The FINANCIAL — Afghanistan's agriculture sector, battered by years of war and drought, is getting support from the Asian Development Bank (ADB).
ADB is extending a $30 million grant from its Special Funds for the Agriculture Market Infrastructure Project to build facilities and standards in the livestock and horticulture industries. The Afghan government will make an in-kind contribution of $1 million.
Agriculture accounts for half of the country’s gross domestic product and is the major source of employment and income for most Afghans. Within the sector, horticulture and livestock industries play a key role.
Prior to the long period of conflict and severe droughts in the last decade, Afghanistan dominated the world’s pistachio market and supplied 20% of the total global market for raisins. But with the destruction of infrastructure and limited access to finance, technical, and market support, agricultural output and quality declined sharply.
Since 2001, there have been gains in horticulture production and livestock numbers, but the sector still needs major and rapid improvement in basic facilities, product standards, and regulatory policies. At present, butchers slaughter animals in the street or in backyards because of the destruction of abattoirs during the war.
The project will invest in five slaughterhouses as well as a number of small-scale packing, sorting, grading, drying, and cold storage facilities for the horticulture sector. It will put up laboratories to certify product quality, provide technical support for product marketing both at home and abroad, and help build up the capacity of the Ministry of Agriculture, Irrigation and Livestock to create and implement sanitary and phytosanitary regulations.
“The project will help cut product losses, raise product standards and increase product competitiveness in both domestic and international markets. It will increase returns to producers and traders, provide opportunities to add value to products and create employment, as well as bringing public health and environmental benefits,” said Allan Kelly, Principal Rural Development Economist with ADB’s Central and West Asia Department.
Setting up new facilities, marketing infrastructure, and a regulatory environment that cuts post-harvest losses can also help galvanize private sector interest in the agriculture industry. It will address key constraints limiting private businesses investment, by improving marketing and supply chains, and product standards.
To help encourage private investment, the project will use a public-private partnership model, with the management and operation of the slaughterhouses contracted out to private companies, which will have the option to acquire ownership of them. Similarly, marketing facilities set up in the horticulture sector will be operated and managed by farmer organizations and agricultural cooperatives, which will eventually assume ownership.
The project will have additional benefits for rural households and the general economy, as the incremental returns from the enterprises will provide households with viable cash alternatives to illegal opium poppy production, which has become a major cash crop for many rural households.
