Leveraging the Agri Products Market
Syed Abdullah Bukhari, the founder and CEO of the Enrichers Investment Group, has an extensive experience of almost 20 years of working in domestic and international financial markets, and agriculture commodity derivatives. He is one of that rare breed of businesspersons who believe in investing in social impact businesses that prioritise doing work to systemically and sustainably serve and attempt to solve local community needs.
Founded in 2011, Enrichers Investment EIG is now claimed to be one of the three top companies operating on the Pakistan Mercantile Exchange (PMEX). It has diversified into agriculture, hospitality and tourism, and real estate in the last decade under Mr Bukhari who says “you must be totally focused on whatever work you do and be disciplined to be successful and grow. Besides, you need to be compassionate about your fellow human beings.”
The company is undertaking a major initiative in the southern districts of Punjab like Bharat, Bahawalnagar and Bahawalpur to bring life to the thousands of acres of barren, uncultivated land using modern technologies employed in the United Arab Emirates and other regions to irrigate the deserts. The company has also undertaken projects related to hospitality in Gilgit-Baltistan to encourage eco-friendly tourism.
In an interview with Dawn, he spoke about his passion — agriculture — and how the government and private sector can lift the lot of smallholder farmers by taking a few small steps, address food insecurity and boost food and other agriculture exports for economic growth.
Selling commodities electronically to overseas buyers can break the shackle of the vicious cycle of farmers who are subject to manipulation
“Pakistan is a resource-rich country blessed with fertile soil and perfect weather for agriculture. But if we are still a food-insecure country, importing food for our people and our small growers are suffering, it means that we need to correct our policies and link our farmers directly to the markets and the industry,” Mr Bukhari, who has a law degree, argues.
“Over the last century, domestic demand for food has escalated as our population has increased radically. According to United Nations, at the current growth rate, the population is expected to double by 2050 and food demand is projected to increase anywhere between 59 per cent to 98pc by then. Pakistan’s food import bill has shot up to $6.4 billion in the first eight months of this fiscal year,” he continues.
According to him, the agriculture sector has a ripple effect on the economy and hence needs to be modelled in a way that “we have not seen before to confront the forecasted demand for food. Climate change-driven water insufficiency, urbanisation, lack of investments, and rising production costs — all are posing a challenge to food security as well as the economy of Pakistan.”
He believes that the agriculture industry can mitigate food insecurity, climate crisis and enhance economic opportunities for farmers and Pakistan. “Agriculture has everything we need to boost incomes and generate jobs. But we need to invest in research and development in this important sector. The responsibility must not be only borne by the government to come at par with developing countries, the private sector should also invest in diverse agriculture-related projects through the Mushurakah model.”
He thinks that the Pakistan Mercantile Exchange can play a major part in the development of agriculture and wellbeing of the farming community. “The two wings of our commodity trading — Cash Settled Futures and Deliverable Futures — the latter can play a critical role in adding a decent plaster to our fractured economy. Albeit, Deliverable Futures come with a unique set of complexities, the recent initiative by PMEX under the Global Commodity Trading Platform (GCTP) has opened a gateway of opportunities by giving transparency and efficiency to these intricate factors.
“A one-window solution to sell commodities electronically to overseas buyers can break the shackle of the vicious cycle of farmers who are subject to manipulation. It may turn out to be a major driver to push our economy and food and other agriculture exports.
“The global buyers will have the advantage to reach a wide variety of verified sellers selling commodities certified by internationally accepted assayers at GCTP. They will not only have the opportunity to purchase commodities with quality certification as per the international standards but also at competitive prices and get the delivery of purchased goods at the port of their choice with the click of a few buttons. GCTP provides the buyers with the security of their money until the trade is successfully executed and the goods are dispatched from Pakistani ports to their respected destination.
“For the first time in Pakistan, GCTP will offer an opportunity to the sellers to sell their commodities globally and get prompt payment without being registered as exporters. Also, the sellers will not have to prepare export-related documents, which will be handled by GCTP on their behalf. Moreover, by listing commodities at GCTP, the sellers will be able to showcase their products in new markets and attract buyers from all over the world.”
Furthermore, he notes, this will arm farmers and other stakeholders with knowledge of supply and demand shift, commercial practices, risk management, quality assurance, and well-developed support infrastructure. “There is a common saying that ‘our farmer is born in debt, grows in debt and dies in debt’. It is because he is not educated or equipped with farming skills to enhance his productivity and reduce waste. Nor is he equipped with the knowledge of the markets or linked with financial and commodity markets, which leaves him at the mercy of the middleman for input purchase and product sales. This situation needs to change.
If we want agriculture to drive economic growth, we must empower our farmers by educating them in modern agricultural practices as well as business management to rid them of the exploitative middleman. Thus, in order to get the ball rolling, the government in collaboration with the private sector should launch awareness programmes for farmers to boost their productivity.”
Mr Bukhari insists that Pakistan can not only become a food-secure nation but also become a net food exporter by fixing its agriculture sector. “Poor productivity is a major obstacle to domestic food security and exports. To keep pace with global food demand, there has to be a shift from domestic demand-generated growth to export-oriented growth, and for that we need to have precise geographically explicit knowledge about gap analysis with local-to-global relevance aligned with grading and sorting potential methods of the market.
“Our policymakers, development professionals and entrepreneurs can cultivate avenues of food export growth by promoting our produce and managing the demand-supply bottlenecks. Export is not about ‘one size fits all, we need to reorient our export policies as well and bring them in line with the global food standard requirements.”
Mr Bukhari says Pakistan also has a comparative advantage in minerals. “Pakistan is home to the largest salt mines and coal reserves. The Himalayan salt or pink salt mined from Punjab is deemed as ‘oil’ or ‘pink gold’ for Pakistan, which reflects its dollar worth. However, it aches my heart to see that it is being exported at a very low price to China and India. “We can do better and earn a lot from salt exports rather than throwing it away.”
Published in Dawn, The Business and Finance Weekly, May 2nd, 2022