Pakistan: Punjab Basmati Rice Value Chain

Sovereign Project | 47166-001

Summary

This technical assistance (TA) is the outcome of wide-ranging stakeholder consultation with the Government of Pakistan and Punjab government agencies, public and private agriculture research institutions, basmati rice farmers, traders, exporters, private associations, and the International Rice Research Institute (IRRI).

Basmati rice famous for its aroma, long grain, better cooking and eating quality is a leading foreign exchange earners of Pakistan, which captures more than two-thirds of the world's basmati production. In 2012, Pakistan earned about $1 billion from basmati exports of 1.5 million tons. Basmati is grown mainly in Pakistan's Punjab province. In fiscal year (FY) 2012, 65% of Punjab's total rice area, or 1.1 million hectare, was devoted to basmati with a production of about 2 million tons.

Latest Project Documents

Title Document Date
Punjab Basmati Rice Value Chain Dec 2013

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Project Name Punjab Basmati Rice Value Chain
Project Number 47166-001
Country Pakistan
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8578-PAK: Punjab Basmati Rice Value Chain
Technical Assistance Special Fund US$ 1.00 million
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector Agriculture, natural resources and rural development - Agricultural production
Gender Equity and Mainstreaming
Description

This technical assistance (TA) is the outcome of wide-ranging stakeholder consultation with the Government of Pakistan and Punjab government agencies, public and private agriculture research institutions, basmati rice farmers, traders, exporters, private associations, and the International Rice Research Institute (IRRI).

Basmati rice famous for its aroma, long grain, better cooking and eating quality is a leading foreign exchange earners of Pakistan, which captures more than two-thirds of the world's basmati production. In 2012, Pakistan earned about $1 billion from basmati exports of 1.5 million tons. Basmati is grown mainly in Pakistan's Punjab province. In fiscal year (FY) 2012, 65% of Punjab's total rice area, or 1.1 million hectare, was devoted to basmati with a production of about 2 million tons.

The country's competitive edge in the basmati world market, however, has been eroding in the recent years because of productivity and quality constraints. Historically, Pakistan has been the world's leading and major supplier of basmati rice. During the period July December 2012, basmati exports declined by 31% (from 349,970 tons to 239,765 tons) compared to the same period in the previous years. This came after India lifted a ban on its rice exports in 2012 and sold the commodity at a price lower than Pakistan's about $100 cheaper per ton against Pakistan's $1,100-1,150 per ton. Meanwhile, demand for basmati has been increasing worldwide. Pakistan's basmati value chain needs to be strengthened to meet rising international demand and maintain its premier lead status.

The major bottleneck in Pakistan's basmati value chain is at the upstream segment, or farm production. High production costs and declining yield of current basmati varieties are making its cultivation a less profitable venture to Punjab rice farmers, resulting in some farmers shifting to non-basmati varieties for better yields.

Project Rationale and Linkage to Country/Regional Strategy Overcoming the major problems affecting Punjab's basmati rice is urgently needed for Pakistan to regain and sustain its competitiveness in the world market, improve the subsector's foreign exchange earnings, and ensure higher incomes for basmati farmers and other stakeholders in the value chain. The TA will focus on measures that meet the following criteria (i) tangible results achievable within 2 3 years; (ii) complementing and adding value to ongoing activities of public and private sector stakeholders; and (iii) having the potential to significantly increase the yields of basmati rice, improve the efficiency of the upstream segment of the basmati value chain, and integrate the upstream more effectively with the midstream and downstream segments of the value chain.
Impact Higher incomes of basmati rice farmers in Punjab and higher export earnings from basmati
Project Outcome
Description of Outcome Improved basmati rice productivity and quality in TA sites
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

1. Improved basmati seed varieties

2. Improved farming and postharvest practices

3. Improved research and service capabilities

Status of Implementation Progress (Outputs, Activities, and Issues)
Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design ADB fielded a TA consultation mission during 26 February 5 March 2013 to identify key challenges and opportunities for basmati rice value chain development in Punjab, and a fact-finding mission during 18 23 August 2013 to finalize the TA design and its implementation arrangements. The missions consulted and interacted with the Economic Affairs Division; Pakistan Agricultural Research Council; National Agricultural Research Center; Planning and Development Department, Punjab; Finance Department, Punjab; Department of Agriculture, Punjab; Punjab Agricultural Research Board; Rice Research Institute, Kala Shah Kaku; National Institute for Biotechnology and Genetic Engineering; Nuclear Institute for Agriculture & Biology; basmati rice farmers, traders, exporters, private associations; the International Rice Research Institute and development partners.
During Project Implementation Punjab Agricultural Research Board; Rice Research Institute, Kala Shah Kaku; National Institute for Biotechnology and Genetic Engineering; Nuclear Institute for Agriculture & Biology; basmati rice farmers; private service providers; and the International Rice Research Institute will actively participate in the TA implementation. Pakistan Agricultural Research Council will support TA evaluation. Economic Affairs Division; Pakistan Agricultural Research Council; National Agricultural Research Center; Finance Department, Punjab; and Department of Agriculture, Punjab will be consulted for policy issues.
Business Opportunities
Consulting Services The TA requires 24 person-months of international consulting services on plant breeding, biotechnology, and agriculture engineering, and 27 person-months of national consulting services on TA coordination support. ADB will engage IRRI in providing the international consulting services using single source selection because of IRRI's long track record and internationally recognized research, training, and knowledge transfer works in developing new rice varieties and rice crop management techniques that help rice farmers improve the yield and quality of their rice in an environmentally sustainable way. Single source selection is further justified since the TA requires the provision of specific germplasm from IRRI to Pakistan. ADB will engage the national TA coordinator on an individual basis.
Procurement N/A
Responsible ADB Officer Ismat Raza
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Environment, Natural Resources & Agriculture Division, CWRD
Executing Agencies
Punjab Agricultural Research Board3rd Floor, ZTBL Building, 47 Mall Road,
Lahore, Pakistan
Timetable
Concept Clearance 10 May 2013
Fact Finding 18 Aug 2013 to 23 Aug 2013
MRM -
Approval 13 Dec 2013
Last Review Mission -
Last PDS Update 29 Aug 2013

TA 8578-PAK

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
13 Dec 2013 06 Mar 2014 06 Mar 2014 31 Dec 2016 06 Feb 2017 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,000,000.00 0.00 200,000.00 0.00 0.00 0.00 1,200,000.00 13 Dec 2013 82,182.00
Title Document Type Document Date
Punjab Basmati Rice Value Chain Technical Assistance Reports Dec 2013

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