Pakistan’s agriculture sector—home to over 8 million farm holdings—faces persistent challenges: low productivity, fragmented markets, limited access to finance, and growing climate stress. Agri-tech holds real promise in addressing these issues. Startups and larger agribusinesses are now experimenting with tools that range from satellite-based crop intelligence and remote irrigation control to digital payments, input marketplaces, and smart warehousing.

This policy brief maps the current agri-tech landscape in Pakistan, highlighting the areas where innovation is gaining ground: digital platforms for market access, smart irrigation and water management, precision agriculture, financial inclusion, and real-time advisory services. Drawing from in-depth case studies—including Farmdar, RemoteWell, Godaam Tech, and Engro’s UgAi platform—the brief examines what’s working, what’s scalable, and where bottlenecks remain.

The findings are clear: while innovation is alive and growing, scaling remains difficult. Most adoption is still concentrated among large, progressive farmers. Hardware-based models face high transaction costs. Farmer trust is built slowly, often through repeated exposure and word-of-mouth. And without foundational infrastructure—like rural connectivity, digital land records, and interoperable data systems—most solutions remain local and fragile.

The brief offers targeted recommendations including strengthening digital payments and warehouse receipt financing, investing in shared infrastructure, co-funding demonstration plots, clarifying regulatory roadmaps, and supporting ecosystem builders with long-term capital. A standout insight is that agri-tech adoption in Pakistan is often driven not by information, but by finance—and not by promotion, but by proof.

Agri-tech is not a silver bullet, but it can be a catalyst. With the right enabling environment, it has the potential to improve yields, reduce losses, expand financial access, and strengthen supply chains. The opportunity now is to move from pilots to platforms—and to ensure that digital agriculture works not just for the few, but for the millions who need it most.

The PBC is a private sector not-for-profit advocacy platform set-up in 2005 by 14 (now 100) of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. 

Pakistan’s edible oil sector presents both a long-standing vulnerability and a major untapped opportunity. The country remains heavily dependent on imports, with edible oil imports regularly crossing USD 3 to 4 billion annually and meeting over 85% of domestic consumption. This import dependence exposes Pakistan to global price shocks, foreign exchange pressures, and supply risks.

Historically, oilseed development in Pakistan has faced multiple challenges: limited institutional capacity, lack of policy continuity, poor seed quality, weak farmer-market linkages, and an underdeveloped value chain. Oilseed crops such as rapeseed-mustard, sunflower, soybean, and cottonseed have been cultivated in varying degrees, but their productivity remains below potential. Farmers have often favored wheat and other Rabi crops due to government price support and greater income certainty.

Despite these challenges, Pakistan holds significant opportunities to scale domestic oilseed production. With improved seed systems, better agronomy, and market linkages, yields for rapeseed-mustard and sunflower can be significantly improved. Soybean, while still at a small scale, holds strong potential to serve Pakistan’s expanding poultry, livestock, and feed sectors. One of the most promising frontiers is oil palm cultivation in Pakistan’s coastal belt, particularly in Balochistan. Favorable climatic conditions, alluvial soils, and controlled irrigation provide a rare opportunity to develop a high-yield, year-round oil palm industry near Karachi’s processing and export hubs. Intercropping options, such as ginger, can further enhance returns.

Pakistan’s growing olive oil sector is also gaining traction, with over 5 million olive trees planted across multiple provinces. Supported by international partnerships, modern processing mills, and growing export activity, olive oil offers an emerging complementary pillar to Pakistan’s broader edible oil strategy.

To fully realize this potential, the brief recommends a set of targeted actions:

• Strengthen institutional capacity and coordination across federal and provincial levels.
• Improve seed development for improved access to good quality seeds.
• Deliver oilseed-specific farmer extension and agronomic advisory services.
• Invest in post-harvest infrastructure and modern oilseed-specific machinery.
• Develop oil palm clusters in Balochistan’s coastal belt.
• Scale up direct procurement models to improve farm-level prices.

With sustained commitment, oilseeds can become a national success story — reducing Pakistan’s import dependence, improving rural livelihoods, expanding exports, and building a more resilient agri-food system.

The PBC is a private sector not-for-profit advocacy platform set-up in 2005 by 14 (now 100) of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. 

Pakistan’s poultry sector is one of the fastest-growing segments of the country’s agricultural economy, contributing significantly to food security, rural livelihoods, and economic resilience. With an annual output of 1.8 billion broilers and growing at an average rate of 8–10% per year, the sector has undergone notable modernization in breeding, feed milling, and farm management. It supports over 1.5 million jobs, absorbs more than 11 million metric tons of agri-residues annually, and provides the most affordable source of animal protein for consumers across all income groups.

Despite these gains, the sector faces a range of challenges that threaten its long-term sustainability and competitiveness. Price volatility, driven by fluctuating demand and frequent supply shocks, is exacerbated by the dominance of the informal market, which accounts for the majority of poultry sales but operates outside the tax net and regulatory framework. Meanwhile, formal processors bear a disproportionate tax burden, discouraging investment in value addition. Experiences from the milk sector illustrate how excessive taxation on the formal market can lead to decreased sales and a consumer shift to unregulated alternatives.

At the same time, high energy costs, unstable input prices—especially for feed—and heavy import dependency on soybean further erode profitability. Additionally, Pakistan’s lack of a comprehensive disease control program and outdated regulations block access to high-value export markets such as the EU and GCC. Although efforts have been initiated to harmonize food safety standards through the Pakistan Standards and Quality Control Authority (PSQCA), implementation has been delayed due to turf issues between the concerned federal and provincial regulators and the absence of a digital, integrated regulatory platform.

This policy brief recommends a multi-pronged reform agenda:

• Streamline food regulation – digital integration between federal and provincial authorities
• Reduce taxes on essential feed and processing inputs and restore zero-rating to support formalization
• Promote poultry processing and cold chain development to absorb market shocks and create an exportable surplus
• Expand domestic soybean production to reduce foreign exchange pressure and ensure feed supply security
• Develop a robust disease eradication strategy to lower mortality rates and open up new export markets

With targeted interventions, Pakistan can unlock the full potential of its poultry sector, enabling it to become a more resilient, competitive, and export-oriented industry that supports both economic growth and nutritional security.

The PBC is a private sector not-for-profit advocacy platform set-up in 2005 by 14 (now 100) of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. 

Pakistan’s seafood sector stands at a critical crossroads. Despite having a 1,050-kilometer coastline along the Arabian Sea, extensive inland water bodies, and favorable conditions for aquaculture, the industry remains underperforming and contributes less than 0.4% to national GDP. With global seafood demand rising — particularly for shrimp, tuna, and value-added products — Pakistan has an opportunity to transform its seafood industry into a high-growth, export-oriented sector.

However, decades of unregulated marine fishing, overexploitation of fish stocks, weak governance, and underinvestment in infrastructure have severely depleted marine resources and limited export competitiveness. According to recent stock assessments, 60% to 90% of Pakistan’s marine fish stocks are already overfished. Widespread use of illegal fine-mesh nets results in large-scale juvenile fish catch, further threatening future stocks. Poor enforcement and an informal trade structure dominated by middlemen have reinforced systemic inefficiencies.

Inland aquaculture offers Pakistan its most viable path for sustainable growth. Successful examples from pilot shrimp clusters show how saline or unproductive lands can be converted into productive shrimp farms using a cluster-based approach. Similar models have transformed aquaculture industries in countries like Ecuador, Saudi Arabia, and Iran. Under this approach, creek-by-creek inland aquaculture clusters can be developed in Sindh and Balochistan, with government investing in land preparation, canals, and shared services while private partners handle operations, logistics, feed supply, and market access. Such models not only reduce pressure on marine fishing but also create stable, high-income livelihoods for smallholders.

Despite moderate growth in seafood exports — which reached $496 million in FY2022–23 — Pakistan remains highly dependent on limited markets like China. Export volumes have hovered around 200,000 metric tons in recent years but remain far behind competitors like India and Vietnam, whose seafood exports exceed $7 billion and $9 billion, respectively. Pakistan’s inability to meet international quality, certification, and traceability standards has blocked access to premium markets such as the European Union.

Pakistan can reposition its seafood sector by pursuing a dual-track strategy: (i) developing a long-term, science-based roadmap for sustainable marine resource management, and (ii) aggressively expanding inland aquaculture using a cluster-based public-private partnership model. With coordinated policy reform, public-private investment, and strong governance, Pakistan’s seafood sector has the potential to not only expand exports and earn foreign exchange, but also create inclusive rural employment, reduce pressure on marine resources, and build long-term sustainability.

The PBC is a private sector not-for-profit advocacy platform set-up in 2005 by 14 (now 100) of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. 

The case studies showcase plays across the agricultural landscape by players from across the corporate and financial sector:

• field crops (wheat, cotton),
• horticulture (tomato, potato),
• condiments (sesame),
• dairy,
• poultry,
• fisheries (fish, shrimp),
• insurance,
• services to farmers,
• and regenerative agriculture.

• They cover Pakistan’s largest food converter National Foods opting for import substitution of tomato paste through tomato cultivation;
• Fatima Group’s work on seed development for Pakistan’s leading field crops (wheat and cotton); PepsiCo’s leadership in maintaining potato farmers’ loyalty for its production of Lays crisps;
• K&N’s long history of spearheading the development of Pakistan’s poultry industry from breeding of chickens all the way to retail of poultry-based consumer products;
• HBL Zarai’s end-to-end service provision model to benefit farmers;
• rice export leader Garibsons and agro-chemicals/high-efficiency irrigation services giant Jaffer Brothers teaming up to invest in fish and shrimp seed;
• textile conglomerate AlKaram investing in a huge shrimp farming and processing facility for exports;
• Chinese conglomerate CMEC’s successful development of sesame exports to China using CPEC,
• dairy giant FrieslandCampina Engro’s empowerment of women dairy farmers;
• the development of robust and reliable crop insurance by TPL Insurance;
• and the shining example of regenerative farming by agri-processor Thal Industries

Advantages and Challenges of Vertical Farming

Vertical farming optimizes land use, conserves water, reduces reliance on pesticides, and allows for year-round crop production. This method can significantly mitigate the impacts of climate change and resource scarcity on agriculture. However, high initial capital costs, significant energy consumption, technical complexity, and the need for specialized knowledge are major barriers. Additionally, the current market infrastructure, high costs of imported materials, and consumer awareness in Pakistan are not fully supportive of this agricultural model.

Countries like the Netherlands and regions such as the Gulf have successfully implemented vertical farming, driven by advanced technology, favorable policies, and a focus on sustainability. These examples highlight the potential for similar success in Pakistan with the right strategies. Despite the current challenges, vertical farming can help Pakistan reduce its dependency on imports and enhance its agricultural exports by producing high-quality, high-value crops.

Conclusions and Recommendations

Vertical farming in Pakistan shows promise, particularly for the high-end market, but faces significant challenges. Many initiatives have struggled to establish themselves locally due to competition with traditional farming prices, high capital requirements, and major financing challenges. Additionally, a lack of research and knowledge on system adaptability to Pakistan’s climate has led to numerous failures. It is essential for the government or a neutral body to collect and share information on the successes and failures of these ventures to support future efforts. Subsidized financing and the elimination of customs duty on imported greenhouse equipment are critical to making vertical farming commercially viable.

A ready market for high-quality produce is also crucial for the success of vertical farming. There is a growing domestic market willing to pay a premium for consistent supply, which some hydroponic farms have failed to deliver due to improper location and equipment. Integration with processors in horticulture value chains can ensure a stable supply and price, aiding business planning and reducing susceptibility to supply shocks. Vertical farming offers an alternative pathway to sustainable agriculture in Pakistan, providing economic opportunities and a means to secure supply and stabilize prices for various industries. Lowering the barriers to entry through targeted government interventions and facilitating the setup of vertical farm facilities is essential for realizing its potential.

Vertical farming presents a promising solution to Pakistan’s agricultural challenges, with the potential to enhance food security, reduce environmental impact, and boost economic growth.

Pakistan is currently a small exporter of pulped products like orange juice and mango derived products, and an importer of pulps for industrial use, primarily tomato pulp for making ketchup. To boost exports and reduce dependency on imported pulps, Pakistan needs to enhance product quality and utilize spare capacity for pulp production which complies with international standards and fulfills local demand. Only three percent of Pakistan’s fruits and vegetable produce is processed into value-added products. Furthermore, industry experts estimate that of Pakistan’s total pulping capacity of around 100,000 tons per annum, only 30 percent is currently being utilized.

Pulping presents an opportunity to increase farmer income by utilizing low-grade fruits, reducing wastage, and promoting fruit and vegetable cultivation. It is also worth noting that horticulture is relatively more water-efficient and offers higher productivity per unit of water.

The industry relies mainly on imported machinery, as locally fabricated equipment fails to meet international standards. Import duties on pulping machinery hinder technological advancement, calling for reforms to reduce costs and promote local manufacturing. Rationalizing the duty structure can help promote the use of advanced and internationally accepted technologies. For example, the availability of advanced technologies such as aseptic packaging and freezing can enhance product quality and global competitiveness of pulped and packaged products made by Pakistan.

The decline of investment in the pulping sector due to waning demand highlights the importance of maintaining policy stability and favorable business conditions for industrial growth. The imposition of additional taxes has created uncertainty and deterred investment, hampering the sector’s potential for expansion and innovation. Addressing policy issues such as high tax rates and regulatory hurdles is crucial for fostering a conducive environment for the sector’s growth. Policy recommendations include rationalizing local taxes and import duties, providing financial incentives, promoting local demand, strengthening quality regulations, and enhancing border controls.

Artificial Insemination: An Overview

Artificial insemination (AI) involves the introduction of semen from selected male animals into the reproductive tract of a female to achieve fertilization. AI offers numerous advantages over natural breeding, including enhanced genetic diversity, better control over breeding outcomes, increased productivity, disease control, and genetic preservation. Despite these benefits, AI requires specialized knowledge, infrastructure, and technical expertise for successful implementation.

Benefits of AI for Dairy and Meat Production

AI can significantly enhance livestock productivity by improving genetic traits such as milk yield, weight, meat quality, and disease resistance. It allows for precise timing and control of breeding outcomes, leading to higher conception rates and reduced reproductive diseases. Economically, AI offers substantial returns on investment by increasing farmer incomes through higher productivity and better-quality livestock.

Challenges and strategies

The adoption of AI faces several challenges, including inadequate infrastructure, lack of trained personnel, and limited awareness among farmers. To address these issues, the following strategies are recommended:

• Strengthening AI Infrastructure: Invest in semen production and service delivery units, expand AI services, and upgrade existing equipment.
• Incentivize private sector to play a leading role in the delivery and spread of AI services and knowledge to farmers
• Import bulls and establish local semen production units to promote cross-breeds that enhance milk and meat productivity with a focus on increasing milk and meat production for local consumption and exports
• Capacity Building and Training: Implement comprehensive training programs for inseminators, veterinarians, and farmers, in conjunction with private sector players.
• Awareness Campaigns: Launch nationwide campaigns to educate farmers about AI benefits and proper breeding practices, and develop targeted extension materials in local languages.

Conclusion

Artificial insemination holds immense promise for transforming Pakistan’s dairy and meat production sectors. By addressing infrastructural gaps, enhancing capacity building, raising awareness, and implementing supportive policies, Pakistan can fully leverage AI to improve livestock productivity, meet local demand, and expand its export potential. The strategic adoption of AI will enhance food security, increase farmer incomes, and drive economic growth, ensuring a sustainable and resilient agricultural sector for Pakistan

Policy interventions should prioritize formalizing milk collection systems, promoting dairy cooperatives, enforcing safety regulations, and educating consumers about milk quality. Investing in milk collection centers holds promise but faces obstacles such as high operational costs and limited financing. Addressing these challenges requires improving access to financing and tackling operational hurdles.

Encouraging the formation of dairy cooperatives, inspired by successful models like Amul in India, can empower farmers and reduce milk wastages. Regulatory reforms, including enforcing pasteurization laws and deregulating milk prices, can streamline the dairy industry, ensuring fair returns for farmers and safe dairy products for consumers.

A collaborative approach involving all stakeholders is crucial to formulate and implement a comprehensive dairy strategy in Pakistan. Prioritizing initiatives such as implementing pasteurization laws, improving milk quality, and supporting the establishment of collection centers and cooperatives can drive sustainable growth in the dairy sector and contribute to overall economic development. Leveraging export opportunities and strategic partnerships can further enhance Pakistan’s position as a competitive player in the global dairy market

1. Shift from being a victim of high global agri-commodity prices to a beneficiary. For Pakistan to achieve 4 percent real GDP growth in agriculture, it needs to improve crop yields to transition from being a food importer to a food exporter.
2. Amend Seed Act to encourage private sector investment. Better seed is at the core of the long-term growth prospects in Pakistan’s agriculture. The main hurdles to seed development is the legal and regulatory regime that discourages the private sector to invest. Therefore, the Seed Act must be amended to encourage reputable private seed companies to invest and the approach to seed regulation must shift from controlling the seed sector to maximizing benefit to the farmer. Furthermore, local production of hybrid seed must be encouraged to achieve scale.
3. Expand cultivated land of fruits and vegetables from 5 percent to 15 percent to save water and to achieve more growth in agriculture. If global players in this trade can be attracted to Pakistan for off-take of fruits and vegetables for export, serious investment into cold chain infrastructure can be justified. Farmers are ready to respond to an assurance that their fruit and vegetable will be guaranteed off-take and the certainty that this produce will not die on the way to end-consumers. This shift is only possible with an increase in yield.
4. Build stronger linkages between processors and growers to meet the global buyers’ demand for traceability and sustainability. Pakistan’s own examples of excellence in agriculture are found where processors have done backward integration with farmers. Processing of agri-commodities into higher value products is what drives agriculture to the next level. Investment in agro-processing in the production areas is a priority for Pakistan to multiply its agriculture GDP.
5. Invest equity capital in modern agri-technology to achieve growth in agriculture. Upgrade in agri-technology like, modern farm machinery, silo storages, cool chains for fruits and vegetables, controlled sheds for poultry, high efficiency irrigation systems, etc, is difficult to achieve through debt alone, therefore, equity needs to be invested at scale through corporate farming.
6. Upgrade Pakistan’s irrigation system to increase agricultural exports. Precision agriculture is not possible without precision water delivery. Furthermore, the unpredictability of water from Pakistan’s irrigation system harms not only the transition to mechanization, it encourages flood irrigation causing enormous on-farm wastage of water.
7. Pakistan’s irrigation system needs to be fixed to reduce massive loss of water in the irrigation system and the uncertainty associated with water delivery. The Indus Aquifer has a slower source of re-charge and it now constitutes half of the water available to Pakistan’s farmers. Therefore, it must be preserved. This requires Pakistan’s irrigation system to be fixed by adopting better water accounting and better water governance—both are politically charged activities but also essential for building trust. Additionally, the quality of water is also essential for growth in agricultural exports.
8. Use the available risk transfer mechanisms to protect farmers from the impacts of climate change and biological perils. The devastating heatwave and biblical floods of 2022 have highlighted the need for strong, globally accepted institutional mechanisms to address these risks. There is a critical need to use the risk transfer mechanisms available at a predictable cost to shift this burden to the insurers.
9. Livestock has driven growth in Pakistan’s agriculture sector but it has plenty of further potential for growth. As the growth trajectory of the poultry sector has shown, modern feed is necessary for animals with modern genetics. Better surveillance and management of disease outbreaks can protect animals’ health and economic value. Disease-free zones with a complementing vaccination regime can be pillars of livestock-based exports.
10. As crop yields and animal yields rise, the price at which each grower breaks even falls. This bears the great promise of agricultural growth regarding lower inflation, higher profitability for growers, and better competitiveness for exporters. Coordinated action by the business community, the financial sector, governments, donors, and growers is required to achieve this.
11. Wealth generation from growth in agriculture is the main route to prosperity in rural Pakistan where most of Pakistan’s poverty resides. The introduction of technology can create better-paying jobs in the rural landscape. But those whose jobs get displaced will also need to be accommodated into the industry.

In addition to this report, as part of the “Grow More/ Grow Better” theme of its Make-in-Pakistan thrust, the Pakistan Business Council has previously published a number of studies on the agriculture sector of Pakistan to highlight significant opportunities to increase value addition, exports and employment in the sector. The studies on horticulture, bovine meat, dairy, olives, honey and potato examine the value chain and highlights factors impeding productivity and quality, and identify potential global markets for export. These reports propose a set of recommendations to enable agricultural growth.

During the FY 2023, The Pakistan Business Council plans to publish four policy briefs on the selected thematic areas in the agriculture and livestock sector that are critical for sectoral improvement and growth. These are:

1. Fruit pulping,
2. Green house/ vertical farming,
3. Artificial insemination for dairy and meat, and
4. Milk collection networks/co-operatives based around large farms.

The policy briefs will highlight the existing gaps/constraints and recommend measures for improving efficiency and sustainability to promote agricultural growth. The briefs will enable PBC to advocacy policy actions with the relevant federal and provincial departments for improving the sector performance.

Video: Reforming Agriculture in Pakistan | Why is there food inflation?

Pakistan’s surplus potato crop and its globally competitive price makes it an ideal destination for processing potato-based products. The country has the potential to convert potato into value-added products, increase exports, and create manufacturing jobs. Pakistan primarily produces potato crisps and french fries on a large scale, while manufacturing of potato starch and other value-added potato products is limited. The entry of PepsiCo with Lay’s crisps has boosted cultivation and distribution channels for industrial-grade potatoes. French fries present an opportunity for Pakistan to increase exports; as its domestic demand is growing, there is potential to build scale locally, and to cater to the available global demand.  The international market for crisps is smaller as compared to french fries, making crisps a less attractive product for export. Pakistan’s potential for growth in other value-added potato products like starch, flour, and flakes is limited due to lower returns.

One of the key limitations facing potato processing in Pakistan is the lack of suitable potato varieties. Only a small percentage of potatoes harvested in Pakistan belong to industrial-grade varieties. The suitability of a potato variety for processing depends on factors like dry matter content, color, length and shape. Lady Rosetta (LR) is the most commonly used variety for industrial processing in Pakistan, suitable for making crisps.  Because of the lack of demand, knowledge and access to capital, farmers do not grow other industrial varieties. Farmers in Pakistan, other than those who work with reputed processors, rely mainly on seeds sourced from the informal sector, hence resulting in low quality harvests. They also practice flood irrigation, which lowers the output and quality of the produce. Import of potato seeds has increased in recent years, which further accentuates the need for local production of high-quality seeds.

Potato cultivation in Pakistan has seen significant growth over the past decade, with an increase in both production and the total cultivated area. The total production of potatoes in Pakistan has doubled in the last decade, primarily due to increased cultivated area rather than higher yields per acre. Pakistan’s yield per acre is lower as compared to countries like Turkey, Iran, and Egypt. To improve output, Pakistan needs to focus on adopting better seed varieties and improving on-farm management. Punjab, the largest province, accounts for over 85 percent of annual potato production, followed by the Gilgit Baltistan region. Punjab’s potato clusters contribute a significant share of total potato production and supply crops for domestic consumption, industrial processing, and exports. Gilgit Baltistan provides off-season potatoes for commercial and domestic utilization, and has potential as a seed multiplication region. The availability of fresh potatoes throughout the year is supported by investments in cold storages. A few districts in Sindh like Badin, Sanghar, and Tando Allah Yar also have potential for potato cultivation, especially for varieties suitable for french fries. Investments in new varieties and regions may be important to cater the challenge of rising global temperatures which pose a threat to potato yields.

Pakistan has the potential to position itself as a french fries exporting country. The domestic market for french fries has grown, and companies like Opa and Panda Fries have increased their production capacity. Regulatory duties on imports and the devaluation of the Pakistani rupee have created market space for domestic production. However, to be globally competitive, local manufacturers need to build a supply chain of potatoes suitable for french fries and work with farmers. The global market for french fries has been growing, with increasing demand from developing countries, and the trade volume reached USD 8 billion in 2021. Industrial-grade potatoes are preferred for producing the right size and quality of fries. The global import market for french fries is dominated by developed economies like the United States, France, and the United Kingdom. Pakistan should aim to become a regional supplier of french fries by working with international fast-food brands. Contract farming and local seed production can help overcome the limited availability of suitable potatoes for mass production. With improvements in seed quality, farming practices, and collaborations with international partners, Pakistan can capitalize on its resources and meet the increasing demand for potatoes and french fries both domestically and internationally.

The potato crisps market in Pakistan is primarily dominated by PepsiCo, which holds over 70 percent of the domestic market share with its brand Lay’s. The second leading brand is Snack City with about 10 percent market share, followed by Oye Hoye with around 5 percent market share. Other companies such as Triple Em, Lotte Kolson, and Dalda Snacks also have a presence in the market. Additionally, there are smaller companies and cottage industries producing unbranded crisps for local markets and bakeries. The manufacturing process of potato crisps involves slicing the potatoes into thin cuts, frying them at high temperatures, and then seasoning and packaging them. In the global market, the crisps industry has experienced growth, with trade reaching USD 2.76 billion in 2021. The top importing countries for crisps include the United States, France, Germany, Canada, and the Netherlands. These countries also have significant domestic manufacturing capabilities, indicating that the import figures only capture a portion of the market size. Among the top exporting countries are the Netherlands, Belgium, the United States, Poland, and the United Kingdom. Pakistan has limited opportunities for exporting potato crisps due to several factors. The domestic market is primarily served by PepsiCo, and smaller companies struggle to achieve scale and lack the infrastructure and brand power for international expansion. Exporting crisps would require significant investments in manufacturing facilities, packaging, and brand development. The high transportation costs associated with shipping crisps further discourage smaller companies from exporting. The best chance for Pakistan to have significant exports in the crisps segment would be if PepsiCo gears its production in Pakistan for export.

Pakistan currently relies on imports to meet its domestic demand for potato starch. The potential for localized production of potato starch exists, but the opportunities for exporting potato starch are negligible. Potato starch is used as a binding agent and thickener in the food industry and as a binder and adhesive in paper making. Globally, around 60 percent of potato starch is used in the food industry, while the remaining 40 percent is primarily used in the paper and paperboard industry. Pakistan’s cheap potato supply presents potential for substituting imports and generating limited exports of potato starch in the future.

By improving the availability of affordable and high-quality potato seed, Pakistan can enhance potato yield and compete with other countries. Currently, most farmers in Pakistan rely on seeds passed down through generations, making their crops susceptible to diseases and blight, resulting in lower overall output. The high cost of procuring certified seeds makes them unaffordable for many farmers, who often opt for cheaper informal seeds. The government’s in-vitro labs and seed multiplication centers have limited production capacity and lack commercial viability. Encouraging formal seed multiplication companies and providing a supportive regulatory environment can help meet the local seed demand. Improving technology adoption in potato cultivation, such as implementing drip irrigation to replace suboptimal canal water flooding, can enhance productivity. The government can collaborate with the private sector to develop financing mechanisms that promote the adoption of better technologies and seeds, leading to an increase in farming efficiency and higher potato yields.

The PBC is a private sector not-for-profit advocacy platform set-up in 2005 by 14 (now 89) of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. 

Global demand for honey is growing due to increased awareness of its health benefits. The global market of honey is valued at USD 7.84 billion and the global exports have grown by 35 percent in the last decade to USD 2.3 billion. However, despite having a conducive environment and diverse flora for producing good quality honey, Pakistan has yet to become one of the major producer and exporter of honey.

The lack of an organized value-chain and growth constraints have prevented Pakistan to establish honey brands locally and access export markets. Poor pre- and post-harvest practices, inadequate training and certifications, and insufficient branding and marketing activities are prevalent across the entire honey value-chain. As a result, locally produced honey has yet to enter the international markets such as Europe, USA, and Japan, and exports are limited to the Middle East, primarily Saudi Arabia and UAE. These exports, mainly of the Sidr honey variety, stand at around USD 9.8 million only and are limited mostly to the wholesale markets, where it is sold in bulk packaging at a low price. Pakistan exports only about 24 percent of its annual honey production which is far less than the global average of 40 percent by other honey producing countries.

Pakistan’s domestic honey consumption is approximately 11,147 tons, with a per capita consumption of 50 grams as compared to the much higher global average of 150 grams. The high price (compared to sugar as a sweetener) and a lack of awareness among consumers regarding the health benefits of honey are major reasons for the low domestic demand. Despite the low demand, the honey market size in Pakistan is estimated to be approximately USD 50 million which includes imports of USD 1.8 million. Honey is imported for the affluent consumer segment, which prefers international brands to the locally produced honey. This proves that there is a commercial opportunity in the domestic market for food processing companies to enter, provided they can create efficiencies in the supply chain and ensure good quality and competitive prices.

To achieve success in both domestic and international markets, it is recommended that beekeeper unions/co-operatives are established to enable agglomeration, and benefit from economies of scale. Furthermore, farmers will need to acquire modern tools and techniques for harvesting and maintaining the quality of honey. Accredited testing facilities, which are easily accessible to the farmers should be established to enable buying and selling of honey based on quality metrics. Unless and until both demand and supply side constraints are overcome, the honey value-chain in Pakistan will remain scattered, unregulated and inefficient with limited potential for growth.

Downloads

• Report on “Potential of Honey in Pakistan – An Analysis of the Global and Domestic Market”
• Presentation on “Potential of Honey in Pakistan – An Analysis of the Global and Domestic Market”

The PBC is a private sector not-for-profit advocacy platform set-up in 2005 by 14 (now 94) of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. 

Pakistan imports edible oil worth USD 3.5 billion per annum. Though most of this is palm oil which suits the culinary habits and to date has been difficult to indigenize, amongst the government’s strategy to promote alternative local sources to reduce reliance on imports and potentially promote exports is an ambitious target of planting over 50 million olive trees on marginalized lands. This would also generate income and employment opportunities. To achieve this target, the government has taken exceptional measures such as: providing subsidies to farmers, imparting technical training and providing large quantities of olive saplings free-of-cost. It has been successfully established that good quality olives can be grown in Pakistan, in particular in the regions of Potohar Punjab, Khyber Pakhtunkhwa and Baluchistan where the climate and topography is suitable for growing olives.

At present, the sector does not have a demand driven growth strategy and the thrust of activities are focused on the supply side without conducting a thorough assessment of the domestic and/or export markets.  Pakistan currently imports only USD 11 million worth of olive oil, which is a small portion of its edible oil market. Olive oil has failed to enter the mainstream domestic market due to the nature of local cuisines, which involve high temperature cooking for which olive oil is not ideal. There is a preference of consumers for the more readily available and cheaper palm and soybean oils. Given this scenario, it is unrealistic to expect that locally produced olive oil will deliver a significant opportunity for import substitution and have any sizeable impact on Pakistan’s edible oil import bill.

The olive oil sector is however growing internationally and there is an opportunity for Pakistan to export it along with other value-added products to markets where there is demand for healthier foods. But these international markets have not yet been analyzed and no conclusive evidence is available that olive oil produced in Pakistan can compete with the existing and established brands there.

The olive sector is expected to have limited growth unless the significant challenges are addressed. It is recommended that first, comprehensive demand-side studies should be conducted to identify the key value-added products and target markets for olives grown in Pakistan, and then the focus should move on to improving the supply and quality of produce as per the market requirements. Moreover, private sector investment should be mobilized for continued sustainable growth of the sector.

Downloads

• Report on “Potential of Olives and Olive Oil in Pakistan”
• Presentation on “Potential of Olives and Olive Oil in Pakistan”
• Webinar on “Potential of Olives and Olive Oil in Pakistan”

The PBC is a private sector not-for-profit advocacy platform set-up in 2005 by 14 (now 89) of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. 

The development of the dairy sector is not just important for the growth of Pakistan’s agricultural economy but also to ensure that the people of Pakistan are well-nourished. With just five percent of the total milk stock being currently processed, there is an opportunity to increase the availability of locally produced dairy products. Measures can be taken to increase the volume of milk being channeled through the formal supply-chain, curtail wastage and adulteration, and increase the production of value-added dairy products such as powdered milk which also helps alleviate seasonal milk shortage. By encouraging the formal dairy sector to process more milk into value-added products, consumers in Pakistan will have safe and nutritious milk and dairy products available for better nourishment. The formal dairy sector is also better positioned to reduce the environmental impact of dairy farming which is gaining considerable attention.

Pakistan faces shortage of milk due to the seasonal fluctuation in demand and supply. At present, the informal market players adulterate milk and dairy companies import milk powder to reduce this demand-supply gap. The seasonal shortage of milk can be reduced by adopting better livestock and feed management practices and domestically producing more milk powder in the flush season and reconstituting it during the lean season to meet high demand.

The milk yield of Pakistan’s local breeds is about four times lower than that of the high-yielding international breeds. To increase milk yield, the dairy farmers can either import high-yielding breeds or genetically improve the local breeds through the process of artificial insemination, which at present is not common in Pakistan. The productivity is also affected by limited access to vaccines and veterinary extension services.

Of the total milk produced, only four percent (eight percent of the tradable milk) is pasteurized and UHT treated and another one percent is used in the production of other value-added dairy products. Around 15 percent of the total milk produced is wasted due to improper storage and handling. To reduce wastage of milk, it is important to encourage dairy processing by implementing and enforcing pasteurization laws by the provinces.

The federal and provincial governments need to formulate a long-term dairy plan to be consistently implemented over time. Sectoral growth strategies applied by Turkey and India provide good guidance for increasing dairy production. With appropriate policy measures, Pakistan can ensure sufficient production of milk and value-added dairy products. The key policy recommendations are summarized below.

1. Conduct a national livestock census once every five years in order to formulate, implement and scale growth strategies that are more effective than those based on estimated data.
2. Restrict export of animal feed and its components, including maize and encourage its utilization to make a balanced diet for animals in order to improve milk yield.
3. Ease import of animal vaccines by minimizing documentation and time delays in completion of import procedures.
4. Increase import duty on milk powder and encourage dairy processing companies to produce it locally during the period of milk shortage. The imposition of import duties may be kept conditional on Pakistan first producing enough milk powder to sustain consumption in the summer months.
5. Ensure the implementation of the pasteurization law in Pakistan by establishing pasteurization infrastructure at milk sourcing points in the rural areas to encourage dairy processing and reduce wastage of milk in Pakistan.
6. Roll-out a nation-wide FMD vaccination drive to improve animal productivity and milk production in Pakistan. The federal government, in coordination with the federating units, needs to ensure adequate availability and effective administration of animal vaccines across the country.
7. Encourage consumption of pasteurized and UHT treated milk by carrying out awareness campaigns among the general public regarding the harmful effects of raw adulterated milk and health benefits of pasteurized and UHT treated milk. To make this happen, consistent efforts are required by the federal and provincial governments to run such awareness campaigns through various mediums.
8. Create awareness regarding the environmental impact of the dairy sector to reduce GHG emissions that contribute to climate change. The provincial governments can create awareness regarding the environmental impact of dairy activities and encourage the sector to adopt mitigating measures. The provincial livestock departments’ advisory wing should run the awareness campaigns across the provinces through various mediums.
9. Provide subsidized financing to small and medium sized farms to import high-yielding dairy breeds and for capital investments to set up large farms. Larger farm size will generate economies of scale for dairy farms. This will attract farm level investments in the sector and eventually increase milk production.
10. Formulate a National Dairy Plan under the overarching policy contours that are mentioned above in order to support their implementation across provinces. The plan should be implemented in phases over a period of 20 years. The phases should consist of a series of initiatives such as: improved breeding programs and access to silage, control on sale of adulterated milk, establishment of milk collection centers and access to working capital financing. The proposed dairy plan should be formulated and implemented by the provincial livestock departments. The implementation of this plan will require consistent commitment by the present and future governments.

Downloads

• Report on “Modernizing the Dairy Sector”
• Presentation on “Modernizing the Dairy Sector”
• Webinar Summary Report

The PBC is a private sector not-for-profit advocacy platform set-up in 2005 by 14 (now 87) of Pakistan’s largest businesses. PBC’s research-based advocacy supports measures which improve Pakistani industry’s regional and global competitiveness. 

The size of the global market for trade in bovine meat is USD 52 billion. The global market size has grown four-fold during the last two decades and is geared to continue growing in the future as incomes rise and the propensity to consume beef as a primary source of protein diet increases in developing countries. The global beef market is an opportunity for Pakistan to diversify its exports, given the existing agrarian base of the country, and about 12.5 million families involved in cattle rearing activities.

While there has been a lot of improvement in the productivity of dairy animals, with an improvement in milk production by 15 percent and 46 percent for buffalos and cows respectively over the last three decades, the yield of animals in producing meat is still low. The milk yield of Pakistan’s buffalo was ranked third best in the world in 2018 at 1,935 kg/animal per annum. There has been limited focus by livestock farmers to rear animals exclusively for meat production, and typically, spent animals which stop producing sufficient milk are sold for meat.

The yield gap for buffalo meat produced in Pakistan when compared to the top three best meat producing countries, Australia, USA and Brazil is about 35 percent, whereas the top performers produce an average buffalo carcass weight of 297 kg/animal versus 196 kg/animal produced in Pakistan. One of the key drivers of the low yield in Pakistan is the unattractive domestic market for beef. In Pakistan, animals are bought and sold by appearance and not by weight, a disincentive for farmers to invest in fattening animals. Furthermore, there is a price control regime in place to ascertain the sale price of meat sold in the domestic market, which is a constraining factor for profitability of the livestock farmer and hence the lack of investment made on improving the meat yield drawn from the animal.

Keeping in perspective the export opportunity of beef, upgrading the value chain to meet the international demand in addition to the domestic demand for beef is essential to benefit Pakistan’s economy. With better earnings from the sector, Pakistan will improve the per-capita income of the rural areas and increase foreign exchange inflow from exports.

Currently, Pakistan exports about USD 250 million worth of bovine meat to eight countries including the six GCC countries, Vietnam and Afghanistan. This constitutes 0.44 percent of the global market. 80 percent of Pakistan’s exports in 2019 were of chilled bovine carcasses and a total of 91.6 percent were in the chilled category which included carcasses, bone-in and de-boned bovine meat. Pakistan’s exporters have leveraged the demand in the near markets for premium chilled meat, mainly sold in restaurants and retail stores. In contrast, the exports of the three largest meat exporting countries which include Australia, Brazil and India are in the frozen beef category and constitute 65 percent, 86 percent and 90 percent of their meat exports respectively. Frozen beef, which is generally considered as lower quality and cheaper, has a longer shelf life and can be transported by sea to the far markets. This improves the marketability of the product and provides better returns due to cheaper transportation costs by sea, as opposed to by air cargo in the case of chilled meat. However, the appropriate processing capabilities and transportation cold chain is required to process frozen beef which is an extra investment. Furthermore, a competitive exchange rate is essential to ensure the ability to match competitor prices, since the frozen beef market is high volume and price sensitive.

In order to compete in the international market for frozen beef, with China, Japan, USA and South Korea being the top buyers of beef, Pakistan needs to comply with the quality standards and phyto-sanitary standards of the importing countries. The Foot and Mouth Disease (FMD) present in Pakistan limits its access to most global markets, for which the government is undertaking a vaccination programme and making an animal quarantine zone in Cholistan. The intervention is expected to move Pakistan from the World Organization for Animal Health’s (OIE) Stage 2 category for countries, (in which FMD is reduced to target areas) to Stage 3. In the third stage the FMD virus is curtailed through an organized national Official Control Programme. Once Pakistan achieves the Stage 3 status, the opportunity to export frozen beef to larger markets such as China will open up.

However, in order to also meet export requirements, traceability of animals is required. This means that Pakistan requires investments in establishing farms where animal herds can be reared exclusively for backgrounding and fattening. In Pakistan, the meat processing companies have started making investments in vertically integrated feedlots which will enable them to assure their customers of traceable animals. However, purchasing land for making feedlots is capital intensive, for which reason the government should consider leasing land to the private sector in the quarantine zone for enabling more players from the private sector to establish feedlot farms and increase the stock of traceable animals.

The federal and provincial governments should redouble efforts to help farmers make their animals traceable, liberalize the price control regime and import suitable breeds of animals and their semen to making high meat yielding bovine breeds available in Pakistan.

Downloads

• Report on “Scaling-Up Bovine Meat Exports of Pakistan” – April 2021
• Presentation on “Scaling-up Bovine Meat Exports of Pakistan” – July 27, 2021