pharmaceuticals etc. Unlike straw board, production of paper board requires addition of long fibre wood pulp, ratio of which may vary depending upon quality of different types of paper board. Higher the ratio of coniferous wood pulp better the quality. Generally recommended ratio

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of pulp ranges from 5 to 20 percent. This can though be manufactured from other raw materials such as wheat straw, paddy straw, kahi grass but the proposed unit is based on sugarcane bagasse.

PRODUCTION ASPECTS The activity envisages processing of sugar mill product (bagasse) and crop residues like wheat straw and paddy straw into value added products. The units can be located where the main raw material is abundantly available such as provinces of Punjab, Sindh and NWFP.

Based on 25 percent recovery of bagasse from a quantity of 40 million tones of sugarcane which is being crushed by the mills, about 10 million tonnes of sugarcane bagasse is annually available. Of this quantity, about 55 percent is being burnt for internal generation of energy. In addition to this, millions of tonnes of wheat straw and paddy straw are being produced in the country. Therefore, supply of raw material will be ensured.

Main raw material will be bagasse, wood pulp and waste paper. Other raw materials will be caustic soda, chlorine, china clay/soap stone, alum and rosin. Bagasse, wheat straw and kahi grass can be substituted with each other as major raw material with corresponding changes in longfibre wood pulp. All the raw materials are available in the country. Main product will be paper board. Conversion ratio is 2.2:1.

MARKETING ASPECTS The production of paper board is being predominantly consumed for packing of cigarette case, match boxes, educational material, file covers, toiletries, cosmetics and pharmaceuticals etc. There is, therefore, a large market for the product in the country. Distribution channels will have to be employed to transport domestically produced paper board to the final consumers. Generally the distribution channels consist of producer, distributor, wholesaler, retailer and consumer.

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Agriculture Companies

Food and Allied

Company Name Foreign Local Quoted on Stock Exchange

1. Mitchells Fruit Farms ü ü

2. Yummy Milk Products (Pvt) Ltd. ü3. CDL Foods Ltd. ( Candia & Haleeb) ü4. Nestle Milkpak Ltd. ü ü5. Idara-e- Kissan (Halla) ü6. Millac Foods Pvt. Ltd. ü7. Fauji Corn flakes ü8. Monnoo Dairies Pvt Ltd. ü ü9. Noon Pakistan Ltd. ü10. Pakistan Milk Food Manufacturers ü11. Prime Dairies ü12. Royal Dairies ü13. Unilever Pakistan ü ü14. Cadbury Pakistan Ltd. ü15. Walls ü16. Ismail Industries ü ü17. National Foods ü ü18. Rafhan Best Food ü ü19. Shezan International ü ü20. Quershi ü21. Ahmed Foods ü22. Pepsi cola ü23. Coca-cola ü24. Macca cola ü25. Qibla cola ü26. LU Biscuits ü27. BP candies ü28. McDonald ü29. KFC ü30. Subway ü

Tobacco

1. Lakson Tobacco Company ü ü2. Pakistan Tobacco Company Ltd. ü ü3. Premier Tobacco Co. ü x4. Khyber Tobacco Co. ü x5. Souvenir Tobacco Co. ü x6. Sarhad Cigarette Ind. ü x7. Saleem Cigarette Ind. ü x8. United Tobacco Ind. ü x9. Bara Cigarette Ind. ü x10. Paramount Tobacco Co. ü x11. F.S. Tobacco Company ü x12. Frontier Tobacco Ind. ü x13. Imperial Cigarette Ind. ü x14. Universal Tobacco Co. ü x15. National Tobacco Co. ü x

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ANNEXURE - IVANNEXURE - IV

http://www.cpp.org.pk/DBEstablishment/estb_219.shtml

http://www.cpp.org.pk/DBEstablishment/estb_221.shtml

16. Delta Tobacco Co. ü x17. Eastend Tobacco Co. ü x18. International Cig. Ind. ü x19. Ambar Tobacco Co. ü x20. Abaseen Tobacco Co. ü x

Sugar

1. Al-Abbas Sugar ü ü2. Baba Farid Sugar ü ü3. Chashma Sugar ü ü4. Cresent Sugar ü ü5. Faran Sugar ü ü6. Frontier Sugar ü ü7. Habib Arkady ü ü8. Habib sugar ü ü9. Hamza Sugar ü ü10. Haseeb Waqas ü ü11. Husein Sugar ü ü12. JDW Sugar ü ü13. Kohinoor Sugar ü ü14. Mehran Sugar ü ü15. Mirza Sugar ü ü16. Noon sugar ü ü17. Premier Sugar ü ü18. Sanghar Sugar ü ü19. Shakarganj Sugar ü ü20. ShahTaj Sugar ü ü21. Tandlianwala ü ü22. Bawany sugar ü ü

N.B. The list given here indicative and not exhaustive. Any company not mentioned here may only due to non-availability/ accessibility of data.

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List of Agriculture Companies Registered with Securities & Exchange Commission of Pakistan

1. Gurmani Agro Farm and Live Stock (Pvt) Ltd. Distt: Muzaffargarh

2. Iffat Agricultural Farms (Pvt) Ltd., Lahore

3. Mitchels Fruit Farms Ltd., Lahore

4. Be Be Jan Agro Farms Ltd., Faisalabad.

5. Greenacres Farms (Pvt.) Ltd., Islamabad

6. Prime Agriculture Farms (Pvt) Ltd., Islamabad

7. Millenium Farming (Pvt) Ltd., Islamabad

8. Corporate Agriculture Farms and Services (Pvt.) Ltd., Lahore

9. Pir Jhando Farms (Pvt) Limited, Karachi.

10. Red Rose Corporate Farming Company (Pvt.) Limited,Karachi

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Available State Land in Balochistan for CAF

S.No Location of Land Size of Plot/ Area in Acres Intended Use of Land

1. District Lasbella

Tehsil SonmianiTehsil DurejiTehsil LiariTehsil Lakhara

165,45981,178381,505126,637

Dairy Farming, Agriculture Farming, Industrial Estate, IT Park, Conventional Centers

2. District Khuzdar

Tehsil KhuzdarTehsil Karakh

22,4714,487

Agriculture Farming, IT Park

3.District Chagai

Tehsil DalbandinTehsil NokundiTehsil TaftanTehsil Chagai

209,322192,52126,35083,201

Agriculture Farming, Industrial Estate, IT parks, Marble Factory, Mines & Mines & Development (Granite, Copper, Ironore, Chromite)

4.District Pishin

Tehsil Pishin

7,874 Agriculture Farming, Dairy Farming, IT Parks, Industrial Estate

5. District kalat

Tehsil SurabTehsil Mangchar

9,866682

Agriculture Farming, Dairy Farming

6. District Kila Abdullah

Tehisil Kila Abdullah

27,922 Mines & Mineral Development, Dairy Farming, IT Parks

7. District Awaran

Tehsil Awaran

20,577 Agriculture Farming, Dairy Farming

8.District Loralai

Tehsil Dukki

16,000 Ostrich Farming, Agriculture Farming

9.District Gwadar

Tehsil GwadarTehsil pasniTehsil Ormara

40,000 Construction of Shopping Malls, Offices/ Residential Plazas, 4-5 stars Hotels. Conventional Centers, Recreation Centers, Establishment of IT Parks, Industrial Estates, Fisheries Development.

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Agriculture farms in Balochistan for Public Private Partnership

S.No Name of Farm Area in Acres Location, District

1. A.D.I 1,185 Khanpur, Naseerabad2. Seed Farm Gidder 1,469 Surab, Kalat3. Seed Farm Gidder 3,519 Gadahwa, Jhal Magsi4. Coconut farm 200 Uthal, Lasbela5. Seed Farm 273 Usta Mohammad, Naseerabad6. Katvi Farm 400 Katvi, Lorali7. Sariab Farm 280 Mastung, Mastung8. Model Farm 480 Gulu Shehar, Sibi9. Kalu Killa Farm 200 Kalu Killa, Killa Siafullah10. Agriculture Research Sub Station 400 Turbat, Turbat

11.Agriculture Research Fruit Experiment Station Wayaro Farm 166 Wayaro, Lasbella

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