Basmati Rice Cluster Report

CLUSTER DEVELOPMENT BASED AGRICULTURE TRANSFORMATION PLAN
VISION-2025
Basmati Rice Cluster Feasibility and Transformation Study
Planning Commission of Pakistan, Ministry of

Planning, Development & Special Initiatives
February 2020
1 KNOWLEDGE FOR LIFE

FOREWORD
In many developed and developing countries, the cluster-based development approach
has become the basis for the transformation of various sectors of the economy
including the agriculture sector. This approach not only improves efficiency of
development efforts by enhancing stakeholders’ synergistic collaboration to resolve
issues in the value chain in their local contexts, but also helps to gather resources from
large number of small investors into the desirable size needed for the cluster
development. I congratulate the Centre for Agriculture and Bioscience International
(CABI) and its team to undertake this study on Feasibility Analysis for Cluster
Development Based Agriculture Transformation. An important aspect of the study
is the estimation of resources and infrastructure required to implement various
interventions along the value chain for the development of clusters of large number of
agriculture commodities. The methodology used in the study can also be applied as a
guide in evaluating various investment options put forward to the Planning Commission
of Pakistan for various sectors, especially where regional variation is important in the
project design.

FOREWORD
To improve enhance Pakistan’s competitiveness in the agriculture sector in national
and international markets, the need to evaluate the value chain of agricultural
commodities in the regional contexts in which these are produced, marketed,
processed and traded was long felt. The Planning Commission of Pakistan was pleased
to sponsor this study on the Feasibility Analysis for Cluster Development Based
Agriculture Transformation to fill this gap. The study aims to cover a large number of
agriculture commodities spread in various clusters throughout the country.
I truly hope that the policies, strategies, and interventions suggested in this report will
facilitate the federal and provincial governments to chalk out and implement plans for
cluster-based transformation of the agriculture sector.

FOREWORD
This is part of the series of studies on 33 agriculture commodities undertaken for the
purpose of preparing a cluster-based transformation plan based on the regional
realities in the entire value chain including production, processing, value addition, and
marketing. I congratulate the whole team of the project especially the Team Lead, Dr.
Mubarik Ali to undertake and successfully complete this monumental study. We are
thankful to all commodity specialists who have contributed to this assignment. The
CABI Project officers Mr. Yasar Saleem Khan and Ms. Aqsa Yasin deserve
appreciation. I truly believe that this study will serve as a basis to make and implement
plans for cluster-based agriculture transformation. I hope you will enjoy reading the
study and it can help you making your investment decisions along the value chain of
various agriculture commodities.
Dr. Babar Ehsan

Bajwa
Regional Director
CAB International

FOREWORD
This report is part of the series of studies on 33 agriculture commodities to prepare the
agriculture transformation plan by incorporating regional realities at the cluster level. In the
report, the clusters of various commodities are identified and characterized, and viable
investment options along the value chain of each cluster are proposed. For this purpose,
the study team has analysed macro data, reviewed the literature, and made extensive
consultation with stakeholders along the value chain. Foreign and local internationally
reputed consultants, Dr. Derek Byerlee and Dr. Kijiro. Otsuka and national consultant Mr.
Sohail Moghal were also engaged to understand the cluster-based development approach
and conduct cluster-based feasibility analysis. An MS-EXCEL based Model was
developed which was validated by our national consultants. Separate viabilities for
individual technologies and products suggested in each commodity are also estimated.
This humongous task would not have been possible to complete without the excellent
cooperation and facilities provide by CABI, the hard work of commodity specialists and our
research team especially Mr. Yasar Saleem Khan and Aqsa Yasin. The true reward of our
hard work is the implementation of the proposed policies, strategies and interventions to
develop agriculture commodity clusters in the country.
Dr. Mubarik Ali

Team Leader
Cluster Development Based
Agriculture Transformation Plan-
Vision 2020 Project
Planning Commission of Pakistan
and
CAB International

ACKNOWLEDGEMENT
It is not possible to mention the names of all those who collaborated with us in
completing this report, but my foremost gratitude goes to numerous stakeholders along
the value chain who generously shared the information about barley production,
marketing, trade and value chain. Without their support, this report would not have
reached to the level of present quality.
My sincere thanks go to Planning Commission of Pakistan for this initiative and

especially financial assistance to complete the project activities. Here I am especially
thankful to Dr. Muhammad Azeem Khan (Ex-Member, Food Security and Climate
Change, Planning Commission of Pakistan), Dr. Aamir Arshad (Chief Agriculture,
Planning Commission of Pakistan), Mr. Muhammad Akram Khan (Project Director;
CDBAT project) and other CDBAT project team member Mr. Muhammad Arif
(Research Associate) and Dr. Habib Gul (Research Associate) for successful
coordination and support for the project.
I am also grateful to Centre for Agriculture and Bioscience International (CABI) and
its Regional Director for Central and West Asia, Dr. Babar Ehsan Bajwa and CABI team
especially Mr. Yasar Saleem Khan for selecting me as commodity specialist for this
task and offering outstanding cooperation, support and advice during all the stages of
this project. However, the research team takes the responsibility of any shortcoming
left in the report.
Dr. Ikram Saeed

Senior Author
Citation:
Saeed, Ikram., Ali Mubarik, Farooq Umar, and Yasin Aqsa. (2020) Basmati rice cluster
feasibility and transformation study. In Ali Mubarik (ed.). (2020) Cluster Development
Based Agriculture Transformation Plan Vision-2025. Project No.
131(434)PC/AGR/CDBAT-120/2018. Unpublished Report, Planning Commission of
Pakistan, Islamabad, Pakistan and Centre for Agriculture and Biosciences International
(CABI), Rawalpindi, Pakistan.

DISCLAIMER
This report is prepared by using the data from various published and unpublished
sources and that obtained during the consultations with stakeholders. The research
team took utmost care to arrive at the figures to be used, but is not responsible for any
variation of the data in this report than those reported in other sources. Moreover, the
views expressed in this report are purely of the authors and do not reflect the official
views of the Planning Commission of Pakistan, Ministry of Planning Development and
Reforms or the Centre for Agriculture and Bioscience International (CABI).

TABLE OF CONTENTS
FOREWORD................................................................................................................... 6
ACKNOWLEDGEMENT ................................................................................................. 7
TABLE OF CONTENTS ................................................................................................. 9
LIST OF TABLES ......................................................................................................... 13
LIST OF FIGURES ....................................................................................................... 15
LIST OF ACRONYMS .................................................................................................. 16
1. INTRODUCTION ........................................................................................ 22
1.1. Basmati - a high quality rice ........................................................................ 22
1.2. National scenario ........................................................................................ 22
1.3. Global Scenario .......................................................................................... 26
2. GOAL AND PURPOSE .............................................................................. 31
3. METHODOLOGY ........................................................................................ 32
3.1. Macro-Data from Secondary Data:.............................................................. 32
3.2. Stakeholders Consultations: ....................................................................... 32
3.3. Literature Review: ....................................................................................... 32
4. LITERATURE REVIEW & STAKEHOLDERS’ DISCUSSIONS .................. 34
4.1. Direct Seeded or Dry Seeded Rice (SDR) .................................................. 34
4.2. By-products of Paddy and Rice ................................................................... 35
4.3. Integrated Weed Management .................................................................... 35
4.4. Coordination with R&D Organizations ......................................................... 36
4.5. Trading Opportunities ................................................................................. 37
5. CLUSTER IDENTIFICATION AND CHARACTERIZATION ....................... 38
5.1. Geographical Identification of Clusters ........................................................ 38
5.2. Comparison of Cluster Characteristics ........................................................ 39
5.3. Value Chain Analysis of Clusters ................................................................ 46
5.4. R&D in Basmati Rice Production................................................................. 47
5.5. Research and Development Organizations ................................................. 48
5.6. Input Supply System ................................................................................... 48
5.7. Harvesting .................................................................................................. 50
5.8. Paddy Marketing ......................................................................................... 50
5.9. Processing (Milling/Husking) ....................................................................... 51
5.10. International Trade and Quality ................................................................... 52

5.11. SWOT Analysis........................................................................................... 53
5.11.1. Overview..................................................................................................... 53
5.11.2. SWOT Analysis for the Clusters .................................................................. 54
6. CHALLENGES FACED BY BASMATI RICE CLUSTER ............................ 61
6.1. Fast Loosing Competitiveness .................................................................... 61
6.2. Shortage of Planting Labour ....................................................................... 61
6.3. Improved Management Practices................................................................ 62
6.4. Shifting to Kubota Type Rice Combine Harvesters...................................... 62
6.5. Aflatoxin Issue in Basmati Rice ................................................................... 62
6.6. Diversification of Processed products ......................................................... 63
6.7. Low Efficiency in Parboiled/Saila Rice Production Technology ................... 64
7. CLUSTER DEVELOPMENT POTENTIALS................................................ 65
7.1. Dissemination of High Yielding Varieties ..................................................... 65
7.2. Shifting to Mechanical Rice Transplanting .................................................. 65
7.3. Improving Rice Crop Management Practices .............................................. 66
7.4. Introduction of Kubota Paddy Combine Harvesters ..................................... 67
7.5. Addressing Aflatoxin Issue by Introducing Paddy Dryers ............................ 67
7.6. Improved Processing .................................................................................. 68
7.7. Introduction of Rice Bran Oil Expellers ........................................................ 69
7.8. Improving Parboiled/Saila Processing Technology...................................... 69
8. CLUSTER UPGRADATION PLAN, POLICIES, AND STRATEGIES ......... 71
8.1. Plan ............................................................................................................ 71
8.2. Policy Reforms............................................................................................ 71
8.3. Formulation of FEGs ................................................................................... 72
8.4. Reforming the R&D System ........................................................................ 73
8.5. Enhancing Adoption of Recently Released Basmati Varieties ..................... 74
8.6. Yield Improvement by Better Crop Management Practices ......................... 75
8.7. Mechanization of Basmati Value Chain ....................................................... 75
8.7.1. Mechanical Transplanting......................................................................... 75
8.7.2. Mechanical Rice Harvester (Kubota) ........................................................ 75
8.7.3. Introduction of Paddy Dryers at Farm Level............................................ 76
8.8. Diversification of Rice Value Chain ............................................................. 76
8.8.1. Introduction of Rice Bran Oil Extraction Unit .......................................... 76

8.8.2. Upgrading Parboiled/Saila Rice Production Technology ....................... 77
8.9. Strengthening International Linkages .......................................................... 77
9. FEASIBILITY ANALYSIS OF UPGRADATION PLAN ............................... 79
9.1. Baseline Status or Prevailing Situation........................................................ 79
9.1.1. Katcha Chawal Cluster-I: Benchmark ...................................................... 79
9.1.2. Pucca/Saila Chawal Cluster-II: Benchmark ............................................. 80
9.1.3. Katcha Chawal Cluster-I ........................................................................... 81
9.1.4. Parboiled/Saila Chawal Cluster-II ............................................................. 82
9.2. Intervention-2: Diffusion of Modern High-yielding Varieties ......................... 83
9.2.2. Parboiled/Saila Chawal Cluster-II ............................................................. 84
9.3. Intervention-3: Yield Improvement by Better Crop Management Practices .. 84
9.3.2. Parboiled/Saila Rice Cluster-II .................................................................. 85
9.4. Intervention-4: Introduction of Rice Combine Harvesters ............................ 86
9.5. Intervention-5: Introducing Dryers at Farm and Market Levels .................... 88
9.6. Intervention-6a: Introducing Rice Bran - Katcha Chawal Cluster-I ............... 89
9.7. Intervention-6b: Improvement in Parboiled/Saila-Rice Making Cluster-II ..... 90
9.8. Total Summary of Benefits from Introduced Interventions ........................... 92
9.8.2. Pucca Chawal Cluster-II ............................................................................ 92
9.9. Costs Associated with Proposed Interventions ............................................ 93
9.9.1. Intervention-1: Gradual Shifting from Manual to Machine Transplanting to Combat
Issue of Low Plant Population ................................................................................... 93
9.9.2. Intervention-2: Yield Improvement by Diffusion of Modern High-yielding Varieties
94
9.9.3. Intervention-3: Yield Improvement by Better Crop Management Practices 95

9.9.4. Intervention-4: Reducing Farm Level Harvest Losses by Introducing Rice Combine
Harvesters ................................................................................................................... 96
9.9.5. Intervention-5: Introducing Dryers at Farm and Market Levels .............. 98
9.9.6. Intervention-6a: Oil Extraction from Rice Bran - Katcha Chawal Cluster-I100
9.9.7. Intervention-6: Parboiled/Saila Rice Making in Cluster-II ..................... 101
9.10. Total Summary of Costs............................................................................ 101
9.10.1. Katcha Chawal Cluster-I ......................................................................... 101
9.10.2. Parboiled/Saila Rice Cluster-II ................................................................ 102
9.11. Net-Economic Benefits ............................................................................. 102
9.11.2. Pucca Chawal Cluster-II .......................................................................... 103
9.12. Investments Need to be Made .................................................................. 103
9.13. Economic Viability of Basmati Rice Cluster Development Plan ................. 105
9.14. Key Product Intervention ........................................................................... 106
References ................................................................................................................ 107
10. Annexures ............................................................................................... 112
Annexure-1: The Pedigree of Pusa-1121 Basmati Rice .............................................. 112
Annexure-2. Raw Rice and Parboiled/Saila Rice Processing Stages (Adapted from SBP,
2016) 113
Annexure-3A: Pictures of Stakeholders consultation .................................................. 113
Annexure-3B. Stakeholders consulted for gathering information about Basmati
Rice/Saila Rice Clusters in Kalar Tract of Punjab, Pakistan ........................................ 115
Annexure-4: Classification of Paddy and Rice By-products ......................................... 118
Annexure-5: District level area, production and yield of basmati rice ........................... 121
Annexure-6: Rice Bran Oil Processing Plant ............................................................... 122
Annexure-7: Feasibility for Mechanical Rice Transplanting ......................................... 131
Annexure-8: Feasibility for Combined Rice Harvester ................................................. 132
Annexure-9: Feasibility for Rice Dryer ......................................................................... 134
Annexure-10-: Costs and revenues statistics of basmati cultivation by conventional
transplanting and improved management practices (Rs/acre) ..................................... 135

LIST OF TABLES
Table 1: Basmati Rice Area Production and Yield in Punjab and Pakistan, during 2000-
16.................................................................................................................................. 23
Table 2: Trends (%) in area under different basmati varieties in rice-wheat belt of
Punjab .......................................................................................................................... 25
Table 3: Impact of the release of new Agny varieties on farmers income and market
price .............................................................................................................................. 26
Table 4: Export of basmati from India and Pakistan during 2001-2017 .......................... 27
Table 5: Country level share of India in total basmati export of Pakistan and India during
2008-2017..................................................................................................................... 28
Table 6: Export trend of rice from Pakistan during 2010 -2018 ...................................... 29
Table 7: Top basmati rice importing countries from Pakistan during 2017-2018 ............ 30
Table 11: SWOT Analysis of Basmati Rice Value Chain in Pakistan ............................. 54
Table 12: An Overview of Economic Benefits, Pre-Conditions, and Constraints of
Mechanical Drying ........................................................................................................ 68
Table 8: Targets of Basmati Rice Cluster Plan .............................................................. 71
Table 13: Benchmark Status of the Katcha Chawal Cluster-I in Sheikhupura District .... 80
Table 14: Benchmark Status of the Pucca Chawal Cluster-II in Hafizabad District ........ 80
Table 15: Yearly Returns of Mechanical Transplanting in Katcha Chawal Cluster-I....... 82
Table 16: Yearly Returns of Mechanical Transplanting in Pucca Chawal Cluster-II ....... 82
Table 17: Yearly Returns from Diffusion of HYV in Katcha Chawal Cluster-I ................. 83
Table 18: Yearly Returns from Diffusion of HYV in Pucca Chawal Cluster-II ................. 84
Table 19: Yearly Returns from Yield Improvement by Better Crop Management in Katcha
Chawal Cluster-I ........................................................................................................... 85
Table 20: Yearly Returns from Yield Improvement by Better Crop Management in Pucca
Chawal Cluster-II .......................................................................................................... 85
Table 21: Yearly Returns from Diffusion of Rice Combine Harvesters in Katcha Chawal
Cluster-I ........................................................................................................................ 86
Table 22: Yearly Returns from Diffusion of Rice Combine Harvesters in Pucca Chawal
Cluster-I ........................................................................................................................ 87
Table 23: Yearly Returns from Introducing Dryers in Katcha Chawal Cluster-I .............. 88
Table 24: Yearly Returns from Introducing Dryers in Pucca Chawal Cluster-II of
Hafizabad District .......................................................................................................... 89
Table 25: Yearly Returns from Rice Bran Oil Extraction in Katcha Chawal Cluster-I ..... 90
Table 26: Yearly Returns from Making Saila Rice in Pucca Chawal Cluster-II ............... 91

Table 27: Yearly Expected Gross Returns from Katcha Chawal Interventions in Cluster-I
(Million US$) ................................................................................................................. 92
Table 28: Yearly Expected Gross Returns from Pucca Chawal Interventions in Cluster-II
(Million US$) ................................................................................................................. 92
Table 29: Yearly Costs of Mechanical Transplanting in Katcha Chawal Cluster-I .......... 93
Table 30: Yearly Costs of Mechanical Transplanting in Pucca Chawal Cluster-II .......... 94
Table 31: Yearly Costs for Diffusion of HYV in Katcha Chawal Cluster-I of Sheikhupura
District ........................................................................................................................... 94
Table 32: Yearly Costs for Diffusion of HYV in Pucca Chawal Cluster-II ...................... 95
Table 33: Yearly Costs for Yield Improvement by Better Crop Management in Katcha
Chawal Cluster-I ........................................................................................................... 96
Table 34: Yearly Costs for Yield Improvement by Better Crop Management in Pucca
Table 35: Yearly Costs About the Diffusion of Rice Combine Harvesters in Katcha
Chawal Cluster-I ........................................................................................................... 97
Table 36: Yearly Costs incurred on Diffusion of Rice Combine Harvester in Pucca
Table 37: Yearly Costs of Introducing Dryers in Katcha Chawal Cluster-I ..................... 99
Table 38: Yearly Costs of Introducing Dryers in Pucca Chawal Cluster-II...................... 99
Table 39: Yearly Cost of Rice Bran Oil Extraction in Katcha Chawal Cluster-I............. 100
Table 40: Yearly Cost of Making Saila Rice in Pucca Chawal Cluster-II ...................... 101
Table 41: Yearly Expected Costs incurred Against the Introduced Interventions in Katcha
Chawal Cluster-I (Million US$) .................................................................................... 101
Table 42: Yearly Expected Costs against the Introduced Interventions in Pucca Chawal
Cluster-II (Million US$) ................................................................................................ 102
Table 43: Yearly Expected Costs against the Introduced Interventions in Katcha Chawal
Cluster-I (Million US$) ................................................................................................. 102
Table 44: Yearly Expected Costs against the Introduced Interventions in Pucca Chawal
Cluster-II (Million US$) ................................................................................................ 103
Table 45: Yearly Stream of Public Investments Needed for the Development of Katcha
Chawal Cluster-I (Million US$) .................................................................................... 104
Table 46: Yearly Stream of Public Investments Needed for the Development of Pucca
Chawal Cluster-II (Million US$) ................................................................................... 104
Table 47: Net-Present Value and Internal Rate of Returns of Costs and Investments
Incurred in Katcha Chawal Cluster-I ............................................................................ 105
Incurred in Pucca Chawal Cluster-II ............................................................................ 105

LIST OF FIGURES
Figure 1: Trends of basmati rice area, production and yield in Punjab, Pakistan, 2001-
2017.............................................................................................................................. 24
Figure 2: Plummeting trend of Pakistani basmati export share as compared to India .... 29
Figure 3: Map of Basmati Rice Targeted Clusters ......................................................... 39
Figure 4: Basmati rice value chain ................................................................................ 46
Figure 5: From paddy grain to rice bran to rice bran oil ................................................. 63
Figure 6: Parboiled/Saila Rice Making Process ............................................................. 64

LIST OF ACRONYMS
AAG Ali Akbar Group
ACIAR Australian Collaboration for International Research
ADP Annual Development Plan
BCR Benefit Cost Ratio
CBOs Community Based Organizations
CPEC China Pakistan Economic Corridor
CO Community Organization
DAP Di Ammonium Phosphate
DSR Dry Seeded Rice
FFA Free Fatty Acid
EFL Engro Fertilizers Limited
FFC Fauji Fertilizers Company, Limited
FFS Farmer Field School
FTA Free Trade Agreement
FEG Farmer Enterprise Group
GAP Good Agriculture Practices
GI Geographical Identification
GDP Gross Domestic Products
Global Gap Global Good Agri. Practices
GoP Government of Pakistan
GMOs Genetically Modified Organisms
ha Hectare(s)
HACCP Hazard Analysis and Critical Control Points
HYVs High Yielding Varieties
ISO International Standard Organization
IPM Integrated Pest Management
IPO Initial Public Offering
IRR Internal Rate of Return
IRRI International Rice Research Institute, Philippines
KSK Kala Shah Kaku, Sheikhupura
Kg Kilogram

MRL Minimum Resistance Limits
MNFSAR Ministry of National Food Security and Research
MUSD Million US Dollar
NARC National Agriculture Research Council
NGOs Non-Governmental Organizations
NPV/W Net Present Value/Worth
NRSP National Rural Support Program
OPV Open pollinated Variety
PARC Pakistan Agriculture Research Council, Islamabad
PCSIR Pakistan Council for Scientific and Industrial Research, Islamabad
PSDP Public Sector Development Plans
PKR Pakistani Rupee
PTA Preferred Trade Agreement
QRC Quality Review Committee
R&D Research & Development
RRI Rice Research Institute
REAP Rice Exporters Association of Pakistan
SoPs Standard Operating Procedures
SPS Sanitary and Phyto-Sanitary
SWOT Strengths, Weaknesses, Opportunities, Threats
TCP Trading Corporation of Pakistan
TDAP Trading Development Authority of Pakistan
TRIPS Trade Related Aspects of Intellectual Property Rights
USA United States of America
USD United States Dollar (i.e., one $ equal to Pak-Rupee 135 for this study)

EXECUTIVE SUMMARY
Rice is grown in all provinces of Pakistan but fine quality basmati rice varieties
exhibiting special features of elongated grain, fragrance and light delicious taste are
popular from the Pak-Punjab ‘Kalar’ tract. Basmati rice enjoys an economic significance
in the economy of Pakistan by contributing 3.1% towards its total agricultural value
addition and 0.6% in the national GDP. According to the latest available statistics, the
annual growth trend in area, production and per ha yield of basmati rice during 2000-
17 in Punjab are (-) 0.54, 0.60 and 1.14 % respectively.
Despite significant improvement in yield during the 2000s, Pakistan has lost the
competitiveness edge in basmati as indicated by its plummeting shares in total basmati
export from 46% in 2006 to less than 10% in 2017, which was conveniently picked up
by its competitor India. Pakistani basmati exports also declined by 45% in absolute term
during the period. This declining competitiveness is due to number of factors that
favoured India than Pakistan during the period including stronger technological
innovations which gave higher productivity growth in basmati that have more elongated
kernel size without aroma, lower production costs due to high input subsidies,
aggressive marketing tactics which enabled to earn high prices to Indian basmati
without aroma and showcasing of cooked dishes like “Biriyani” instead of “Murgh Pulao”
etc.
In view of the above scenarios, the present project is developed to explore the
technological and economic opportunities for investment in the basmati rice value chain
in Pakistan with the goal of improving its competitiveness. Focus group consultation
meetings/discussions were arranged to gather field information from diversified
stakeholders engaged in basmati paddy production, marketing, and processing viz.,
farmers, commission agents, traders, processors, and development partners in public
and private sector. Based on the final basmati product processed, two clusters for
basmati rice are defined in this study: i) Katcha (polished) rice-Cluster-I supplying white
rice with its central district of Sheikhupura; and ii) Parboiled (Saila) rice-Cluster-II
supplying parboiled rice with central district of Hafizabad. While Super Basmati and
Basmati-386 are the major varieties cultivated in Cluster-1, Kainat basmati is the
dominant variety in Cluster-II each have relatively different management practices and
passes through different processing process.
Six interventions are suggested in the focal districts and feasibility of these
interventions is estimated. These are: i) gradual shifting to mechanical rice
transplanting which is needed for increasing plant population and long awaited
productivity enhancement issue of the area; ii) diffusion and adoption of high yielding
varieties in the area which is required to replace the varieties like basmati-386, Supra,
Supri, etc.; iii) introducing improved crop management practices as large gap between
average and progressive farmers’ yield and associated variations in crop management
practices can be noticed across farms; iv) shifting to rice combine harvesters which are
essentially needed to control harvest and post-harvest losses in milling and address
the problem of burning of rice straw; v) introduction of paddy drying at farm level in

order to improve the quality of paddy and its by-products; vi) introduction of rice bran
oil in cluster-I and increasing production of parboiled/Saila rice in cluster-II to diversify
rice value chain as well as addressing increasing demand of Saila rice in Pakistan and
abroad.
The economic feasibility analysis shows that, from stakeholders’ perspectives, the total
gross revenue from the Basmati Up-gradation Plan in the focal points of both clusters
(i.e., Sheikhupura and Hafizabad) would be US$105.9 million during the 5th year of the
plan. From development project perspective, it will require an investment of US$73.8
million in a 5-years project both by the public and private sectors. The public sector
investments shall address the areas like strengthening of basmati rice research and
extension services, arranging farmer’s training programs towards adoption of improved
crop management practices, providing capacity building training to all value chain
stakeholders to efficiently manage the value chain, organizing Farmer’s Entrepreneur
Group (FEG) with collection centres, building cluster-based infrastructure,
strengthening international linkages, and offering concessional loans all of which will
cost to the government about 26% of the total investment which will be US$26.4 million.
The remaining 74% of the total investment of US$47.4 million will be brought by the
private sector which will be mainly required for mechanization of transplanting & drying,
extraction of bran oil and modernization of Saila process. We believe that private sector
can be attracted for these investments with the proposed incentives structure by the
government and highlighting the expected potential benefits of the interventions.
The additional operation cost (undiscounted) due to the improvement in the value chain
would be US$52.2 million and net cash flow after (undiscounted) deducting all
associated operational costs and investment at the focal points of both the clusters
would be US$68.1 million during the 5 th year of the project. The Internal Rate of Returns
(IRR) of the whole basmati rice Up-gradation Plan in the focal points of both clusters
was estimated at 28% thus clearly indicating an economically viable project. In addition
to economic returns, the Up-gradation Plan will add to the foreign exchange earning
worth of US$157 million during the last year of the Plan. These investments will also
generate thousands of skilled and unskilled jobs along the value chain nodes including
respective industrial zones, mostly in rural areas. It must be noted that the proposed
Upgradation Plan is only for the central points of each cluster, which covers only 40%
of the total basmati clusters and 30% of the whole basmati growing areas. The targeted
Plan will have tremendous spill over effects within and outside of each cluster. Thus,
the above impact is very conservatively estimated. The summary of cluster-level
information and economic impacts of basmati Up-gradation Plan of each cluster are
presented in the Summary Sheet given below.
The main pillars of the basmati rice Up-gradation Plan are: the capacity building of all
stakeholders in the value chain management, development of cluster-based
infrastructure, reforms in R&D system, mechanization and diversification of the value
chain and strengthening of international interaction and collaboration. Among these,
we give highest priority to the capacity building of stakeholders and reforms in basmati
R&D.

Summary Sheet
Information B.-Katcha B.-Saila Overall
Area of the cluster (ha) 472.77 203.55 676320
Production of the cluster (tonne) 832.93 406.98 1239910
Yield of the cluster (kg/ha) 1761.8 2042.9 1833.3
262,640.
Area of cluster focal point (ha) 158,230 104,410 0
503,140.
Production of the focal point (tonnes) 289,840 213,300 0
Yield of the focal point (tonnes/ha) 23.48 21.4 44.8
Yield increase -mechanization in planting
(tonnes/ha) 0.29 0.32 0.6
Added production from mechanized planting
(tonnes) 11503.65 8466 19,969.5
Additional value due to mechanized planting (Mil.
US$) 4.34 4 7.9
Additional production due to improved varieties
(tonnes) 10736.74 27,090.6 37,827.3
Additional production value - improved varieties (M.
US$) 4.05 11.5 15.6
Additional production – Improved management
practice (tonnes) 21473.49 22,575 44,049.0
Additional production value – improved practices
(M.US$) 8.10 10 17.7
Production saved- reduced PH losses (tonnes) 22430.59 18,168.75 40,599.3
Additional production value – reduced PH losses
(M.US$) 8.46 12.72 21.2
Added value of production from improved quality
(M.US$) 15.57 14 29.8
Additional value from bran oil (M.US$) 0.52 5.6 6.1
Number of transplanter required 2172 1433 3,605
Harvester required 814.6 537.5 1,352.1
Dryer required 348.1 241.7 589.7
Processing unit required for rice bran oil 3.0 3.0
Investments (M.US$)
Investment on strengthening Basmati research 1.852 1.852 3.704
Investments on mechanical transplanter 13.033 8.600 21.633
Farmers training for good practices 0.484 0.361 0.845
Investment on driers 6.265 4.350 10.615
Investment on combined rice harvester 15.477 10.213 25.690
Investment on new installing Saila rice plant 1.107 1.107
Investment on bran oil extraction 0.202 0.202
Organizing FEGs with collection centres 1.500 1.000 2.500
Strengthening international links 0.500 0.500 1.000
Government loans 3.847 2.670 6.517
Total Investment 43.2 30.7 73.8
Public sector investment 15.2 11.2 26.4
Private sector investment 28.0 19.4 47.4
Economic Analysis (M.US$)
Enhanced production - (exportable)(tonnes) 66144 76300 142,445
Increased production at international prices 72.8 83.9 156.7
Gross revenue from all Interventions 48.6 57.3 105.9
Total operational costs of the Interventions 22.0 30.1 52.2

Net cash flow from all interventions 26.58 27.13 53.71
NPV (M.US$) 6.6 9.5 16.1
Internal Rate of Return (%) 23.7% 32.8% 28%

1. INTRODUCTION
1.1. Basmati - a high quality rice
The origin of word basmati can be traced to the word “vasmati” meaning soil recognized by its
fragrance (Akram, 2009). The Hindi world “Bas” was derived from the Prakit word “VAS” and
has a Sanskrit root --- “Vasay” (meaning Aroma) while “mati” originated from “Mayup”,
(ingrained from the origin). In common usage “Vas” is pronounced as “Bas”, and while
combining “Vas and Mayup”, the later changed to “mati”, thus the word “basmati” emerged
(Gupta, 1995; Ahuja et al., 1995; Singh and Singh, 2009). Later on, the definition of basmati
was changed to include other fine long-grain qualities even without aroma, which is the
definition considered throughout in this study, although sometime we distinguish between
aromatic and non-aromatic basmati.
The name ‘basmati’ is traditionally associated with its geographical origin (Bligh, 2000). It is
generally accepted that good quality basmati rice is characterized by extra-long super fine
slender grains with chalky endosperm and a shape comparable with a Turkish dagger;
pleasant and exquisite aroma, sweet taste, dry, fluffy and soft texture when cooked, delicate
curvature, low amylose, medium-low gelatinization temperature, 1.5 to 2-fold lengthwise
elongation with least breadth-wise swelling on cooking and tenderness of cooked rice (Siddiq
et al., 1997). Because of all these attributes, basmati rice commands a premium price in the
world market (Bhattacharjee et al., 2002).
1.2. National scenario

Currently, basmati rice in Pakistan accounts for 3.1 percent of total agricultural value added,
9.0 percent of the crop sector GDP, and 0.6 percent of national GDP. In the past five years,
the total basmati rice production in the country varied from 1.867 to 3.467 million tonnes vis-
à-vis domestic consumption staying at 1.0 million tonnes (Government of the Punjab, 2018b;
Government of Pakistan, 2018).
In Pakistan during 2016-17, basmati rice was cultivated on 1.45 million ha producing a total of
2.74 million tonnes of cleaned rice and giving 1.89 tonne/ha yield. During 2001-16, the area
under basmati rice experienced a negative growth in the country, while production and per ha
yield had a positive trend at annual growth rates of (-)0.31, 1.31 and 1.61 percent, respectively,
(Table 1).

Table 1: Basmati Rice Area Production and Yield in Punjab and Pakistan, during 2000-16
Punjab Pakistan
Productio
Years Area Production Yield Area Yield
n
(000 Ha) (000 t) (Kg/Ha) (000 ha) (Kgs/ha)
(000 t)
2000-01 1114 1601 1438 1158 1701 1468
2001-02 1294 1914 1479 1332 1999 1501
2002-03 1317 2176 1652 1377 2304 1673
2003-04 1426 2309 1619 1521 2522 1659
2004-05 1467 2348 1601 1558 2555 1639
2005-06 1535 2642 1721 1659 2920 1761
2006-07 1474 2494 1691 1589 2736 1721
2007-08 1377 2453 1781 1467 2643 1801
2008-09 1548 2602 1680 1697 2901 1710
2009-10 1414 2475 1751 1543 2732 1770
2010-11 1334 2365 1773 1413 2445 1731
2011-12 1121 1889 1685 1241 2124 1711
2012-13 995 1758 1767 1057 1867 1766
2013-14 1193 2057 1725 1298 2268 1748
2014-15 1320 2337 1770 1424 2548 1789
2015-16 1254 2279 1817 1359 3466 2551
2016-17 1353 2524 1866 1454 2740 1885
Growth rate (%) (-) 0.54 0.6 1.14 -0.31 1.31 1.61
Source: Government of Pakistan, 2018a.
Over 92% of basmati rice production in the country comes from Punjab. In Punjab, the area
fluctuated between 0.95 million ha in 2012 to 1.55 million ha in 2008, while production varied
between 1.76 to 2.6 million tonnes during the period. Overall during 2000-2016, the basmati
area in Punjab declined at a rate of 0.54% per annum, while yield and production increased
at the respective rate of 1.14% and 0.6% per annum. Both area and production experienced
a serious dip from 2011 to 2013 which was subsequently recovered (Figure 1).

Figure 1: Trends of basmati rice area, production and yield in Punjab, Pakistan, 2001-
2017
Annual Growth Rates: Area= -0.54%; Production= 0.60%; Yield= 1.14%
Source: Various Issues of Punjab Development Statistics, 2008, 2012, 2017
In Punjab, during 2016-17, basmati (aromatic and non-aromatic) varieties are cultivated nearly
on 77% of total rice area planted, while their share in total rice production is around 73%.
Remaining 23% area and 28% of the total production goes to course-grain varieties
(Government of Pakistan, 2018). More than 7 basmati varieties are grown in the province, of
which Super Basmati (aromatic) and Kainat (non-aromatic) are the two dominant varieties
occupying over 69.2% and 28.3% of total basmati area, respectively (Table 8). In the recently
conducted field survey, Super Basmati followed by Kainat and Basmati-386 (aromatic) are
found to be dominant varieties collectively planted at 95% of total basmati rice area during
2017 (Bashir et al., 2018).
Considerable changes in basmati varietal mix spread can be seen during 2010s. An overtime
substitution of Super Basmati1 with Kainat-1121/PS-22 has taken place in the rice-wheat
1
The line was evolved through hybridization of Basmati-320 and line 10486. Since its approval in 1996
for general cultivation, it gained popularity among rice growers for its longer grain, aroma, and better
cooking quality. The variety also gained attention of its quality among international buyers (Bashir et al.,
2018).
2
Indian Pusa-1121 variety, recognized in Pakistan as PK-1121 (or Kainat), was evolved through the
process of hybridization over a long breeding process in Indian Agricultural Research Institute (IARI).
The variety is known for its extraordinary kernel (grain) length, which can be as much as 8.2 millimeters
(0.32 inches) for a single grain, the longest ever known released rice cultivar in the world. It has very
high kernel elongation ratio ranging from 2 to 2.5, i.e. length of cooked to uncooked kernel. When
cooked, the rice does not turn sticky, possesses minimum breadth-wise expansion with intermediate
alkali-spreading value and amylose content. It was leased for commercial cultivation in kharif season
of 2003 (see Annexure-1 for its pedigree). By 2007, the variety was rapidly popularized among Indian
farming community, as Pusa-1121 is photo-sensitive, requires less water, matures early and yields 4.5-
5.0 tonnes per ha as compared to 2.5 tonnes per ha for traditional tall basmati.

The percent area occupied by other varieties is quite low, highlighting a need to explore
reasons for this. Similar observation was made by Bashir at al., 2018.
Table 2: Trends (%) in area under different basmati varieties in rice-wheat belt of
Punjab
2010- 2011- 2012- 2013- 2014- 2015- 2016-
Varieties 11 12 13 14 15 16 17
--- (Percent area under different basmati varieties) ---
Super Basmati 93.53 92.95 90.65 83.17 78.02 71.12 69.25
Kainat-1121/PS-
2 2.34 0.60 3.10 14.55 19.59 27.33 28.28
Basmati-385 1.25 0.96 0.40 1.11 0.89 0.80 0.67
Basmati-2000 0.00 0.06 0.07 0.00 1.22 0.74 0.51
Basmati Karnal 0.00 1.93 0.00 0.35 0.28 0.00 0.00
Basmati-370 0.00 0.06 0.00 0.12 0.00 0.00 0.00
Basmati
Shaheen 0.00 0.06 0.00 0.00 0.00 0.00 0.00
Other Basmati 2.89 3.37 5.79 0.70 0.00 0.00 1.29
Source: Government of the Punjab (Crop Reporting Services Department), Lahore (2018c).
In Pakistan, the ‘Kainat’ variety was imported in around 2006 and officially released in 2013.
Because it is high yielding and fetch about similar or sometime even better farm gate prices
as Supper Basmati or Basmati 386, its adoption is rapid. The variety is non-aromatic but very
much suitable for parboiling processes. Therefore, the parboiling facilities have mushroomed
in the region. Currently parboiled plants are operating in the basmati growing region of ‘Kalar’
in Punjab. In parboiling process or preparing Saila rice, paddy is soaked in water for a certain
time period and afterward dried and then milled. In this way, the starch inside paddy grain is
gelatinized, and after removal of outer paddy layer, the rice grain appeared yellow in colour,
which can be darkened according to the requirement. In the process, however, the bran losses
its oil quality thus cannot be processed into bran oil suitable for human consumption but it may
be used for other industrial by-products. The parboiled rice grain is relatively harder than the
non-parboiled rice and upon cooking; there are little chances of grain burst. Any rice can be
milled with this process, basmati or non-basmati rice (Choudhary, 2016), but in India and
Pakistan, it is most popularly done with basmati long-grain non-aromatic rice like Kainat in
Pakistan and Pusa in India due to high consumers’ demand. Detailed parboiling processes
are explained in Annexure-2.
Parboiled rice is favoured by consumers and chefs who desire an extra fluffy and separately
cooked rice, and presently very popular amongst the commercial caterings to prepare salty
rice dishes as ‘Biryani’ as well as sweet rice dishes as ‘Zardah/Mutanjan’ at the occasion of
marriage parties and other festivals. The popular dishes of rice are “boiled rice”, “Zardah”,
“Pulao” and “Biryani” that are relished almost universally.
However, basmati aroma is still favoured mainly by Indian-Pakistani-Turkish-Middle Eastern

communities living in Europe. Currently, however, international demand is changing towards
non-aromatic but still long grain varieties that remain separated after cooking with milky whitish

colour. This resulted in falling demand for Pakistani basmati in favour of the Indian fine
Saila/steamed rice3 of Kainat, Pusa series of basmati.
1.3. Global Scenario

Basmati rice is traditionally grown in the Himalayan foothill regions of India and Pakistan.
Pakistan had been enjoying an edge over India in the production and export of traditional
basmati rice with respect to quality traits like aroma. However, certain technological
innovations, policy support, international environment, change in consumers’ behaviour, and
market drive by Indian traders ruined this edge and shifted the trade tide in favour of India.
This shift started with the development and release of a series of ‘Pusa’ type varieties by
Indian researchers. Initially, Pusa-1121 was released in 2003 which shifted the yield frontier
from 3.0 t/ha to 3.6 t/ha. The gain was further strengthened with the release of Pusa-1509 in
2010 which further enhanced the farm-level yield to 4.25 t/ha. This not only reduced the market
price of basmati rice for traders but also improved the profit of the farmers, thus creating win-
win situation for both parties (Table 3). These benefits provide the quick drive for adoption of
these varieties.
Table 3: Impact of the release of new Agny varieties on farmers income

Average Gross Cost of Net
Average Market price Income cultivation Return
Variety Yield (t/ha) (IRP/t) (IRP/ha) (IRP/ha) (IRP/ha)
Basmati-
386/CSR-
30 2.37 28000 66360 47000 19360
Pusa-112 3.62 25250 91405 48000 43405
Pusa-1509 4.25 23000 97750 45000 52750
Source: Estimated by authors from the average yield, market price, and cultivation cost taken from
Bashir, et al. (2018) and Grover, et al. (2014)
As noted in Footnote 2, Pusa varieties are good for par-boiling, efficient par-boiling
technologies were developed in India. However, these developments with Pusa varieties
would have been meaningless if Indian traders would not have adopted pro-active commercial
strategy. The Pusa-varieties gave completely a new product to traders to sell. It has much
longer kernel (grain) length than traditional basmati varieties, but has little aroma especially
after parboiling. Indian traders through product promotion strategies, such as food stalls,
propaganda campaign, etc., convinced the Middle East consumers that aroma is not so
important especially when par-boiled rice is cooked which gives completely a new attractive
look to the dish. In addition, the catering industry of India introduced internationally a new
variety of dishes called ‘Biryani’ (instead of ‘Murgh Pulao’ from aromatic basmati varieties)
3
In Steaming Process, steam passes through paddy grains, and upon drying paddy husk is removed.
The rice grain inside remain white, however, its surface become harder and upon cooking, the grains
do not burst (Choudhary, 2016).

where aroma even if originally present in rice grain is lost during cooking under the impact of
heavy use of other spices.
Some policy factors also favoured Indian traders which are: i) Availability of highly subsidized
inputs (i.e. fertilizers, pesticides, custom-hiring of sowing and harvesting machines) gave
market edge to Indian farmers and traders vis-à-vis Pakistan where inputs are relatively less
subsidized. ii) Although, India banned the export of non-basmati rice in April 2008 through
September 2011, but Indian traders continue exporting Pusa rice as basmati under the nose
of Indian customs. iii) Indian Government also withdrew Minimum Export Price (MEP)
regulation from basmati rice, which allows Indian traders to play around with the market as it
suits them.
International political environment also favoured Indian traders. Not affected by USA sanction
under the Food vs Oil Program, India could export food grains to Iran. On the other hand,
Pakistan’s trade was routed through the Bank of New York, which was suspended by the US-
Government. Hence, Pakistan was deprived of its niche Iranian rice market. In addition, Iranian
Government also offered other facilities to India4 during sanction period.
On the other hand, Pakistan could not respond quickly to the changing basmati environment
internationally. First of all, there was no counter strategy to nullify the Indian propaganda on
aroma and traders could not convince the Middle East consumer that aroma is in fact the most
important element in basmati rice dishes. Secondly, its research system could not develop
parallel to ‘Pusa’ varieties of its own which can compete with Indian varieties. Although some
seed companies brought the seed of Pusa varieties from India and was able to get it released
officially with the name of PK1121 (commonly known as Kianat) in 2013, but it was too late.
India by then moved to higher Pusa varieties and Pakistan remains behind in technological
front. On top of it, the Indian government support to farmers through input subsidies, especially
free electricity for tube wells, is generally higher than in Pakistan. Aslam (2016) reported that
49% untapped productivity gaps in Pakistan can be attributed to poor research (12%) and
weak agricultural advisory services (37%). In addition, the export of Pakistani basmati rice has
been impacted by leaf blight, bearish trade practices, and inefficient market conditions (ADB,
2018). The Chairman of REAP pointed out that Indian basmati industry is more organized in
approaching international market. Lack of support from the Pakistani government to establish
brand image is also a factor in losing the competitiveness.
In the current scenario, Pakistan is losing trade war in basmati rice with India, as is evident
from the export growth trends. It should be noted that in the drive to gain basmati share, India
has expanded the basmati market from US$1.1 billion in 2006 to US$4.58 billion in 2013
(Table 4). India not only has captured the additional expanded market but also encroached
upon Pakistani share thus the later not only lost its relative share to India but also could not
maintain its absolute level of export both in quantity as well as in value (Table 4).
Table 4: Export of basmati from India and Pakistan during 2001-2017
4
Iran has decided to open a direct route with India to import basmati rice from the country
[http://www.business-standard.com/article/markets/basmati-rice-exports-to-iran-via-dubai-soar-
115111001536_1 .html].

Value share Quantity share
Quantities (000 tonnes) Values (Million US$)
Year (%) (%)
World Pakistan India World Pakistan India Pakistan India Pakistan India
2001 1262.1 410.4 851.7 671.5 197.4 474.1 32.5 67.5 29.4 70.6
2002 1150.5 483.8 666.7 644.1 252.2 391.9 42.1 57.9 39.2 60.8
2003 1303.5 593.3 710.2 740.7 315.2 425.5 45.5 54.5 42.6 57.4
2004 1427.6 656.1 771.5 803.7 360.9 442.8 46.0 54.0 44.9 55.1
2005 1905.0 742.0 1163.0 1052.9 423.6 629.3 39.0 61.0 40.2 59.8
2006 1816.8 771.1 1045.7 1094.0 474.5 619.5 42.4 57.6 43.4 56.6
2007 2034.0 850.6 1183.4 1900.0 826.2 1073.8 41.8 58.2 43.5 56.5
2008 2480.8 924.4 1556.4 3079.5 1,018.80 2,060.7 37.3 62.7 33.1 66.9
2009 3049.1 1032.3 2016.8 3175.6 878.3 2,297.3 33.9 66.1 27.7 72.3
2010 3541.3 1170.6 2370.7 3457.3 966.2 2,491.1 33.1 66.9 27.9 72.1
2011 4131.5 953.3 3178.2 4076 853.7 3,222.3 23.1 76.9 20.9 79.1
2012 4133.9 674.0 3459.9 4255.7 691.6 3,564.1 16.3 83.7 16.3 83.7
2013 4424.8 667.5 3757.3 5642.1 775.8 4,866.3 15.1 84.9 13.8 86.2
2014 4225.7 523.4 3702.3 5121 602.9 4,518.1 12.4 87.6 11.8 88.2
2015 4525.8 480.0 4045.8 3931.6 453.6 3,478.0 10.6 89.4 11.5 88.5
2016 4454.5 469.3 3985.2 3669.8 453.2 3,216.6 10.5 89.5 12.3 87.7
2017 4481.8 425.0 4056.8 4579.5 410.1 4,169.4 9.5 90.5 9.0 91.0
Source: Government of Pakistan, 2018 (Various Issues).
India: Download from India Ag Export Authority: http://apeda.gov.in/apedawebsite/ on 22-05-2019
Pakistani export values reported in terms of Rupees were converted into US$ using the respective
year exchange rate. The exchange rate data was taken from FAOSTAT on 22-05-2019.
While Indian export of basmati increased from 1.04 million tonnes in 2006 to 4.06 million
tonnes in 2017, Pakistani basmati export plummeted from 0.7 tonnes to 0.42 tonnes in the
corresponding period, which is about 45% decline in 11 years. The Pakistani share in export
of basmati quantities declines from over 42% in 2006 to less than 10% in 2017. Similar trends
can be seen in the foreign exchange earnings from basmati rice during the period.
Since 2008, Pakistan has lost its basmati share in all major Middle East basmati markets, as
well as UK, and USA markets (Table 5).
Table 5: Country level share of India in total basmati export market during 2008-2017
Saudi
Years UAE Yemen Iran Kuwait Qatar USA UK
Arabia
2008-09 86.6 71.7 44.6 38.2 89.1 18.3 73.9 67.7
2009-10 87.9 72.6 48.8 66.1 91.8 9.6 59.1 39.5
2010-11 89.4 70.2 53.3 75.5 94.5 12.6 73.9 52.6
2011-12 92.1 79.1 60.7 82.3 97.0 24.2 86.9 77.4
2012-13 91.9 65.3 77.6 96.2 97.8 75.6 81.7 82.9
2013-14 93.2 49.5 71.4 99.6 96.4 60.0 81.1 71.7
2014-15 95.8 71.8 82.5 99.8 97.8 87.5 81.8 79.7
2015-16 95.9 85.0 72.9 99.3 99.8 72.2 84.7 88.5
2016-17 96.6 80.8 79.6 99.4 98.6 86.3 85.8 100.0

*The remaining share in each country in a year goes to Pakistan
Overall, Pakistan has lost basmati share in international market from almost 46% in 2006 to
less than 10% in 2017. The decline started more rapidly in 2010 when India consolidated its
impact of innovation by releasing Pusa-1509 variety (Figure 2).
Figure 2: Plummeting trend of Pakistani basmati export share as compared to India
Source: Drawn from the data in Table 4
Total Pakistani rice export has been fluctuating between 3.4-4.2 million tonnes during 2017
(Table 6), but the proportion of basmati rice to non-basmati rice in total rice export quantities
has declined from 31% to 12% during the period. Similarly, the total value of Pakistani rice
export had touched to US$2 billion, but the share of basmati in the value of total basmati rice
export has declined from US$953 million to US$525 million, i.e., from 46% to 26% of the total
export in the corresponding period. In total, the export of rice from Pakistan is confronting with
a seriously crisis situation during 2010s (Table 2). This continued discouraging position led to
piling up of the carry-over stocks and falling domestic basmati prices within the country. The
government had to provide financial support to farmers and traders costing billions of Rupees
to partially compensate the losses during 2016.
Table 6: Export trend of rice from Pakistan during 2010 -2018

Quantities (000 Tonnes) Values (Million US$) Average price
(US$/tonne)
Year
Non- Non- Non-
Basmati Total Basmati Total Basmati
Basmati basmati basmati
2010-11 1138 2564 3702 953 1138 2091 837 444
2011-12 965 2756 3721 841 1237 2078 872 449
2012-13 630 2859 3489 627 1211 1838 995 424
2013-14 734 2628 3362 846 1052 1898 1153 400
2014-15 677 3055 3731 682 1167 1849 1007 382
2015-16 503 3759 4262 455 1405 1860 905 374
2016-17 480 3105 3585 427 1181 1607 888 380
2017-18 501 3522 4024 525 1476 2001 1047 419
Source: Quality review Committee (QRC) & Trade Development Authority of Pakistan (TDAP)

The major importers of Pakistani rice overseas are: a) Gulf & Middle East for white basmati
rice; b) European countries brown basmati rice c) Asia & Africa for single polish basmati rice;
d) Asia and Africa for double polish basmati rice. On average, Saila to ‘Katcha’ rice export
ratio is 20:80 amongst the Gulf and Middle East countries. The specific importing countries of
Pak-basmati are UAE, UK, Belgium, Oman and Saudi Arabia (Table 7). Pakistani basmati
fetches highest price in UAE, Oman, and Saudi Arabia.
Table 7: Top basmati rice importing countries from Pakistan during 2017-2018
Average price
Quantities (000 tonne) Values (000 US$) (US$/ton)
Non- Non- Non-
Basmat Basmat Basmat Basmat Basmat Basmat
Country i i Total i i Total i i
UAE 74.86 109.68 184.538 89.4 42.3 131.6 1194 385
UK 66.93 2.81 69.733 64.3 2.3 66.6 961 834
Belgium 46.59 5.48 52.068 49.6 4.3 53.9 1064 794
Oman 32.80 38.39 71.198 37.8 26.9 64.6 1178 699
Saudi Arabia 28.04 56.70 84.744 31.2 35.2 66.4 1113 621
Italy 27.57 6.70 34.268 28.2 4.9 33.1 1024 733
Source: Quality review Committee (QRC) & Trade Development Authority of Pakistan (TDAP)
The above macro-level analysis suggests that Pakistan is fast losing its basmati
competitiveness in its international markets. To remain competitive, Pakistan must put the
whole value chain of basmati in order. The Planning Commission of Pakistan initiated this
study to identify various constraints, suggest appropriate interventions and evaluate their
feasibility at various segments of the value chain. As situation may be different in various
basmati clusters, the analysis will be conducted at basmati cluster levels. Based on this
analysis, an upgradation plan for each cluster will be suggested to improve the
competitiveness of basmati rice.

2. GOAL AND PURPOSE
The overall goal of this project is to contribute to the ‘Cluster Development Based Agriculture
Transformation Plan -V2025’. The specific objectives are spelled out as under:
i. To identify the major clusters of basmati rice production in Punjab, Pakistan
ii. To characterize each cluster and conduct a diagnosis and SWOT of the basmati rice
value chain in each cluster
iii. To identify technological, institutional, infrastructure and policy gaps in each cluster
iv. Assess the potential of basmati rice production in each basmati rice producing cluster
v. Suggest technological, institutional, infrastructure and policy interventions to achieve

the cluster potentials
vi. Conduct economic and social feasibility of the suggested interventions
vii. Make suggestions and prepare an upgradation plan to improve the competitiveness of
the basmati rice sector in Pakistan.

3. METHODOLOGY
The required primary and secondary information pertaining to the characteristics, gap,
potential and needed interventions were gathered during August through October of 2018
through a wide-ranging consultation with stakeholders along the value chain in Kalar tract,
collect and synthesize macro-data, and conduct an intensive but not exhaustive literature
review as follows:
3.1. Macro-Data from Secondary Data:

Desired macro data (i.e., quantitative and qualitative) were collected from various published
and unpublished reports, books and periodicals of government and non-government
organizations, and web portals and internet search on basmati rice value chain (See the
details of data source from reference list presented at the end of this document.
3.2. Stakeholders Consultations:

Primary information (i.e., quantitative and qualitative) were collected through formal and
informal survey means by following the purposive sampling technique (i.e., non-probability
sampling) including personal meetings, consultations, key informant interviews, surveys and
focus group discussions, emails, telephonic conversation by using structured and unstructured
(open-end) questionnaires (See a list of stakeholders consulted in Annexure-3).
3.3. Literature Review:

The literature gathered and synthesized to understand and comprehend the relevant and
significant knowledge, issues and opportunities. Literature review will assist in recognition of
gaps between known and unknowns. The literature review will also guide us to identify and
design the interventions to bridge the gap and upgrade the basmati rice cluster development.
(See succinct findings in targeted areas in the literature review section).
Following generic and current updated parameters and indicators were used in collecting the data:
a. Local and Global context of basmati rice cluster sectors;
b. Production potentials and review of basmati rice cluster sectors;
c. Cost of production, best practices, seedlings/transplanting, harvesting and threshing,

post-harvest processing of basmati paddy including drying, de-husking, from growers,
commission agents, processors, traders, catering service providers, etc.;
d. Branding, marketing/trading and processing information from traders, wholesalers,

retailers, exporters, and processors;
e. Issues and constraints relating to production, harvesting/threshing, drying, processing,

marketing, shellers, trading, and storing were gathered from all respective
stakeholders;

f. Information on parameters required for undertaking feasibility study including financial,
costs, investment, prices, conversion factors, etc., and
g. Recommendations and benchmarks based on local and global standards employed in

this study depending upon the nature of clientele ship and situation in the cluster,
The author used the data set generated to identify and characterize the basmati rice clusters,
conduct SWOT analysis, describe the value chain, identify gaps and opportunities, suggest
interventions, and set values for various parameters used in feasibility analysis. The
investments required for various interventions and associated costs were quantified, and
expected benefits of each intervention were also estimated. The Net Present Value (NPV) and
Internal Rate of Return (IRR) of the whole package of interventions to upgrade the identified
clusters were worked out. Basmati Rice Cluster Transformation Plan is also formulated which
identified the useful signals in each cluster for updating and scaling up the whole value chain
of basmati rice on sustainable ground. The Basmati Upgradation Plan is initially designed for
the focal point of each basmati cluster. However, we believe that the Plan will generate forward
and backward spill over effects to the surrounding districts and regions of the focal point.
Mainly these spills over effects will open up the additional income and employment
opportunities through boosting productivity of land, labour and capital resources across the
value chain and benefit all stakeholders including farmers, commission agents, processors,
service providers, traders, consumers, etc.

4. LITERATURE REVIEW &
STAKEHOLDERS’ DISCUSSIONS
The purpose of literature review and consultations are to: a) identify important variables that
influence the sector; b) development of the hypotheses/research questions; c) finding the
testability and replicability of the findings of the current research; e) not running the risk of
“reinventing the wheel” and avoid wasting of efforts on trying to rediscover something that is
already known; and f) the relevance and significance of the problem identified as perceived
by the scientific community. These guidelines were followed in keeping ourselves on track.
The significant areas reviewed and presented as follows:
4.1. Direct Seeded or Dry Seeded Rice

(SDR)
Hasnain (2017) and Akhtar et al., (2018) noticed that in compliance to address the problems
like drudgery, high production cost, low quality, low cropping intensity and above all water and
labour scarcity during peak crop season of rice crop seedlings transplanting, the interest in
DSR cultivation technology has resurged. The sowing of dry seeds into dry or moist, non-
puddled soil has many advantages over traditional transplanting and is a principal method of
rice growing in many parts of the world including Philippines, Vietnam, Thailand, Korea,
America, Japan and the sub-Saharan Africa. The study discussed the advantages of DSR
technology, i.e., 15-30 percent saving in water and 40 percent in labour cost, low input use,
reduced tillage and efficient utilization of nutrients at proper placement and time. Mechanized
direct seeded transplanting may further lead to resource use efficiency and sustainable
agriculture. This indicates that direct seeded rice farmers are technically more efficient as
compared to conventional farmers. Shaheen et al. (2017) also supported above findings of
DSR method of paddy cultivation in rice-wheat cropping zone - II of Punjab, Pakistan. They
revealed that direct seeded rice farmers are technically more efficient as compared to
conventional method of rice planting farmers (i.e., rice cultivation through puddling method).
On the other hand, technical efficiency model results revealed that overall technical
inefficiency turned to be 14 percent at the aggregate level comprising of 15 percent at
conventional rice farms and 13 percent at direct seeded rice farms. But this study did not
explain the limitations of the DSR methods across and within the soil types, different ecologies
and pest infestation levels.
In Pakistan traditional DSR is reported on limited areas across southern part of Punjab and
still warrants a big challenge for both research and extension wings of the agriculture
department for its standardization, popularization and adaptation. The author of this report
observed that Rice Research Institute (RRI), Kala Shah Kaku (KSK) has also introduced the
DSR technology in different parts of the Punjab. But, the diffusion process is very slow due to
number of reasons, especially lack of expertise on the part of farmers, unsuitability of
hard/clayey soil type zones (mostly in ‘Kalar’ tract) and the danger of dense weed infestation.
Therefore, DSR technology got less reception in the Kalar tract. However, visiting and talking
with the people in number of villages of Narang Mandi, Muridke, Malikay, Kamoke,
Eimanabad, Wazirabad, Daska, Nowshera Virkan, Ali Pur Chatta areas of Union Councils, we

found that mechanized transplanting under wet situation may currently have more scope, if all
the operations before crop establishment, like nursery raising, land levelling, puddling,
irrigation, and transplanting are done through an expert service providing company.
4.2. By-products of Paddy and Rice

Rice milling is a major agribusiness industry in Pakistan especially in Punjab and Sind
provinces. Generally milled rice is consumed as staple food in some regions of Pakistan.
Sagar and Ashraf (1986) noted that rice products are fairly high value commodities but
currently its industrial use is limited. Major rice milling by-products are husk, bran or brown
rice, and rice germ. The study emphasizes to improve the range of rice industrial products
which can enhance their uses in several foods, feed and pharmaceutical products, thus reduce
production cost of the whole value chin. Improving milling cost of rice can also enhance the
competitiveness of the whole rice industry (see Annexure-4 for the list of rice products). The
concepts and definitions as well as classifications are spelled out in the annexure for reference
as well as standardization employed in the business circle of rice/paddy products’ transaction
in domestic and international trading. The same concepts have been used for interpretation in
the present project report.
In the stakeholders’ discussions, they pointed out that some potential companies in basmati
rice processing can improve its value chain. For example, Matco Foods Limited, which is
Karachi based leading basmati rice exporting company for over 50 years across 60 countries
in the world, is in the process of expanding its operations into new rice products, such as rice
glucose, and rice protein at its own plant through seeking and adopting the Chinese
technology. Similarly, rice bran oil, which is considered most healthy edible oil and already
being produced in large quantities in China, India, and Vietnam, is also being marketed in
Pakistan although economic viability of its local production is not yet clear. In this report, the
feasibility of bran oil extraction will be explored.
4.3. Integrated Weed Management

Farooq et al. (2017) pointed out that weeds’ infestation reduces per ha yield and quality of the
paddy produce due to adulteration of weed seeds in the produce. Although the paddy yield
normally drops in the range of 15-20 percent, but in extreme cases, total crop failure may
happen. The competition between weeds and rice depends on: i) relative growth stages of
rice and weed; ii) nature of stand establishment (paddy cultivation method by adopting
seedling transplanting versus direct seeded rice); iii) density of plant population; iv) variety
type; and v) moisture and nutrients availability.
Controlling weeds with just through chemical gives the weeds a chance to adapt to that
chemical. Integrated weed management practices in rice includes proper land preparation,
water management, hand hoeing, crop rotation, and herbicides as a last resort. In Pakistan,
where rice seedlings are transplanted into puddled soil, the competition at the initial stage
while crop establishment is in progress is minimal than in the DSR fields.
Conclusions: In the basmati rice clusters, the most commonly weed management operations
in vogue are land preparations through puddling method, where good water management

practices and relatively less quantity of herbicide applications are successfully practiced. The
growers are having the expertise in running these practices since long from their forefathers.
Moreover, these practices seem to be feasible and successful, especially in Kalar tract. On
the basis of this logic and widely adopted practices of rice cultivation through employing
puddling method, this project focus on mechanization of the practice to improve its efficiency.
The economic and cost feasibility of mechanized transplanting in both the basmati rice clusters
have been prepared with these assumptions.
4.4. Coordination with R&D Organizations

In Pakistan, the research and development funds for rice crop are not very significant and its
priorities are not even spelled out in visionary strategic development documents of National
as well as provincial like Pakistan Vision 2025 and Punjab Growth Strategy 2018/Punjab
Agriculture Policy 2018, though rice export is the second major exportable commodity after
cotton. As reported in ADB (2018), only couples of exclusive basmati rice projects have been
funded out of the development funds like agricultural endowment funds of PARC, Islamabad,
which provided only a meagre amount. Generally, Pakistan invest very low (only 0.17 percent
of its agriculture GDP) on R&D as compared to their competitor alleys like Bangladesh, China,
India and Nepal (Ali et. al. 2018).
In view to overcome the shortcomings of R&D funds, Pakistan always look for and explore the
local as well as international R&D partners. For example, since independence, Pakistan has
been member of Consultative Group of International Agricultural Research (CGIAR),
especially International Rice Research Institute (IRRI), Philippines. The technical assistance
from IRRI in the areas of breeding through germplasm sharing and capacity building had been
an integral part of the rice research system in the country. The development in the rice
production up to this point is an evidence of IRRI technical support to Pakistan during the last
50 years or so.
In a relatively recent development, Pakistan has entered a new partnership agreement with
Chinese government; name the ‘China Pakistan Economic Corridor’ (CPEC). It has multiple
areas of mutual cooperation in terms of financial, capital, technical, capacity building,
communication, infrastructural networking, etc. Chinese companies have already been
engaged in development of hybrid paddy and wheat seeds in Pakistan. The Chinese
researchers of Sinochem Group Agriculture Division and Yuan Longping High-Tech
Agriculture Co. are already engaged, in partnership, with Pakistan’s public and private
research institutions (e.g., Guard Agriculture Research Services Pvt. Ltd.), and running pilot
projects at 200 sites to develop hybrid rice varieties.
The Pakistani and Chinese governments have jointly identified a couple of areas for
cooperation in agriculture. China has promised to build agriculture demonstration centres
across Pakistan and supply seeds and machinery to Pakistani farmers. So far infrastructure
projects were a priority in CPEC, but recent government has given priority to include
agriculture related projects in CPEC like building farm-to-market road networks that will
connect with storage, packaging and processing units. Unlike other infrastructure projects
which are mostly taken up by the private sector, the agriculture infrastructure development
projects in CPEC is waiting for the long-term state funding. Some of the reservations were
also reported in the literature about the implications of CPEC agreement, for example:

“--- CPEC could work for Pakistani agriculture or it could be a disaster ---‘’, as said Nazish
Afraz, a Professor of Economics and Public Policy Researcher at the Lahore University of
Management Sciences. “--- None of the potential gains under CPEC are automatic, though,
and there is a sense that China much more prepared than Pakistan ---”. “--- We should not
just become a market for Chinese goods completely---‘’ as said by the Federal Secretary of
Food Security and Research, Mr. Mekan. He further added that the government was “late” in
setting advantageous conditions for the country’s farmers and businesses. (November 14,
2018 and December 5, 2018: FacebookGoogle+LinkedInTwitter: Chinese help in agriculture).
4.5. Trading Opportunities

The Chairman of Rice Exporters Association of Pakistan said that Iran is a nation of rice eaters
with an average consumption of 46 kg per capita. They are very fond of Pakistani super
basmati rice due to its taste, aroma, length, and cooking ability. Pakistani premium rice export
potential can be materialized on sustainable footings, if Iranian government access to super
basmati rice is facilitated through appropriate trade measures and technical barriers may be
removed by offering lower duty regime on the imports of Pakistani rice in Iran under Preferred
Trade Agreement (PTA). Further, the REAP Chairman suggested that Pakistan may move
forward from PTA to a Free Trade Agreement (FTA) preferably an effective zero import duty
regime on both sides. The implementation of PTA between two neighbouring countries was
effective since 2006 and the current volume of bilateral trade between the two countries is not
true reflective against its potential. As a result of reforms in trade policy, it will be instrumental
for agriculturally enriched Pakistan to launch bilateral trade relationship with Petroleum
enriched Iran. Unfortunately, however, most trading is done through other countries by
adopting sometime illegal means. There is a real potential that both countries may increase
bilateral trade volume up to 5 billion USD, if just the problem of transferring money through
banking channel is addressed. The authority in REAP is fully in favour of opening Iranian bank
in Pakistan which will ensure sustainable trade between private business partners as well as
governments of both Islamic nations. On these lines, “The Bank Melli Iran” is interested to
open branch in Lahore. Under the bank arrangements like ‘Currency Swap Agreement’, the
representative of REAP assured that all rice exporters will be routing necessary transactions
in their own currencies by legal means. (April 3rd, 2018; Facebook+Google+LinkedIn+Twitter).
The author of this report learned from the traders and processors of basmati rice that Pakistani
rice and its by-products are in high demand, and enjoying the status of niche market in
exporting of brown rice amongst the quality cautious consumers across the European Union
countries as well as in Middle East-Gulf and America.

5. CLUSTER IDENTIFICATION AND
CHARACTERIZATION
5.1. Geographical Identification of Clusters
In Punjab, basmati paddy crop is cultivated in almost all the 36 districts of Punjab, except in
barani (un-irrigated) districts (Annexure-5). However, it is highly concentrated in Kalar tract
comprising of seven districts, namely Sheikhupura, Sialkot, Gujrat, Hafizabad, Gujranwala,
Nankana Sahib and Narowal (Figure 5). The Kalar tract of Punjab-Pak is popular in producing
quality basmati rice among the rice producing areas of the world, and contribute about 50% of
the total basmati rice area and production in Pakistan. The tract is classified into two clusters
based on the distinct basmati variety grown and final processing through which each variety
passes through:
i) Katcha rice (Cluster-I) - This cluster consists of Sheikhupura, Sialkot, Gujranwala,

Narowal and Gujrat districts of Punjab with Sheikhupura as its focal point. The total
area of the cluster is 473 thousand ha supplying a total production of 833 thousand
tonnes, which is about one third of the total basmati rice area and production in the
country. Variably, over ninety percent of the production in this cluster is comprised of
Supper Basmati and Basmati-386 which is mainly processed for polished (or Katcha)
rice. The tehsil of Muridke of district Sheikhupura is the focal point of the cluster that
contributes 158.2 thousand ha and 289.8 thousand tonnes of Katcha rice, which is
about one third of the total cluster area and production. The focal district has not only
highest area but also highest per ha yield in the cluster (Table 6)
ii) Saila (Pucca) rice (Cluster- II) - This cluster consists of Hafizabad and Nankana Sahib
districts of Punjab with Hafizabad as its focal point. The total area of the cluster is 204
thousand ha supplying a total production of 407 thousand tonnes, which is about 14%
of the total basmati rice area and production in the country. About 75% percent of the
production in this cluster is comprised of PK-1121 variety, which is mainly processed
for parboiled/Saila (or Pucca) rice. The focal point of the cluster is Sheikhupura district
that contributes 104.4 thousand ha and 213.3 thousand tonnes of Pucca rice, which is
more than one half of the total cluster area and production. The focal point of the cluster
has not only highest acreage under basmati rice cultivation but also highest yield
among the two districts of the cluster (Table 8).
Table 8: Area, production, and yield of major basmati rice growing districts of Punjab
during 2016-17

Production (000
District Area (000 Ha) Tonnes) Yield (Kg /Ha)
Cluster-I (Katcha rice)
Sheikhupura 158.23 289.84 1831.8
Sialkot 114.93 205.66 1789.4
Gujranwala 101.98 184.35 1807.7
Narowal 63.94 105.5 1650.0
Gujrat 33.69 47.58 1412.3
Total cluster 472.77 832.93 1761.8
Cluster-II (Pucca rice)
Hafiz Abad 104.41 213.3 2042.9
Nankana Sahib 99.14 193.68 1953.6
Total cluster 203.55 406.98 1999.4
Total Punjab 1352.8 2524.4 1866
Total Pakistan 1454 2740 1885
Rice occupies about 35% of the total annual cropped area in both clusters; however, it is a
major crop during the Kharif season as it occupies about 90% of the total cropped area in the
season in both clusters. The basmati to non-basmati ratio in the total rice area is 70:30 percent.
Fodder occupies another 7-8% of the total kharif cropped area (Government of the Punjab,
2016a).
Figure 3: Map of Basmati Rice Targeted Clusters
5.2. Comparison of Cluster Characteristics

Both the clusters have socioeconomically, biologically and physically comparative advantage
to cultivate basmati rice. The ecology has intrinsic natural unique character that gives
fragrance and pleasant taste to basmati, especially while cooking. These characteristics are
popular throughout the world and fetches premium price, and has been especially demanded

amongst the consumers of Asia, Gulf, Middle East, Europe, etc., especially among the
consumers in these countries belong to Indian and Pakistani origins.
The Kalar tract of Pak-Punjab situated in between two rivers including Ravi and Chenab called
doaba belt. These districts are operating under the public advisory services of adaptive and
general extension departments. However, the role of private extension advisory services,
especially of pesticide companies to provide plant protection coverage, in both the cluster is
on the rise. The knowledge and approach of the public sector extension service is confined to
the farm-level and very limited to address the issues of the farming and allied community which
is under paradigm shift to meet the global challenges of agrarian economy. The
comprehensive comparison between Cluster-I and II are presented in Table 9. The key
aspects covered in characterization are: varieties planted, crop husbandry, R&D
infrastructure, export, supply chain, certification of international standards, socioeconomic
networking, marketing practices, socioeconomic networking, etc. of Cluster-I and Cluster-II
Table 9: Characteristics and Comparison of Clusters
Salient Features Cluster-I Cluster-II

"Katcha chawal" of Basmati Rice "Pucca chawal" of Basmati Rice
Brown-white (single polished and Parboiled ('Saila') - Steamed rice
Product
double polished/silky) Basmati of Basmati Rice
Rice
Sheikhupura, Sialkot, Hafizabad, Nankana Sahib
Districts
Gujranwala, Narowala
Rice Zone 'Kalar' tract of Punjab 'Kalar' tract of Punjab
Sheikhupura: Hafizabad:
Super Basmati=83%; Bas- PK-1121=85%; Super
386=15%; Others=02% Basmati=08%;
Sialkot: Others=07%
Super Basmati=70%; Bas- Nankana Sahib:
386=25%; Others=05% PK-1121=70%; Super
District area by variety
Gujranwala: Basmati=20%;
Super Basmati=36%; Bas- Others=10%
386=57%; Others=07%
Narowal:
Super Basmati=90%; Bas-
386=05%; Others=05%
Area of the cluster (000
ha) 472.77 203.55
Production of the cluster 832.93 406.98
(000 tonnes)
Yield of the cluster (clean 1761.8 1999.4
rice-kg/ha)
Focal point district/tehsil/ Sheikhupura/Muridke Hafizabad/Pindi Bhattian
Mouza
Area of the focal point: (000 158.23 104.41
ha)
Production of the focal 289.84 213.30
point: (000 tonnes)

Yield of the focal point: 1831.8 2042.9
(clean rice-kg/ha)
Percentage of the basmati 25 22
rice area to total cropped
area during the year in the
cluster (basmati area/total
cropped area)
Geographical and Mix of Clayey and Loamy texture Mostly Clayey with patches of
Environmental Factors soils. Loamy texture and saline soils.
Flat plain, the broad strip of land Flat plain, the broad strip of land
between Ravi and Chenab rivers between Ravi and Chenab rivers
30° 10° N 30° 10° N
Relatively semi-dry climate with Sub-humid climate with hot and
hot and humid summers and cold humid summers and cold winters.
winters.
Good quality surface and subsoil Good quality but in some area’s
water for canal and tube well brackish poor-quality
irrigations, respectively. groundwater for tube well
irrigations.
High costs of pumping due to High costs of pumping due to
ever increasing energy rates. ever increasing energy rates.
Average rainfall 400 mm to 700 Average rainfall 300 mm to 500
mm per annum mostly during the mm per annum mostly during the
months of Monsoon, June months of Monsoon, June
through August. through August.
Day Temperature rises up to Day Temperature rises up to
42°C during earlier stage of crop 45°C during earlier stage of crop
season (Summer) season (Summer).
In winter it drops to 08-20°C In winter it drops to 10-22°C
during later stage of crop season. during later stage of crop season.
Wind, rain falls and hail storms Wind, rain falls and hail storms
may occur during summer may occur during summer
months. months
Strong winds blowing during Strong winds blowing between
September and November September and November
months causes lodging, months sometimes causes
especially in Super basmati damages to paddy crop.
fields. (see in Annex Figure 1)
Fog converted to Smog that Fog converted to Smog that
occurs during the winter season occurs during the winter season
mainly during the months of late mainly during the months of late
October to early January. October to early January.
The density of smog depends The density of smog depends
upon the intensity of pollution and upon the intensity of pollution and
level of humidity present in the level of humidity present in the
air. air.
Mostly dry but rare spell of rain Mostly dry but rare spell of rain
comes during panicle emergence comes during panicle emergence
and harvesting of crop, and harvesting of crop,
September through December. September through December.

Basmati Rice varieties are Basmati Rice varieties are
moderately photosensitive. moderately photosensitive.
Rice Growers Small holding size (<05 acres), Small holding size (<10 acres),
medium (05-12.5 acres), large (> medium (11-30 acres), large (>
12.5 acres) 30 acres)
Most of farmers under matric and Most of the farmers are
can understand new methods matriculate --- Partly follow and
and techniques of good practices afford new methods and
including: judicious use of techniques of good practices
chemicals i.e., fertilizers, including: judicious use of
pesticides/ weedicides. chemicals i.e., fertilizers,
pesticides/ weedicides.
Many Paddy growers' Most Paddy growers'
associations (CBOs/Coops) are associations (CBOs/Coops),
inactive except few NGOs, inactive except National Rural
(potentially Engro Pvt. Ltd.) Support Program (NRSP)
covering smaller part of basmati covering smaller part of Saila rice
rice ecology in order to help ecology --- guiding and
farmers to pool input and output supporting farmers in crop
resources by farmers’ groups. husbandry management, and
post-harvest handling including
marketing and processing.
Small farmers’ family members Family members of small farmers
engage in routine farming chores. do many chores by themselves
like animal care, watering to the
paddy fields.
Transplanting is done by hired Transplanting of seedlings,
labour, while harvesting and harvesting and threshing
threshing of paddy is performed performed through hired casual
on rental/hiring services of wheat labour as well as on custom hired
combine harvesters. service of rice combine harvester
(See in Annex Figure 2)
Product Features Basmati ‘Katcha Chawal’ Current dominant grown fine
prepared from fine popular variety, basmati was PK-1121
varieties: Super Basmati ('Kainat') --- with an average yield
(average yield of paddy 2.5-3.0 of paddy 3.4-3.7 tonne/ha.
tonne/ha); Bas-386 (average PK-1121 variety is exhibiting the
yield of paddy 3.0-3.5 tonne/ha), height to the tune of 120 cm. The
and other insignificant varieties grain size of this variety is larger
grown including Basmati-385, than for all reported basmati
Super Kernel, Basmati-515, varieties in the rice belt.
Kissan, Punjab, Chenab, etc.
have higher yield potential than
Bas-386.
Grain (Kernel) size, appearance The grain size is extra-long
and shape affect towards greater measuring >8 mm. It has high
market acceptability: Grain size of degree of grain elongation after
all above mentioned basmati rice cooking in comparison to basmati
varieties varied between 6.5 to 8 and non-basmati rice.
mm.

The milling recovery varied from Parboiled Rice is hard that has
62 to 72 percent depending upon gone through a steam-pressure
the moisture content of the dried process before milling. It is
paddy soaked, steamed, dried, and then
milled to remove the outer hull.
Variety Features Indigenous blood: crosses PK-1121 '(Kainat'), fine rice
between Basmati-320 and line variety borrowed foreign
10486. germplasm, mainly used for
preparing parboiled ('Saila') rice
because of their elongated grain
size especially after cooking with
measuring ranges from 16 mm to
18 mm
The maturity periods of various Kainat variety seedlings
varieties are: 95 days for transplanted up to mid of July and
Basmati-515, 100 days for Bas- matures mid-November to last
386, 105 days for Punjab week of November. The maturity
Basmati, and 110 days for Super period is 110 days.
Basmati, and Chenab Basmati. Plant Population density status is
On average farmers maintain similar to that of the other all
55,000 to 65,000 plant population types of paddy cultivation.
per acre against the
recommended level of 120,000
plants/acre
Nursery and Most growers raise their own Majority of farmers prefer to raise
Transplanting of paddy nursery seedlings at their nursery and plant fine Kainat
Seedlings own farms and it is self- paddy through dry-bed method.
maintained
Only 5-10 percent farmers are Farmers’ seed source of ‘Kainat’
using certified seed from Punjab variety is from the research
Seed Corporation, private seed station as well as from the Punjab
dealers and research station. Seed Corporation.
The importance of timely sowing Same practices observed as of
of nursery and the transplanting Cluster-I for raising nursery and
age of seedlings is very important transplanting of seedlings.
to achieve higher paddy yield in
all rice varieties.
Inputs/Management Normally, 7-9 ploughings (@ Normally, 8-10 dry ploughings (@
Practices Rs.2000 per plow and planking) Rs. 1500 per plow) practiced
including dry and wet (puddling) before transplanting paddy
practiced before transplanting the seedlings.
paddy seedlings.
On average, 1.5 bag of On average total 2 bags of
Urea/acre (Rs.1700/bag) and one Urea/acre (Rs.1700/bag) and one
bag of DAP/acre (Rs.3600/bag) is bag of DAP/ acre (Rs.3600/bag)
applied split in two doses with is applied in two doses with basal
basal dose of 0.5 bag of Urea and dose as one bag of Urea/acre and
one bag of DAP. one bag of DAP/acre.

The second dose of only one bag The second dose of only one bag
of urea was applied before of urea was applied before
emergence of flowers. emergence of flowers.
In 'Kalar' tract, mostly granular as Granular and liquid pesticides are
well as liquid pesticides are used applied to control pests at
against the pests at different different stages of paddy crop
stages of crop growth. growth.
On average, cost of all pest On average, cost to control all
control including weeds ranged pests including weeds ranged
from Rs.4500 to Rs.5500 per from Rs.6000 to Rs.6500 per
acre. acre.
Harvesting and Threshing The traditional way of manual The paddy harvested and
harvesting and threshing is totally threshed with wheat combine
wiped out. Presently, almost all harvesters is exhibiting high
the farmers are harvesting and moisture contents (i.e., up to 34
threshing the basmati paddy crop percent) vis-à-vis rice combine
mechanically by employing either harvester exhibiting relatively low
mostly with wheat combine or few moisture contents due to inbuilt
by rice combine harvesters on in fan to separate grain from inert
rental charges of Rs.2500-3000 material (i.e., <34 percent).
per acre (takes 30-40 minutes) (See both machines in Annex
and Rs.4500-5000 per acre Figure, 2&3.)
(takes 1.2 hour), respectively.
Drying/Packaging/ Mostly, farmers transport the Drying, packing and
Transportation paddy direct to the markets in transportation operations are not
trolley without drying and packing different. Currently, Rs.50-60 per
except few who used sacks. 65-Kg bag of paddy incurred for
drying. It includes labour charges
for sun drying may be by two
times with some intervals as well
as for packing and un-packing
paddy in a bag.
Commission agents/'Pharias' or
wholesalers or Sheller owners
also buy paddy directly from
farmers, mostly from farm gate,
and transport either by trolley or
Mazda (@Rs.150/40-kg)
Wholesaler/Retailer Commission agents exploit the Contractors or wholesalers buy
situation and condition of paddy the product from farmers as they
received at their purchase have connections with the
centers by offering low prices due commission agents in the market.
to presence of high moisture The price is offered to the farmers
contents, green paddy grains and based on the quality, form and
pieces of paddy straw ('Kundi'). location of the rice product.
(See in Annex Figure 4.)
The commission agents often
charge 1-7 percent of the total
revenue computed against the
paddy received from the growers

depending upon the extent of the
loan received by the growers
during the crop season for
meeting purchased inputs
expenses. In addition, they
deduct one Kg paddy out of 40 kg
on account of 'palidhari' as a
labour charges for loading/
unloading, etc. of paddy.
The quality judgment criterion is The auction in the wholesale
not standardized in case of paddy market is generally based on the
trading, so the range of variety, and deductions are made
purchases and sales are varied based on moisture content,
from one lot to another within and presence of inert material and
across the market locations. green grains.
This situation is favourable for the Thus, exact grading is not
commission agents/ traders/ determined for the paddy
retailers due to non-existence of products except purity of variety.
legitimate rules of marketing
about the permissible limits of
moisture contents of paddy or rice
at the points of entry/ exit from
farmers through rice Sheller mill
processors, and later on to
consumers.
Technological Some commission agents have Parboiled - 'Saila' rice become
Innovations & already started using mechanical rancid upon storage for longer
Infrastructure dryers period --- discover safe
Development technology to maintain or improve
the quality of the commodity.
Many farmers are already using Quick development of Kainat
Direct Seeded Rice (DSR) varietal series, although this is a
technology in paddy cultivation. reactive action in response to
Indian researchers’ pro-active
action of releasing superior
Kainat varieties (Pusa series)
with almost 26 percent higher
yielder as well as elongated
kernel size after cooking, thus
fetching higher price in
international market
Export/ domestic Relative annual basmati rice Parboiled ('Saila')/steamed rice
marketing exports share of Pakistan demand is rapidly increasing in
declined significantly vis-à-vis the domestic and international
increased share of India. market ---- especially in Gulf, Iran
and Middle East.
Certification Mandatory quarantine Similar to Cluster-I requirements
requirements of importing as well and bottlenecks of Food safety
as exporting countries of food standards and traceability traits
safety standards and traceability

fulfilled under the prevalent including HACCP, SPS, TRIPS,
agreements (HACCP, SPS, etc. fulfilled.
TRIPS, etc.)
Socioeconomic In some cases, females of family In heavy chores of rice cultivation,
networking/Gender or hired labour engaged in the women participation is low,
involvement transplanting of paddy seedlings, but higher in decision making for
harvesting paddy straw to feed sale and retention paddy
their livestock, and looked after products for seed and
postharvest care including household’s consumption uses.
storage, etc.
Source: Feedback from different stakeholders blended with Secondary sources surveyed
Note: Please see Annexure 3 discusses the Basic Concepts and Classification of Paddy and Rice
By- products.
5.3. Value Chain Analysis of Clusters

A number of stakeholders are engaged along the value chain of basmati rice products in both
the clusters, as elicited in the schematic flow chart in Figure 6. Its’ processes are starting from
agricultural R&D as well as technology transfer activities of public and private institutions
through the phases of agricultural production, harvest and paddy marketing, processing and
ends at domestic and international trading. During the consultation meetings and focused
group discussions with the stakeholders along the value chain in the targeted basmati rice
clusters, some of the key findings are discussed in this section.
Figure 4: Basmati rice value chain

Agri. R&D + Agricultural Harvest & Paddy Processing Marketing of rice &
Tech. Transfer Production Marketing (Milling/Husking) International Trade
 Varietal Dev.  Inputs supplies  Rice harvesting/  Upgrading paddy  Rice grading,
Research systems, especially threshing/combine drying system branding/packaging,
seed, fertilizer, oldness
 Crop Mgmt. pesticide, and  Paddy quality –  Technology used
Research credit proper drying in rice milling  Rice marketing
(maintaining outlets (traders,
 Farm machinery  Agri. services proper moisture  Types of various rice commission agents,
development providers on crop content) products (brown super stores, etc.)
(planting/spray/ management rice, single- polished
harvest/thresh/Dryi practices at farm  Paddy marketing rice, double-polished  Rice catering outlets
ng Technology level outlets (beoparies, rice, silky rice, (vendors, restaurants,
Research commission agents, parboiled Saila) rice marriage halls, food
 Plant density rice mills) and steamed rice streets, others, etc.)
 Agricultural technology
advisory services supplier  Rice grading,
packaging
 Policy incentive
for technology
adoption
Implementing Implementing Implementing Implementing Implementing

Agency Agency Agency Agency Agency
 Provincial and  Punjab  Farm  Rice sheller  Rice sheller

Federal Agri. Agriculture Machineary mills, Rice mills, Rice
Department Traders Traders,
Packaging and

Research  Rental hiring Service Branding, like
System service Providers, Engro and
providers, Guard and other
 Private Agencies  Farming
 Pesticide REAP members,
like Engro, Community,
companies, e.g., TDAP, TCP
Guard pvt. Ltd. Commission
Bayer,
And Provincial Agents,
Syngenta, etc.),
Agricultural
Fertilizer  Rice sheller
Extension
companies, i.e., owners and rice
Departments
Fatima traders
(Field, Farm
Fertilezer
Machinary, etc.),
Company, Fouji
NGOs-NRSP
Foundation and
Pakarab
Fertilizer
Company
 Several private
seed Compnies
 Zarai Tarqyati
Bank
 Increasingly
short laor for
transplanting
 Few mechanical
transplanting
services are
emerging
Source: Figure Adapted from Bashir et al. (2018)
5.4. R&D in Basmati Rice Production

Basmati crop cultivation in Punjab was not much popular than other states of un-divided India.
The varietal improvement of basmati rice was initiated in 1926 at Kala Shah Kaku, Muridke
through pure line selection from available indigenous cultivars of paddy. The first rice variety,
Kangni-27, was released from Rice Research Station, KSK for cultivation in 1927. In 1933,
the world-famous rice variety, “basmati-370” was selected from the local selected land races
and approved for cultivation on extensive area of rice growing regions of un-divided India.
Basmati-370 proved to be the most valuable traditional quality rice which became a standard
variety for export quality led to a manifest boom in export of India and Pakistan even after
independence of Pakistan (Bashir et al., 2018). This variety enjoyed maximum popularity
among the domestic and international consumers mainly due to sweet taste and pleasant
aroma. After this variety some other successful basmati varieties were released like basmati-
385 (in 1985), Super Basmati (in 1996), Bas-386 (in 2014), etc.
Recently released basmati varieties, Kissan, Chenab and Punjab, by RRI, Kala Shah Kaku
are not getting diffused among the rice growers due to the lack of the traits they expect, i.e.,
something additional to the traits in super basmati variety. Moreover, Pakistani breeders are
still emphasizing on developing aromatic basmati varieties unlike Indian's emphasizing on
non-aromatic high yielding with elongated kernel size rice varieties like Pusa series (Kainat

type). A promising basmati variety generation gap exists after Super Basmati --- which warrant
to introduce improved germplasm viz., both open pollinated variety (OPV) and Hybrid.
Recently, the Rice Research Institute (RRI), KSK seeks the approval of its research agenda
from its board, comprising of representative members from farmers associations, REAP, seed,
pesticide, and fertilizer companies, and academia like agricultural universities. The impact of
this needs to be seen in the near future. Some other institutional reforms will be required like
introducing output oriented specialized extension fast approval of varietal release and diffusion
of promising basmati rice varieties.
There are many emerging and unresolved issues that need to be resolved through research t
keep basmati competitive in national and international markets, such as: a) Further
improvement in basmati varieties to meet international demand (e.g., improved version of PK-
1121 competitive to Indian Pusa series); b) Discover safe technology to maintain the quality
of rice after parboiling (e.g., to control Saila rancid in storage); e) Promotion and training of
Integrated Pest Management (IPM) techniques or use of organic pesticides, especially to
control weeds; e) to promote mechanization of production processes; f) diversification of
basmati value chain. .
5.5. Research and Development

Organizations
There are several institutions in the public sector in the provincial agricultural research as well
as federal agricultural research arms of the Ministry of Science and Technology, Pakistan
Atomic Energy Commission, Pakistan Agricultural Research Council working for the
improvement of the basmati rice value chain. In addition, some state-of-the-art private sector
companies, like Guard Pvt. Ltd. as well as Engro EXIMP, a subsidiary of Engro Corporation,
are supplying quality rice seed and manufacturing rice products.
Recently the National Rural Support Program (NRSP) has launched a unique development
project in Saila rice zone (Cluster-II) of Punjab to mobilize farmers through establishing
community-based organizations for the purpose of setting community-based marketing,
processing and trading facilities. In this process, the resources are pooled for accomplishing
the above-mentioned activities in order to gain maximum profit share by the farmers. These
community organizations are also linked with provincial agricultural research and extension
services for advisory services. These organizations can be used as catalyst in improving the
whole value chain of rice basmati clusters.
Several internationally accredited quality certification laboratories, like PCSIR under Ministry
of Science and Technology, NIBGE under the aegis of Pakistan Atomic Energy Commission,
Grain Testing Lab. at Karachi, PARC under Ministry of Food Security and Research have
been established in the country.
5.6. Input Supply System

Input supply chain system well established throughout the 'Kalar' tract and is operated by the
private sector. There is no serious shortage of rental service providers of tractor driven plowing
and wheat combine harvesters. The availability of the services of rice combine harvesters is
also increasing fast as it considerably lessens the paddy losses as well as save rice straw
which is either fed to the animals are sold to the traders of paper industry. The achievement
of desired plant population in paddy fields is another important rice production issue.
Commonly paddy fields are maintaining 55 to 60 thousand plant population per acre against
the recommended level of 120 thousand of plant density. As already discussed, this issue may
be easily managed by the service providers through introducing the mechanical rice
transplanter of China or Korean made technology, as evidenced in the fields of Ali Pur Chatta
Union Council of District Gujranwala. Moreover, an alternate technology of DSR method of
paddy cultivation may be popularized in loamy soil type area, especially in Cluster-II basmati
rice belt. Normally for the first one and a half month after transplanting seedlings, farmers
irrigate to paddy fields twice a week with light doses for proper plant establishment and
suppression of weeds' germination depending upon the soil type and incidence of rain falls.
The interval of irrigations may be weekly up to tasselling and grain formation stage and later
on stopped depending upon the weather and soil conditions.
Fauji Fertilizers Co. (FFC), Engro Fertilizers Limited (EFL), Ali Akbar Group (AAG), Jafar
Brothers Limited, Fatima Fertilizer Company, Syngenta, Bayer Crop Science are the main
crop input (chemicals and seed) suppliers and all of these have well established dealership
and distributor network system across the Punjab especially in basmati rice belt. Seed is
mostly supplied by the Punjab Seed Corporation Pvt. Ltd., & Seed Council, and on small scale
quality basmati rice seed is also supplied by the RRI, KSK as a breeder seed, truthful labeling
seed and foundation seed for popularization as well as growers’ feedback. Seasonal, short
term interest free loans are also disbursed by the scheduled banks for purchased inputs
including seed and fertilizer. Commonly, farmers are using below average and imbalance
fertilizer input levels, therefore, it impacts negatively, equally on output productivity and quality,
except few progressive growers. Input and output quality monitoring system is not well
established in Pakistan and its situation is better in Punjab than other provinces. The public
institutions performance and Standard Operating Procedures (SoPs) are same in both
clusters.
In 'Kalar' tract, mostly granular as well as liquid pesticides are applied to protect the pest
attacks at different stages of paddy crop growth. For example, the granular pesticides were
used to control rice leaf folder, stem borers, grasshoppers (i.e., green and red), and liquid
pesticides spraying to control green leafhoppers, aphids and Jassid on rice crop. On average,
farmers are spending to control all pests including weeds ranged from Rs.4500 to Rs.5500
per acre (Inayatullah et al., 1986; Field Survey Information, August-October, 2018). Serious
lapses observed in public agriculture sector, especially plant protection department, because
the pesticide companies are aggressively selling their products to maximize their profits. It is
very common problem noticed on the farmers’ fields pertaining to non-judicious use of micro
and macro nutrients, pest control measures and insufficient pest management strategies.
Since, farmers' practice like reckless use of pesticide due to lack of pest scouting awareness
& non-declaration of minimum resistance limits (MRL) - defence against residual effects of
pesticides on the living organisms, as well as, lack of government prudent monitoring system
to check the quality of inputs and outputs at right time, form and location. As per author’s field
observations, farmers had adopted the behaviour of overusing of pesticides even without
monitoring of pest load; farmers are used to apply pesticide as a precautionary measure to
avoid severe pest losses on fine basmati paddy crop, especially the productivity of super
basmati crop. It is general opinion that the allied departments like Plant Protection and
Agricultural Extension are not pro-actively addressing these issues as compared to the
pesticide private companies may be due to their business opportunities by selling their
products. The crop husbandry practices are not much different across the basmati clusters
except, plant protection, weed control and frequency of irrigations. The Cluster-II area of
Kainat variety belt is relatively drier and exhibits separate flora and fauna. It requires more
care of frequent irrigations to snub weeds germination as well as paddy plant establishment.
Some more weedicide application performed than Cluster-I paddy crops.
The strategic solutions may be opted by the government to resolve above mentioned issues
by creating awareness, tax rebates/ interest free loan provisions on imported farm machinery
like rice transplanter, rice combine harvesters and dryers. Since, these farm
machinery/equipment and technology require lumpy investment to procure as well as
launching of skill development programs in line acquaintance about the intervention of
technology in order to earn maximum benefits at all nodes of value addition players through
satisfying the needs of the ultimate stakeholders/producers.
5.7. Harvesting
The traditional way of manual harvesting and threshing has totally vanished. Presently, 80%
of the farmers are harvesting and threshing the basmati paddy crop mechanically by
employing wheat combine harvesters (using both for wheat and rice crops) with rental charges
of Rs.2500 -3000 per acre (takes 30-40 minutes). More than 80 percent farmers are using this
machine in both basmati rice clusters. The paddy straw harvested with wheat combine is not
much useful, especially for feeding to the animals, and the field is left with longer stubbles.
Recently, upgraded rice combine harvester (Kubota) has been introduced, designed by the
Korean/Chinese technology for paddy harvesting and threshing. Its rental charges are
Rs.4500-5000 per acre (takes 1.2 hour). Presently, Kubota combines are covering about 15-
20 percent harvested area of paddy crop. The paddy straw harvested with Kubota machine
has many advantages like: relative green paddy can be used for animal feeding; short stubbles
in the field enables easy ploughing for next crop; saving more than 60% harvest losses thus
giving 6-7 maunds higher production per acre compared to paddy harvesting by wheat
combine harvester; avoiding health effects of smog due to rice straw burning in cold winter
season in metropolitan cities of rice belt and Lahore. It suggests alternates to straw burning
and support allied agro-industrial.
5.8. Paddy Marketing

The commission agents ('Arthi') and wholesale merchants do keep accounts of their paddy
transactions with loose record about type of varieties purchased and sold but no moisture
contents record exhibited at this point of time. This was commonly observed that commission
agents exploit the situation and condition of paddy received at their purchase centers by
offering low prices due to presence of high moisture contents, green paddy grains and pieces
of paddy straw ('kundi') (See in Annex Figure-4). This situation is favourable for the
commission agents/traders/retailers due to non-existence of legitimate rules of marketing
about the permissible limits of moisture contents of paddy or rice at the points of entry/ exit
from farmers through rice Sheller/Mills, and later on to consumers. The quality judgment
criterion is not standardized in case of paddy trading, so the price range offered for the

transactions of paddy produce are varied from one paddy lot to another within and across the
market locations depending upon the seller’s status (i.e., socioeconomic, inputs purchased on
cash or credit, and political influence). The paddy prices are low immediately after harvesting
season, increasing gradually as the supply decrease with the passage of time. Thus, the
paddy price increased from Rs.100 to 300 per maund after harvesting season over, depending
upon the type of basmati varieties and its' demand and supply situation. Though the moisture
content of paddy --- a factor for price determination and the chances of aflatoxin infestation
increases if dumped in heaps and not aerated appropriately. The auction in the wholesale
market is generally based on the variety, and deductions are made based on moisture
contents, presence of inert material and green grains. The price is offered to the farmers based
on the quality, form and location of the rice product.
The traders, wholesalers–sheller owners buy the paddy directly from the farmers. The
commission agents often charge 1-7 percent of the total value of paddy received from the
growers. In addition, they deduct one-kilogram paddy per 40-kg on account of 'Palidhari' as a
labour charges for loading/unloading and weighing services, etc. of paddy. The growers who
do not take loan from the 'Arthi' pay commission or Arhat @ 1-2 percent of the value of produce
sold, which increases from 3 to 7 percent, if some money is borrowed from the Arthi. On
average, the Paddy growers/Arthi/Sheller Owners/Wholesaler/Retailers purchased paddy of
different basmati varieties during the season as: Super Fine (banned): Rs.900-1050; Supri
(Banned): Rs.1100-1300; Basmati-386: Rs.1100-1300, Super basmati: Rs.1500-2000; The
basmati rice wholesale prices of major varieties recorded during survey period in September-
October, 2018 are as follows: Basmati-386: Rs.2100-2300, Super Basmati: Rs.3600-4000.
Supply chain of basmati paddy exhibited numerous inbuilt constraints throughout its flow from
the farmers' field to the rice processing mills including high moisture content prone to aflatoxin,
farmers’ exploitation by commission agents lead to offering low paddy rates, mixing of inferior
basmati rice varieties of Basmati-386, Supri, etc. in Super basmati especially by Sheller mill
owners as well as basmati traders.
The strategic post-harvest solutions need to be followed by taking care of efficient harvest and
quick disposal of quality products of paddy and its by-products including Katcha and Saila rice
commodities by using marketing intelligence and interconnected structure of regional and
inter-regional nodes of markets. Since, farm machinery like rice combine harvester may be
employed to save harvest losses and additional contribution by saving rice straw that would
generate higher value additional towards the kitty of all stakeholders involved. The farmers
will gain relatively better share out in the form of marketing margins by less harvest losses
plus additional wheat straw for the animals besides reduction in the cost of production.
5.9. Processing (Milling/Husking)

Based on the processing capacities of rice sheller plants, the processors could be categories
broadly into three categories like small, medium and large sized processors. These processing
plants are located in the close proximity of the basmati paddy growing areas of Kalar tract and
in the surrounding districts of Punjab province. These processors as well as commission
agents buy the paddy and mostly sun drying depending upon the condition of weather and its
immediate purpose like storing for future de-husking or directly process for rice recovery.

Paddy and its product buyers could be categorized as: i) commission agents/brokers (Pharia)
and rice sheller owners who directly buy paddy from the farmers; ii) domestic and international
traders who buy head and broken products of rice etc.; iii) oil extraction mills, feed mills and
pharmaceutical companies, etc. who buy rice bran/powder buyers, iv) packing material
manufacturers who buy husk (thooh) as a source of energy who use it as filler to save from
shocks; rice sheller owners also use the husk in burning for paddy drying and brick kiln owners
for making bricks, etc.
The prices of paddy and its main products, especially rice are low at the commencement of
the season, increasing gradually as the supply shrinks against demand as well as on aging of
Katcha rice, but aging parameter is not counted in case of 'Saila'. The price of PK-1121
(Kainat) used in Saila was Rs.1700-2300 per 40 kg during early season of crop harvest. While
the wholesale price of its parboiled was Rs.5000-5700 per 40 kg during early October, 2018.
The price of Saila is normally more by Rs.250-300 per 40 Kg than 'Katcha rice'.
The exact grading is not determined for the paddy and rice products except purity of variety,
moisture content, head rice and broken categories of rice. The supply chain limitations of
paddy of ‘Kainat’ (PK-1121) are similar as explained in Cluster-I, but inbuilt bottlenecks of its
processed products (Parboiled/ steamed) include rancid of stored grain---aging lead to
rejection by the consumers, resultantly reducing its demand and price.
Processing through passing the phases of drying, storing and milling to recover quality
products of Katcha and Saila rice each have distinct channels to pass through in value addition
phases. In the process, the importance of efficient technology of mechanical dryers as well as
rice sheller mounted with upgraded Saila rice making plants are necessary to yield quality
products to meet consumers’ demand and as fetch good price.
REAP representative said that the process for quality finished rice starts from paddy
procurement. The paddy is procured and dried and then kept under silos for effective storages.
It is then cleaned, husked, polished, graded and then packed for exports. The value-addition
of rice ranges from 100 percent to 140 percent. The paddy of basmati is procured at $450/
metric tonne while it is exported at around $1000 PMT. Parboiled and steamed is exported at
around $1200 PMT. (Web portal information, December, 2018).
5.10. International Trade and Quality

As noted earlier, the relative annual basmati rice export share of Pakistani basmati rice is
declining significantly vis-a-vis increased share of India. The demand is increasingly shifting
toward ‘Saila Chawal‘ rice internationally more particularly in the Middle Eastern consumers
as well as locally especially among the commercial catering service providers (‘Pakwans‘).
Mandatory quarantine requirements of importing countries pertaining to food safety standards,

traceability traits, HACCP, SPS, TRIPS, etc., are becoming increasing one of the major
obstacles in entering into free markets for both Katcha rice from Cluster-I and Saila rice from
Cluster-II. Only few Pakistani companies are liable to meet the desired standards. The quality-
control responsibility for rice trading from government to government is on the shoulders of
Trading Corporation of Pakistan (TCP). The quality issues in trading with the private parties is
dealt by the Rice Exporters Association of Pakistan (REAP). The quality control issue between

private parties of importing and exporting country may sometime leads to mistrust. The quality
issues in rice, like aflatoxin infestation, residual effects of pesticides/weedicides, etc. may be
resolved through quality-based contract with farmers’ organization, giving more responsibility
to REAP, and linking export with internationally accredited laboratories in the country.
Transportation network is reasonably satisfactory due to good cargo facilities of vessels/trucks

by road and bogies by railways, ships by sea from Karachi/Gwadar --- more improvements
are in progress upon the completion of CPEC project --- from the rice processing zone to the
consumers' regions locally as well as overseas (via dry ports within country and to the Karachi
port).
Several brand names in export of rice have been stablished brand in packing of 1, 2, 5 and 10
kg. However, majority of companies are trading as non-branded product in bulk lots. The
branded products are earning better reputation as well as higher price than the non-branded
products.
The major constraints being faced among the rice exporters that hinder free trading are
complex procedural formalities including rules and regulation especially for food safety
measures varied for different importing countries, and import/export duty charges, etc. To
overcome these constraints, Standard Operating Procedures (SOPs) be designed for
assurance of quality control mechanism acceptable globally.
Aggressive strategies and advertising propaganda are lacking by the responsible

organizations of Pakistan for trading rice products especially, basmati rice export. Thus, the
country needs artifact export lead polices, mobilizing of commercial attaches posted abroad,
revisiting REAP and TDAP joint efforts in boosting export orders and searching of new export
markets especially for basmati rice and its by-products to regain its share in the basmati export
market. Moreover, this exercise must support to break the negative inertia created globally by
Indian exporters.
On top of all, like the Indians, there is an urgent need of adopting the aggressive promotional
campaign of Pakistani brands especially in Saila of Kainat for rapid reception amongst the end
users through different means like launching international food contests in food street galas,
rice catering outlets-vendors, restaurants, marriage halls, food streets and others. This type
of efforts will definitely promote the basmati rice products’ marketing domestically as well as
globally to fetch value addition for the kitties of all stakeholders starting from farmer to
consumers.
5.11. SWOT Analysis

5.11.1. Overview
The SWOT analysis was carried out with the focus group discussions housed in Kalar tract
basmati rice producing clusters. The findings were synthesized through employing the
grounding theory of qualitative and quantitative approaches. A list of potential questions was
used for staying on track. Each targeted question was completed through querying and keeps
on pondering until reaching at exhaustive point from the respective stakeholder in terms of

strength, weakness, opportunity and threat pertaining to the aspects of basmati rice value
chain. The detailed proceedings of the discussion are presenting in the following section.
5.11.2. SWOT Analysis for the Clusters
Both of the basmati rice clusters have their unique strengths, weaknesses, opportunities and
threats, the details are illustrated in Table 11. The salient features of these clusters are
suitable ecological mainly due to enabling sun light, temperature, natural precipitation, sweet
ground water, irrigation network through canals and tube wells, soil types, farmers’ expertise
gained from past generations, physical location of the crop area near to roads, markets,
processing mills, etc. Some major threats came up in the SWOT analysis are: i) rice straw
burning leading to environmental pollution triggers smog problem during winter, ii) lodging in
Super Basmati in Cluster-I due to imbalance use of nutrients and pest attacks, iii) overuse of
pesticide lead to added costs and residual effects, iv) stagnant or even declining total factor
productivity due to lack of organic matter as well as other micronutrients, v) problem of
aflatoxin manifested due to green crop harvests, vi) declining export trend of Pak. basmati rice
due to change in consumers’ demand, un-competitiveness due to low productivity; changing
consumers’ taste preferences and convenience of catering service providers, vii) lack of
sufficient R&D funds as well as laxity in the release quality basmati varieties/seeds superior
than Super basmati, viii) inefficient processing of rice sheller mills as well as for preparing
Saila rice, etc.
Table 8: SWOT Analysis of Basmati Rice Value Chain in Pakistan

Areas Strengths Weaknesses Opportunities Threats
Environment/Cli  Clayey (Heavy) and  Drought and  Climate change  Heavy monsoon
mate Change maira (Loamy) soil floods cause induces to rain falls
texture, hot and biotic and abiotic productivity gain of occasionally
humid climate, and stresses, rice by increasing cause floods
mildly & well drained encourage the temperature, as leading severe
lands in both different types of a result of global damages to the
clusters "Katcha pest attacks and warming. rice crop (i.e., at
Chawal" (Brown- pathogen  Occurrences of early/late stages
white-single/double infestation floods bring new of growth and
polished/ silky Rice) incidents leading area under rice maturity.
and "Pucca Chawal" to significant crop.  High moisture
(Saila (parboiled)- productivity content in the air
steamed rice). losses and presence of
 Suitable for Basmati green seeds in
rice cultivation. the harvested
 Sufficient canal & paddy trigger
suitable Tube well Aflatoxin
irrigation supplies infestation.
 Loss of
biodiversity due to
over-utilization of
harmful
chemicals.

 Add in
environmental
pollution due to
pesticide use, it
further degrades
soil and water
bodies when
chemicals
leached down.
 Paddy straw
burning cause
environmental
pollution - develop
the problem of
smog in winter.
Inputs Supplies  Easy accessibility to  Non-availability of  Already established  Shortage of

reliable input supply quality basmati soil testing labs in irrigation water at
system including rice seed, lot of the rice growing the critical stages
fertilizer and mixing noticed of areas of Punjab can of crop growth
pesticide/ herbicide fine varieties by play a major role in count a lot
through many the private providing their towards reduction
National/ vendors except services on in crop yield.
Multinational few companies. affordable payment  Use of
Companies.  Rice growers’ basis, via matching adulterated or
 Healthy competition knowledge not the input use vis-à- expired pesticides
exists among updated about vis with the present creates
chemical firms to the quality and soil nutrient inefficiency
supply and promote brand of condition status towards inputs
their respective appropriate prevailed. output impacts as
products to control inputs.  In the surrounding well as cause
pest and weeds  Lack of on time areas of basmati harmful effects on
infestation problems availability of rice crop, soil, output and
erupts from time and quality inputs at burgeoning trend of water bodies.
again. control prices poultry & dairy farms  Injudicious use of
 Insured inputs including, observed to feed chemicals
supply from the fertilizer, increasing rural and especially
tobacco companies pesticide/ urban population--- residual effects of
due to contract herbicide, zinc resulted to up pesticides and
farming and other scaling the biogas nitrates are
important plants (energy) and becoming major
micronutrients. its byproducts threat to supply
including slurry/ clean water and
 Declining soil
manure applied for survival of
productivity
arresting the biodiversity and
observed over
declining organic on top of the
time mainly due
matter in the fields health of mankind
to depletion of
as well as supply of
organic matter
bio-gas for
along with other

micro and macro household energy
nutrients. consumption.
 Limited  Introduction of
availability of mechanization in
certified, quality, farm operations like
and pure plowing, seedling
improved fine rice transplanting,
varieties harvesting and
seed/seedlings threshing.
(e.g., Super, PK-  Developed
1121, Kissan, backward linkages
Punjab and like, Agro-industry
Chenab farm equipment and
Basmati). chemical
manufacturing
promoted.
 Seed Act 2015-
obligated to Agri.
Departments to
establish and
promote certified
seed, seedlings/
nurseries, and gain
an opportunity by
running its
entrepreneurship
through declaring
industry status i.e.,
tantamount to
cluster develop.
Cluster  Large number of  Small and  More awareness  Lack of trust
Interactions farmers present in marginal farmers and empowerment between
both clusters (i.e., are frustrated due training warranted stakeholders ---
"katcha" and to misusing of about the institutions damages to the
"Pucca") but where their membership who look after the institutional
the associations facilities like interest of all transparency in
(especially NRSP) purchased input farmers especially mutual business
present get good on credit by the the deprived ones. deals.
services from the influential and  More need-based  Lack of harmony,
private infrastructure large farmers. trainings from the communication
and pool their  Most farmers’ resource and integration
resources to fetch associations are professionals of all amongst the
good returns. inactive. stakeholders stakeholders of
 Informal credit facility  Lack of engaged in good basmati rice value
available for the interaction production chain actors.
purchased inputs to observed practices, post-
the needy growers between the harvest
from the commission farmers, management,
‘Arthi’/commissio marketing

agents though at n agents, paddy intelligence, trading
higher interest rates. processors and and matching the
traders, and even quality with the
between farmers, consumers’
researchers and demands.
extension
workers.
 Each stakeholder
tries to conceal
the facts from
others.
Production  Enjoys local  Ecologically  Extension of quality  Health hazard
Management comparative Suitable of any lab. Testing facilities problems
Practices advantage in other major crop warranted on no occurred to the
cultivation of cultivation in profit no loss basis chemical users
Basmati rice. kharif season -- for soil, water, and hefty cost
 Farmers exhibiting non-profitable quality testing of have to bear by
age old generation except some paddy products as the consumers
expertise and vegetables. well as chemical due to imbalance
knowledge for  Lack of brands. and heavy doses
production of paddy knowledge about  Rice cultivation of pesticides
crop. the application areas’ soil applied on paddy
and possible productivity of crop.
 Fairly good services
of plant protection impacts of using Punjab especially  Heavy windy
advisory services micro/macro ‘kalar’ tract is rainfalls at the
and processing nutrients declining steadily--- early and maturity
facilities available in especially zinc, design tailored stage of crop
rice belt from private boron and potash farmers’ trainings on growth increase
sector. on the quality of maintaining long- the risk and
grain kernel and term soil fertility uncertainty to
 Occasionally govt.
productivity of management harvest good
support schemes in
paddy. through adopting crop.
collaboration with
 Less knowledge various crop
potential donors
about the rotations with the
placed for paddy
importance of perspective of weed
maximization
using balanced control, nitrogen
through outreach
fertilizer doses in fixation and organic
demonstrations and
paddy production matter building.
media manifested
– status  Awareness trainings
manifested management about
through the paddy related
observing farm machinery use,
frequent lodging maintenance and
of super basmati safety and
crop on maturity. acquisition on
 Absence of laws/ affordable prices
penalty/ standard through provision of
operating tax holidays or
procedures subsidy system.

(SOPs) about  Scope of higher
plantation of yield Potential
banned varieties, existed through
planting/ abridging gap.
harvesting and
moisture content-
based pricing
mechanism of
paddy products
Transportation  Mostly appropriate  High diesel cost  A lot of scope  Uncertain/ risks of
farm to market road makes the available to improve road accidents of
network present. transportation the mode of haulage trolley mounted
freight higher through packing tractors
 Tractor mounted
leading to reduce paddy in sacks numerous—prone
Trollies used for
farmers’ profit instead of carriage to death or sever
transportation from
farm to market. margin. in, open lot, trolley in injuries
order to reduce
 No quality damage  No feasible
alternate losses while
reported during
transport works transportation.
transport.
except tractor
mounted trolley
due to condition
of road’s network
from field to
nearby markets.
Marketing  Marketing and  Significant gaps  An effective  Increased free
paddy procurement observed in marketing laws entry of paddy
system well offering of paddy provision demanded growers in the
established in the products’ prices to implement in market increase
vicinity of rice belt among different letter and spirit --- the competition at
mainly through the commission reduce the farmers’ the cost of higher
regularized agents/ brokers exploitation in the rejection rate of
commission agents at different hands of ‘Arthi’ many marginal
(‘Arthi’) and/or nearby markets  Scope of marketing paddy products’
brokers (‘Pharia’). for the same information system growers, and their
 Large number of variety and grade promotion present produce may
buyers and sellers of paddy. through inking the fetch very low
of paddy and  Auctioning in the agreement with prices not even
products in a wholesale market electronic media meeting cost of
market. with visual including Cell phone production.
 Farmers’ loyalty inspection of the companies.  Low receipt of
often observed to paddy lots  Financial support by marginal paddy
sell their paddy without gauging the commission prices leads to
produce from where moisture content agent to the paddy malpractices by
one sought the loan with moisture growers may be the farmers as
to purchase meter. effective and well as traders
necessary inputs  Farmer instrumental to through mixing
including seed, exploitation by maintain quality the rejected non-
fertilizer, pesticides, commission harvest through descript varieties

fuel/ electricity bills, agents, who entering into with the similar
etc. sought advance contract agreement superior quality
loans to purchase (including buyback rice products.
inputs via and input supply  Illegal trading or
deducting high through technical smuggling a
commission supervision) with the major threat
charges (i.e., growers. through the
upto 7% against neighboring
produce value) country borders
as well as especially Iran &
offering low Afghanistan in the
prices against the absence of
produce. materializing the
Moreover, these advance orders.
farmers also
bounded,
ethically, to sell
their produce to
the same ‘Arthi’.
Trade/Export  Fine quality basmati  Rising costs of  Up gradation of  Sharp declining
rice with special production due to existing quality labs trading trend of
characteristics like continuous up to conduct desired Pakistani basmati
aroma, slender surging of factors tests as well as rice in
kernel and of production setting up of new international
elongated grain size including: high labs meeting the markets mainly
after cooking always inflation, rupee’s standards of due to loosing
fetch premium price devaluation, internationally trade
locally as well as rising gasoline, accredited and competitiveness
globally. electricity agro- approved labs. especially with the
 Quality/nutritious chemicals prices  Introduce more high introduction of
conscious and labour value added and more cost-
consumers may like charges. internationally effective high
to pick from the  Food safety and registered yielding Indian
available shelves of traceability patented/branded fine rice variety of
diverse rice products standards of rice products for Pusa series
including ‘Katcha importing earning maximum (‘Kainat’) as well
Chawal’ of brown, countries (i.e., revenue through as aggressive
white and silky rice Aflatoxin local sale proceeds marketing tactics
& ‘Pucca Chawal’/ presence, SPS, and foreign adopted by the
parboiled (‘Saila’) HACCP, Global exchange, e.g., bran Indian traders.
and steamed rice. GAP, EuroGAP, oil, baby foods,  High cost of
 Consumers in low TRIPS, etc.) animal, poultry & investment on
income brackets especially Europe fish, feeds and establishing
may enjoy the and Japan --- cosmetics. accredited labs of
quality, nutritious major obstacles  Upgrading the rice international
dietary dishes with to enter into high- shelling mills standards, and
pleasant fragrance valued global exhibiting technically lack of awareness
through picking low markets. and economically amongst the
priced out of the  Presently, efficient operations stakeholders,
available multiple numerous rice in order to compete especially paddy

range kernel sizes of shelling and meet growers, traders,
broken basmati rice machines international processing mill
products viz., 3/4, installed in the standards owners, etc.
2/4, 1/4 depending rice belt but  Lack of stringent
upon consumers’ mostly running quality control
affordability levels. under capacity, measures and its
 Pakistani rice and economically legitimacy
traders including as well as effective for the
public and private technically trading
companies exhibit inefficient due to commodities in
trading potential of obsolete consonance
marketing/ exporting processing mills between the
the quality paddy trading partners
seed of fine and locally and
coarse varieties globally.
locally as well as
globally
Processing  Well established Notably large  Up gradation and/ or  Quality
age-old easy access number of rice replacement of processing of
to paddy processing mills in the area milling technology, Pakistani basmati
(de-husking mills) in low operating especially for rice products of
facility in the rice inefficiency due parboiled and parboiled and
belt of Punjab. to using obsolete steamed processing steamed rice is
 Abundant supply of technology of rice plants mainly fetching low
modern rice polishing as well because of its high revenue as
Sheller/mills and as traditional demand locally and compared to
processes plants in modes of par- internationally. Indian products
the rice growing boiling and  Sustainable demand due to known and
belt. steamed for quality rice may unknown reasons
facilities. be assured through --- in depth
 The rice recovery up scaling more analysis is wanted
rate was severely efficient milling to unveil critical
damaged at technology in line causes.
harvesting stage with global SoPs,  Basmati rice
due to using old SPS and other WTO producers’
wheat combines quality compliances, earning share is
for rice branding, patenting relatively low than
harvesting for fetching higher all of the
resulting in prices stakeholders
higher broken involved in the
rice ratios to value addition
head rice while chain of rice
processing rice processing
by the mills. industry

6. CHALLENGES FACED BY
BASMATI RICE CLUSTER
6.1. Fast Loosing Competitiveness
As noted earlier, the major threat to the basmati rice clusters, especially to Katcha Rice-
Cluster-I production, is the stiff competition with India in traditional international markets. The
changing consumers’ behaviour from aromatic basmati towards long-grain non-aromatic
basmati has resulted to plummet the export of aromatic basmati rice from Pakistan. These
developments in aromatic rice may completely wipe out Katcha-Basmati Cluster-I, if serious
efforts are not made to improve its competitiveness. The cluster has inherent disadvantage as
its yield is relatively lower when compared to the non-aromatic basmati rice while it fetches
almost same or even lower price than the Pucca rice. When compared with Indian, overall
performance of Indian basmati varieties is relatively better as it gives about 53% higher yield
than that of currently grown basmati varieties in the Pakistani Punjab (Bashir et al., 2018;
Grover et al., 2014; Government of the Punjab, 2017). According to the farmers, Super
Basmati is also gradually losing its yield potential.
The Pucca-Rice Cluster-II production also faces tough competition with India in international
market. For the last two decades India has been ahead of Pakistan in releasing better yielding
non-aromatic basmati rice. The latest comparison shows that the Pusa varieties like Basmati-
1509 yields about 26% higher at average farmers’ field than Pakistani PK-1121 (Kainat)
variety. Overall, India has developed better parboiling technologies, while in Pakistan the
efficiency of the technology is mixed. According to farmers, the PK-1121 is also gradually
becoming vulnerable to many diseases.
To become competitive in basmati rice, Pakistan has to resolve technological, institutional,

and economic issues in modern technology dissemination and adoption, improve the value
chain management, diversify the rice-based manufactured product, and encourage an
offensive drive to introduce its branded products. Some of the technology and institutional
issue are further elaborated in the following sections.
6.2. Shortage of Planting Labour

In rice production, nursery raising and its transplantation is one of the most labourious and
one of the major variable cost items. The period for this activity is June-Jul --- the hottest
months of the year. Because of the good non-farm employment opportunities available in the
area, the prevailing hot season and high hot-humid condition of the paddy field, the shortage
of planting labour has increased wages and production costs. This increasing cost, unless
resolved through technological innovation, may further deteriorate the competitiveness of rice
production in Pakistan.

6.3. Improved Management Practices
In both basmati rice clusters, achieving fast diffusion of improved management practices is a
big challenge because of considerable variations in soils, quality of surface and ground water
available and socioeconomic profile of the farming community in the area. Moreover, supply-
driven, bureaucratic, and top-down orientation of the extension system in the Punjab makes it
difficult to bring a change in the existing practices and diffuse optimal agriculture management
practices to farmers (Ali et al., 2018). A large number of demonstration plots which are planned
and implemented by farmers’ organization but supervised by experts would be required to
promote optimal crop management practices under different socioeconomic conditions in each
cluster.
6.4. Shifting to Kubota Type Rice Combine

Harvesters
Too much manual paddy handling creates problems both in quality and quantity (NAPHIRE,
1997). Harvesting and its related handling operations are significant points in the post-
production sequence because grain losses can be incurred (Samson and Duff, 1973).
The gradual shifting from manual to mechanized paddy harvesting in the rice-wheat area of
Punjab dates back to the introduction of Basmati-385 when it had significantly higher yield
compared to Basmati-370. The shortage of harvesting labour emerged as a major problem.
The introduction of wheat combine-harvesters for paddy harvesting rescued the farmers,
despite paddy and straw losses at harvesting and increased percentage of broken rice at
milling. Secondly, the farmers have to either burn paddy straw and left-over stubbles in the
field or utilize disc plows for preparing their fields for wheat plantation. The burning of rice in
the field also created smog problem causing pulmonary diseases. The introduction of wheat
straw chopper has provided another alternate. Despite these disadvantages, the shifting to
mechanical harvesting was fast.
Recently, however, with the increasing concerns on the environmental impact of agriculture
production, especially with smog, and high cost of the existing wheat combined harvester used
in basmati, in terms of high broken percentage, changing basmati rice harvesting and
threshing method has become essential as well as a challenge for basmati stakeholders and
policy makers.
6.5. Aflatoxin Issue in Basmati Rice

The aflatoxin (AFs) contamination in domestic as well as export-quality grains is an important
public health concern. Rice is highly vulnerable to fungal contamination owing to its cultivation
in extremely wet field and harvesting in warm and sometime humid season (Sales and
Yoshizawa, 2005). Delays in drying, incomplete drying, or uneven drying of harvested rice will
result in quality and quantity losses, including yellowing and discoloration, reduced milling
yields, loss of seed germination and vigor, and damage caused by insects that are more active
at high moisture contents (IRRI, 2009).

The first warning shot about aflatoxin was heard in early 2006 when European Union rejected
the rice consignments due to high AFs contamination (Saeed, 2006). Later, several studies
found positive aflatoxin in various types of rice samples and AF-B1 the most frequently
occurring contamination in Pakistan (Reddy and Waliyar, 2012, Firdous et al., 2012, Asghar
et al. 2014 and Mukhtar, Farooq, and Manzoor, 2016). Due to improving awareness among
advance country and urban consumers, this situation may cause a serious threat to the rice
sector especially for its export.
6.6. Diversification of Processed products

Pakistan until recently has concentrated only on basmati aromatic (Katcha) rice. However,
with tough competition with India, the single commodity value chain will not work. To become
competitive, Pakistan has to diversify its basmati-based value chain product. Rice bran oil
presents one such opportunity. This is also necessary because India is already extracting and
exporting rice barn oil which has given an additional competitive advantage to the value chain
stakeholders.
Rice seed or the paddy kernel is covered with two layers: bran (the inner layer) and husk (the
outer layer) (Figure 8). Paddy becomes rice only when the two layers are removed properly
through milling. During milling, first brown rice is extracted by removing the husk from paddy,
leaving the bran layer intact around the kernel --- this process is called “husking”. In the second
step, the bran layer is removed by polishing machines that rub the gains together under
pressure --- this process is called “milling”. The output is a polished white kernel or fine rice,
which is ready for cooking (Patil, 2011; TDAP 2010). In general, the term rice milling implies
both husking and milling.
Figure 5: From paddy grain to rice bran to rice bran oil
Pakistan has a great challenge to indigenize this technology; otherwise, the country will further
loose its competitiveness with India in basmati value chain. Bran oil extracting machinery is
costly for Pakistan as India is one of the leading countries in rice bran oil technology. Its’ per
litter cost is close to sunflower oil. Thus, currently bran oil extraction can be commercially
viable if it fetches as high price as sunflower oil. However, by indigenizing the technology, the
cost can be decreased significantly (for costs details of bran oil, See Annexure-6). Rice bran
oil can also be blended with other oils in many countries including India (The Express Tribune,
20th August 2014) https://tribune.com.pk/story/750936/innovative-concepts-setting-up-
pakistans-first-rice-bran-oil-plant/
6.7. Low Efficiency in Parboiled/Saila Rice

Production Technology
Parboiling means is precooking of rice within the husk. Parboiling makes rice easier to process
by hand, improves its nutritional profile and changes it texture. Removing the bran layer
manually is easier if the rice is parboiled, however, somewhat more difficult to process
mechanically. The bran of parboiled rice is somewhat oily, and tend to clog machinery. Most
parboiled rice is milled in the same way as white rice. Parboiling rice drives nutrients,
especially thiamine, from bran into the grain, making it 80% nutritionally similar to brown rice.
The starches in parboiled rice become gelatinized, making it harder and glassier than other
rice. Parboiled rice takes more time to cook, and the cooked rice is firmer and less sticky
(Sindh Board of Investment, 2010).
Realizing several advantages of parboiled rice, India has mastered not only in its processing
but also in marketing. As noted earlier, India used this product not only to expand basmati rice
market, but also to encroach on Pakistani basmati share. Pakistan came late in the par-boiled
rice technology and feel threat to further loose basmati market unless it gets mastery in
parboiling technology and marketing of parboiled rice. The efficiency of processing paddy into
Saila in terms of the quality of the produce and ratio of broken rice is low compared to India -
-- converging into higher milling costs. In addition to the yield gap between Indian and
Pakistani in non-aromatic varieties, the gap in the efficiency in parboiling cost must also be
closed.
Figure 6: Parboiled/Saila Rice Making Process

7. CLUSTER DEVELOPMENT
POTENTIALS
7.1. Dissemination of High Yielding
Varieties
RRI, Kala Shah Kaku has released three varieties in 2016 for general cultivation namely:
Kissan Basmati, Punjab Basmati and Chenab Basmati. These varieties, as claimed by the
institute, are better yielding as compared with Basmati Super. Moreover, they are early
maturing and have better head rice recovery and grain length as compared to Basmati Super.
Kissan Basmati has better average and cooked grain length than Super Basmati and PS-2.
Punjab Basmati being short stature and stiff stem is resistant to lodging. Chenab Basmati is
moderately susceptible to Bacterial Leaf Blight (BLB), Paddy Blast (PB) and Stem Rot. On the
other hand, NIAB, Faisalabad has also released two basmati varieties during the last 10 years.
These varieties have performed better in paddy yield in NURYT than earlier cultivated
varieties, and are 2-week early maturing as compared with Basmati Super. The variety is also
cold tolerant and can be planted in high altitudes. NIAB Basmati 2016 is also suitable for Kallar
tract. Noor Basmati is extra-long and early maturing as compared with Basmati Super and
other field varieties (Bashir et al., 2018).
The BLB, Paddy blast, stem borer, etc. are the major threat for Basmati rice. At present, some
mildly susceptible BLB resistant varieties are available. As per demand of REAP (Rice
exporters Association of Pakistan), PS-2 fine extra-long grain rice without significant aroma
has been approved in the recent Punjab Seed Council meeting held in 2018 with a new name
of PK-1121. Rice exporters did not wait for release of new variety and brought Indian extra-
long grain varieties to meet the demand for extra-long-grain. Recently Kainat-1509 and Kainat-
1401 brought from India are at adaptability stage at the farmer’s fields (Bashir et al., 2018).
These efforts in developing and adapting new basmati varieties, both aromatic and non-
aromatic, are commendable. Although, generally, it is claimed that the new varieties are higher
yielding as compared with Super Basmati. However, these varieties could not get popularity
among the farmer as Super Basmati is still the major basmati variety cultivated in Kallar tract.
Although, PK-1121 has been recently officially approved, but it has been already adopted by
majority of farmers in Pucca-Basmati Cluster-II. However, we believe that if new available
approved varieties are properly pushed through a campaign, the average yield in Cluster-I can
be increased by 10%, while 20% in Cluster-II. Higher anticipated potential in Cluster-II is
because of the higher gap between the experiment and average yield of Kainat type long-
grain (non-aromatic) varieties.
7.2. Shifting to Mechanical Rice Transplanting

At present, basmati rice is mainly transplanted manually. The desired plant population for
basmati rice is nearly 200 thousand. In a recently conducted survey, the average plant
population was found ranging between 124 to 148 thousands per ha compared to the
recommended level of 250,000 plants per ha.
Technologies are already available for mechanical planting. Several versions of Chinese,
Japanese and even locally developed transplanters are available in the market. It must be
noted the mechanical trans-planter as such is not successful unless the whole package
including nursery and field preparation, irrigation, and transplanting are promoted as a
package. The Agricultural Mechanization Research Institute (AMRI) Multan, Agricultural
Engineering Faculties and Departments in Agricultural Universities, and Agricultural
Engineering Institute of PARC are already trying to popularizing the use of mechanical rice
transplanting (Farooq et al., 2001).
Recently, few progressive farmers imported Chinese rice transplanters and have successfully
used it for rice transplanting in on a large area in Hafizabad district. They have established
success stories and some service providers have also now involved in the diffusion of
mechanical transplanting package in basmati rice farming communities.
The mechanical transplanting, as reported by few farming communities who have adopted this
technology, can save more than 82 percent labour and increase plant population by nearly 18
percent compared to manual transplanting (Bashir et al., 2018). It can be anticipated that
application of other inputs according to plant population shall certainly contribute in increasing
paddy yield in the area. Hence, it can be easily assumed that mechanical transplanting can
increase existing yield by at least 15%.
7.3. Improving Rice Crop Management

Practices
Significant yield gap of about 50% is observed between progressive and average farmers both
operating in similar localities (Punjab Agriculture Sector Plan, 2015). Earlier studies, especially
in rice in the 1990s, suggested that variation in the quality of farmers’ natural resources base
could cause part of the yield gap (saline or waterlogged land, for example, or poor-quality
water and substandard seeds), but a significant portion can be attributed to poor management
practices, indicating weaknesses in access to institutions such as information and input-supply
markets (Ali and Flinn, 1989 and Ali, 1995).
Farmers are cultivating rice since decades, however, when new technologies like varieties,
chemicals, management practices, etc. are introduced, their knowledge about latest
development in production technologies need to be upgraded on regular basis for sustained
productivity growth along with conserving agricultural resource (Ali and Byerlee, 1991).
According to the extension workers in each cluster, the farming community is already being
educated on the updated knowledge about day-to-day developments in crop farming through
electronic and print media along with demonstrating various technologies through
workshops/seminars/demonstration plots/farmers’ field days of the departments of agricultural
extension, agricultural advisory services, etc. However, results are not very effective, as it is
mostly supply driven (Ali et al., 2018). If advisory service is made more target and result
oriented, this can significantly improve the farm management practices and harness yield
potential. However, acknowledging the slow institutional change, we assume that only 5%
increase in yield is possible through improved management practices.

7.4. Introduction of Kubota Paddy Combine
Harvesters
Currently almost 80 percent of paddy harvesting is done by using combine harvesters initially
designed for wheat, which results in grain shattering and a fairly high proportion of rice loss at
milling stage in the form of broken rice, particularly in Katcha rice. Moreover, the basmati rice
straw is lost in the field.
The introduction of combine rice i harvesters (called Kabota) by some progressive has created
a great opportunity to address these issues. At present, this intervention is at infancy stage.
To diffuse this technology at a faster rate so that the entire paddy area can be served with
Kabota within five years span;, however, it will require certain incentives. But once adopted, it
can save at least 15% of the harvesting losses. This will not only result in saving farmers’ loss
of paddy due to shattering and rice straw in the field, but also address environmental issues
plus easy land preparation for the cultivation of following wheat crop.
7.5. Addressing Aflatoxin Issue by

Introducing Paddy Dryers
Keeping the paddy moisture-content between 14-20% and its temperature below 15oC are the
key to keep aflatoxin at bay and this activity needs to be done before rice grain reaches in the
hands of rice millers. However, paddy is harvested in Punjab during October and November
with ambient temperature is relatively low and relative humidity is fairly high, both of which
induces aflatoxin infestation. Moreover, farmers and traders prefer to sell wet rather than dried
paddy due to lack of their access on drying infrastructure. Some traders consider drying as
expensive and non-profitable business, although the claim needs to be proven (Swaskita,
2012).
In rice shellers, paddy is normally sun dried before husking. The problems of using sun-drying
floor are: i) needs more space, while land is becoming limited; ii) fully depends upon weather
condition, therefore, the frequency of hot-sunny days is low during wet and cold seasons; iii)
causes a higher loss due to animal and other disturbances; and, iv) results in low quality of
grain due to sudden rains, dust and other foreign materials contamination (Nugraha et al.,
2007; Swastika and Sutrisno, 2010).
However, new opportunities have emerged with the invention of solar drier. The use of
mechanical drying systems offers so many advantages over sun-drying like maintenance of
paddy quality, safe drying during rains and at night, increased capacity, easy control of drying
parameters and the potential for saving on labour cost. The solar drying can be provided to
Basmati Farmers Entrepreneur Groups (FEGs) at union council level, so that when paddy
comes from the field, it can be dried before it is delivered to traders or rice sheller owners.
This can not only improve the quality of rice, reduce post-harvest losses but also minimize
farmers’ exploitation due to arbitrary hand-felt method of moisture measurement by traders.
There is considerable scope for improving farmers’ returns by introducing paddy solar dryers
to farmers as they have to face price cut from 9 to 13 Rs./kg (which can be saved) if fungal

infestation is detected in their produce (Bashir et al., 2018). The benefits, constraints, and pre-
conditions for introducing solar driers are elaborated in Table 12.
Table 9: An Overview of Economic Benefits, Pre-Conditions, and Constraints of

Mechanical Drying
Sr. Economic Benefit Pre-Condition Constraints
No.
1. Increase market value of  Existing and significant price  Little differentiation of quality
(better quality) paddy differentiation for different in the markets
quality levels, must
 Little implementation of
compensate for drying cost-
standards
plus weight reduction
occurring during market
access
2. Secure income from  Significant discount for spoilt  Need to sell immediately
minimizing weather risks or wet paddy after harvest
 Discount do not cover drying
cost
3. Increase income from  Possibility of buying additional  Limited working capital
being able to process wet paddy
more grain in a given time
Source: Rice Knowledge Bank, IRRI, Philippines5.
Studies conducted in Thailand and Cambodia showed that the cost of drying in both countries
is equivalent to 4% of total paddy production cost. All the dryers that were successfully
commercialized in Vietnam have drying cost <5% of the paddy value. Case studies in other
Asian countries indicate that mechanical dryers with cost higher than 5% of the paddy value
cannot be introduced successfully (Rice Knowledge Bank, IRRI, Philippines). In feasibility
study carried out in Indonesia by Swastika (2012) revealed that the use of mechanical dryers
proved to be highly profitable compared to sun-drying at the floor. Paddy drying at farm level
using mobile paddy dryers is becoming gradually popular in India.
We assume here that the farmers will receive 20% higher paddy price after solar drying. Seven
percent of this premium will be due to the reduction in moisture content from an average of
25% to 18%, while 10% premium will go due to improvement in quality such as reduction in
aflatoxin and broken percentage. With these assumptions, farmers will receive additional
revenue of US$21.6 million in Cluster-I and 19.0 million in Cluster-II.
7.6. Improved Processing

Diversifying the range of basmati products like brown rice, single and double polished/silky
rice, and Saila/steamed rice can help Pakistan to gain its share in international market as
these products have high potential demand in national and international markets. For example,
Pakistan’s foods industrial sector, Matco Foods (Pvt.) Limited, Karachi has recently opened
5
[http://www.knowledgebank.irri.org/step-by-step-production/postharvest/drying/economic-aspects-f-drying]

up new avenues by diversifying the by-products of basmati rice through its operations and
now producing rice glucose and rice protein that are mostly used in pharmaceutical,
confectionery, juice and other such finished food products. The company has recently raised
Rs.757 million with total issuing of over 29 million ordinary shares. Since rice glucose is not
extracted from genetically modified (GM) food, it has huge demand in industrialized countries
where health-conscious consumers prefer it over glucose that is extracted from GM food.
Currently, Matco exports 75 percent of its rice glucose production to international markets
where it is priced at around $11,000 per tonne against a price range of just $400-500 per tonne
in the domestic market. Hopefully, future market trends are expecting to be rising bullishly, if
export policies and quality issues will be addressed appropriately.
7.7. Introduction of Rice Bran Oil Expellers

Rice bran is the thin layer between hull and white rice produced from the paddy during milling
(Figure-3). Rice bran is high in vitamins and nutrients, while its oil lowers cholesterol in healthy,
moderately hyper-cholesterolemic individuals. According to American Heart Association, rice
bran oil is the healthiest edible oil in the world.
Rice bran oil expelling relies on high quality rice bran oil expellers and its state-of-the-art
technology is available with India – though expensive. During oil extraction, rice bran is put
into the feeder of expeller. As the screw worm transports rice bran forward, the space becomes
smaller and smaller, thus squeezing rice bran oil out. The extracted bran oil seeps out though
a small opening in the bottom of the squeezing barrel, where rice bran oil cake cannot pass
through, thus, separating rice bran oil from oil cake. At present, two imported brands namely
Seasons Rice Bran Oil and King Bran Oil are marketed in Pakistan. Keeping in view the
interest of certain class of consumers, there are chances of popularizing it on the lines of
Canolive and Corn Oil in Pakistan.
Our estimates show that sufficient quantities of raw material, i.e. rice bran, is available in the
area and at least two such units can be installed in Cluster-I. These plants can produce over
447 tonnes of rice bran oil to arrest the target of about 900 tonnes of rice bran product. If
properly popularized, these supplies of bran oil can be domestically consumed which can give
a big relief to the edible oil import in the country and save huge foreign exchange. Some of
these supplies can also be exported which can earn foreign exchange earnings. However, for
this proper financial and technical support to the private sector would be needed. One
technical issue is that the bran must be used in oil extraction within few hours after it is
produced during rice milling, otherwise oil quality in it gets deteriorates. However, there are
several technologies available to preserve the bran for several weeks with simple technologies
like heating and using chemicals.
7.8. Improving Parboiled/Saila Processing

Technology
As noted earlier, the demand for parboiled/Saila rice in Pakistan and abroad is increasing due
to its widespread uses in various dishes served in hotels, restaurants, marriage halls and the
vendors. The price for Saila rice is also higher than the Katcha rice in domestic and
international markets. The reason reported is relatively easiness in cooking compared to

Katcha rice. According to the cooking experts, while cooking Katcha rice, the quantity of water
used should be according to the age of rice, whereas such problem does not exist with Saila
rice. After cooking, the Pucca rice looks more separated and longer thus attractive. On
production side, the soaking, heating and drying methods in Katcha rice are old fashioned and
carried out manually before selling it for milling. Moreover, farm yield of Saila (Kainat) rice is
higher than the old aromatic basmati rice.
These changes in market and technology have created significant potential for all stakeholders
along the basmati value chain for increasing the proportion of Saila rice and upgrading the
Saila processing technologies. Our consultation with stakeholders suggests that currently
about 60% of Kainat produce in Cluster-II is utilized in Saila processing, which can be
increased to at least 80% to utilize almost all the Kainat production in the cluster. It means the
focal point of Cluster-II (just district Hafiz Abad) has the potential of producing additional of
over 64 thousand tonnes of Saila.
The continued increasing demand for Saila in the Middle East and within the country suggests
that additional supply can be absorbed in the national and international market. The
upgradation of Saila processing technology shall reduce Saila rice manufacturing cost, which
is currently expensive compared to katcha rice. Moreover, incentives in establishing Saila
manufacturing plants shall help the private sector to not only meet the national and
international demands but also to compete with India in the Moiddle East. Raising the
proportion of Saila rice to 80% in Cluster-II will generate additional revenue to the processor
to the tune of US$9.68 million assuming it fetches higher price of US$148 per tonne compared
to the katcha rice.

8. CLUSTER UPGRADATION PLAN,
POLICIES, AND STRATEGIES
8.1. Plan
After reviewing the constraints and potentials of basmati clusters, targets are fixed with the
consultation of stakeholders: The purpose of whole exercise is to develop a research-based
cluster development plan for basmati rice to achieve the targets presented in the following
Table.
Table 13: Targets of Basmati Rice Cluster Plan

1. "Katcha" Basmati Rice-Cluster-I: Increase yields by 10% from the current base
to over the five-year period through improved varieties.
"Saila"- Parboiled/ Steamed Rice – Cluster -II: Increase yields by 20% from the
current base to over five years through improved varieties.
2. Increase in yield by 15% through the introduction of mechanical transplanter on
50% of the area in both clusters
3. Increasing yield by 5% in Cluster-I and 12% in Cluster-II through improve
management practices.
4. Reducing harvest and post-harvest losses by 62% (from 13% to 5% in both
Clusters) through appropriate harvesting and drying technologies.
5. Improving quality of the product by introducing proper drier at the farm/service
providers/market level to yield aflatoxin and dumping free product that can add
about 25% price in the original price of paddy in both the clusters.
6. Utilization of most of the rice bran in brain oil manufacturing in Cluster-I through
incentivizing oil expeller.
7.
Increasing processing of Saila rice and its proportion as compared to the katcha
rice to meet the international rising demand of the former.
8.2. Policy Reforms

The policy makers must realize that direct income subsidy to farmers, like the one in 2016,
which cost billions of Rupees, will not improve the competitiveness of basmati rice production.
It must be stopped and the money should be channeled towards reforming institutions,
improving infrastructure, building capacities of the stakeholders for the purpose of improving
competitiveness of the sector. Any support must have clear target towards this goal and must
be continuously evaluated.
Firstly, there shall be clear long-term vision of the government about the basmati sector which
clearly sets policies and targets with respect to the type of basmati rice and its byproducts
including Saila, brown rice, rice bran oil, etc., the country should go in the future. The status
of the sector vis-à-vis industry must be clarified.

Secondly, basmati trade policies shall follow the long-term vision about the sector and be
proactive in view of the changes in international market. Efficient and possibly duty free trade
pacts with importing basmati rice countries, especially with Iran and Middle Eastern countries
shall actively be negotiated. Negotiation shall be made with Iran to convert Preferred Trade
Agreements (PTA) into Free Trade Agreement (FTA). Alternate more efficient banking
arrangements will be negotiated with Iran so that the trade is not affected by the American
sanctions. New basmati rice markets in Europe, Far East and North America shall be explored.
Thirdly, the R&D system shall be reformed to make it more responsive to resolve the issue
along the whole value chain. The private sector shall be encouraged to get engaged in varietal
development, especially in basmati hybrid where any innovation can be protected. The public
sector research institute shall move towards those issues which currently private sector is not
addressing, like developing efficient high-yielding Saila varieties that can compete with India
in productivity and quality, develop SOPs for efficient management practices to improve
productivity and sustainability, and provide cheap machinery models and SOPs for bran oil
manufacturing, efficient SOPs for Saila manufacturing, etc. The approval of varietal
development shall be made transparent and efficient. The system will be made financially and
administratively autonomous from the bureaucratic control and snags.
Fourthly, support shall be provided to organize Farmers Entrepreneur Groups (FEG) which
shall become the focal points for basmati upgradation Plan. The groups will become a key in
ensuring quality to millers and traders thus induce quality and price-based contract farming
with commission agents, traders and processors.
Fifthly, the public sector especially Ministry of Commerce will work with the private sector, like
REAP, in analysing the changing market demand trends in basmati rice and its quality
requirements in national and international markets and disseminate these to various
stakeholders like traders, mill owners, and FEGs.
Finally, any upgradation plan for basmati rice would require huge operational costs in terms
of additional inputs, machinery, technical skills, etc. that has to be borne by the stakeholders
themselves and usually not accounted in development plan. In the proposed upgradation plan,
financial system will be made to supply the loans to meet additional operating costs to farmers,
traders, processors, and other stakeholders along the value chain.
8.3. Formulation of FEGs

 At each union council level, Farmers Entrepreneur Groups will be organized with the
help of NGOs like NRSP who have main focus on social mobilization.
 Basic infrastructure like shed for collection point, room for storage and drying will be
built by the government although land will be provided by the FEGs.
 Management of the collection center will be through a hired manager by the FEGs
through consensus but initially paid by the government.
 All incentives and capacity building training would be channeled through FEGs.

 The members of the groups will be trained as demanded by the majority of FEGs. They
can pick any or all of the training modules including good agricultural practices, IPM
on pest especially weed management, setting up demonstration fields for variety
testing and good agricultural practices, mechanical drying of paddy, mechanical
transplanting, etc. These modules will be developed by the specially hired experts for
this purpose.
 The FEGs will also be given priority on specialized loans for the purpose of promoting
mechanization of the rice value chain.
 The groups will be encouraged to start quality- and fixed price-based contract with rice
mills and traders. The main responsibility of FEGs would be to ensure quality.
8.4. Reforming the R&D System

To reform the research basmati research system, US$ 1.85 million has been allocated, for
each cluster, to address issues related to Cluster-I and Cluster-II. This fund will be allocated
on output-oriented research project in each cluster. For the sustainability of any development
effort, the provincial and federal R&D system will be reformed on the following lines:
 From the total R&D funds, special funds will be confined to enhance research
collaboration between international universities and rice related research
organizations, like International Rice Research Institute (IRRI), Australian
Collaboration for International Research (ACIAR), etc. for sharing advanced
germplasm/nurseries and collaborative research on strategic basmati rice issues.
 Unfreezing and redirecting the cess funds for creating its Research Endowment Funds
for financing rice research activities in Pakistan. Some of the funds will go to FEGs to
conduct the group level activities, like seed and seedling production, training of
farmers, etc.
 The Commodity Board on basmati rice will be given more autonomy to decide and
monitor the research conducted in Rice Research Institute Kala Shah Kaku, NIBGE,
etc.
 The extension wing of Agriculture Department will be made more responsive to the
needs of the farmers, traders and processors. New dedicated and professionally
sound staff will be hired to implement the Plan. They will set up demonstration and
conduct training as per demand of the FEGs and trade and processors associations.
The quality and outcome of the training and advisory services will be monitored by the
stakeholders.
 Detailed and practical modules will be developed for the capacity building of farmers
for good agriculture practices like: i) testing the latest released basmati rice varieties
and other management practices on their own farm; ii) mechanical rice transplanting
for achieving recommended plant population; iii) periodic use of laser land levelers for
saving water and better pegging of better nursery plants during mechanical
transplanting; v) proper decomposition of Farm Yard Manure; vi) use of balanced

dozes of fertilizers; and vii) application of Integrated Pest Management, especially
weed management practices. These modules will be implemented as per demand of
FEGs through the private sector.
 Collaboration with local and international rice related organizations and universities
will be improved. International and local consultants will be engaged in conducting
trainings of the extension staff and researchers on strategic issues like bran oil
production, research on bacterial leaf, maintaining the quality of basmati rice during
production, drying, and processing, etc.
 Competition among researchers, extension agents and development partners will be

held for their best contribution in identifying and resolving the issues along the value
chain.
8.5. Enhancing Adoption of Recently

Released Basmati Varieties
During the field visit, it has been observed that a critical mass of seed dealers (mostly also
dealing with rice weedicides and insecticides) is present in both Cluster-I and Clusters-II.
These seed-cum-insecticide dealers can be purposefully engaged for providing certified seed
of latest released basmati rice varieties. However, in the backup, a well supervised and fully
certified system of seed production, grading and packaging system will be established. For
this purpose, the following measures will be taken:
 FEGs will select progressive farmers within the group for producing certified seed of
latest approved varieties under the direct supervision of scientists at Kala Shah Kaku,
NIAB, NIBGE and PARC as well as member farmers within the FEGs.
 The FEGs will be linked with the service providers of mechanical rice transplanting in
the area for supplying certified nurseries of latest released varieties to other farmers
in the rice belt of Punjab.
 Establishing nursery production centers which produce certified seed nursery on

scientific grounds within each FEGs and supply it to farmers on subsidized rate.
 Providing financial support to FEGs in engaging certified seed production and the
service providers of mechanical rice transplanting in the area. Financial incentives will
also be provided to the scientists extending their supervisory services in producing
certified seed.
 Provision of nursery of certified seed at subsidized rate during project period in order
to achieve early spread of modern basmati rice varieties on farmers’ fields.
 FEG member farmers will be trained for certified seed production and nursery raising.

8.6. Yield Improvement by Better Crop
Management Practices
To bridge the 50% yield gap between farmers and experiment station, following measures will
be taken:
 The skills of farmers and other stakeholders in the value chain will be continuously
updated on new emerging methods of cultivation. Incentives will be provided to FEGs
establish demonstration plots by the selected members of farmers in the group under
the guidance of experts of Agriculture Department and Universities on the issues the
group consider to be important. However, the FEGs will be made aware of the new
cultivation methods and their anticipated impact on yield and costs, such as DSR,
mechanical transplanting, optimum use of fertilizer, proper decomposition of manure
and its use, etc.
 The key staff of Extension Wings of Agriculture Department will be trained on the DSR
and mechanical rice transplanting for achieving recommended plant population,
efficient decomposition and use of farm yard manure, application of balanced dozes of
fertilizers; and application of recommended doses of plant protection chemicals. This
staff will train the selected members of FEGs on these issues as per their demand.
 Training of farmers and service providers on FEG demanded issues on modern

methods of rice cultivation.
8.7. Mechanization of Basmati Value Chain

Several opportunities exist to mechanize the basmati value chain which will be actively
pursued through the FEGs and the private sector. The increased operating costs of these
machines will also be facilitated by providing soft loans. Following specific strategies will be
adopted to mechanize the basmati value chain in each cluster.
8.7.1. Mechanical Transplanting
 Mechanical transplanting can significantly improve productivity by bringing optimum

plant population. Keeping in view the rising demand and interest of the farmers for
having mechanical rice transplanters, the interest free loans worth of about US$3.5
and US$2.3 million are assigned for Sheikhupura and Hafizabad clusters staggered
over the four-year period. A total of 79 and 52 mechanical transplanters will be
subsidized in Cluster-I and Cluster-II, respectively. These transplanters will be
preferably given to the members of FEGs or to the nearby service providers in the focal
point.
8.7.2. Mechanical Rice Harvester (Kubota)
 As noted earlier, the mechanical rice harvesters can significantly reduce the harvesting
losses and mitigate environmental pollution. Providing financial support to the

agricultural service providers of Kubota combined harvester by offering interest-free
loans by the ZTBL and other commercial banks in the area. The total number of
harvesters needed for the focal point of Clusters-I and Cluster-II would be 158 and 40,
respectively. The total interest free loans needed for this purpose would be US$11.7
and US$ 2.9 million respectively for Cluster-I and Cluster-II staggered on for four-year
period. These harvesters would be preferably provided to the FEGs and its costs and
benefits would be shared proportionate to the investment by the members. The nearby
service provided to each cluster can also apply.
 To popularize the Kubota-rice combine harvester, the paper industry would be

engaged for ensuring better prices for the extra available rice straw.
8.7.3. Introduction of Paddy Dryers at Farm Level
 The provincial wing of Agricultural Research and some innovative technological

services providers will be engaged to single-out the most successful dryer suitable to
our agro-ecological conditions and within the economic access of the farming
community in the area.
 Based on the recommendation, various types of dryers (e.g. mobile dryers, solar
bubble dryers, solar dryers etc.) already used in various countries in Asia will be
introduced in the focal point of both the clusters.
 A total of 290 driers in Cluster-I and 235 driers in Cluster-II would be sponsored in the
cluster focal points of each cluster costing US$12.9 million and US$10.4 million in
respective cluster. These driers would preferably be provided to the FEGs where return
would be proportionately shared according to the investment made by the members of
the group. Each farmer will be charged for the services rendered to him/her.
8.8. Diversification of Rice Value Chain

Diversification of rice value chain, especially in Cluster-I is very important due to the
declining demand for the main product, i.e., aromatic polished rice. As discussed earlier,
several opportunities may be explored, but strategies to promote rice bran oil are discussed
and Saila rice is discussed.
8.8.1. Introduction of Rice Bran Oil Extraction Unit
Installation of Rice Bran Oil Extraction unit is an intervention not being picked by the private
sector in Pakistan despite considerable quantities of rice bran is produced/available in the
Cluster-I. Moreover, India is successfully producing rice bran oil and exporting to the world; so
why not Pakistan? Following strategies are proposed here to install rice bran oil mills and
promote its use in the country:
 The government will provide interest free loans on four-year maturity basis to install
two rice bran oil mills,
 The import of all machinery used in bran oil production will be duty free.

 The rice mills will be given special tax incentives to install rice bran politicization plan
to stabilize the oil quality for several months.
 Farmers Entrepreneur Groups will be given priority for such loans.
 Side-by-side research will be outsourced to indigenize the bran oil extraction

technology by reverse engineering or making small sized units.
 The bran oil will be promoted among consumers through media campaign.
8.8.2. Upgrading Parboiled/Saila Rice Production

Technology
Keeping in view the rising prospects of marketing of parboiled basmati rice in domestic and
international front, there is a strong felt need to upgrade existing parboiled paddy preparation
technology in the Cluster-II where varieties suitable for parboiling are already grown.
 The production increasing intervention of Kainat in Cluster-II will provide increased raw
material for Saila making.
 As parboiled paddy production requires only three operations, i.e. soaking, steaming
and drying, the paddy drying intervention above will be dovetailed with Saila making.
The mobile paddy dryers will be introduced for Saila paddy manufacturing afterwards.
 Interest free loans on four year-terms will be offered to set up the new Saila plant in
Cluster-II.
 Special incentives will be provided to export Saila to Middle East to enable the traders
to compete with India.
 Saila consumption will also be promoted to consumers in domestic market.
8.9. Strengthening International Linkages

Pakistan lost the international basmati market mainly because of its poor international links
and lack of analysis of the international trends. The country has to pay a great cost for this.
To avoid this happening in the future, following strategies are suggested:
 A Market Research Cell will be established at REAP that will continuously analyse
the international trends in basmati rice markets in major basmati importing countries,
including total quantities imported, quality, prices, domestic production and prices of
basmati in Pakistan and India, technological development in the basmati sector
(production, processing, trade, etc.) in both India and Pakistan. The cell will also
forecast the market situation for short and long-run. These trends will be regularly
and timely communicated to the traders, research station, FEGs and advisory will be
issued for necessary action to all stakeholders along the value chain.

 Competition among traders will be held and awards will be given to best performing
trader groups.
 Study tours will be organized to explore new potential market and devise strategies
to explore these markets.
 Organize rice cooked dishes gala amongst international buyers of basmati rice.
 Branding of basmati produce will be encouraged through TDAP and REAP.
 Some international exhibition in the rice-wheat belt of Pakistan for the basmati rice
importers of the world with due arrangements for field visits and visits of the rice
processing mills for the trust building on quality.

9. FEASIBILITY ANALYSIS OF
UPGRADATION PLAN
In line of the above strategies, various interventions are designed to improve the
competitiveness of each cluster’s products. Consequent upon the field survey of the Kalar
tract are consultations with stakeholders --- farmers, commission agents (Arthi),
processors/rice mill owners, traders and public & private institutions --- we conclude that there
is discernable potential available for overall improvement in the performance of both clusters
in myriad ways. Based on this field work, six interventions are suggested in each cluster that
warrants improvements to boost efficiency of basmati rice value chain. These interventions
are:
1. Yield Improvement by Diffusion of Modern High-yielding Varieties
2. Gradual Shifting from Manual to Machine Transplanting
3. Yield Improvement by Better Crop Management Practices
4. : Introduction of Rice Combine Harvesters
5. Addressing Moisture/Aflatoxin Issues by Introducing Dryers at Farm and Market Levels
6. (a) Oil Extraction from Rice Bran - Katcha Chawal Cluster-I and
6 (b) Improvement in Parboiled/Saila-Rice Making Cluster-II
In this section, these suggested interventions along with their underlying assumptions are
explained. Their impacts on productivity enhancement, gross revenues, increase in costs, net
returns, and investment requires are estimated. Then Internal Rate of Return (IRR) and Net
Present Value (NPV) of the whole package of intervention are quantified. We also explained
these parameters for the Key Product Intervention, which is bran oil in this case, at the end of
this section.
9.1. Baseline Status or Prevailing Situation

9.1.1. Katcha Chawal Cluster-I: Benchmark
At present during 2016-17, basmati rice mainly aromatic is produced on 158.23 thousand ha
which supply nearly 290 thousand tonnes of basmati paddy in the focal district, Sheikhupura
of Cluster-I. The annual yield growth is estimated (based on recent past 17 years) to the extent
of 1.14 percent. It is worth noting that price of paddy as well as clean rice in the Cluster-I was
calculated as weighted price (i.e., based on the weightage allotted to super basmati equal to
70 percent and basmati-386 equal to 30 percent). Without any intervention, assuming the
existing growth rate in yield, the expected production shall reach to the level of 306.76
thousand tonnes worth valuing to the tune of US$115.77 million at the farm gate prices (i.e.,
@ 377.38 USD/t) during the 5th year of the project as benchmark level. The expected
production of clean rice from the basmati paddy would yield 199.40 thousand tonnes (@ 65%
recovery rate of clean rice from paddy) valuing worth 172.43 million USD at wholesale level
(i.e., price @ 864.76 USD/t) on 5th year of the project life (Table 10).
Table 10: Benchmark Status of the Katcha Chawal Cluster-I in Sheikhupura District
Sr.
Items Inputs Year-2 Year-3 Year-4 Year-5
#
1. Area under cultivation in focal point (ha) 158,230
2. Total production in the focal point area 289,840
(tonnes)
3. Baseline yield (tonnes/ha) 1.83 1.87 1.90 1.92 1.94
4. Annual yield growth without intervention (%) 1.14%
5. Annual expected production (tonnes) 296,472 299,864 303,294 306,764
6. Farm gate price of basmati paddy (US$/t) 377.38
7. Total value of basmati paddy (Million US$) 111.88 113.16 114.46 115.77
8. Existing clean rice-paddy ratio (%) 65.0%
9. Annual expected production of clean rice 192,707 194,911 197,141 199,397
(tonnes)
10. Price of clean rice at wholesale level (US$/t) 864.76
11. Annual expected value of rice (Million US$) 166.65 168.55 170.48 172.43
9.1.2. Pucca/Saila Chawal Cluster-II: Benchmark
The benchmark information about focal district, Hafizabad, in Cluster-II exhibits 104.41
thousand ha of land under basmati rice cultivation that produced 213.30 thousand tonnes of
clean rice (i.e., yield @ 2.04 t/ha) during 2016-17 year. The annual yield growth is estimated
as 1.14 percent (based on recent past 17 years). The expected production level of paddy will
reach to the level of 225.755 thousand tonnes worth valuing to the tune of 96.21 million USD
at the farm gate prices (i.e., price @426.19 USD/t) on arresting 5th year of the project without
any intervention. The expected production of clean rice from basmati paddy will recover to the
tune of 158.028 thousand tonnes (i.e., @ 70% recovery rate of clean rice) that become by
valuing worth 150.50 million USD at wholesale level (i.e., price @ 925.38 USD/t) by arresting
on 5th year of the project life (Table 11).
Table 11: Benchmark Status of the Pucca Chawal Cluster-II in Hafizabad District
Sr.
#
1. Area under cultivation in focal point (ha) 104,410
2. Total production in the focal point area 213,300
(tonnes)
3. Baseline yield (tonnes/ha) 2.04 2.09 2.11 2.14 2.16
4. Annual yield growth without intervention 1.14%
(%)
5. Annual expected paddy production 218,181 220,677 223,201 225,755
(tonnes)
6. Farm gate price of basmati paddy
(US$/t) 426.19

Sr.
#
7. Total value of basmati paddy Million 92.99 94.05 95.13 96.21
US$)
8. Existing clean rice-paddy ratio (%) 70.0%
9. Annual expected production of clean rice 152,726 154,474 156,241 158,028

(tonnes)
10. Price of clean rice at wholesale level 952.38
(US$/t)
11. Annual expected value of rice (Million 145.45 147.12 148.80 150.50
US$)
Intervention-1: Gradual Shifting from Manual to

Machine Transplanting
On average farmers are maintaining 55-65 thousand plant populations against the
recommended level of 120 thousand plant populations per acre. Low paddy plant population
may overcome by adopting different modes including the Direct Seedling Rice (DSR) and
mechanical transplanting. Recently, Rice Research Institute, Kala Shah Kaku, Muridke has
demonstrated DSR plantation on 8000 acres in the selected districts including Narowal,
Gujranwala, Sheikhupura, Sialkot, Khanewal and Lahore. The impact of this effort is not wide
spread due to several reasons viz., variation in soil type, water availability, varying outcomes
of the practice in different ecologies, technical know-how, etc. On the other hand, a successful
introduction of mechanical rice planter (Chinese/Korean make) through a private service
provider, without any government support, is already in practice on 2000 acres to maintain the
desired number of plant population density per unit land in village Verpal Chatta of Ali Pur
Chatta Union Council of Gujranwala District. The service providers are managing nursery
raising in required trays by themselves which are ready to transplant in field by rice
transplanter. This technology is more acceptable and popular among the rice growers where
it is tested and made known to them, but all other farm operations remain unchanged. The
available machine has manual calibration to adjust the plant population density as desired i.e.,
up to 120,000 seedlings per acre. Moreover, currently there is serious labour shortage at the
peak season of rice seedlings transplantation. Therefore, under this situation, the introduction
of rice transplanter as an intervention that may be feasible and widely accepted by the growers
of the area. The feasibility of mechanical rice planter is estimated in Annexure-7.
9.1.3. Katcha Chawal Cluster-I
In the feasibility analysis, it is assumed that the introduction of mechanical transplanter would
increase the per ha yield by 15 percent on the adopters’ farm at the end of 5th year of project
span and onwards. The gradual increase in yield of 3.75 percent of incremental rate per
annum is fixed starting from 2nd year through 5th year. In five years starting from 2nd year,
quarter of the total rice area will be planted by mechanical transplanters which would be
phased out with the incremental rate of 6.25 percent annually. As a result of adoption of
mechanized transplanting intervention, an additional production of 115.04 thousand tonnes of

paddy would be expected amounting to US$4.34 million at farm gate prices on the 5th year of
the project (Table 12).
Table 12: Yearly Returns of Mechanical Transplanting in Katcha Chawal Cluster-I

Sr.
Items Inputs Incremental Year-2 Year-3 Year-4 Year-5
#
1. Percent area to be covered by 25% 6.25% 6.25% 12.50% 18.75% 25.00%
transplanting
2. Yield improved by mechanized 15% 3.75% 3.75% 7.50% 11.25% 15.00%
transp.(t/ha)
3. Actual yield ↑ by improved plant pop. 0.07 0.14 0.22 0.29
(t/ha)
4. Added prod. by mechanized 695 2811 6398 11504
transplant (tonnes)
5. Value of addit. Paddy at farm gate (Mill 0.26 1.06 2.41 4.34
US$)
9.1.4. Parboiled/Saila Chawal Cluster-II
The intervention of introducing mechanical transplanters is also suggested in this cluster due
to same nature of issue, such as, low plant population density per ha, unavailability of labour
at the time of transplanting, etc. In the feasibility analysis of Table 14b for Cluster-II, similar
extent of yield increases and adoption rate is assumed as in Cluster-I. As a result of adoption
of mechanized transplanting intervention, an additional production of 84.66 thousand tonnes
of PK-1121 (Kainat) paddy (added Yield @ 0.32 t/ha) would be of expected value US$3.61
million at farm gate prices on the 5th year of the project (Table 13).
Table 13: Yearly Returns of Mechanical Transplanting in Pucca Chawal Cluster-II

Sr. # Incre-
Items Inputs Year-1 Year-2 Year-3 Year-4 Year-5
mental
1. Percent area to be covered by 25% 6.25% 6.25% 12.50% 18.75% 25.00%
transplanting
2. Yield improved by mechanized 15% 3.75% 3.75% 7.50% 11.25% 15.00%
transp.(t/ha)
3. Actual yield ↑ by improved plant pop. 0.08 0.16 0.24 0.32
(t/ha)
4. Added prod. by mechanized 511 2069 4708 8466
transplant (tonnes)
5. Value of additional paddy at farm gate 0.218 0.882 2.007 3.608
(Mill US$)

9.2. Intervention-2: Diffusion of Modern
High-yielding Varieties
As discussed earlier, a large number of recently released presumably high-yielding varieties
both for Cluster-I and Cluster-II are available, but they are not being adopted mainly because
of unawareness of the farmers. These varieties will be promoted through demonstration fields
conducted by the member farmers of FEGs under the supervision of the professionals from
RRI, Kala Shah Kaku and Universities. The seed production and nurseries for transplantation
will also be arranged by the FEGs.
The modern high-yielding varieties like Kissan basmati, Chenab, Punjab and Basmati-515 are
already approved but not adopted by the farmers. The varietal degeneration process of Super
Basmati (the Queen of basmati rice varieties) is reported to be quite high resulting in shrinking
and deforming the size of kernel, losing uniformity and stability in plant height and yield. Rice
researchers/bio-technologists of public (RRI, KSK, Muridke) and private institutions (Guard
Agricultural Research & Services Pvt. Ltd, Raiwind Rd., Lahore) are diligently engaged to
release, very soon, the promising varieties superior to super basmati, especially hybrid. In the
light of above discussion and assumptions, the feasibility study was carried out in Kalar tract
with the special interest to boost productivity of basmati rice through promoting “improved high
yielding basmati rice varieties” as an intervention in the focal district, Sheikhupura.
It is assumed here that the intervention would add 7 percent per annum productivity gain on
maturity of project (i.e., on and after 5 th year of project life) with 1.8 percent annual incremental
rate from 2nd year to arrest 5th year of project life span. The seven percent gain in productivity
would yield 0.14 tonne/ha of basmati paddy in 5th year. It was assumed that 50 percent area
of the focal district would be covered in the intervention with the incremental rate of 12.5
percent per annum effective from 2 nd year through to 5th year of the project span.
As a result of diffusion of HYV of basmati rice intervention, an additional production of 10.737

thousand tonnes of paddy would be expected amounting to US$ 4.05 million at farm gate
prices on the 5th year of the project. The interim production and its revenue results of 2nd
through 4th year may be viewed from the Table 17. Such additional production can easily be
absorbed in domestic market.
Table 14: Yearly Returns from Diffusion of HYV in Katcha Chawal Cluster-I
Sr. # Incre-
mental
1. Area replaced by modern basmati 50% 12.5% 12.5% 25.0% 37.5% 50.0%
HYV (%)
2. Increase in yield due to HYVs (t/ha) 0.03 0.07 0.10 0.14
3. Yield increase due to basmati HYV 7% 1.8% 1.75% 3.50% 5.25% 7.00%
(%)
4. Additional prod. due to diffusion of 649 2624 5971 10737
HYVs (tonnes)

5. Value of add. paddy due to HYVs (Mill 0.24 0.99 2.25 4.05
US$)
9.2.2. Parboiled/Saila Chawal Cluster-II
Under the prevalent situation of emerging global and national trend of enhancing consumers’
demand for Saila rice, the present feasibility study is prepared to boost Kainat production by
exploiting the upcoming HYV potential.
It is assumed that improved high yielding varieties of Kainat series will bring 20 percent
productivity gain on maturity of project i.e., on 5 th year of project life with an annual incremental
rate of 5 percent contribution staring from the 2nd year up to 5th year (i.e., 0.43 tonnes/ha). To
achieve 20 percent productivity gain in 5 years of project life on account of diffusion of HYV,
60 percent paddy area of the focal district will be covered in four phases with 15 percent per
annum increment staring from the 2nd year of the project. As a result, an additional production
of paddy will be fetched to the tune of 27.091 thousand tonnes (i.e., an additional yield @ 0.43
t/ha) valuing worth US$11.55 million on the 5th year of the project. The intervening production
and its revenue results of 2nd through 4th year may be viewed from Table 15.
Table 15: Yearly Returns from Diffusion of HYV in Pucca Chawal Cluster-II
Sr. # Incre-
mental
1. Area replaced by modern basmati
HYV (%) 60% 15.0% 15.00% 30.00% 45.00% 60.00%
2. Increase in yield due to HYVs 0.10 0.21 0.32 0.43
(t/ha)
3. Yield increase due to basmati HYV 20% 5.00% 10.00% 15.00% 20.00%
(%) 5.0%
4. Additional prod. due to diffusion of 1636 6620 15066 27091
HYVs (tonnes)
5. Value of add. paddy due to HYVs 0.70 2.82 6.42 11.55
(Mill US$)
9.3. Intervention-3: Yield Improvement by Better

Crop Management Practices
It is assumed that with an improvement in farm management practices like optimal use and
timing of inputs, proper weed control, etc. would add 7 percent in the yield with an annual
phasing of 1.75 percent effective from 2nd year through to 5th year in Cluster-I. This assumption
is set on conservative estimates, since it includes the farmers’ acceptable level of input use
practices adopted after yearlong experiences as well as knowledge gained through
agricultural extension advisory services including seed, fertilizer, irrigations, pesticides,
weedicide harvesting & threshing, etc.

The advisory services will be provided by specially hired and trained extension worker for this
purpose. About 106 additional professional extension workers in Cluster-I would be required
to render these services in the focal targeted sites of each cluster. Thus, additional production
of paddy to the tune of 21.473 thousand tonnes would be expected worth US$ 8.10 million at
farm gate prices on the 5th year of the project. The interim additional production and its
additional revenue results of 2nd year through 5th year may be viewed from the Table 16.
Table 16: Yearly Returns from Yield Improvement by Better Crop Management in
Katcha Chawal Cluster-I
Sr. # Incre-
mental
1. Yield improvement by better crop 7% 1.75% 1.75% 3.50% 5.25% 7.00%
mgmt. (%)
2. Yield increase by better crop mgmt. 0.03 0.07 0.10 0.14
(t/ha)
3. Additional paddy production by 5188 10495 15923 21473
enhanced yield (tonnes)
4. Value of addition paddy due to yield 1.96 3.96 6.01 8.10
improvement (Million US$)
9.3.2. Parboiled/Saila Rice Cluster-II
Here 70 additional dedicated professionals will be hired and trained to conduct the advisory
services. This will add into the productivity by 0.22 t/ha of Kainat basmati rice at the end of 5th
year of project life. Thus, an additional production of 22.8 thousand tonnes of paddy would be
expected amounting to US$ 9.62 million at farm gate prices on the 5th year of the project. The
year to year gain in additional production and its additional revenues effective from 2nd year
through to 5th year of the project due to employing improved management practices may be
viewed from the Table 17.
Table 17: Yearly Returns from Yield Improvement by Better Crop Management in
Pucca Chawal Cluster-II
Sr. # Incre-
mental
1. Yield improvement by better crop 10% 2.50% 2.50% 5.00% 7.50% 10.00%
mgmt. (%)
2. Yield increase by better crop mgmt. 0.05 0.11 0.16 0.22
(tonne/ha)
3. Add. paddy prod. by enhanced yield 5455 11034 16740 22575
(tonnes)
4. Value of additional paddy (Million 2.32 4.70 7.13 9.62
US$)

9.4. Intervention-4: Introduction of Rice
Combine Harvesters
It is observed that currently Kubota is used only on 15-20 percent of paddy cultivated area. Its
rental charges are Rs.4500-5000 per acre (takes 1.2 hour). The paddy straw harvested with
Kubota can be used for animal feeding, cut the stubbles at ground-level with little left-over
stubbles in the field to be burned. It also yields 81 -114 kg more production per ha by saving
losses, as well as, contributes towards lowering moisture contents than that of wheat combine
harvester due to its superior technology mounted with air fans for separating grain from rice
straw. Combine harvesters also damages to the kernel of the rice through developing cracks
in it and grain breaks on rice processing but with Kubota less cracks developed. However,
Kubota is not as efficient, in comparison, as combined wheat harvester when paddy crop is
lodged. This deficiency must be kept in mind while evaluating its feasibility as an intervention.
A care is needed while giving recommendation as well as interpretation of the results
pertaining to the performance of this technology. The economic feasibility of rice combined
harvester is estimated in Annexure-8.
Based on the information gathered from the service providers of wheat and rice harvesting
machines, on average, 500 ha could be harvested by the Kubota type rice combine harvesters.
The service charge for the Kubota machine is assumed to be 33% higher than that in wheat
combined harvester.
It is assumed that 13 percent post-harvest losses during wheat combine harvesting shall be
reduced to 5 percent at farm level after introducing Kubota rice combine harvester, making
net-effect of 8 percent phased out into four years with an annual increment rate of 2 percent
starting from 2nd year through 5th year of the project. We also assume that rice combine
harvester will be fully adopted in each cluster area in the project period (phased out with 20
percent per annum incremental rate on the completion of 5 year’s span of the project). Two
pronged benefits on adoption of rice combine harvester will be in the form of saving paddy
straw worth 7.53 million USD, and additional paddy of 22.43 thousand tonnes (i.e., worth of
8.46 million USD) making the total revenue of US$ 16 million towards 5th year of the project.
The annual details are portrayed in Table 21 pertaining of economic and feasibility analysis.
Table 18: Yearly Returns from Diffusion of Rice Combine Harvesters in Katcha Chawal
Cluster-I
Sr. Incre-
# mental
1. Current losses by harvesting rice
13%
with wheat combine harvesters (%)
2. Losses by rice harvesting with
5% 8% 2.00% 4.00% 6.00% 8.00%
Kubota rice combine harvesters (%)
3. % rice area currently harvested by
20%
using combine harvesting method

4. % rice area shifted to Kubota rice
100% 80% 20.00% 40.00% 60.00% 80.00%
combine harvesting (%)
5. Additional paddy achieved by 1212 5053 11937 22431
reducing harvesting losses at the
farm level (tonnes)
6. Value of additional paddy achieved 0.46 1.91 4.50 8.46
(Mill. $)
7. Value of paddy straw got @ $60/ha
1.88 3.77 5.65 7.53
(Mill. $) 60
8. Total benefit to farming community
by shifting to Kubota rice harvesting 2.34 5.68 10.15 15.99
(Million $)
Similar assumptions are applicable as in Cluster-I made in terms of saving in harvest losses
an adoption speed of the machine. The value of paddy straw saved would be worth US$ 4.97
million, and saving of harvest losses would be worth of US$18.17 thousand tonnes worth of
US$ 7.74 million fetching total benefit as 12.71 million USD during the 5th year of the project
(Table 19).
Table 19: Yearly Returns from Diffusion of Rice Combine Harvesters in Pucca Chawal
Cluster-I
Sr. # Incre-
mental
1. Current losses by harvesting rice with
13%
wheat combine harvesters (%)
2. Losses by rice harvesting with Kubota
5% 8% 2.00% 4.00% 6.00% 8.00%
rice combine harvesters (%)
3. % rice area currently harvested by
20%
using combine harvesting method
4. % rice area shifted to Kubota rice
100% 80% 20.00% 40.00% 60.00% 80.00%
combine harvesting (%)
5. Additional paddy achieved by reducing 903 3846 9350 18169
harvesting losses at the farm level
(tonnes)
6. Value of additional paddy achieved 0.38 1.64 3.98 7.74
(Mill. $)
7. Value of paddy straw got @ $60/ha
1.24 2.49 3.73 4.97
(Mill. $) 60
8. Total benefit to farming community by
shifting to Kubota rice harvesting 1.62 4.13 7.71 12.71
(Million $)

9.5. Intervention-5: Introducing Dryers at
Farm and Market Levels
The drying losses are varied from 3 to 15 percent depending upon the available moisture
contents after paddy harvest. Most of the Sheller owners have their own mechanical drying
facilities (See Annex Figure-5) but they prefer sun drying except when labour is short, and bad
weather conditions including wet, fogy/smoggy season. On average, Rs.50-250 is incurred to
dry 65 kg paddy depending upon the level of moisture content and mode of drying either sun
drying or mechanical drying. The economic feasibility of mechanical rice drier is estimated in
Annexure-9.
Currently, about 20 percent basmati paddy already dried through mechanical driers and the
target is drying of 90 percent paddy by employing mechanical dryer making annual adoption
rate of 18 percent per annum from 2nd year through 5th year of the project. In total 290 dryers
would be needed to remaining 70 percent paddy in the focal district. These driers will be
supplied to FEGs on subsidized rate. In this way, 261.04 thousand tonnes of paddy shall be
dried by 5th year considering 9.3 conversion factor. In the drying process of paddy, and an
additional value added in the farm gate price (460 US$/t) of basmati paddy was by 83 US$/t
that finally arrived at 543 US$/tonne. As a result of introduction of mechanical dryer in the
area, the expected additional value of paddy from improved quality would be 1.79, 6.81, 10.89
and 15.57 million USD from 2nd year though 5th year of the project (Table 20).
Table 20: Yearly Returns from Introducing Dryers in Katcha Chawal Cluster-I
Incre-
mental
Percent of product currently dried 20%
Target %age of practicing paddy 90% 18% 18% 35% 53% 70%
drying
Conversion factor of paddy drying 10 to
(W to D) 9.3 7%
Actual production needs to be solar 53,238 112,296 180,350 261,036

dried (tonnes)
Dried Production (tonnes) – after 7% 49,511 104,436 167,725 242,764
cut
New higher price due to better paddy 460
quality and lower moisture
(USD/tonne) – 26+57= 83 83
Value of add. paddy of improved
quality produced in the cluster (Mill
US$) 1.79 6.81 10.89 15.57

Similar assumption regarding current output being dried through mechanical drier and
conversion factor, and additional price to be fetched after drying are made here as in Cluster-
I. Additional 235 dryers (with the capacity of 1000 tonnes of paddy drying during the paddy
crop season) would be required in four phases to dry additional paddy of the targeted focal
district. As a result, additional dried paddy would be 196.64 thousand tonnes on the 5th year
of the project that would be phased out into four-year span of the project starting from the 2nd
year through to 5th year. As a result of drying, new higher price 520 USD/tonne will be realized
due to improvement in quality of paddy with a drying premium of price of 94 USD/tonne at
farm gate prices. Hence, the value-added paddy shall fetch additional value to the tune of
1.49, 5.76, 9.52 and 14.25 million USD from 2nd year through to 5th year, respectively.
Table 21: Yearly Returns from Introducing Dryers in Pucca Chawal Cluster-II of
Hafizabad District
Incre-
mental
% of product currently dried 20%
Target %age of practicing paddy 90% 18% 18% 35% 53% 70%
drying
Conversion factor of paddy drying (W 10 to
to D) 9.3 1.25
36,893 79,502 131,371 196,638
Dried paddy production (tonnes)
New higher price due to better paddy 520

quality 64+30=94
Value of add. paddy of improved
quality produced in the cluster (Mill
US$) 1.49 5.76 9.52 14.25
9.6. Intervention-6a: Introducing Rice Bran -

Katcha Chawal Cluster-I
In several countries like Japan, a major proportion of edible oil comes from this source. In
some other South-East-Asian countries like, Burma, Thailand, India, Nepal, and republic of
Korea, the rice bran oil is more commonly used. In Pakistan, until today it is not yet widely
used, but additional supply of bran oil through this intervention can either be promoted within
the country or can be exported. This intervention is applicable to Cluster-I only because bran
oil quality may deteriorate during parboiling/steaming process of Saila. The detailed feasibility
of bran oil extraction is explained in Annexure-6.

It is assumed that currently there is no bran oil extracted from the rice bran in Cluster-I of the
targeted focal district. It is suggested from the 2nd year onwards, the rice bran oil will be
assumed to extract oil from 20 percent paddy with an annual increment rate reaching 80
percent on the 5th year of the project. Since, the recovery rate of rice bran from the basmati
paddy is 1.5 percent (Bashir et al., 2018), the rice bran production would be collected from the
total production (i.e., existing production without intervention as well as additional production
gained by employing all the interventions). At the rate of 1.5% of bran production from the
paddy milled, it was estimated that the rice bran amounting to 4,475 tonnes shall be available
from the available paddy in the 5th year of the project. Total number of bran oil extraction
machines required would be 3. It is assumed that each unit will collect rice bran from 10 rice
mills each will install bran palletization machine which will make pallets of bran and thus
stabilize the quality of oil content in it. It is assumed that rice bran contains 20 percent oil
contents, resultantly; the enhanced production of bran oil would be extracted to the tune of
895 tonnes in the 5th year of the project (Sagar and Ashraf, 1986). The intervention of bran oil
extraction would be contributing to the extent of US$ 0.52 million (sold at US$1630/ t) in the
5th year as a gain from bran oil. The other details in this respect may be seen in Table 22.
Table 22: Yearly Returns from Rice Bran Oil Extraction in Katcha Chawal Cluster-I
Incre-
mental
Current %age of bran converted to
bran oil 0%
Target %age of bran conversion into 80.0% 20.00% 20.0% 40.0% 60.0% 80.0%
bran oil
Qty. of rice bran produced for oil 1.5% 3,651 3,850 4,122 4,475
extraction
Conversion rate of oil from rice bran 10%
Quantity of rice bran oil produced
(tonnes) 369 391 417 447
Expected value of bran oil @ 1629.60
US$1630/t (Million US$) 0.43 0.46 0.49 0.52
9.7. Intervention-6b: Improvement in

Parboiled/Saila-Rice Making Cluster-II
As noted earlier, the current dominant grown fine variety of basmati rice in Cluster-II is PK-
1121 (‘Kainat') which is mainly used for preparing Pucca Chawal or Saila because of its
elongated grain size especially after cooking with measuring ranges from 16 mm to 18 mm.
Some other non-registered varieties like Basmati-519 may also be used for preparing Saila.
Parboiled rice is rough that has gone through a steam-pressure process before milling. It is
soaked, steamed, dried, and then milled to remove the outer hull. This procedure gelatinizes
the starch in the grain, and is adopted at the mill in order to harden the grain, resulting into

less breakage (yielding 3.2 kg/40 kg more head rice than steamed rice), thus ensuring a firmer,
more separate grain (Bashir et al., 2018).
Parboiled rice is favoured by consumers and chefs who desire extra fluffy and separate
cooked rice. The 'Saila' of this variety is very popular amongst locals and overseas traders
and consumers. The Pakistani commercial cooks ('Pakwans') are totally using basmati rice
'Saila' and steamed products for preparing Biryani and sweet dishes ('Zardah/Muttangan') due
to number of good reasons especially, Saila yields better performance after cooking, as said
by the consumers and 'Pakwans' the quantity of serving plates increased than that of non-
Saila ('Kaccha Chawal') product, good show casing of 'Pakwans', no breakage of cooked rice
grains as well as convenience of 'Pakwans'.
With the increasing demand of Saila in the Middle Eastern countries and within country,
absorption of additional supply of Saila generated through this intervention will not be an issue.
However, it may reduce the market for Katcha rice.
During field visit, it was observed that currently 50 percent of Kainat basmati variety is used
for making Saila rice. In order to achieve the targeted level (i.e., 80 percent of Saila making),
an additional 30 percent Kainat paddy need to be brought under Saila making OR it would be
30 percent with annual increments as 7.50 percent staring from 2nd year through to 5th year of
the project. After intervention, total expected production of Saila rice of Kainat would be 63.432
thousand tonnes in the 5th year of the project. The wholesale price premium of Saila rice is
148.15 US$/t higher than Katcha Kainat rice, making additional 5.56 million USD on 5th year
of the project life. For other years, please see the Table 23 below.
Table 23: Yearly Returns from Making Saila Rice in Pucca Chawal Cluster-II
Incre-
mental
Current status of making Saila rice 50.0%
from Kainat basmati (%)
Target percentage of preparing Saila 80.0%
rice from Kainat basmati (%)
Net-increase in Saila rice conversion 30.0% 7.50% 15.00% 22.50% 30.00%
(%) 7.50%
Enhanced production of Saila 11,901 25,646 42,378 63,432
basmati rice (tonnes)
Premium price of Saila rice compared 148.15
to Katcha Chawal ($/t)
Expected additional value from
increased Saila basmati rice
production (Million US$) 1.04 2.25 3.71 5.56

9.8. Total Summary of Benefits from Introduced
Interventions
The yearly benefits stream from the six introduced interventions in focal point of Sheikhupura
district in Cluster-I are summarized in Table 27. It can be observed that the total benefits from
the six introduced interventions shall be worth of US$ 48.59 million by the 5th project year.
Table 24: Yearly Expected Gross Returns from Katcha Chawal Interventions in Cluster-I
(Million US$)
Items Year-2 Year-3 Year-4 Year-5

Intervention-1: Shifting to mech. Transplanting 0.26 1.06 2.41 4.34
Intervention-2: Diffusion of HYVs 0.24 0.99 2.25 4.05
Intervention-3: Improved management
practice 1.96 3.96 6.01 8.10
Intervention-4: Adoption of rice combine
harvester 1.83 3.81 6.01 8.46
Intervention-5: Paddy drying service providers 1.79 6.81 10.89 15.57
Intervention-6: Rice bran oil extraction 0.43 0.46 0.49 0.52
Total 8.401 20.856 33.707 48.594
9.8.2. Pucca Chawal Cluster-II
The yearly benefits stream from the six introduced interventions in focal Hafizabad district of
Cluster-II is summarized in Table 25. It can be seen that the total benefits from the introduced
interventions are worth of US$ 57.29 million by the 5th project year.
Table 25: Yearly Expected Gross Returns from Pucca Chawal Interventions in Cluster-II
(Million US$)

Intervention-3: Improved management practice 2.32 4.70 7.13 9.62
Intervention-4: Adoption of rice combine harvester 0.38 1.64 3.98 7.74
Intervention-6: Saila Rice Making 1.04 2.25 3.71 5.56
Total 7.400 20.538 36.507 57.295

9.9. Costs Associated with Proposed
Interventions
9.9.1. Intervention-1: Gradual Shifting from Manual
to Machine Transplanting to Combat Issue of
Low Plant Population
9.9.1.1. Katcha Chawal Cluster-I
As mentioned earlier that in five years starting from 2 nd year, total 15 percent area will be
covered by using mechanical transplanter with annual incremental rate as 3.75 percent. As a
result of adoption of mechanized transplanting intervention, an area of 23, 735 ha shall be
mechanically transplanted by the 5th year of the project. As mechanical transplanting is 40%
expensive than manual transplanting (however, by mechanical transplanting the plant
population per ha will increases), it will result an additional cost to the farming community to
the extent of USD 0.40 million by 5th year of the project (Table 26).
Table 26: Yearly Costs of Mechanical Transplanting in Katcha Chawal Cluster-I
Incre-
mental
Percent area covered by mechanical 15% 3.75% 3.75% 7.50% 11.25% 15.00%
transplant
Area brought under mechanical 5,934 11,867 17,801 23,735
transplant(ha)
74.07
Manual transplanting cost (US$/Ha)
Rise in cost by shifting from manual to 40.0%
mechanical transplanting (US$/Ha)
Expected additional cost due to shifting
from manual to mech. transplanting
(Million US$) 0.102 0.203 0.305 0.406
9.9.1.2. Parboiled/Saila Chawal Cluster-II
The intervention of introducing mechanical transplanter is also suggested in this cluster due
to same nature of issue as well as opportunity to overcome the problem of low plant population
per ha, non-availability of labour during transplanting period, etc. In the cost analysis of Table
21b for Cluster-II, in five years starting from 2nd year, a total of 25 percent area shall be covered
by using mechanical transplanters with annual increments as 6.25 percent. As a result of
adoption of mechanized transplanting intervention, an area of 26,103 ha shall be mechanically
transplanted by the 5th year of the project. Since mechanical transplanting is 40% expensive
than manual transplanting, therefore, the additional cost to the farming community due to
shifting to mechanical transplanting shall be 0.74 million US$ by 5th year of the project (Other
details are presented in Table 27).

Table 27: Yearly Costs of Mechanical Transplanting in Pucca Chawal Cluster-II
Incre-
mental
Percent area covered by mechanical
transplant 25% 6.25% 6.25% 12.50% 18.75% 25.00%
Area brought under mechanical 6,526 13,051 19,577 26,103
transplant(ha)
Manual transplanting cost (US$/Ha) 74.07
Rise in cost by shifting from manual to 40.0%
mechanical transplanting (US$/Ha)
Expected additional cost due to shifting
from manual to mech. transplanting
(Million US$) 0.185 0.370 0.555 0.741
9.9.2. Intervention-2: Yield Improvement by Diffusion of Modern

High-yielding Varieties
The diffusion of latest released high yielding varieties (HYVs) require purchasing of new seed,
which is relatively expensive than the home retained seed of previous crop season. Moreover,
it is also assumed that the farmers shall continue purchasing new seed for the additional
plantation under new varieties. Therefore, additional expenses are involved on the part of
farming community. Assuming that with the efforts of provincial Department of Agricultural
Extension and other Agricultural Advisory Services of private sector, farmers are convinced to
adopt new varieties, hence some additional expenses need to be incurred by the farming
community in order to buy the seed of newly released varieties. It is estimated that the farming
community has to spend nearly 0.66 million USD towards 5 th year of the project. For further
details, please see Table 28 below.
Table 28: Yearly Costs for Diffusion of HYV in Katcha Chawal Cluster-I of Sheikhupura
District
Incre-
mental
Area covered under basmati HYV (%) 50% 12.50% 12.50% 25.00% 37.50% 50.00%
Area planted under new HYV (ha) 19,779 39,558 59,336 79,115
Cost of raising nursery of new 16.67
HYV(USD/ha)
Increase in cost/ha due to new 25.00
HYV(USD/ha) 8.33

Additional cost due to shifting to HYV 0.16 0.33 0.49 0.66
(Million USD)
9.9.2.2. Parboiled/Saila Chawal Cluster-II
Considering cluster-II, to achieve 20 percent productivity gain in 5 years of project life on

account of diffusion of latest released HYV, 50 percent paddy area of the focal district will be
covered in four years with 12.5 percent per annum increment staring from the 2 nd year of the
project. As a result, an additional cost of purchasing the seed of latest released high yield
varieties will be nearly 0.44 million USD towards 5 th year of the project. The details for other
project years please see Table 29 below.
Table 29: Yearly Costs for Diffusion of HYV in Pucca Chawal Cluster-II
Incre-
mental
Area covered under basmati HYV (%) 50.0% 12.50% 12.50% 25.00% 37.50% 50.00%
Additional area planted under new HYV 13,051 26,103 39,154 52,205
(ha)
Cost of raising nursery of new 16.67
HYV(USD/ha)
Increase in cost/ha due to new 25.00
HYV(USD/ha) 8.33
Additional cost due to shifting to HYV 0.11 0.22 0.33 0.44
(Million USD)
9.9.3. Intervention-3: Yield Improvement by Better

Crop Management Practices
As a result of improved management practices, the cost on seed (both because of the increase
in quality and improvement in quality), nursery management practices, fertilizer consumption
especially its balanced use, and labour harvesting practices will increase. We assume that all
this will add 7% of the total cost in Cluster-I and 13% of the total cost in Cluster-II. The
difference is because in cluster-I, improved management practices will involve not much of
additional inputs, rather improved skills and knowledge through rendering additional advisory
services of Agricultural Extension professionals, while in cluster-II, in addition of skills and
knowledge additional inputs would be required. The detailed cost structure under traditional
transplanting and improved practices is shown in Annexure-10.
For achieving 5 percent yield increase through improved management practices, the farmers
have to incur additional expenses worth US$ 13.29 million by the 5th year of the project (Table
30).

Table 30: Yearly Costs for Yield Improvement by Better Crop Management in Katcha Chawal
Cluster-I
Incre-
mental
Paddy production cost at farm level
(US$/ha) 1152.0
Increase in cost due to adoption of 7% 1.82% 1.82% 3.65% 5.47% 7.29%
better crop management practices (%)
Total increase in cost due to improved 3.32 6.657 9.97 13.29
crop management practices (Million
US$)
9.9.3.2. Parboiled/Saila Rice Cluster-II
The recurring cost incurred on providing improved management practice is assumed to the
extent of 13 percent with an annual increment of 3.26 percent that was phased out in four
years w.e.f. 2nd year through to 5th year respectively. Thus, total cost was computed to be
18.84 million USD on arresting of 5 th year of the project life (Table 31).
Table 31: Yearly Costs for Yield Improvement by Better Crop Management in Pucca
Chawal Cluster-II
Incre-
mental
Paddy production cost at farm level
(US$/ha) 1383
Increase in cost due to adoption of better 13% 3.26%
crop management practices (%) 3.26% 6.52% 9.78% 13.05%
Total increase in cost due to improved crop
management practices (Million US$) 4.711 9.422 14.133 18.843
9.9.4. Intervention-4: Reducing Farm Level Harvest

Losses by Introducing Rice Combine Harvesters
Reducing the harvest and post-harvest losses is a big challenge virtually in all crops produced
in Pakistan including rice. The gravity of this challenge is relatively more in perishable fruits
and vegetable crops. In case of basmati rice, any mistake taken place at harvesting and/or
post-harvest handling results not only a loss in the quality of the product produced, but also
increases the proportion of by-products (particularly broken rice) produced during processing.
Till recent past, the harvesting of paddy was done by using wheat combine harvesters, which
not only results in loss of valuable rice straw (mainly burnt by the farmers in the field), leaving
big stubbles in the field and grain shattering in the field. Therefore, to get rid of huge by-
product, the farmers started burning the straw, which caused environmental pollution and
chest diseases by inhaling smog in those days. Moreover, the ratio of broken rice produced
during milling was also higher. Therefore, the need for introduction of some machine which
harvest the paddy crop from the height close to the soil and preserves rice straw rather than
resorting to its burning.
In recent past, Kubota rice combine harvesters were introduced in the area by the private
sector itself. This intervention has proved its worth in terms of controlling grain shattering in
the field during harvesting and preserving rice straw which could be either fed to the animals
or sold to the paper industry. The rental price of these combine harvesters are 33 percent
higher than the conventional wheat combine harvesters, but the farming community warmly
welcome this machine as well as evidence of fast adoption. In Table 35 below, the stream of
costs associated with the use of Kubota rice combine harvesters is presented. It has been
estimated that farming community has bear additional expenses amounting 2.32 million USD
by shifting paddy harvesting of 126.58 thousand ha to Kubota rice combine harvesters by 5 th
year of the project. The other details are presented in Table 32.
Table 32: Yearly Costs About the Diffusion of Rice Combine Harvesters in Katcha
Chawal Cluster-I
Incre-
mental
Paddy harvesting cost by using
wheat combine harvesters 55.56
(US$/Ha)
Percent increase in cost by
shifting to Kubota rice combine 33.0% 8.25% 8.25% 16.50% 24.75% 33.00%
harvesters (%)
Percent increase in area towards
Kubota rice combine harvesters 100% 20.00% 20.00% 40.00% 60.00% 80.00%
(%)
Area harvested with Kubota rice
combine harvesters (Ha) 31,646 63,292 94,938 126,584
Additional cost due to shifting to
Kubota combine rice harvesters
(Million US$) 0.580 1.160 1.741 2.321
Turning to cluster-II, it has been estimated that farming community has bear additional
expenses amounting 1.53 million USD by shifting paddy harvesting of 83.53 thousand ha to
Kubota rice combine harvesters by 5 th year of the project as depicted in Table 33.
Table 33: Yearly Costs of Diffusion of Rice Combine Harvester in Pucca Chawal Cluster-II
Incre-
mental
Paddy harvesting cost by using wheat
55.56
combine harvesters (US$/Ha)
Percent increase in cost by shifting to
33.0% 8.25% 8.25% 16.50% 24.75% 33.00%

Percent increase in area towards
100% 20.00% 20.00% 40.00% 60.00% 80.00%
Area harvested with Kubota rice
combine harvesters (Ha) 20,882 41,764 62,646 83,528
Additional cost due to shifting to
Kubota combine rice harvesters
(Million US$) 0.383 0.766 1.149 1.531
9.9.5. Intervention-5: Introducing Dryers at Farm

and Market Levels
Mycotoxins are naturally occurring toxins produced by certain molds and can be found in
crops. Warm humid conditions accelerate their growth. One such mycotoxin is aflatoxin which
damages DNA and increases incidence of liver cancer. High levels of aflatoxins have been
reported in rice from India. Toxin reviews is a medical journal which published an article
regarding aflatoxin in rice around the world. As per the article published in 2006, India has
amongst the highest levels of incidence among rice producing countries. A survey covering
12 states showed that 16 percent samples exceeded the Indian permissible limits of 30 hg/kg,
61.5 percent of the samples reported aflatoxin level above 5 hg/kg. On the other hand, EU
allows maximum level of 4 hg/kg of rice https://www.brecorder.com/2019/01/15/465958/fungi-
toxins-and-basmati-exports/
Relative to Pakistan, India has a technologically advanced agriculture sector, more prone to
using pesticides and fungicides manufactured domestically. Pakistan has not developed
chemical pesticide market which has to be imported hence being too expensive to use. Thus,
Pakistan has a comparative advantage in employing more organic farming which is why
tricylazole limits are not a problem for basmati exports from Pakistan. However, improper
storage and sun-drying of paddy increases the incidence of aflatoxins in rice. While the private
sector has been fast in setting up driers in their units, therefore, this problem is addressed to
a large extent. On the other hand, there is news that in the rice sector, the aflatoxin levels will
be further revised by the European commission. Between the permissible limits of tricylazole
and aflatoxins, Pakistan can increase basmati exports to EU further. However, government
initiatives may be required to increase mechanical drying of paddies. Since warm humid
conditions are required to decrease aflatoxin levels, antiquated methods of drying may hamper
Pakistan’s exports of basmati rice https://www.brecorder. com/2019/01/15/465958/fungi-
toxins-and-basmati-exports/
As discussed in previous section that the intention is practicing universal paddy drying in the
area (i.e. 90%) or making it mandatory in the cluster area, which is currently operating at 20
percent level. Though the farming community has to face a nearly 25% quantitative loss by
practicing paddy drying before taking it to the market, however, it is also assumed that market
is responsive in terms of offering better prices to farmers brining dry paddy in the market. At
present, what so ever the sun-drying of paddy is practiced, it is mainly done by domestic labour
or permanently hired farm labour, whose opportunity cost falls around 40.38 USD per tonne.

It is estimated that by 5th year of the project, nearly 261 thousand tonnes of paddy shall be
dried by using dryers, costing to the farming community as 5.221 million US$ (Table 34).
Table 34: Yearly Costs of Introducing Dryers in Katcha Chawal Cluster-I

Incre-
mental
Percentage of paddy currently
dried 20%
Target output to be dried by the 18% 17.50% 35.00% 52.50% 70.00%
dryers (%) 90%
Current drying cost by sun-drying
(US$/tonne) 20.83
Paddy drying cost using dryers
(US$/tonne) 40.83 20
Total quantity of paddy dried by
using paddy driers (tonnes) 53874 114065 182439 261036
Total cost of shifting to paddy
dryers (Million US$) 1.077 2.281 3.649 5.221
Considering the introduction of paddy driers in parboiled rice cluster-II of Hafizabad District,
the same target of making it mandatory in the cluster area is also fixed, which is currently
operating at 20 percent level. In this cluster, what so ever the sun-drying of paddy is practiced,
it is also mainly done by domestic labour or permanently hired farm labour, whose opportunity
cost falls around 10.71 USD per tonne. It is estimated that by 5th year of the project, more than
181 thousand tonnes of paddy shall be dried, costing to the farming community as 7.99 million
US$ (See the details in Table 35).
Table 35: Yearly Costs of Introducing Dryers in Pucca Chawal Cluster-II

Incre-
mental
Percentage of paddy currently dried
(%) 20%
Target output to be dried by the dryers 15% 15.00% 30.00% 45.00% 60.00%
(%) 80%
Current drying cost by sun-drying
(US$/tonne) 10.71
Paddy drying cost using dryers
(US$/tonne) 44.09 33.38

Total quantity of paddy dried by using
paddy driers (tonnes) 34003 73274 121079 181233
Total cost of shifting to paddy dryers
(Million US$) 1.499 3.231 5.339 7.991
9.9.6. Intervention-6a: Oil Extraction from Rice Bran

- Katcha Chawal Cluster-I
Rice bran is one of the abundant by products produced in the rice milling industry to yield
familiar white rice. Research conducted during the last two decades has shown that rice bran
is a unique complex of naturally occurring antioxidant compounds. In recent years, rice bran
has been reckoned as a potential source of edible oil in its natural form (Moldnhauer et al.,
2003; Iqbal et al., 2005; Chatha et al., 2006; Sagar and Ashraf, 1986). Young-Hee et al. (2002)
reported that rice bran contains 15-20 percent of oil, depending upon degree of milling, variety
and other agro-climatic factors. Rice bran oil, its natural state, contains several constituents of
potential significance in diet and health. It also contains high valued protein, fat and dietary
fiber. In addition to phytonutrients, vitamins and mineral and medicinally important anti-
oxidants, γ-oryzanol (natural mixture of ferulic esters) rice bran has reckoned as potential
source of edible oil (Iqbal et al., 2005).
At present, virtually no rice bran oil extraction activity is going on in the targeted clusters. Our
target is to utilize all the rice bran produced in the cluster for extracting rice bran oil, before
utilizing it for other purposes. It has been estimated that from 2 nd through 5th year, 3.65, 3.91,
4.17 and 4.47 thousand tonnes of rice bran shall be available in the cluster for making rice
bran oil out of it. Based on the discussions made to various experts during the field visit, it
came out that almost 250 US$ per tonne is the bran oil extraction cost, therefore, the stream
of costs associated with bran oil extraction in the cluster shall be 0.143, 0.46, 0.49 and 0.52
million USD from 2nd through 5th year of the project (See other details in Table 36).
Table 36: Yearly Cost of Rice Bran Oil Extraction in Katcha Chawal Cluster-I
Incre-
mental
Current % of bran used to extract bran
oil 0.0%
Rice bran to be used to extract bran oil 20.00% 20.0% 40.0% 60.0% 80.0%
(%) 80.0%
Bran production to be used in bran oil
(tonnes) 1.5% 3,694 3,911 4,170 4,475
Quantity of bran oil produced (tonnes) @20% 369 391 417 447
Cost of bran oil extraction @ 249.57 $/t
(MUS$) 249.57 0.43 0.46 0.49 0.52

9.9.7. Intervention-6: Parboiled/Saila Rice Making in
Cluster-II
Parboiled or Saila rice is the rice that has been partially boiled in the husk. The three basic
steps of parboiling are soaking, steaming and drying. These steps also make rice easier to
process by hand, boost its nutritional profile and change its texture. About 50% of the world
paddy production is parboiled. The parboiling treatment is practiced in many parts of the world
such as India, Bangladesh, Pakistan, Myanmar, Malaysia, Nepal, Sri Lanka, Guinea, South
Africa, Italy, Spain, Nigeria, Thailand, Switzerland, USA and France (Wikipedia).
It is assumed that the present level of conversion of 50 percent of the Kainat basmati varieties
into Saila-parboiled rice shall be enhanced to 80 percent of Saila making. The Saila rice is
fetching relatively higher price in the domestic and international markets. However, in Saila
rice, some degree of aroma present in basmati varieties is lost. The cost of preparation of
Saila rice product from Kainat paddy is estimated nearly 51.3 USD per ton. Total cost incurred
for making Saila rice of Kainat was estimated to the tune of 0.11, 0.252, 0.416 and 0.623
million USD starting from 2nd year through to 5th year respectively (Table 37).
Table 37: Yearly Cost of Making Saila Rice in Pucca Chawal Cluster-II
Sr. # Incre-
mental
1. Cost of preparing paddy for Saila 51.28
rice purpose (US$/ton)
2. Total cost of paddy production for
Saila rice purpose (Million US$) 0.117 0.252 0.416 0.623
9.10. Total Summary of Costs

Table 38, presents the summary of the yearly costs stream from the six introduced
interventions in focal Sheikhupura district.0 It can observe that total costs associated with the
introduced interventions shall worth from US$ 5.340 million in 2nd year to US$ 22.012 million
by 5th project year – implying an increase of almost four times towards the end of the project
period.
Table 38: Yearly Expected Costs incurred Against the Introduced Interventions in
Katcha Chawal Cluster-I (Million US$)


Intervention-3: Improved management
practice 3.323 6.647 9.970 13.294
Intervention-4: Adoption of rice combine
harvester 0.580 1.160 1.741 2.321
Intervention-6: Rice bran oil extraction 0.092 0.098 0.104 0.112
Total (Million US$) = 5.340 10.719 16.263 22.012
Table 39 summarizes the yearly costs stream from the six introduced interventions in focal
Hafizabad district. It can observe that the total costs related with the introduced interventions
shall cost US$ 7.004 million in 2nd year to US$ 30.165 million by 5th project year – implying an
increase of more than four times towards the end of the project period.
Table 39: Additional operational costs due to Interventions in Cluster-II (Million US$)

Intervention-3: Improved management practice 4.711 9.422 14.133 18.843
Intervention-4: Adoption of rice combine harvester 0.383 0.766 1.149 1.531
Intervention-6: Making Saila of basmati rice 0.117 0.252 0.416 0.623
Total (Million US$) = 7.004 14.258 21.918 30.165
9.11. Net-Economic Benefits

Table 40, summarizes the yearly stream of net-economic benefits (after offsetting all the
operating costs) from the six introduced interventions in the focal point of the cluster,
Sheikhupura district. The total net-benefits from the introduced interventions shall begin from
US$ 3.062 million in 2nd year to US$ 26.582 million by 5th project year – implying an increase
of more than ten times towards the end of the project period.
Table 40: Yearly Expected Costs against the Introduced Interventions in Katcha Chawal
Cluster-I (Million US$)

Total expected gross returns from cluster
development interventions (Million US$) 8.401 20.856 33.707 48.594

Gross costs to be incurred on cluster
Net-economic benefit (Million US$) 3.062 10.137 17.444 26.582
9.11.2. Pucca Chawal Cluster-II

Table 41 summarizes the yearly stream of net-economic benefits from the six introduced
interventions in focal, Hafizabad district. It can observe that the total net-benefits from the
introduced interventions shall begin from US$ 0.396 million in 2nd year to US$ 27.131 million
by 5th project year – implying an increase of more than nineteen times towards the end of the
project period.
Table 41: Yearly Expected Costs against the Introduced Interventions in Pucca
Chawal Cluster-II (Million US$)

Total expected gross returns from cluster
Gross costs to be incurred on cluster
Net-economic benefit (Million US$) 0.396 6.280 14.589 27.131
9.12. Investments Need to be Made

In order to improve the sample Katcha Chawal cluster, public investment under project
approach is needed. As all the calculations are made on the basis of a 5-year project,
therefore, the year stream on investments required for all the six proposed interventions is
given in Table 29a below. Our results clearly show that nearly 33 million USD are need to be
invested in 5 years project period. Moreover, the government shall provide loans amounting
12.44 million USD shall be utilized during the project period. Most of the expenses are in the
form of 100% interest free loans to the service providers in the area and installation of rice
bran oil extraction plant. The public sector investment pertains to the areas like strengthening
of basmati rice research and extension services, and arranging farmers’ training programs
towards adoption of improved crop management practices.

In order to improve the sample parboiled/Pucca rice cluster, public investment under project
approach is needed in a number of areas. Our results clearly show that more than 25 million
USD are needed to be invested in 5 years project period. Moreover, the government shall
provide loans amounting 9.5 million USD shall be utilized during the project period. Most of
the expenses are in the form of 100% interest free loans to the service providers in the areas
of enhancement of Saila rice production in the cluster. The public sector investment pertains
to the areas like strengthening of basmati rice research and extension services, and arranging

farmers’ training programs towards adoption of improved crop management practices. The
details of these investments and government expenditures are illustrated in Table 45 for
Katcha Chawal cluster and Table 42 for Pucca Chawal cluster.
Table 42: Yearly Stream of Public Investments Needed for the Development of Katcha
Chawal Cluster-I (Million US$)
Items Total Year-1 Year-2 Year-3 Year-4

Strengthening basmati rice research (100%
Public investment) 1.852 0.463 0.463 0.463 0.463
Popularization of mechanized transplanting
(100% interest free loans to service providers) 13.033 1.303 2.607 3.910 5.213
Investment in Agri. Extension for diffusion of
improved management practices (100% govt.) 0.484 0.121 0.121 0.121 0.121
Farmers trainings in best management practices
(100% Government) 6.265 1.293 1.445 1.641 1.886
Investment in popularization of paddy dryers
(100% interest free loans to service providers) 15.477 1.548 3.095 4.643 6.191
Popularization of Kubota type rice combine
harvesters (100% interest free loans to service
providers) 0.202 0.134 0.067 0.000 0.000
Investment for installing rice bran oil extraction
units (100% interest free loan to private sector) 1.500 0.375 0.375 0.375 0.375
Investment to organize FEGs and provide basic
infrastructure 1.852 0.463 0.463 0.463 0.463
Strengthening international links 0.500 0.125 0.125 0.125 0.125
Loans provided by the Govt. 3.847 0.471 0.794 1.121 1.462
Total investment on the cluster needed 43.161
(Million US$) 5.833 9.092 12.399 15.836
Table 43: Yearly Stream of Public Investments Needed for the Development of Pucca
Chawal Cluster-II (Million US$)
Items Total Year-1 Year-2 Year-3 Year-4

Strengthening basmati rice research (100% Public
investment) 1.8519 0.463 0.463 0.463 0.463
Popularization of mechanized transplanting (100%
interest free loans to service providers) 8.6000 0.860 1.720 2.580 3.440
Investment in Agri. Extension for diffusion of
improved management practices (100% govt.) 0.3609 0.090 0.090 0.090 0.090
Farmers trainings in best management practices
(100% Government) 4.3501 0.816 0.943 1.148 1.444
Investment in popularization of paddy dryers (100%
interest free loans to service providers) 10.2125 1.021 2.043 3.064 4.085
Popularization of Kubota type rice combine
harvesters (100% interest free loans to service
providers) 1.1074 0.237 0.237 0.237 0.395

Investment for installing Saila rice plants (100%
interest free loan to private sector) 1.0000 0.250 0.250 0.250 0.250
Investment to organize FEGs and provide basic
infrastructure 1.8519 0.463 0.463 0.463 0.463
Loans provided by the Govt. (Million US$) 0.500 0.125 0.125 0.125 0.125
Strengthening international links 2.6697 0.323 0.544 0.773 1.030
Total investment on the cluster needed (Mil. US$) 30.65 4.19 6.41 8.73 11.32
9.13. Economic Viability of Basmati Rice Cluster

Development Plan
In Table 44, the discounted value of stream of investments incurred under project approach
and the net-benefits achieved by the farming and non-farming business community are
estimated on yearly basis. It revealed that the Internal Rate of Returns (IRR) for the basmati
rice cluster development in Sheikhupura District is 23.7 percent --- clearly indicating an
economically viable project. It is clearly showing worth investing into the cluster for the uplift
of the basmati rice production in the area through various proposed farm and non-farm level
investments.
Incurred in Katcha Chawal Cluster-I
Items Total sum Year-1 Year-2 Year-3 Year-4 Year-5

Discount rate (%) 8.50%
Discounted value of investments 43.161 -
or costs (MUSD) 5.833 9.092 12.399 15.836
Discounted value of net
economic returns (MUSD) -5.833 -6.030 -2.262 1.608 26.582
Net Present Value (Million 6.569
USD)
Internal Rate of Returns (%) 23.7%
In Table 45, the discounted value of stream of investments incurred under project approach
and the net-benefits achieved by the farming and non-farm business community are estimated
on yearly basis. It revealed that the Internal Rate of Returns (IRR) for the basmati rice cluster
development in Hafizabad District is 32.8 percent --- clearly indicating an economically more
viable project than that of Katcha Chawal Cluster-I.
Incurred in Pucca Chawal Cluster-II

Total
Items Year-1 Year-2 Year-3 Year-4 Year-5
sum
Discount rate (%) 8.50%
Discounted value of investments or costs 30.65 -
(MUSD) 4.19 6.41 8.73 11.32
Discounted value of net economic returns
(MUSD) -4.19 -6.02 -2.45 3.27 27.13
Net Present Value (Million USD) 9.513
Internal Rate of Returns (%) 32.8%
9.14. Key Product Intervention

The team believes that rice bran oil product development can be a key product intervention
that can not only improve the competitiveness of Pakistani basmati rice value chain but also
help the country to solve its ballooning edible oil import. Thus, a comprehensive feasibility
study has been undertaken for exploring and exploiting the high value bran oil product by the
future researchers (See Annexure-6 for the details). The feasibility of the bran oil depends
upon the bran oil prices. Even with the lowest price of bran currently in the market, lower than
the canola oil, the IRR of bran oil extraction turns out to be 47%. However, to achieve this,
some technical issues like stabilization of the barn oil quality need to be resolved (the research
in Kala Shah Kaku has already achieved this). Moreover, the bran oil extraction from the kainat
paddy used for preparing parboiled (Saila) rice product may also be explored in the future.

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10. Annexures
Annexure-1: The Pedigree of Pusa-1121 Basmati
Rice

Annexure-2. Raw Rice and Parboiled/Saila Rice
Processing Stages (Adapted from SBP, 2016)

Annexure-3A: Pictures of Stakeholders consultation
Lodged Super Basmati Paddy Crop
Kubota Rice Combine Harvester
Wheat Combine Harvester

Sample of Basmati Paddy Supplied at Sale Centre
Mechanical Dryer.

Annexure-3B. Stakeholders consulted for gathering
information about Basmati Rice/Saila Rice Clusters
in Kalar Tract of Punjab, Pakistan
Name/ Organization/Busines Address
Sr.# Contact #
Designation s Name/Occupation
1 Omar Ashraf Farmer and Usman Sadoki Mianwali Road, 0300-8748787
Sindhu Rice mill owner Hameedpur Kalan, Tehsil
Kamoki Distt Gujranwala
2 Amer Seikh Farmer Narang Mandi, Sheikhupura 0300-7778812
Area
3 Hajji Bilal Farmer Kotli Mano Saidhu, 0307-7278250
Sadhu Aamenabad, Area
4 Muzammil Farmer Pagian, Narowal Road 0345-4316245
5 Azim Farmer Pagian, Narowal Road 0300-77967767
6 Azmat ullah Farmer Ghalla Mandi, Hafizabad 0300-7525925
laghai
7 Shehbaz Farmer/Rice Mill Aziz Chack, Daska Road, 0301-8644740
Cheema Owner Wazirabad
Brother's
8 Azam Samore Farmer Jalalpur Bhattian, Hafizabad
9 Inam Khaliq Farmer Depay Pur, Union Council Maju 0323-6432880
Chaudhry Chack, Tehsil Nowsheran
Virkan
10 Amjad Mahar Commission Agent/ Grain Market, Tatley Aali, Adda, 0305-6101940
Arthi Gujranwala - Sheikhupura Road
11 Amjad Javed Commission Agent/ Master Allah Baksh and Sons (055) 3844820/
Arthi Gunjh Mandi, Gujranwala 3844791
12 Mansoor Commission Agent/ Faizan Medina Traders Shop # (055) 37349902
Ahmed Arthi 68, Ghala Mandi, G.T Road
Gujranwala
13 Chaudary Commission Agent/ Aziz Chak Traders Sheikh Niaz 0301-8644740
Shehbaz Arthi Ahmed Ghala Mandi Daska
Ahmed Road Wazirabad
Cheema
14 Khurshid Sidhu Agricultural Service Fertilizer dealer, Ghalla Mandi 0300-8159223
Provider Mor Aimenabad, Wahndo road
Ahmenabad
15 Safdar Hussain Agricultural Services Chairman Sons Zarai 055-8706364
Chatta Provider/Farmer Corporation Larri Aadda
Warpaal Chatta(Rice
Transplanter)
16 Dr. Iqrar khan Agri. Extension Deptt. Near District Court, Gujranwala 055-9200195
(Dy. Dir) City
17 Dr. Javed Agri. Extension Deptt. Near District Court, Gujranwala 0344-4042053
Pathear (Dy. City
Dir. Agri.)
18 Engr. Naeem Adaptive Research Agricultural Extension Complex, 0334-4665465
Faisal Deptt. G.T Road Gujranwala

Name/ Organization/Busines Address
Sr.# Contact #
Designation s Name/Occupation
19 Dr. Muhammad Rice Research G.T Road, Kala Shah Kaku, (042) 37951826
Akhtar, Director Institute Muridke
20 Dr. Nadeem Rice Research G.T Road, Kala Shah Kaku, (042) 37951826
Iqbal, Dy. Institute Muridke
Director
21 Muhammad Manager Marketing, 17 KM G.T Road Kamoke, 0321-3409724
Asif Rana C/O Atlas Foods Pvt. Ltd. Gujranwala
Ch. Sameen
22 Shahzad Ali Guard Agriculture 8th K.M., Raiwind Road, Lahore 042-35320563
Malik, MD Research and
Services Pvt. Ltd.
23 Rana Zafar, Guard Agriculture 8th K.M., Raiwind Road, Lahore 042-35320563
Food Research and
Technologist Services Pvt. Ltd.
24 Sajid Cheema, National Rural Rakhwala / Madray Wala Road, 0333-8109396
Station Support Program Hafizabad
Manager (NGO)
25 Kashif-ur- Rice Export Suit # 405,421,4th Executive 0300-8456715
Rehman Association of Floor, Sadiq Plaza, The Mall
(Secretary Pakistan Road, Lahore
General)
26 Ali Hussain Rice Export Suit # 405,421,4th Executive 0321-7861119
Asghar (Senior Association of Floor, Sadiq Plaza the Mall
Vice Chairman) Pakistan Lahore
27 Abdul Ghafoor Trading Corporation Office building #1, 3rd Floor, (042) 99206068
of Pakistan Aiwan-e-Iqbal Complex,
Egerton Road, Lahore
28 Raheel Rao Trade Development 62 Garden Block, Garden 0333-4701230
Authority of Pakistan Town, Lahore
29 Shafiq Hassan Export, Jalalpur Bhattian, Hafizabad 0300-4007440
Corporation
30 Muhammad Rice Trader Tatley Aali Adda, Nowshera
Sadeeq Virkan Road, Gujranwala

Annexure-4: Classification of Paddy and Rice By-
products
{Sagar, and Ashraf. (1986); NATIONAL COURIER, New Paper of (03/07/2018)}
Rice Bran
Rice Bran consists of 8 to 10 percent of rough rice exhibiting about 20 percent oil contents in
it. In most of South-east Asian countries, the bran material is not fully exploited due to number
of known and unknown reasons, especially in Pakistan. So, these needs to be explored on
war footings. Since, the present study has proved its economic significance in Pakistan that is
not less than the contribution made by maintaining the rice crop plant population density at
par with the recommended levels. In Japan, a major proportion of edible oil comes from this
source. Burma, Thailand, India, Nepal, and republic of Korea also manufacture edible oil from
rice bran to some extent. Some agencies have attempted to explore the possibilities of its uses
through extracting quality edible oil in Pakistan. But the bottleneck of moisture contents
appearance in the rice bran triggers to rancid the oil quality due to up surging in the rates of
free fatty acid (FFA) as per hour reaction of lipolysis enzymes. Some studies have determined
that rice bran contains 2.5 percent FFA, so it is necessary to save the oil from decaying if
treated the rice bran immediately after separation with some suitable chemicals to check
hydrolysis. The rice bran contains high value edible material with 15 percent protein, 20
percent B vitamin, and very rich in other vitamin ingredients like thiamine, riboflavin, and
pyridoxine to the tune of 2.26, 0.25 and 2.5 mg /100 gm., respectively. Bran oil has safe and
valuable multiple uses viz., balanced animal feed preparation, vegetable cooking oils (contains
12-17 % lipids).
On other hand, the oil from parboiled rice is low in acid values (i.e., low contents of FFA). This
special characteristic of oil extracted from parboiled rice bran seems to be subjected to
treatment by steam which prevents lipase from decomposing the bran oil into free fatty acids.
This area needs further probing for developing the understanding about the feasibility of oil
extraction from parboiled paddy rice.
Rice Polish
Rice polish is usually considered the fraction of milled rice grain which is obtained by milling it
for another pause after removing the bran. Its value on average basis is 4 percent but varies
on milling depending on degree of hardness of rice kernel. Similar to rice bran, it is rich in
nutrients viz., thiamine, riboflavin and pyridoxine to the extent of 1.84, 0.18 and 2.0 mg. per
100 gm., respectively. Oil and protein contents presence in rice polish bearing low protein and
high protein rice grains are varied from 12.8 -13.7 percent and 13.1-18.8 percent, respectively
(i.e., on dry weight basis). The lipid content ranges are from 9 to 15 percent. It is primary
ingredient for stock feed but sometimes it is used in baby food and health food.
Rice germ

The germ constitutes 2 percent of the weight of the rice grain. About 80 to 90 percent of it is
detached from the grain that gets mixed with the bran during the polishing of rice. Rice germ
contains about 20 percent protein, 30 percent oil and 15 percent sugars. Similar to rice bran
and rice polish, it contains vitamins B and E. The isolated germ also contains oil. The
powdered rice germ is used in dietary formulations as well as pharmaceuticals. Keeping this
in view, the Japanese have developed rice variety jumbo germ size and are grown for
industrial uses. Technically advanced countries are already making best use of this byproduct.
Since, Pakistan grows rice in abundance has many rice mills but this byproduct is being
wasted due to unawareness and lack of technical knowhow.
Definitions and Classifications of Rice:
A) RICE: means milled rice includes cargo rice, white rice, glutinous rice and boiled rice (e.g.,
whole grain, head rice, big broken, broken or small broken):
1) Cargo Rice: (BROWN RICE, HUSKED RICE) means rice obtained from paddy of which
only the husk has been removed. This includes whole grain, head rice, big broken, broken,
and small broken;
2) Plain or White Rice: means rice obtained from paddy which has been husked and milled
while by removing its bran layers. This includes its whole grain, head rice, big broken, broken,
and small broken; and
3) Parboiled Rice: may be husked or milled rice processed from paddy or husked rice that
has been soaked in water and subjected to a heat treatment so that the starch is fully
gelatinized, followed by a drying process.
B) GRAIN CLASSIFICATION: means the proportional mixture of rice of different classes to

form a grade Rice Kernel divided into four classes namely:
1) Extra Long Grain: Exhibits, head rice/whole grain measuring the average grain length of
6.90 mm or more depending upon type of variety;
2) Long Grain: Contains, head rice/whole grain measuring the average grain length of more
than 6.0 mm but not more than 6.90 mm, and again depends upon variety;
3) Medium Grain: Reveals, head rice/whole grain measuring the average grain length of
more than 5.0 mm but not more than 5.9 mm; and
4) Short Grain: Shows, the head rice/whole grain with the average grain length of 5.00 mm
or less.
C) YELLOW KERNEL: means the kernel of which 25% or more of the surface area has turned
yellow in color.
D) CHALKY KERNEL: means the kernel of which 50% or more of the surface area is white
like the color of chalk.

E) GREEN RICE: means the kernel of green color in Cargo (Brown) rice which when broken
is also green in color from inside or in the endosperm.
F) BROKEN RICE: Broken of size ¾ length of grain and above shall count as head rice.
The above definitions as well as classifications are standardized in the business circle of rice/
Paddy products’ transaction in domestic and international trading. The same concepts have
been discussed for interpretation in the present project report.

Annexure-5: District level area, production and yield
of basmati rice
Table 46: District level area, production and yield of basmati rice in Punjab during 2016-17
Production (000
District Area (000 ha) tonnes) Yield (kg/ha)
Attock...... 0.000 0.000 -
Rawalpindi.......... 0.000 0.000 -
Islamabad........... 0.000 0.000 -
Jhelum.............. 1.220 2.090 1713
Chakwal............. 0.000 0.000 -
Sargodha....District 27.110 43.850 1617
Khushab............. 26.310 50.750 1929
Mianwali............ 6.070 10.250 1689
Bhakkar............. 0.400 0.710 1775
Faisalabad…. 19.830 36.930 1862
Toba Tek Singh...... 37.630 87.540 2326
Jhang............... 49.370 94.260 1909
Chiniot............... 31.970 56.380 1764
Gujrat...... 33.690 47.580 1412
Mandi Baha-ud-Din... 57.460 104.840 1825
Sialkot............. 114.930 205.660 1789
Narowal............. 63.940 105.500 1650
Gujranwala.......... 101.980 184.350 1808
Hafiz Abad.......... 104.410 213.300 2043
Sheikhupura…… 158.230 289.840 1832
Nankana Sahib ……. 99.140 193.680 1954
Lahore.............. 27.520 46.470 1689
Kasur............... 34.400 58.280 1694
Okara............... 72.430 142.510 1968
Sahiwal………. 27.520 56.980 2070
Pakpatan............ 46.540 95.630 2055
Multan.............. 15.780 28.360 1797
Lodhran............. 10.930 18.360 1680
Khanewal............ 28.730 57.130 1989
Vehari.............. 33.180 62.190 1874
Muzaffargarh…… 21.050 37.770 1794
Layyah.............. 9.710 16.730 1723
D. G. Khan.......... 0.000 0.000 -
Rajanpur............ 0.000 0.000 -
Bahawalpur…… 13.760 25.330 1841
Bahawalnagar......... 58.270 116.950 2007
Rahimyar Khan....... 19.430 35.190 1811

Annexure-6: Rice Bran Oil Processing Plant
Pakistan can save billions of dollars spent on the import of edible oil, if the production of local
oil seeds promoted and some other innovative options like extraction of rice bran oil is
encouraged. The oil import bill is set to rise as the population is increasing with a fast pace
which will hurt forex reserves. Therefore, government should promote edible oil sector to make
the country self-sufficient. Primitive oil mills are wasting hundreds of thousands of oilseeds
during oil extraction, while about 30 thousand tonnes of oil can be extracted from the rice bran
which needs attention of the private sector. Per capita use of edible oil in Pakistan stands at
13 liters, while its usage is increasing by 3 percent per annum (Daily Nation, 18 th October
2015).
The rice bran is a by-product of the rice milling process. The conversion of paddy into brown
rice as well as well as white rice produces this by-product. Bran is the outer shell of our daily
rice grain and is often removed during processing and used as animal feed and others.
According to the American Heart Association, rice bran oil is the healthiest edible oil in the
world. Rice bran oil may be the largest underutilized agricultural commodity in the world. The
production and processing of rice bran oil are similar to many other vegetable oils. The cost
per liter is close to sunflower oil, but relatively healthier. The production of rice bran oil is
economically viable. Pakistan is also one of the largest exporters of rice in the world, but does
not produce any bran oil like other countries. India is currently the largest producer of rice oil.
Every year about 3-4 million tonnes are produced worldwide, mainly in Asian countries like
Japan, Thailand and China. Increasing home cooking oil production is a good option. Pakistan
currently produces 6.7 million tonnes of rice annually and can reduce its import edible oil bill
by around $ 510 million, using the potential of producing rice bran oil. Pakistan can gradually
improve the efficiency of rice bran oil technology. At present, domestic rice bran oil
consumption is very low, so an aggressive marketing campaign is required to launch the
product on the domestic market.
Objective:
The objective of this feasibility study is to estimate feasibility of the Rice bran oil on small
scale processing plant for the future investors so that by following functions in the value
chain can be incorporated:
 Crude rice bran → cleaning → softening → expanding → drying → to extraction and

loading etc.
The process
Rice bran oil processing plant /oil leaching plant /oil solvent extraction machine process is
given below:
1. The material (for pre-treatment) is sent to rotary extraction by the scraper conveyor.
The material will be extracted by the solvent or mix oil. After this step, we will get meal
and mix oil.

2. Meal is sent to toaster. Through the toaster, the solvent in the meal will separate from
the meal. The solvent goes to condenser and is recycled to rotary extraction.
3. After the mix oil from the rotary extraction enters into 1st evaporator and 2nd
evaporator, most of the solvent in the mix oil is separated.
4. The mix oil from 2nd evaporator goes to stripping tower and almost all the solvent is
separated. From the stripping tower, we can get crude oil and solvent. The solvent is
sent to condenser and is recycled to rotary extraction.
Process Flow chart of Rice Bran Oil extraction
Specifications of Rice Bran Oil Processing Plant:
Craft features:
Create good production environment

1. Minimize the total fat loss, increase oil yield and output and improve the quality of oil and
cake & meal.
2. Comprehensively utilize impurities and offal.
3. Perfectly match extraction production line, design different production processes
according to different materials.

Rice bran oil processing plant /oil leaching plant/oil solvent extraction
machine
Introduction:
It is composed mainly of extractor desolventizer, evaporators, stripping tower and condensers.

The oil can be extracted from oil-bearing materials through solvent contacting, steeping or
spraying of oil flake (soybean) or pre-pressed cake (rapeseed, cottonseed, sunflower seed,
peanut, rice bran, sesame, tea seed, coconut etc.) based on solvent extractor, stainless steel
tube condenser, aluminium alloy tube condenser or plate condenser, exhaust gas freezing
recovery device are applied in the technology with advanced process and good performance.
1. Solvent extraction machine

2. Suitable for rice bran oil press
3. Pure oil, edible oil quality
4. Capacity: 10 tonnes/day
5. Used for hot and cold press
Rice Bran processing Machine Rice Bran Processing Plant

Pictures of the processing machine
Machine’s main equipment:
(1) The solvent extract equipment adopts stainless steel fixed grid tray, frequency
conversion speed regulation, extract equipment storage tank feeding level is automatic
control, high extracting efficiency, low energy consumption; Extracting condenser,
steam degassing condenser, stripping condenser, evaporative condenser, the final
condenser is aluminium alloy tube-type condenser, the condensation effect is fast.
(2) Wet meal dissolution using DTC toast-desolventizing, dissolution, drying in one
machine. The production of finished meal powder is small, good colour, toast-
desolventizing level is self-automatic control.
(3) Adopts film evaporation process, evaporation temperature is low, crude oil quality is
good, energy saving, secondary steam from toaster and waste heat can be utilized,
as the first evaporator heat source.
(4) Steam-lift crude oil and steam mixed oil heat exchange, save energy.
(5) The tail gas recovery uses the water bath type tail gas recovery device, the tail gas
recovery two times utilization, reduces the solvent consumption.

Specification of Rice bran oil processing plant/oil solvent extraction machine
Condition: New Type: Hot Air Dryer

Automatic Grade Automatic Voltage: 220V/380V/440V
Brand Name: Hanson Power(W): 5.5KW
Production Rice Bran (15% to Phosphoric acid: 2-3 Kg/t oil
capacity: 20%)
Capacity: 10 tonnes/day, or Colour: As required
According to request
Raw material: Rice Bran Advantage: High oil yield, retain
low power
Model Number: CT-C-II Weight: 1200 kg
Function: Oil Solvent extractor Certification: ISO9001
Warranty: 1 Year Year: 2019
After-sales Engineers available Dimension (L*W*H): 2000*1400*1850mm
Service Provided: to service machinery
overseas
Name: Rice bran oil Area: Depend on the
processing plant /oil capacity
leaching plant /oil
solvent extraction
machine
Material: Steel and Iron Factory: Henan Hanson,
machinery Co., Ltd.
Plant and Machinery:
Productive Capacity: 10-40 Tonnes per day
Processing Material: Puffed Rice Bran
Major Equipment: Rotocel Extractor/Loop Extractor/Towline Extractor, D.T.D.C
Desolventizer Toaster, Evaporation and Steam Stripping Equipment, Paraffin Recovery
Equipment
Application: The extraction of rice bran oil, Get crude rice bran oil. The production line of rice
bran oil extraction machine adopts the type of safe and advanced technology oil processing
craft on basis of chemical extraction theory. Developed countries make processing of 90% oil
by oil extraction process. The extraction process mainly includes extraction system,
desolventizing and toasting system, evaporation system and condensation system.
Oil Extraction System: For extracting oil from Expanded rice bran to get Miscella, which is
mixture of Oil and Hexane;
Wet Meal Desolventizing System: For removing Solvent from Wet Cake Meal, toast as well
as dry Meal, to get proper finished Meal Product qualified for animal feed;
Miscella Evaporation System: For evaporating and separating Hexane out from Miscella
under negative pressure;
Oil Stripping System: For thoroughly removing residual Solvent to produce standard Crude
Oil for the following oil refining process

Solvent Condensing System: For recovering and circulating use of Hexane;
Paraffin Oil Recovering System: To recover residual Hexane
The cost of plant & machinery is estimated at US$ 18000 including installation and
commissioning. The installed production capacity will be 1 tonne per day. The cost estimates
for plant & machinery has been worked out based on the cost figures available from recent
orders paced for similar items in the recent past, duly updated to cover the price escalation in
the intervening period. These costs are given in the following tables:
Plant and Machinery
S. No. Particulars Quantity Rate (US$)

1. Bran Oil processing machine 1 8000
2. Solar generator 1 3000
3. Packaging machine, Pouch sealing machine 1 1000
PU Building for Processing Unit Installation (1000
4. 1 6000
sq. ft.)
Total 18000
Misc. Fixed Asset Costs:
US$ 7320 has been estimated under the heading of miscellaneous fixed assets. The details
of electrical installations for power distribution have been considered commensurate with the
power load and process control requirements. Other miscellaneous fixed assets including
furniture, office machinery & equipment, equipment for water supply, office stationery,
telephone and refreshment, workshop, fire-fighting equipment, etc. will be provided on a lump
sum basis as per information available with the consultants for similar assets. The details of
miscellaneous fixed assets and their associated costs are been shown in table below:
Miscellaneous fixed asset cost

S. No. Particulars Quantity Rate (US$)
1. Office Equipment 1 1000
2. Furniture and Fixture 1 1000
3. Miscellaneous Accessories 1 1000
4. Fire Fighting 1 70
5. Computer with Accessories 2 1000
6. Water Treatment Plant – 500 litres per hour 1 1000
7. Loading Tempo 1 250
8. Electrical and water lines Installation 1 2000
Total 7320
Pre-Operative Expenses:
Expenses incurred prior to commencement of commercial production are covered under this
head that total US$ 7632. Pre-operative expenses include establishment cost, rent, taxes,
traveling expenses and other miscellaneous expenses. It has been assumed that the funds
from various sources shall be available, as required. Based on the project implementation

schedule, the expected completion dates of various activities and the estimated phasing of
cash requirements, interest during construction has been computed. Other expenses, under
this head have been estimated on a block basis, based on information available for similar
projects.
Pre-Operative Expenses
Sr. No. Particular (for 1 year) Amount (US$)
1. Interest up to production @ 16% on term loan amount of US$ 4777

29855 (30% of total project cost)
2. Electricity charges during construction period 1000
3. Marketing Launch Expenses 1000
4. Technology Know-how 3000
5. Training expenses 1000
6. Travelling Expenses 1000
Total 11777
Cost of raw material:
Based on a processing capacity of 10 tonnes per day considering and 90 days of working per
year, the annual raw material consumption of the pack house is 900 tonnes. The cost of bran
based on its average selling price as determined through interview with randomly selected
farmers and converting it into US$ (with conversion rate of one US$=135) is $170/tonne.
Adding US$20 per tonne transportation cost from the field to processing unit, the raw material
cost for pack house would be US$190.
Cost of raw material

Rate per tonne (US$) for the
Qty. (Tonnes) per Raw material cost
Particulars raw Rice Bran at the
annum (US$)
wholesale
Raw Bran for
190 900 171000
Oil extraction
Note: converting 1 tonne of Raw Rice bran will produce 10 % oil, so in the model we will be
using conversion factor for oil extraction from per tonne raw rice bran.
Land Lease Charge:
Required land is 6,000 sq. ft. which has been considered on lease @ US$200 per annum for
first three years and @ US$232 for the fifth year and subsequently @5% increase every year.
Table Land lease charges

S. No. Year Lease charges Per Annum (US$)
1. 1st year 200
2. 2nd year 200
3. 3rd year 210
4. 4th year 221
5. 5th year 232

Total 1063
Electricity and Water Consumption Charges:
The unit cost of electricity has been considered @ PKR.20.70/ unit assuming that the entire
power requirement is met from the grid. A power supply of 2.2 Kw is deemed appropriate. The
expense on water supply, treatment and distribution has been suitably considered, based on
the tariff by water and sanitation agency (WASA) for per month consumption of water tariff of
@ 92.82 PKR/thousand gallons. Water requirements are approximately 100 gallons per day.
Electricity and water consumption charges

S. No. Description Amount Per Annum (US$)
1. Power Consumption 4000
2. Water Consumption 200
Total 4200
Human Resource Cost

One pack house manager, one accountant for six months, one supervisor for complete year
technical staff Salaries & wages (including benefits) for different categories of employees have
been considered based on present day expenses being incurred by other industries in the
vicinity. The breakdown of manpower and incidence of salaries & wages are detailed in the
table Salary & Wages. Salary & wages are increased @ 5% every year.
Salaries and wages

Sr. No. Description Requirement Salary/month (US$) Salary/annum (US$)
1. Plant Manager 1 600 7200
2. Accountant 1 450 5400
3. Supervisor 1 400 4800
4. Skilled Workers 2 300 3600
5. Driver 1 200 2400
6. Security Guard 1 200 2400
Total 2150 25800

Table 47: Cost of the Project
Sr. No. Particular Value (US$)
Fixed costs:
1. Plant and Machinery 18000
2. Misc. Fixed Assets 7320
3. Pre-operative expenses 11777
Operating costs:
4. Cost of raw material 171000
5. Land lease charges 1063
6. Electricity and water consumption 4200
7. Salary and wages 25800
8. Packaging Cost 44440
9. Marketing Cost 1000
10. Margin Money for Working Capital 1000
11. Contingencies 5% of Fixed Assets 366
Total variable costs 285966
Project Income Statement
Net profit (Net cash flow) = 36099
NPV =47,004
IRR =40%
Project Viability:
The Internal Rate of Return of the project is estimated at …..%, which is significantly higher
than the bank return rate of 16%.Hence, the project is deemed financially viable. The NPV of
the project is positive (US$ ….) at a discount factor of 16% during the first 5 years of operation
considered. This implies that the project generates sufficient funds to cover all its cost,
including loan repayments and interest payments during the period. This also indicates that
the project is financially viable over the long term.
Note: Extracting 1 tonne of raw rice bran will produce 20% of oil.

Annexure-7: Feasibility for Mechanical Rice
Transplanting
Operating efficiency @0.45 acre per hr (ha per 0.1
hr) 8
Per day efficiency @10 hrs work every day (ha) 1.8
Working days in a year 25
Area transplanted in a season (ha) 46
Revenue (US$)
15 0.1 0.2
Increase in per ha yield (%) % 0.07 4 2 0.29
Total increase in production for the whole 6.4 9.8 13.2
season (tonnes) 3.20 7 2 4
Price of paddy (US$/tonne) 377 377 377 377
244 370 499
Increase in revenue due to improved yield (US$) 1207 2 5 7
Direct variable costs
Cost of manual transplanting (US$/ha) 226 226 226 226
Cost of mechanical transplanting (US$/ha) 171 171 171 171
Saving in cost (US$/ha) 56 56 56 56
252 252 252
Total saving in cost during the season (US$) 2528 8 8 8
14. 14.
Cost of training support by the government 14.8 8 8 14.8
Maintenance (2% of the machinery cost) 120 120 120 120
Depreciation 550 550 550 550
Increase management cost of paddy field due to
improved plant population (0.05% of the initial 262 262 262
cost) 2622 2 2 2
Total variable cost 779 779 779 779
166 292 421
Gross profit 428 3 6 7
Indirect fixed cost
-
600
Machinery 0
-
600
Total 0 0 0 0 0
-
600
Grand total cost 0 779 779 779 779

-
600 166 292 421
Net profit (Net cash flow) 0 428 3 6 7
8.5
NPV % 1,051
IRR 15%
Annexure-8: Feasibility for Combined Rice Harvester

Operating efficiency @6 acre per hr (ha
per hr) 2.43
Per day efficiency @8 hrs work every
day (ha) 19.4
Working days in a year 20
Area harvested in a season (ha) 389
Revenue (US$)
Reduce post-harvest losses (%) 8% 8% 8% 8% 8%
Base year yield (t/ha) 1.87 1.90 1.92 1.94

Total increase in production due to
reduce losses for the whole season
(tonnes) 58 59 60 60
Price of paddy (US$/tonne) 377 377 377 377
Increase in revenue due to improved
yield (US$) 21977 22228 22482 22740
Added value of rice straw (US$/ha) 60

Increase in revenue due from straw
saving (US$) 23310 23310 23310 23310
Total Revenue 45287 45539 45793 46050
Direct variable costs
Cost of wheat harvester (US$/ha) 56 56 56 56

Cost of Kabuta rice harvester (US$/ha)-
33% higher than the rice transplanter 74 74 74 74
Additional cost of rice harvester
(US$/ha) 18 18 18 18
Labour cost 31,040 31,040 31,040 31,040

Total additional operating cost of
harvester (US$) 7,122.62 7,123 7,123 7,123

Gross profit -16186 -15934 -15680 -15423
Indirect fixed cost

-
19
00
Machinery 0
-
19
00
Total 0 0 0 0 0
-
19
00
Grand total cost 0 38163 38163 38163 38163
-
19
00
NPV 8.5% 5,066

IRR 21%

Annexure-9: Feasibility for Rice Dryer
Year
Revenues 1 Year 2 Year 3 Year 4 Year 5
Revenue (US$)
Capacity of the dryer per day (tonnes) 15 15 15 15
Working days in a year 50 50 50 50
Quantity of rice that can be dried
(tonnes) 750 750 750 750
Dried paddy (conversion factor=93%) 698 698 698 698

Premium for drying paddy (value
addition) (US$/tonne) 64 64 64 64
Total revenues (US$) 44748 44748 44748 44748
Direct varaible vosts
Labour cost 25200 25200 25200 25200
Electricity and water 2500 2500 2500 2500
Depreciation sost 1350 1350 1350 1350
Maintinance (5% of the machinery, equipment
and furniture cost) 900 900 900 900
Land lease charges (5%) increment on
annual 300 315 331 347 365
Marketing (US$5/tonne) 2250 2250 2250 2250
Office administration 556 556 556 556
Gross profit 44748 44748 44748 44748
Indirect fixed cost 44.1
-
1800
Machinery 0
-
1800
Total 0 0 0 0 0
-
1800
Grand total cost 0 33071 33086 33103 33120
-
1800
8.5
NPV % 18,595
IRR 53%

Annexure-10-: Costs and revenues statistics of
basmati cultivation by conventional transplanting
and improved management practices (Rs/acre)
Added cost
Marginal Small Medium Large Overall due to
Item
(N=108) (N=119) (N=53) (N=61) (N=341) improved
practices
Seedbed preparation and nursery TP
Disc plowing 450 346 519 381 415 0
Dry plowing 4,931 4,809 4,238 4,740 5,017 0
Dry planking 528 432 519 510 588 0
Wet plowing 5,899 6,204 6,157 6,134 6,086 0
Wet planking 1,832 1,821 1,643 1,772 1,791 0
Nursery raising 1,730 1,730 1,730 1,730 1,730 900
Nursery transplanting 9,885 9,885 9,885 9,885 9,885 1,000
Fertilizer, manure
application
Di-ammonium phosphate
1000
(50-kg bags,) 5,938 5,738 5,738 6,671 5,938
Urea (50-kg bags,) 4,766 5,016 4,766 4,515 4,801 0
Nitrophos (50-kg bags,) 96 48 386 96 96 50
Other (e.g. sulfate of
50
potash) 93 371 278 834 371
Boron 42 63 42 168 63 20
Zinc sulfate (10-kg bags) 1,390 1,520 1,353 1,594 1,464 500
Farmyard manure
50
application 291 323 196 78 135
Green manuring 0 0 0 280 40 0
Irrigation
Canal 210 210 210 210 210 0
Tubewells 13,662 15,756 13,202 14,850 15,736 0
Mixed (Canal+tubewell) 7,800 6,600 7,350 9,000 8,013 500
Plant protection
Manual weeding 185 0 0 0 74 0
Weedicide 1,975 2,054 1,975 2,331 2,074 0
Granular pesticide 1,173 1,247 1,519 1,433 1,297 0
Pesticide spray 1,817 2,192 2,232 2,430 2,113 0
Harvesting and threshing
Manual harvesting and
20
threshing cost 717 337 85 36 132
Combine harvester for
500
wheat cost 6,783 6,835 7,141 6,653 6,765
Combine harvester for rice
0
cost 204 473 290 985 748
Cost estimates
Total variable costs
4,590
(Rs/ha) 72,192 73,539 71,163 76,329 74,837

Added cost
Marginal Small Medium Large Overall due to
Item
(N=108) (N=119) (N=53) (N=61) (N=341) improved
practices
Mark-up (12.5% per
annum) 4,043 4,148 3,996 4,353 4,246
Total fixed costs—land rent
for 6 months 43,245 43,245 43,245 43,245 43,245
Total cost (Rs/ha) 119,480 120,932 118,404 123,927 122,328
Yield (kg/ha) 3,675 3,878 3,778 3,762 3,781
Value of straw - - - - -
Costs and returns
estimates
Total cost (Rs/ha) 119,480 120,932 118,404 123,927 122,328
Production cost at farm
gate (Rs/kg) 33 31 31 33 32
Market costs/40-kg
(transport+commission) 2 1.9 1.9 1.9 1.9
Av. market price obtained
(Rs/kg) 35 36 36 38 36
Net income/ha (all costs
included) 2,273 9,507 9,135 11,054 5,765
Net income/ha excluding
land rent 45,518 52,752 52,380 54,299 49,010
ha = hectare, kg = kilogram, md = 40-kg; Source: Baseline Survey data, 2017.
Note: This table is taken from Bashire et al., 2018 for traditional technology, while additional cost under
improved technology is estimated after stakeholders’ consultation.

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CLUSTER DEVELOPMENT BASED AGRICULTURE TRANSFORMATION PLAN

Planning Commission of Pakistan, Ministry of

1 KNOWLEDGE FOR LIFE

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4 KNOWLEDGE FOR LIFE

Dr. Babar Ehsan

5 KNOWLEDGE FOR LIFE

Dr. Mubarik Ali

6 KNOWLEDGE FOR LIFE

My sincere thanks go to Planning Commission of Pakistan for this initiative and

Dr. Ikram Saeed

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1.2. National scenario

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Annual Growth Rates: Area= -0.54%; Production= 0.60%; Yield= 1.14%

Source: Various Issues of Punjab Development Statistics, 2008, 2012, 2017

24 KNOWLEDGE FOR LIFE

However, basmati aroma is still favoured mainly by Indian-Pakistani-Turkish-Middle Eastern

25 KNOWLEDGE FOR LIFE

1.3. Global Scenario

Table 3: Impact of the release of new Agny varieties on farmers income

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Table 4: Export of basmati from India and Pakistan during 2001-2017

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Figure 2: Plummeting trend of Pakistani basmati export share as compared to India

Source: Drawn from the data in Table 4

Table 6: Export trend of rice from Pakistan during 2010 -2018

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i. To identify the major clusters of basmati rice production in Punjab, Pakistan

v. Suggest technological, institutional, infrastructure and policy interventions to achieve

vi. Conduct economic and social feasibility of the suggested interventions

31 KNOWLEDGE FOR LIFE

3.1. Macro-Data from Secondary Data:

3.2. Stakeholders Consultations:

3.3. Literature Review:

a. Local and Global context of basmati rice cluster sectors;

b. Production potentials and review of basmati rice cluster sectors;

c. Cost of production, best practices, seedlings/transplanting, harvesting and threshing,

d. Branding, marketing/trading and processing information from traders, wholesalers,

e. Issues and constraints relating to production, harvesting/threshing, drying, processing,

32 KNOWLEDGE FOR LIFE