ISLAMABAD: Pakistan has benefited immensely from the Trade and Supply Chain Finance Program (TSCFP) of the Asian Development Bank (AfDB) for food and agriculture related imports over the last 18 years month.
The TSCFP has supported more than 1,900 food and agriculture related imports worth $2.3 billion in 10 developing countries in Asia, with the bulk of the assistance going to Pakistan, in Bangladesh and Vietnam, according to information published by the AfDB.
AfDB says it has stepped up support to alleviate worsening food shortages in Asia and the Pacific by expanding aid through its trade and supply chain finance program to remove bottlenecks bottleneck in the import of food and agricultural products.
To bolster its support, the TSCFP has increased risk limits on trade finance guarantees for food imports by $300 million. When combined with co-financing by partner commercial banks of transactions under the expanded limits, the support can translate into approximately $500 million in additional financing for food imports in the region.
The additional support will facilitate trade in food and goods such as fertilizers to promote food production, with the new limits allowing the AfDB to assume additional exposure in transactions with its partner banks to finance the import of these items . The new limits will be reviewed after one year.
“There is a growing food crisis which means that more and more families are going hungry every day in developing countries in Asia,” said Steven Beck, Director of TSCFP. “Already, a significant portion of our trade finance portfolio supports food security. But it is clear that we need to do even more, as high food price inflation has eroded the current limits of global trade finance for food imports.
Meanwhile, the latest edition of the AfDB’s Asian Development Review indicates that climate change – manifested in rising temperatures, changing rainfall patterns and increasing and intensifying flooding – is causing concerns among farmers and those concerned with the development of agriculture and food. made in Pakistan.
The per capita availability of arable land and irrigation water is decreasing, while the demand for food and industrial raw materials is increasing. Prices of agricultural inputs in Pakistan – such as fertilizers, pesticides, farm machinery and diesel – have soared, driving the high cost of agricultural production and consumers gasping at rising commodity prices food and other commodities.
The shortage of wheat production in the recent past, in the face of the domestic needs of an ever-growing population, has triggered price increases, while imports have weighed on the country’s foreign exchange reserves.
Posted in Dawn, September 18, 2022