Countries are increasingly recognizing the importance of cold storage in food security, adopting measures such as subsidies and preferential tariffs to support growth in this sector. Pakistan risks falling behind without similar policies. The National Electric Power Regulatory Authority (Nepra) has faced criticism for classifying cold storage facilities as 'commercial' entities, which stakeholders argue overlooks their industrial role in preserving agricultural produce and maintaining export supply chains, thus increasing operational costs significantly.
This classification has implications beyond agriculture, affecting the competitiveness of Pakistan's exports by increasing costs. Nepra's decision contradicts government initiatives aimed at enhancing the national cold chain infrastructure, crucial for reducing food wastage and ensuring a consistent food supply. The 'Cool Chain Industry' initiative, aimed at modernizing cold chain facilities across Pakistan, has attracted significant investment, but Nepra's tariff classification threatens the viability of these investments.
Experts argue that this policy undermines the objectives of the Cool Chain Industry initiative, making profitability challenging and deterring new investments. The decision may also affect Pakistan's relationship with global financial institutions like the International Finance Corporation and the World Bank, which support cold chain projects critical for reducing food wastage and boosting agricultural exports. An effective cold storage infrastructure is vital for the agriculture sector, which contributes significantly to Pakistan's GDP, and the current policy risks exacerbating food wastage and diminishing the nation's competitiveness in international markets.
The imposition of commercial tariffs on cold storage facilities raises concerns about food safety and regulatory compliance, potentially leading to cost-reduction strategies at the expense of best practices. This could compromise food safety, undermine Pakistan's credibility in global markets, and deter investor confidence in the sector. Stakeholders are urging the government to reconsider Nepra's decision to ensure the growth and innovation of the cold chain sector, which is essential for Pakistan's economic and social development.
Without timely intervention, Pakistan risks losing momentum in a sector crucial to its future. Industry experts call for a reclassification of cold storage facilities as industrial units to unlock investment, stimulate innovation, and enhance food security. Aligning policies with international standards is essential for a sustainable and competitive future for Pakistan's agricultural and industrial sectors.
Source: The News