The Pakistan Agricultural Coalition (PAC) has proposed extending warehouse receipt financing directly to farmers as a new approach to wheat procurement that will allow growers to keep wheat in their possession while borrowing against it for up to six months after harvest, PAC CEO Kazim Saeed told ProPakistani.
The government could give farmers the financing facility and retain the first right to purchase the wheat after six months, regardless of the market price.
Speaking at a media briefing ahead of the Agri Connections Conference and Expo, Saeed said the proposal would build on the private aggregator model but shift part of the financing support directly to farmers.
He said the approach could address problems seen under Punjab’s wheat aggregator model last year, when the indicative price initially appeared attractive but weather-related losses changed farmers’ market expectations. He also pointed to cases where farmers were told they could not retain wheat without permits as tragic and could have been avoided.
Saeed said the government-administered wheat sector is now moving toward deregulation and needs greater private sector participation. He said the International Finance Corporation (IFC) will discuss the transition to a deregulated wheat sector at the Agri Connections Conference and Expo, which will be held at Lahore Expo Center from October 1 to 2 under the theme “Food Security and Agri Investment in the Era of Climate Change.”
The conference will also focus on food affordability, climate risks, food safety and agricultural investment. Saeed said food security had become a household-level issue in Pakistan, while the country’s agricultural exports remained below their potential partly because of food safety concerns and rejection of consignments linked to excessive pesticide use.
The event will also examine livestock investment, shrimp cultivation, olive oil, chilled meat exports and emerging agricultural businesses.
According to the conference program, the first day will include sessions on food security and changing trade dynamics with the World Bank, the impact of input markets on food security, deregulating agricultural supply chains with the IFC, and helping farmers deal with climate change.
The climate session will cover crop insurance and carbon finance, while a separate session will focus on food safety for exports in partnership with the Food and Agriculture Organization.
Saeed said the government is developing a broader financing ecosystem for farmers covering access to quality inputs, warehouse receipt financing, collateral-based lending, agricultural business finance and crop insurance.
He said PAC has been involved in the development and adoption of the warehouse receipt financing framework, while the State Bank of Pakistan is leading the Zarkhez framework and the Securities and Exchange Commission of Pakistan is working on crop insurance. PAC has also been entrusted with leading the government’s work on crop insurance.
The second day of the conference will focus on investment in livestock, access to finance for farmers, shrimp exports and investment opportunities in agriculture.
The program includes an SECP and PAC investor roundtable featuring the SECP chairman, Pakistan Stock Exchange chairman, PMEX chairman and Pakistan Business Council CEO. A separate session will examine the foundation for Pakistan’s shrimp exports.
Other sessions will cover the future of technology in agriculture, including presentations from Hello Tractor, the Punjab Agriculture Department, Al Ghazi Tractors, Fauji Fertilizer Company and Topcon Positioning Systems. The conference will also hold ZarZaraat, a competition for agricultural startups, with finalists pitching to investors before the closing ceremony.
ZarZaraat program follows a Shark Tank style model for agri startups. Saeed said 51 companies pitched last year, with three finalists, while this year PAC received 25 applications and selected three finalists and one honorable mention, who will presentations.
The conference will also feature presentations on agricultural technology, including Hello Tractor, mechanization, fertilizer and precision agriculture technologies.
Saeed also highlighted Punjab’s expansion of agricultural credit and mechanization initiatives, including the Kissan Card, tractor schemes and high tech machinery financing. He said Sindh was developing a legal framework for modern cooperatives to give farmers greater market power.
He added that these initiatives would require greater participation from banks, businesses, investors and other private sector players to channel capital into agriculture.
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