Supporting Gilgit-Baltistan’s Agriculture Sector

Agriculture provides employment to a large population of Gilgit-Baltistan (GB). This is despite the limited amount of irrigated arable land available. Only around 1.2 percent of the total land area in GB is cultivated (Table 1). With the completion of the Karakoram Highway (KKH) in 1978, the improved connectivity with a larger domestic market as well as with China has induced a rapid transition in agriculture from staple crops to cash crops and higher value fruits. Given the agro-climatic advantages of the area, this means that GB can produce country’s winter crops during the summers and sell them as “off-season” products at a premium. However, this would require further investments in expansion of limited cultivable area as well as improved productivity and enhanced market connectivity.[1]

Source: Agha Khan Rural Support Programme, 2017

Over time, most crop and fruit yields in GB have suffered from low productivity. This includes crops, such as wheat, maize and barley; and fruits, such as cherry, pear, walnut, grapes and mulberry. However, some crop and fruit statistics have shown encouraging signs. Potato – the largest cash crop in the region – registered a 91 percent increase in production over 2001 levels in 2001-06 period. Production of apricots and apples – two major fruit crops with high market potential – rose by 6 percent and 15 percent in the period 2001-06. Please see figures 1 and 2 below.[2]

Figure 1: Major Crop Yields

Source: The Government of Gilgit-Baltistan et al., 2011

Figure 2: Major Fruit Yields

Source: The Government of Gilgit-Baltistan et al., 2011

Agriculture in GB experiences high losses at production and post-harvest stages. The waste rate is particularly acute in vegetables and fruits. In vegetables, significant losses are recorded in potatoes and tomatoes. Among the major fruits, mulberry and apricot record 66 percent and 41 percent losses, respectively. However, the noticeable exceptions are the less perishable fruits, including almond and walnut at 3 percent and 2 percent, respectively. The extent of processing and value addition in the sector is limited, which partly explains the high waste rate for perishable produce. Nearly all vegetables and fruits are sold fresh with some exceptions, such as apricots, where some processing takes place in the form of drying and kernel-oil extraction; while in the case of apples and cherries, a limited number of local marketing associations add value by grading, packaging and labeling. Honey-bee keeping is another activity in which some value is added by bottling and labeling.[3]

Summary of key challenges faced by GB’s agriculture sector

• Little cultivable land
• Limited technology access for processing and value addition
• Long distances from markets coupled with weak transport network and storage infrastructure
• Tariff and non-tariff barriers on exports to China

The issue of little cultivable land, which leaves holdings fragmented and limits the scope for scale in production, can be dealt by making additional land arable through water- and land-development[4]. Government and civil society can assist in this regard.

GB enjoys centuries-old tradition of chemical-free agriculture. Use of clean glacier water and non-use of insecticides, pesticides and herbicides has given the region a niche in natural and organic farming. This has opened a window of opportunity for local farmers to cater to health-savvy customers in domestic and international markets. However, limited access to technology for processing and value addition prohibits the local farmers from fully availing this opportunity. For example, a pioneer organic set-up in Karimabad, Hunza since 1986 by the name of Hunza Fruit Processing is producing a range of processed fruit products, including jams, squashes, juices, dry fruits and energy bars. Such products are in high demand and would fetch premium prices in down-country markets, such as Islamabad, Lahore and Karachi. However, without access to technology for vacuum packing, given organic products have a shorter shelf life, the business is not able to take its products outside GB. Additionally, organic businesses in Karimabad often quote lack of marketing training as an obstacle in competing against down-country products with superior branding.

Perishable produce means that it has to reach end markets quickly, especially given inadequate local cold storage facilities. Long distances from down-country markets and absence of specialised transport, such as refrigerated trucks, makes this even harder[5]. The KKH route is difficult and unpredictable, Babusar Pass route stays closed due to heavy snow fall for six months in a year and flights are infrequent and expensive. As a result, most fruits and vegetables are either sold locally at lower prices or are wasted. A local entrepreneur in Karimabad suggests that a short-term solution to this problem could be to utilise local courier services – with their existing network in the area – for transport of perishable produce. Although, a long-term solution would be to improve the overall infrastructure, including storage and transport.

Local businesses complain about unfair treatment by China. While competitive Chinese products have displaced local products, GB is not able to access Chinese markets, despite its proximity with China, due to restrictions posed by tariff and non-tariff barriers[6]. GB produces an estimated 4,000 tonnes of cherries and 20,000 tonnes of apples annually. Given increasing Chinese fruit imports, China is a potential market for GB. Thus, negotiating mutually beneficial fruit trade agreements with China under the China-Pakistan Economic Corridor (CPEC) could boost GB’s fruit industry, and create local jobs.[7]

Summary of key opportunities for GB’s agriculture sector

•  Making additional land arable through water- and land-development
•  Providing access to technology for processing and value addition
•  Improving overall infrastructure, including storage and transport
•  Negotiating mutually beneficial fruit trade agreements with China under CPEC

[1] The Government of Gilgit-Baltistan, Asian Development Bank, The World Bank, 2011

[2] The Government of Gilgit-Baltistan et al., 2011

[3] The Government of Gilgit-Baltistan et al., 2011

[4] The Government of Gilgit-Baltistan et al., 2011

[5] The Government of Gilgit-Baltistan et al., 2011

[6] The Government of Gilgit-Baltistan et al., 2011

[7] Agha Khan Rural Support Programme, 2017s

Usman Naeem is the Country Economist at the International Growth Center (IGC).