Industry profile and overview

Industry Analysis: The most important crops are wheat, sugarcane, cotton, and rice,
which together account for more than 75% of the value of total crop output.
Pakistan's largest food crop is wheat. In 25, Pakistan produced 2!,5"!,# metric tons
of wheat, more than all of $frica %2,&#,5'5 metric tons( and nearl) as much as all of
*outh $merica %2#,557,7'# metric tons(, according to the +$,
Pakistan has also cut the use of dangerous pesticides dramaticall).
Pakistan is a net food e-porter, e-cept in occasional )ears when its harvest is adversel)
affected .) droughts. Pakistan e-ports rice, cotton, fish, fruits %especiall) ,ranges and
/angoes(, and vegeta.les and imports vegeta.le oil, wheat, cotton, pulses and consumer
foods. The countr) is $sia's largest camel market, second0largest apricot and ghee market
and third0largest cotton, onion and milk market.
The economic importance of agriculture has declined since independence, when its share
of 12P was around 5&%. +ollowing the poor harvest of !""&, the government introduced
agriculture assistance policies, including increased support prices for man) agricultural
commodities and e-panded availa.ilit) of agricultural credit. +rom !""& to !""7, real
growth in the agricultural sector averaged 5.7% .ut has since declined to a.out #%.
$gricultural reforms, including increased wheat and oilseed production, pla) a central
role in the government's economic reform package.
/uch of the Pakistan's agriculture output is utili3ed .) the countr)'s growing processed0
food industr). The value of processed retail food sales has grown !2 percent annuall)
during the 4ineties and was estimated at over 5! .illion in 2, although supermarkets
accounted for 6ust over !% of the outlets.
The +ederal 7ureau of *tatistics provisionall) valued major crop )ields at 8s.5#,'9'
million in 25 thus registering over 55% growth since 2 while minor crop )ields
were valued at 8s.!'#,77 million in 25 thus registering over #!% growth since 2
Significant Trends:
$griculture is an important sector of Pakistan econom). It provides living to 99 percent
of population of the countr). 7esides, it accounts for 2! percent of 12P, a.sor.s #&.#
percent of emplo)ed la.our force, and contri.utes !! percent to e-port earnings.$s such,
agriculture growth is ver) crucial for economic growth in Pakistan. $griculture sector
supplies raw materials to manufacturing sector. It also provides market for manufactured
products.

2uring the period !"502# agriculture value added grew at an annual average rate of
&.9 percent which has e-ceeded the average population growth rate of 2." percent during
this period. :arious factors have significantl) contri.uted to the growth of agriculture.
$mong these, the most important are technological progress em.odied in high0)ielding
varieties of food grain and cotton, pu.lic sector investment in agriculture, research and
e-tension e-penditures %8;<( and ph)sical infrastructure. $lthough agriculture sector
growth has significantl) contri.uted to the growth rate of 12P of 5 percent during this
period, however, its own performance has shown violent .ehavior over time. Ta.le !
provides trends in growth rates of value added in agriculture sector of Pakistan. ,n one
hand, agriculture value added grew at a meager rate of onl) !.' percent during the !"5s.
,n the other hand, it showed a respecta.le rate of growth of 5.!2 percent during the
!"9s. In other periods its growth remained .etween these limits.
Growth Rate: $gricultural has shown mi-ed trends during the current decade. It showed
impressive growth in the middle with 7."% in 25. 7ut agriculture is facing lots of
challenges like water scarcit), weather changes and some others. $nal)se the given
figures a.out annual agriculture growth rate of pakistan from 2#05 to 2!.
No. Year Growth Rate Target Difference
!.
2"0!
2.% &.'% 0!.'%
2.
2'0"
#.7% &.5% =!.2%
&.
270'
!.5% #.'% 0&.&%
#.
2907
5.% > >
5.
2509
2.5% #.2% 0!.7%
9.
2#05
7."% #.% =&."%
Key Success Factors: +ollowing are the ke) factors found after research to .e crucial for
success in an $gri.usiness
.

Industry Knowledge 00 The entire management team needs to develop and maintain
market and industr) savv) and awareness. /arket and industr) awareness is often a
prime selection criterion for ke) positions. +or the venture to succeed, it must remain
competitive in its industr) in terms of operating efficienc) and cost of operations. It is
the management team?s responsi.ilit) to .e aware of industr) standards and recommend
investments and upgrades over time to insure that the venture remains competitive.

,perating margins and investor returns must also .e competitive with industr) standards
and the management and the .oard must .e aware of the margins and returns of other
industr) participants. This too will likel) re@uire ongoing reinvestment of some of the
earnings to e-pand or upgrade facilities. In the a.sence of such industr) awareness, the
.oard and farmer0mem.ers ma) develop unrealistic e-pectations regarding the returns
from their venture. /an) farmer0owned processing activities are fundamentall)
commodit) .usinesses characteri3ed .) thin margins.

!ployee Training 00 +inall), the new organi3ation should plan and prepare for
significant investments in emplo)ee training. This is particularl) relevant if the facilit) is
located in a rural area where manufacturing and processing industries are rare. 4ew
emplo)ees will likel) need su.stantial training in areas such as safet), sanitation, and
@ualit) control.