Irfan Noor

The rice sector of Pakistan, contributing approximately $4 billion annually to the nation’s agricultural economy, is currently facing a significant threat due to an inquiry initiated by the Federal Investigation Agency (FIA)  The inquiry targets 72 rice-exporting companies whose consignments were rejected by European countries for non-compliance with phytosanitary requirements. While ensuring compliance with international standards is vital for maintaining global market credibility, the actions taken by FIA raise serious concerns about jurisdictional overreach, procedural missteps, and the adverse impact on one of Pakistan’s most valuable export sectors.

Under Pakistan’s Constitution, the FIA’s jurisdiction primarily covers areas such as financial fraud, cybercrimes, and security matters. The agency’s involvement in agriculture-related issues—specifically phytosanitary compliance—goes beyond its mandate. Matters concerning sanitary and phytosanitary (SPS) standards fall under the purview of the Ministry of National Food Security and Research, the Pakistan Standards and Quality Control Authority (PSQCA), and the Department of Plant Protection (DPP). The FIA’s demand for documents such as letters of credit (LCs), pre-loading inspection certificates, test certificates, and even details of the warehouses where consignments were stored, appears to be an overextension of its authority. Exporters have reported incidents of harassment, with FIA officials entering business zones and pressuring them. Such actions have instilled fear in the rice export community, distracting exporters from focusing on quality and market growth.

This inquiry comes at a time when the rice sector should be concentrating on addressing real challenges. The recent lifting of India’s ban on rice exports poses serious competition to Pakistani exporters. India’s rice exporters operate with the benefit of government subsidies, autonomy in export policies, and freedom to innovate and expand their market presence. Meanwhile, Pakistan’s rice exporters face bureaucratic hurdles and a lack of supportive infrastructure. Instead of addressing the sector’s pressing issues—such as improving phytosanitary standards, reducing aflatoxin levels, and strengthening compliance with international regulations—the focus has been diverted to an invasive investigation that does little to enhance Pakistan’s standing in global rice markets.

To understand the impact of such inquiries, a comparison with India’s rice export policies is instructive. India exported over $10 billion worth of rice in 2022, driven by supportive policies, subsidies, and governmental focus on improving production quality. In contrast, Pakistani rice exporters are forced to navigate regulatory uncertainties, and now, the added pressure of an inquiry that appears misaligned with the true needs of the sector. This discrepancy puts Pakistan at a significant disadvantage in global markets.

The consequences of this inquiry are likely to be far-reaching. Investor confidence in Pakistan’s rice industry may decline, as the current climate of suspicion and fear discourages further investment. Exporters may be distracted from pursuing international market opportunities, focusing instead on responding to the FIA’s demands. Moreover, Pakistan’s reputation as a reliable rice exporter could suffer, leading to increased scrutiny from international buyers and potential market losses.

To ensure the continued success of the rice sector, the government must reevaluate the scope and jurisdiction of the FIA’s involvement in agricultural matters. The responsibility for improving phytosanitary compliance and addressing international rejections should rest with relevant agricultural bodies that possess the necessary expertise. Furthermore, there is an urgent need for government support to empower exporters through subsidies, investments in modern technology, and strategic efforts to penetrate new markets.

As one of the largest contributors to Pakistan’s agricultural exports, the rice sector deserves a more thoughtful approach. Instead of harassing exporters, the government should focus on creating policies that promote innovation, sustainability, and competitiveness on the global stage. Only through such a shift in priorities can Pakistan hope to maintain and expand its market share in an increasingly competitive global rice market.

The writer holds a graduation degree in External Law from the University of London. In addition to his work in litigation, he serves as the Treasurer of the Rice Exporters Association of Pakistan (REAP) and is the Managing Director of BSP Foods (Pvt) Ltd. With his diverse expertise, he offers a comprehensive and analytical perspective on the dynamics, standards, comparability, and sustainability of Pakistan’s rice sector.

Published Date: October 10, 2024