ISLAMABAD, Jan 16: The Ministry of Food, Agriculture and Livestock (Minfal) has launched a project for the improvement of horticulture and livestock related business in the country, official sources said here.

About 2,000 agro-enterprises are expected to benefit from the agribusiness support fund operations over the five years of the project life.

Further, a handful of institutions are expected to develop dedicated agribusiness finance functions, which could benefit an additional 10,000 agro-enterprises, (including up to 12,500 farm entrepreneurs) by improving access to finance, providing significant jobs and income generating opportunities.

The total cost of the project is estimated at $49 million to which the government will contribute $6.9 million, the agribusiness enterprises $10.4 million, private sector institutions $600,000, and the beneficiaries $100,000. The Asian Development Bank will provide a concessional loan of $31 million for the project.

The agri-business development project would lead to development of 705 agriculture business enterprises through formation of 1,250 farmers groups involving 12,500 farmers. Additionally, the project will develop 100 business development support companies and 30 research and extension service provider companies as well as supporting 10,000 agriculture business enterprises backed with a strong human resource component.

The project will focus on horticulture business, through actions to improve the livestock and dairy institutional framework, and support to the selected enterprises will be provided.

The agriculture sector accounts for 25 per cent of gross domestic product, almost half of jobs, and about 70 per cent of exports. However, the sector's growth has been on the decline since 1990, and yields of major crops have stagnated in the past decade.

Commercial agriculture and agribusiness development in the country is constrained by poor infrastructure, sector institutions and policies, and governance practices. Limited access to modern technology and to financial and business development services further hampers development, says the project document.

The rationale of the project is to address constraints that impede development of the sector, and exploit domestic and export market opportunities in the agribusiness sector, thereby contributing to increased economic growth and rural employment.