Rice Industry Overview and Outlook

RICE | LOCAL INDUSTRY Business Risks OPERATING RISK • . Rice is a basic essential commodity, the second staple food for Pakistan after wheat. Since it accounts for approx. ~10% of the cultivated land and 3.1% of the agricultural value addition, the Sector has its own economic significance. Apart from this, it is the 2nd largest export crops for the country following cotton. Business Risk of the Sector remains low, despite the outbreak of the Covid-19 pandemic, with little disruption witnessed on the operating front. • On the other side, the potential for the Sector growth has always been undermined owing to the following factors: - - Production of Rice is confined to irrigated fields, while no sustainable solutions to guarantee water security have been developed. Lack of technological innovations and low quality seeds result in lower yield of the crop, specially basmati, in comparison to the regional countries. High cost of inputs (e.g., fertilizers) discourage small farmers to grow. Additionally, no policy framework has been developed to expand the area under cultivation for rice. Another concern is the locust invasion reported by farmers in Punjab's Okara and Pakpattan districts. Measures to contain the invasion and prevent further crop losses are required on a timely basis. PACRA 20 20

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