PUBLIC PRIVATE DIALOGUE Report – Kandahar

 

Event Date October 23rd 2019
Event Venue Kandahar ACCI Hall, Kandahar
Event Topic Fruit Processing Industry Development
Supported By World Bank Group and ACCI
Number of Participants Invited 65
Number of Participants Attended 50

 

On October 23, 2019, the Executive Committee on Private Sector Development (PriSEC) organized its 3rd round of Public Private Dialogue (PPD) events in Kandahar province on Fruit Processing Industry Development. For better coordination, the Secretariat managed the event in collaboration with ACCI. Representatives from the government, private sector, and international partners were invited to attend.

 

Objectives:

  • Assessing and identifying the obstacles and opportunities associated with the fruit processing industry
  • Identify challenges of dry and fresh fruit packaging and transportation
  • Identify challenges at trade ports such as Air Cargo and Chabahar Port
  • Raising awareness of the importance of Food/Fruit Processing Industry development
  • Raising awareness of PriSEC and its achievements
  • Finding solutions to the challenges of the fruit processing industry in Kandahar

 

Agenda for the Event:

  • Speeches by the participants
  • Presentation on PriSEC
  • Presentation on Fruit Processing
  • Panel discussion
  • Group work

 

Responsibility for event coordination and facilitation between ACE and PriSEC was based on the relevancy of the topic to relevant PriSEC and ACE team members and PriSEC Working Groups. Accordingly, the following representatives attended the event from Kabul:

  • Khalil Rahman Burhani – Technical Advisor at PriSEC Secretariat
  • Akbar Danish – PriSEC Consultant
  • Abdul Malik Hamdard – PriSEC Consultant
  • Farhad Ahmad – PriSEC Consultant

 

Event Management:

Facilitator: Ahmad Rafi Siddiqi (Kandahar Citizen Charter)

Panelists:

  • Faridullah Habib, Senior Advisor, MoIC
  • Mohammad Hamed Sadat, Acting Director, MAIL
  • Gul Mohammad Arian, Director, MoEc
  • Abdul Baqi, Deputy Director, Kandahar ACCI Office
  • Khairgul Afghan, Deputy Director, Kandahar ACIM Office
  • Haji Abdul Ahad, Director, Kandahar Dry Fruit Association
  • Haji Nanai, Director, Kandahar Fresh Fruit Association

 

Event Participants:

Around 50 individuals participated in the event, including representatives from all sectors of the fruit industry, the private sector, the government, donor agencies working in the area, and civil society.

 

Participants Private Sector Civil Society
Provincial MRRD Directorate Kandahar ACCI Civil Society Members
Provincial MoIC Directorate Kandahar AWCCI University Lecturers
Provincial MoEc Directorate Kandahar ACIM Media Representatives
Provincial MoF Directorates (Mostofiat) and Customs Kandahar Fresh Fruit Association USAID Representative
Provincial MAIL Directorate Kandahar FACT University Students
Provincial MoWA Directorate Domestic industrialists
PriSEC Traders (Export and Import)
Agriculture Development Fund Kandahar Dry Fruit Association
Kandahar Transport Association
Fruit Sellers
Farmers and garden owners
12 ~30 8

 

Key issues and challenges addressed:

  • Lack of comprehensive marketing strategy in international markets for the Afghan products through MoIC and BMOs;
  • Lack of statistical date on forecasted harvest;
  • Lack of agriculture production capacity;
  • Lack of forecasted prices;
  • Lack of demand for local products in both domestic and international markets;
  • Producers’ lack of accessibility to loans and other challenges of access to finance, in particular, unavailability of Islamic compliant loans for the sector in Kandahar;
  • Lack of public awareness and capacity building programs at district levels for the farmers, value chain intermediaries, and associated stakeholders in the fruit supply chain;
  • Improper coordination mechanisms and discrimination against individual traders by the BMOs on access to aid, capacity building programs, and participation in international markets and exhibits;
  • Lack of community engagement programs to enhance coordination and cooperation among key fruit industry stakeholders, which results in:
    • Farmers lacking knowledge of the market and market demand
    • Fruit industry intermediaries and wholesalers unable to assess market supply and demand
    • Traders lacking standard packaging and access to proper fruit processing tools, equipment, mechanisms, and procedures
    • Chambers not implementing standard procedures or obeying protocols that are required for the national and international trade
    • MAIL lacking proper capacity building programs for farmers, lacking quality control laboratory facilities, and unable to provide organic fruit certificates;
  • Infrastructure related challenges including:
    • Lack of electricity for industrial parks and processing centers
    • Lack of skilled labor for standard processing methods
    • Lack of standard machinery and equipment for processing raw material and producing finished goods
    • Lack of standard packaging and marking procedures to properly secure and preserve goods during transportation
    • Improper marketing strategies, lack of market research, and lack of targeted marketing results in miscalculating demand for high value crops/goods;
  • Due to both a lack of coordination between the government and private sector and private sector procrastination, the private sector remains unaware of critical reforms, and as a result proceeds with outdated and ineffective practices;
  • Businesses lack expert legal staff to assist them in legal matters, especially regarding international trade disputes;
  • Zabul also produces dry fruits, such as almonds, figs, raisins, and walnuts, however, there is no storage facility or processing centers in Zabul;
  • Entities such as HVC – AVC provide technical support for the agriculture sector, such as machinery and packing facilitation for women in business. However, the facilities have only reached a few businesswomen;
  • The Kandahar Air Cargo port does not function as expected and required and remains a burdensome, costly, and restricted port for many Afghan traders;
  • Issues of insecurity, poor quality roads, and illegal customs tariffs being collected by government employees and terrorist groups on highways are issues that plague domestic transportation hubs and highways;
  • Land transport is inefficient, taking more than 11 days for goods to be transported from Kandahar to Kabul.
  • Currently, Afghan products including fruits are only transported to the Mumbai port; Afghan traders need access to alternative markets such as those in New Delhi, Bengal, Hyderabad, Bangalore, and others in order to diversify trade routes and obtain access to broader markets.
  • In the Indian market, Afghan traders function more as commissioners rather than businesspersons due to unfair trade deals done by the Indian trade counterparts.
  • Fresh fruits and vegetables are not always prioritized at customs points. This results in food spoilage, and hours of waiting at the customs and borders.

 

Key messages, outcomes, and recommendations:

  • MoIC to conduct a comprehensive marketing program through their commercial attachés to seek access to international markets for Kandahar produced fruits;
  • MAIL in coordination with MoIC to conduct an analysis on forecasting the production and supply of local fresh and dry fruits in the domestic and international markets, and facilitate access to markets through exhibitions, expos, PPDs, etc.;
  • MAIL and MoIC in coordination with BMOs to conduct price and demand analysis for the locally produced agriculture products in international markets in order to avoid price falls and protect local traders and investors;
  • MAIL to conduct technical workshops for farmers and associated stakeholders on increasing the nutritional value of agricultural products and enhancing the quality of harvested goods;
  • MAIL, MoIC and BMOs in coordination with ACIM to support business processing industries by:
    • Facilitating businesses’ access to electricity
    • Purchasing, leasing, or granting processing equipment to businesses
    • Training skilled labor for industrial work
    • Introducing and supporting standard packaging procedures, systems and equipment to businesses
  • MoIC, MAIL and BMOs to conduct comprehensive awareness programs on the development of the agriculture sector, recent government reforms and initiatives, and identification of potential markets in the region. The programs should also include preliminary analyses of the market supply and demand, consumer  preferences for specific products and quality demanded, and potential for growth;
  • MAIL, MOIC, and BMOs should cooperatively increase community awareness of and explicitly market locally produced fruits and vegetables in Kandahar;
  • BMOs should be proactive in finding international markets, and helping businesses to develop marketing strategies for and access to international markets;
  • GIRoA to improve land transportation and to source alternative trade ports beyond the Air Cargo port, such as the Chabahar Port or the Lapis Lazuli port,  to increase access points to new markets for Afghan traders;
  • GIRoA to implement standard transportation mechanisms and to provide subsidies on rental transportation means so local exporters can compete in international markets;
  • DAB, MoF and international donor agencies to facilitate access to finance including by supporting funding schemes, reducing barriers to access to credit and grants, and promoting the provision of short- and long-term loans;
  • Specific sites including the 1008 Jerib land in Spin Boldak and 950 Jerib land in Daman District to be allocated to fruit processing industries; the 1000 Jerib land site in front of Kandahar airport, currently unused, to be used as an economic zone and industrial park;
  • Establish a cargo terminal, a hotel, and a cold storage facility with multiple capacities at the Kandahar International Airport;
  • MAIL, MoIC, and BMOs in coordination with donor agencies to plan short- and long-term training programs to improve the local skilled labor force;
  • GIRoA and donor agencies to support skilled labor education for industrial work becoming part of education programs at school, universities, and TVET institutes in Kandahar;
  • Private sector BMOs and the business community to share their experience and technical capacity on advanced fruit processing advanced methods and successful approaches with businesswomen so that the women-owned businesses can expand;
  • MoF and ACD to prioritize fresh fruit and vegetables before other goods transported through customs for trade. Furthermore, online delivery of goods will avoid the missing ship and air cargos which carries huge transportation costs in international trade.
  • MoIC, MoFA and MAIL to discuss and negotiate with the Indian government on provision of access to alternative markets in India such as those in New Delhi, Bengal, Hyderabad, Bangalore, and others;
  • The Afghan government should have a physical facility, such as a marketplace, in various Indian economic zones to store goods, and find local buyers for the products;
  • BMOs should be proactive on facilitating access to international markets. The chambers need to have professional personnel such as economists and commerce specialists who can conduct assessment of foreign markets, identify potential markets, competitive consumer products, and conduct analyses of markets in different regions.

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