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A Long-Term Vision to Building Pakistan’s Resilient Agriculture

Posted: Jun 26, 2024 12 minute read GAR 7 Likes
Imran J. Nasrullah, Managing Director for Africa, Middle East, and South Asia
Imran J. Nasrullah speaks about Pakistan’s agricultural prospects, the benefits of corporate farming and the need to legislate for better food standards.

Q: Let’s start with a brief overview about your professional background and what Golden Agri-Resources (GAR) does.

Imran: My role is regional. I cover South Asia, the Middle East and Africa. I have been involved in the agri-commodity sector for almost 28 years, and in the last 12 years, specifically with corporate farming-related businesses. I don’t claim to be an agri expert, but I certainly have experience in building businesses in multiple geographies. GAR is a very big player in the agri field. We are among the top 10 corporate farmers in the world, and have one of the largest palm plantations in Indonesia. We work with our own corporate farmers, as well as with smallholder farmers across Indonesia. We are very much an agricultural farming-based company. We are one of the largest players in the palm oil space, and we distribute palm products to over 100 countries. Palm oil is very versatile, and goes from cooking oil to renewable fuel to specialty fats, animal feed to oleo-chemicals and specialty chemicals.

Q: When did GAR enter Pakistan?

Imran: In 2013, as importers of palm products. By palm products, I mean cooking oil products or palm olein, which is then refined into edible oil. All of the top edible oil players – Dalda, Mezan, Soya Supreme and Sufi – are our customers. They buy the product from us and refine it. We also supply products to make shortening, margarine and biscuit fats; we are working with EBM and CandyLand in that respect. We are also into oleo-chemicals (they go into making soap and shampoo), and about a year ago, we launched our dairy animal feed business. Pakistan is now our hub for animal feed for the region, and we are about to launch in the Middle East using Pakistani resources.

Q: In Pakistan, do you have an agricultural presence on the ground?

Imran: No. We do not want to be corporate farmers in Pakistan. We want to work with large-scale corporate farmers and bring them up to speed with the best farming practices we have learned over the years in Indonesia. For example, from an edible oil perspective, canola, soybean, rapeseed and mustard seed are indigenous to Pakistan. They can be grown here and the oil extracted could be a substitute for some of the soybean oil that is being imported. We are keen to see the growth of the oilseed industry in Pakistan as a solution to importing edible oil. When these seeds are crushed, a lot of powder – called meal – is extracted and used in the animal feed industry.

Q: Do you work with Pakistani cooking oil brands only in terms of supplying the commodity?

Imran: Yes, none of them are into corporate farming; they are into processing. They buy the oil from us and refine it.

Q: In which areas do you interact with brands in terms of their corporate farming aspect?

Imran: In dairy feed. The majority of Pakistan’s large dairy corporate farms is our customers. Last year, we launched a product called GoNutri Energy, which is an ingredient that can be added to animal feed rations to enhance milk fat production for greater yield and quality. The fat content in milk has to be high because it can then be used to make butter. We have dairy experts who work with these farms in an advisory capacity. They are basically veterinary scientists and provide technical advice.

Q: Why does Pakistan still have one of the lowest dairy yields in the world?

Imran: Dairy yields in Pakistan are estimated at approximately four to six litres per day compared to the 20 to 30 litres achieved by large corporate farms in Europe and the US, and the feed plays only a small part in the overall picture – basic hygiene, the conditions under which the animals are kept, the amount of water and shade they get – all affect yields. This is why multinational farm managers are working with the top corporate farms in Pakistan to introduce best practices. Pakistani corporate dairy farms are doing better than they used to, but they still have a long way to go. This is about the transition or development of the corporate farm industry in Pakistan. When you have a small farm looking at 800 animals compared to 5,000 animals, the scale changes and the overall conditions for the animals vastly improve.

Q: Which brands does GAR work with in this respect?

Imran: We work with Nishat, Sapphire, Dayfresh, Everfresh and Dada Dairies. They then supply to Nestlé, Milkfields, Prema and Goodmilk, among others.

Q: Has GAR not considered entering the corporate farming space in Pakistan?

Imran: No, although we have been approached by entities in Pakistan. What we are open to, is sharing what we have learned about sustainable agronomic practices – based on our own experience in Indonesia where we work with 7,000 (our goal is to reach out to 100,000) farmers and teach them best agriculture practices. Corporate farming is a science that is transferable and we can partner in doing this.

Sustainable agronomic practices – one of the skills taught to farmers to increase their agricultural practices

Q: How would you describe the science behind corporate farming?

Imran: It is about putting processes in place to measure performance, improvements and yields, and for this you need players on the ground working on a day to day basis. Then there is the question of traceability. Customers in the developed world want their food to be traceable and to do this, farmers need to be aware of how it relates to them; the fact that if they produce a product that is traceable, they will be paid better. Corporate farming is also about educating and teaching. How do we look at waste? How do we tackle energy and manage water resources? Indonesia’s challenge, and Pakistan will face the same challenge, is land. Indonesia does not want to cut more trees to grow more palm, so it becomes a question of getting more out of the same land. How do you do that? Is it just fertiliser use? Is it about the technology you adopt? Do you use drones to understand soil conditions? All of these things can be developed as part of the science of corporate farming.

Q: In your opinion, why is Pakistan’s overall agricultural performance so overwhelmingly subpar? We seem to know the solutions, yet we are unable to implement them. Why?

Imran: Pakistan’s challenges around low yields and productivity are not unique; we see this everywhere. Farmers’ incomes are not high enough and the younger generations do not want to farm; they would rather go to a large city and become Uber or Careem drivers. We have an ageing farmer population across the globe. Then there is the fact that smallholder farmers are not receiving the scale of inputs and the financing they require; there are middlemen

“The layers of challenges in Pakistan’s agriculture make a corporate farming structure essential. We need to think holistically to address them, integrating smallholders, productivity, to sustainability and traceability.”

(arthis) who manipulate part of the ecosystem, and at some point, exploit it. There are multiple problems and you cannot tackle all of them at the same time. It is these layers of challenges that make a corporate farming structure essential for a country like Pakistan. Corporate farming can bring about improvements; we have seen it in the dairy sector. It is also happening in the potato sector with Lay’s. Pepsi is working with contract farmers. They give them the seeds and the credit to grow potatoes. Imagine if this were scaled up to corn, wheat, rice, sugar or oilseed. If that were to happen, you would have a sustainable long-term future that integrates smallholders into the bigger picture. Apart from challenges such as water scarcity and land degradation, over-fertilisation is a problem. When you export bananas to the EU, they are rejected because the lead content in our soil is too high. Another challenge is growing the wrong crops. We need a balanced agriculture policy. Corporate farming has brought significant improvements in Indonesia, and it is now a G20 country. In Pakistan, we have to be patient and take a 20 to 30-year view in terms of getting things right.

Q: What is the difference between contract farming and corporate farming?

Imran: Contract farmers are individuals and they farm on behalf of a corporate entity. For example, Pepsi did not want to get into farming, so they said, we will help you grow the best potatoes in the world by providing you with the seeds and the financing. There are loads of contract farmers growing potatoes for Pepsi; by the way, the Pakistani potato is now counted among Pepsi’s top potatoes in the world. That is contract farming. Corporate farming is when a company takes on 5,000 acres of land and hires farmers as their employees. In Indonesia, in addition to their own farmers, corporate farms by law have to include a percentage of smallholders, which is a way of bringing people out of poverty – a very progressive way of doing things. It is something that could eventually happen in Pakistan.

Q: Is the Lay’s potato you are talking about accessible to the ordinary consumer?

Imran: The scale is too small and upscaling this kind of thing is beyond Pepsi’s capabilities.

Q: Which means that good quality produce is not available to Pakistani consumers?

Imran: Yes. However, good quality milk in boxes is available, although only a tiny minority can afford to buy it. The problem is lack of regulation. Legislation needs to come in to ensure better quality food. At the very minimum, if legislation regarding pasteurisation is passed and implemented, there will be an increase in demand for better quality milk, which in turn will increase demand for better quality feed and hence, a cleaner supply chain. Governments need to draft legislation around food safety and standards, and players like ourselves can help because we work with food authorities around the world. That is where things need to go. If proper legislation is enacted in the milk space, the corporate dairy farm sector will skyrocket and they will be able to produce value added products, such as hydrated milk or infant formulas, and export them. Governments need to play their part in terms of legislation and implementation, and then the private sector will come in and take over. The fact that we do not have good quality potatoes is because there are no regulations regarding food quality, and if food quality is not a requirement, why would the farmer invest in producing it for the mass market?

Q: Is this lack of regulation due to apathy or vested interests?

Imran: I don’t want to get into a political debate, but agriculture is no different from any other sector in Pakistan. As to whether it is vested interests or apathy, I would say that it is a combination of multiple things. Today, two-thirds of the population is food insecure. Had measures been taken earlier, we would not be in this situation. We would not be massively importing food or, at the very least, we would be exporting food that we can produce well and not importing food we can produce ourselves.

Q: Is GAR involved in any other agriculture related areas apart from palm oil and dairy feed?

Imran: We also do sugar. We trade about a million tons of sugar. We bought sugar last year from Pakistan and traded it to West Africa. However, Pakistan’s sugar crop is inconsistent and fraught with its own challenges due to government regulations and other issues, so it is not a consistent export. One also has to keep in mind that Pakistan’s water resources are scarce and sugar is a huge water consumer. We are also working with some oleo-chemical players on the production of soap and shampoo in Pakistan. We are also working with top-quality Pakistani food companies. Companies like CandyLand, EBM and Young’s are trying to innovate in terms of their product quality. We work with global accounts such as McDonald’s, Krispy Kreme and Pizza Hut to develop recipes for better quality products and we are trying to build that skill in Pakistan.

Q: With brands like EBM and CandyLand are you just supplying a product or is there more to it?

Imran: We are certainly supplying product, but we are also having broader conversations with brands in terms of an urban population that is becoming more conscious about food safety and standards. There are 30 million people in Karachi and both housewives and younger generations are asking for better quality food. So brands are asking us questions about how they can make their products better and this is where our expertise becomes relevant. There is a huge opportunity to work with brands to make their product better in terms of taste and nutrition. This is what differentiates us from many of our competitors who just sell product. We have an innovation centre in Jakarta where our chefs are developing better quality products with better flavours and taste. One of our dreams is to have a similar centre in the region, maybe Dubai. A lot more Pakistani companies are participating in Gulfood Dubai.

Our R&D lab in Marunda, Indonesia – where we develop new, innovative food products for customers and consumers

Q: Is Pakistan putting the right emphasis on training top quality nutritionists and food scientists?

Imran: There is a lot of potential in Pakistan, but we are not producing the right level of talent systematically. The private sector are training people for their own needs and sending them abroad. It goes back to the question of regulation and legislation. If there is no demand for good quality food, you are not going to have a demand for qualified food scientists; they would rather go to Dubai or elsewhere, because the environment in Pakistan doesn’t exist. There has to be an ecosystem to absorb that talent.

Q: Does Pakistan have the rudiments necessary to create an ecosystem that prioritises food safety and standards?

Imran: I don’t think there is an ecosystem per se, although I see islands. My hope is that these islands connect and become a big landmass.

 

Interview by Mariam Ali Baig, originally published in Aurora. This article has been republished here with permission.

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