As Pakistan economy majorly depends upon agriculture income (more then 60%). In last two decades agriculture industry is growing much faster than before, but unfortunately growth rate is now on decreasing trend because of unfavorable economic conditions due to terrorism and flood in 2011 and now in 2014. But still large number of opportunities is available in agriculture industry for investment. Opportunities can be availed in fertilizer, pesticide, agricultural equipment (machinery) and in seed production (hybrid) sectors. Because of fewer number of available in these sectors. Government policies are favorable for investors in these sectors, but due to unfavorable economic conditions, investors avoid to make any investment.
Cotton and cereal (wheat etc) crops are the main productions of agricultural industry. Fertilizer and textile industry are strongly connected with these two productions. Textile industry majorly damaged due to energy crises and it affects the cotton productivity too.
Lesser number of threats for new entrants in agriculture industry sectors results favorable conditions to new investors and for existing firms in case of expansion of their business.
So these five forces analysis show the opportunities and threats of agriculture industry and its sectors. Porter’s fives forces application revels the attractiveness of agriculture industry, therefore firms can develop strategies to avail the available opportunities and avoid the treats by applying the five forces analysis in agriculture industry and in agri-sectors.
Market Trends
Agriculture forms the backbone of Pakistan’s economy. The sector contributes 25 percent of the country’s gross domestic product (GDP) and employs almost half of its labor force. For these reasons, agricultural productivity growth is a key factor in Pakistan’s economic development and poverty alleviation objectives. In turn, agricultural research and development (R&D) is crucial in generating agricultural productivity gains through new and improved crop varieties, cropping practices, labor-saving technologies, postharvest and processing methods and marketing mechanisms.
