Afghanistan Analysts Network – English

Economy, Development, Environment

Crops not Watered, Fruit Rotting: Kandahar’s agriculture hit by war, drought and closed customs gates

Ali Mohammad Sabawoon 22 min

Farmers across Afghanistan have been hit hard by drought and fighting in recent years. In this report, we look at how this has affected agriculture in one province, Kandahar, famous for its fruit production. Much of the fruit crop is – or should be – exported, yet the frequent and unpredictable closure of crossings into Pakistan has been an additional headache for farmers and exporters in the province. Those trying to dry and process food crops in Kandahar’s industrial park have also been hit by its collapse since the takeover of Afghanistan by the Taleban. AAN’s Ali Mohammad Sabawoon has been hearing from farmers and others about the woes affecting Kandahar’s agricultural economy.

A farmer shows a drought-damaged pomegranate from his orchard in Kandahar. Photo: Alessio Romenzi/FAO, 2 November 2021

Agriculture is the backbone of Afghanistan’s economy, accounting for 44 per cent of all jobs in the country overall and more than half (52.6 per cent) of jobs in rural Afghanistan (see Afghanistan Living Conditions Survey (ALCS) 2016-2017: Analysis Report here). While agriculture’s share in the Gross Domestic Product (GDP) has been on the decline, down from 30 per cent in 2007 to 22 per cent in 2016, the sector has remained an important source of livelihoods for rural communities and plays a critical role in determining the price of basic food items on the domestic market, according to the 2016-17 ALCS. Afghanistan’s agriculture has again risen in importance now that many other sectors of the country’s aid-dependent economy have collapsed. (see AAN’s reporting on the economy here, here and here).

Kandahar province has long been viewed as one of Afghanistan’s agricultural hubs. The provincial economy is heavily reliant on farming, with around 45 per cent of the workforce engaged in the sector in 2007, which according to the World Bank, is the only year for which this data is available (see here).[1] For an in-depth discussion on the province’s economy and labour force, see this 2011 Samuel Hall report commissioned by Mercy Corps and this undated GRM International profile of Kandahar province. Kandahar’s main export products — grapes, pomegranates and figs — are grown in Arghandab and Arghistan districts in the north and northeast of the province, respectively (in particular pomegranates), Panjwayi and Zheray in the west and southeast, respectively (especially grapes) and Shah Wali Kot, the northernmost district bordering Uruzgan and Zabul provinces (mainly figs).

Its famed fruit accounts for a large part of Afghanistan’s total fresh and dried fruit exports, according to the director of the Fresh and Dry Fruits Association of Kandahar, Haji Nany Agha (see Pajhwok report here). In the Afghan solar year 1398 (2019-2020), the head of the province’s Chamber of Commerce and Industry, Haji Nasrullah Zaheer, told Pajhwok news in February 2020, Kandahar exported 168,000 tons of dried and fresh fruit with an estimated value of USD 198 million. This, he said, was despite the 2019/20 harvest having been badly affected by fighting and drought.  

However, agricultural productivity in Kandahar has been weakened over the long term by recurrent droughts and poor water resource management. Over the past two decades, droughts have forced farmers to dig deeper wells in search of precious water to irrigate their farms and orchards, costing them thousands of dollars and depleting underground water resources. One farmer, Esmatullah, told AAN that only those who had saved considerable sums of money from the sale of their fruit in previous years could afford to invest in digging deeper wells. The past two years of severe drought meant tens of thousands of acres of rain-fed land, mainly in Daman, Khakrez and Maiwand districts, did not have enough water to grow heavily water-dependent crops, such as wheat and melons. (See AAN’s report on the effects of drought and global warming in Afghanistan here).

Years of fighting over territory between the Taleban and the former government forces and its international backers have also made it difficult for farmers to tend their fields and orchards and left them struggling to transport their produce to markets. All were severely affected in the last round of fighting that intensified in November 2020 (see reporting here), with a Taleban offensive that was beaten back by Afghan government forces with the help of US airpower, but resumed and continued until Kandahar city fell to the Taleban on 13 August 2021.

In addition, protracted closures of the Spin Boldak/Chaman crossing into Pakistan have hit farmers hard. These closures led to large-scale spoilage as fruit-laden trucks were left waiting in the hot sun. When the crossings were open, delays in processing and inefficiencies in customs clearance procedures pushed up the costs of doing business for exporters.

A final threat affecting Kandahar’s farmers and food exporters has been the dire problems facing Kandahar’s industrial park, where fruit drying and packaging and animal feed production take place. Agro-industry accounts for more than 90 per cent of manufacturing in Afghanistan, as a whole, according to the 2014 World Bank Report Revitalizing Agriculture for Economic Growth, Job Creation and Food Security, and depends on domestic raw materials. However, similar to other areas of activity in the manufacturing sector, over the long run, agro-industries have faced barriers to growth, including a lack of reliable electric power, rural road networks and transport facilities, working capital and access to industrial land. Since the change of government in August, the Kandahar industrial park has nearly collapsed, with factory owners forced to cease operations because of a lack of electricity. Many factory owners, not just those dealing with agricultural produce, are considering moving their businesses abroad to Pakistan and Iran.

This report will look in turn at how the conflict, border closures and the collapse of the industrial park have hit agriculture in Kandahar. It begins with a scrutiny of the toll taken by the conflict on farming in several districts, especially Arghandab, and at what could be done to improve matters now the conflict is, at least for now, over.

The conflict’s toll on one district: Arghandab

The Taleban’s November 2021 offensive came in the middle of what is many people in Arghandab a crucial time, the pomegranate harvest (October to January). It is also when farmers prepare and irrigate their fields for the coming year. Several residents told AAN the Taleban had pulled back after farmers warned them the population would rise up against them if people were not allowed to work their land, although US airstrikes were also reported as the cause of the Taleban’s withdrawal. However, in December, just as farmers were starting the critical task of ploughing their fields and fertilising their orchards, the fighting started up again. By early February, residents told AAN that the Taleban had captured around 90 per cent of Arghandab district and were steadily progressing. Fighting then moved on to other districts such as Panjwayi, Zheray, Maiwand and Shah Wali Kot.

According to residents, in April, government forces again drove Taleban fighters out of the district. On 4 April, the government declared that it had cleared the entire district but warned that the Taleban had planted thousands of mines that could pose a danger to returning populations. A local journalist told AAN that mine clearance operations were slow because the demining agency apparently needed prior permission from the Taleban. The slow pace of mine clearance hampered the return of the area’s residents and made it difficult for farmers to harvest their crops and tend to their land. Moreover, after the brief ceasefire agreed between the government and Taleban to mark Eid-ul Fitr (13-15 May), the fighters resumed their attacks.

During the fighting, even though it was sporadic and only sometimes intense, many houses were destroyed and orchards damaged, and crops and the harvest harmed. There was large-scale displacement. A resident of Arghandab told AAN that only those who did not have the means to leave or wanted to stay to protect their houses and orchards remained in the district. One farmer told AAN that due to the severe fighting, displacement and water shortages, the district’s farmers had been unable to grow their traditional crops of maize, pulses, peanuts and vegetables, such as radish and okra, in 2021. Shortages of irrigation water had been caused by fighting in Shah Wali Kot, where the province’s only large dam, Dahla Dam, is located. It regulates the water flow of the Arghandab River which irrigates not only Shah Wali Kot and Arghandab, but also five other districts, Zheray, Panjwayi, Dand, Daman and Maiwand. Drought meant there was less water in the dam, and by the time it had increased to allow for irrigation, the Taleban had captured the dam and stopped the flow of water; this allowed them to cross the river when they needed to.

By May 2021, Kandahar’s farmers were fed-up – they needed to irrigate their crops. They sent a delegation to the Taleban to ask for water to be sent to their districts. At the time, the Taleban were again being pushed back from Arghandab district and the government was planning an offensive in Shah Wali Kot. The Taleban told the delegation they would allow the river to flow on the condition that the government refrained from starting its operation in Shah Wali Kot district. Finally, after about two months of negotiations led by the Zonal Water Management Authority, an agreement was reached between tribal elders and the Taleban and water from the Dahla Dam was finally allowed to flow to the province’s parched fields and orchards.

For many farmers, this was too late. They tried their best to save the harvest, but yields were much lower than normal (see Pajhwok reporting here and here). Abdul Khaliq, an experienced pomegranate grower, told AAN that when pomegranate orchards are not watered on time, a long period without water followed by water can cause the pomegranates to burst. Esmatullah, a farmer in Arghandab district, told AAN that because of the damage to his harvest, he was only able to sell his pomegranates for half the price of what he had been able to sell them for in the previous year:

When the orchard needed to be watered and sprayed, we couldn’t do it because of the fighting. We were displaced to Kandahar city and there were mines on all the roads to the district [so we couldn’t reach our fields]. We didn’t spray the orchard. We couldn’t take care of it and water it on time. This is why the pomegranates burst and burst pomegranates sell for very little in the market.

A man cycles along a sluice gate above the dry bed of the Zahir Shahi Canal on the outskirts of Kandahar city. Photo: Alessio Romenzi/FAO 2 November 2021

The effects of heavy fighting on farming in other districts

Arghandab was not the only district in Kandahar that saw intense fighting. In early 2021, people from Panjwayi, Zheray and Shah Wali Kot fled the violence, seeking refuge in Kandahar city. It was a crucial time in the farming calendar when Kandahar’s farmers irrigate their fields and spray their orchards for agricultural pests. A farmer from Panjwayi district, Nur Muhammad, told AAN that because of the fighting, he and many others in his district suffered a serious income loss:

I usually get around 800,000 Pakistani Rupees (around USD 4,500) every year for my grapes, but I made only 150,000 Rupees (around USD 850) this last year. The grapes were very good in the beginning, but because of the fighting, I was unable to spray and water my vines on time. The grapes either dried on the vine or were spoiled by pests and disease.

There was agreement for the Taleban to cease their attacks in May 2021, brokered by tribal elders. That would have allowed Panjwayi farmers to work their land and water their orchards, wheat fields and vegetable crops. However, a Kabul-based journalist from Panjwayi district, who asked not to be identified, told AAN that the Taleban violated the agreement and government troops responded in kind.

By mid-June, the Taleban had captured three districts, Maiwand, Ghorak and Khakrez. By early January Mianashin, Shor Abak and Panjwayi districts had fallen. The strategic district of Spin Boldak – where there is a major customs office managing exports to Pakistan – fell to the Taleban on 14 July, and Dand, the district nearest Kandahar City, fell two days later. A month later, the government lost Zheray, Takhtapol and Daman districts (all 13 August) and finally, after experiencing a month of fierce fighting, Kandahar City became one of the last holdouts to fall to the Taleban, also on 13 August, a day before the Taleban entered Kabul (see AAN reporting on the fall of districts to the Taleban here).

In addition to destroying or damaging orchards and spoiling wheat fields, the conflict also caused damage to homes and raisin-drying ‘houses’. Gul Ahmad, a farmer in Zheray district, detailed his losses: his vineyards and three raisin houses valued at 500,000 Pakistani Rupees (USD 2,800) were destroyed and the money he earned from selling his grapes was much lower than in previous years – not enough to repay his loans. He said he still owes USD 2,000. Many other farmers in Zheray district, he said, “couldn’t collect even a single sack of wheat – they’d been unable to water or harvest it” because of the heavy fighting.

How to recover now peace has come?

The Taleban takeover of Afghanistan brought an end to the fighting, but many farmers are still struggling to cope with the heavy losses sustained in 2021 and wonder how they will manage to plant and bring in a harvest in the coming year. There is hope that relief in the form of international support to Kandahar’s farmers could be on its way. Agriculture has been identified as one of the sectors prioritised for assistance and the United States Department of Treasury General Licence 15 allows for “the exportation or reexportation of agricultural commodities” to Afghanistan (see GL 15 here). The Asian Development Bank (ADB) has already contributed USD 65 million to the FAO to “provide crop and livestock inputs, including wheat seeds, fertilisers, to help 150,000 smallholder wheat producing families (see here).

On 1 February, the FAO Representative in Afghanistan, Richard Trenchard, visited Kandahar to assess the needs of farmers and met with provincial governor, Muhammad Yousuf Wafa. Trenchard said that before the fall of the Republic, FAO had supported the agriculture sector in 14 districts in Kandahar and there were plans for the organisation to resume operations and expand them to all the districts. He said FAO would begin with five or six projects to build check dams and clear canals (see Ariana News report here).

The severe drought that has plagued production over the past two years is set to ease this year, with winter rainfall fuelling hopes of recovery. The Dahla Dam is nearly full and farmers hope to use it for irrigation. Many farmers have also planted crops in rain-fed fields, including in Daman, where Najibullah Khan told AAN farmers had planted wheat. Another farmer in the same district, Muhammad Akram, said people were ploughing and preparing their land to grow melons. The rise in the water table, he said, would allow farmers to irrigate their melon fields using solar-powered well-pumps. In Panjwayi district, Samiullah reported that the water table was now higher than it was last year at this time and people had planted wheat and were watering their orchards.

Samiullah also said that farmers were also hedging their bets by planting opium poppies. Poppy cultivation has increased in Panjwayi this year, he said, because farmers were hoping that more water for their fields would mean a strong poppy harvest. They also think that an anticipated ban on opium cultivation by the Taleban, as they did when they were last in power in the 1990s, would increase market price and profits. In a Kabul press conference on 17 August, their first since they took power, Taleban spokesperson Zabihullah Mujahid said: “From now on, Afghanistan will be a narcotics-free country but it needs international assistance.” He urged the international community to step in with assistance for alternative crops (see the full transcript here). As anticipated, an official ban on opium cultivation was decreed by the Taleban on 3 April 2022.

Closed crossings … and rotting fruit

Afghan traders have long complained of the adverse effects of frequent border closures on their ability to export agricultural products to Pakistan. Afghanistan’s trade routes to Pakistan, as well as India and other international markets through the port of Karachi, are vulnerable to crossing point closures, particularly during crucial post-harvest periods, when delicate fresh fruit is susceptible to rot in unrefrigerated containers which can wait, sometimes for weeks, at crossings. The focus of this report is how border closures harm those growing and exporting food crops. The impact on imports is just as import and although outside the scope of this report is touched on in an annex.

The closure of official crossings often linked to political squabbles or security concerns have ailed trade between Afghanistan and Pakistan for years. For example, for several weeks in 2016, crossings at Torkham in Nangrahar and Chaman in Kandahar were closed in response to “several deadly attacks across Pakistan in mid-February” (see this Diplomat report) and tensions over Pakistan’s plans to build a fence at the Torkham crossing, which escalated into a gunfight between border guards (see Al-Jazeera here). In August of the same year, the gate was shuttered again after a group of Afghan youth, reportedly celebrating the country’s independence day, vandalised the border post and burned a Pakistani flag (see RFE/RL here).

In another high-profile incident, the Spin Boldak/Chaman gate closed in 2017 after a battle erupted between Afghan and Pakistani border forces. The fight was triggered by a registration process carried out by Pakistan on Afghan soil in Luqman and Jahangir villages of Spin Boldak. Although the battle lasted less than two days, the gate remained closed for 23 days (See AAN report here).

Even when customs offices are open, poor infrastructure and processing systems often mean long delays and high costs associated with exports. Fluctuations in Pakistan’s import policies also periodically interrupt trade (see, for example, here and here). In an international metric of the cost of doing business, the World Bank 2020 Doing Business Indicators, Afghanistan ranked 177 out of 190 countries and received a score of 31 out of 100 for trading across borders; export processing (completing all required documents and clearing customs) in 2020 took an average of 276 hours (compared to an average 127 hours in South Asia) and costed USD 797 (compared to an average USD 468 in South Asia).

According to the 2017 World Bank report, these difficulties at official crossings, together with a lack of sufficient infrastructure such as cold storage facilities, serve as a disincentive to traders who often opt to export lower value non-perishables such as raisins instead of higher value perishables such as grapes (see here). It cited delays at customs checkpoints as one of the main barriers to trade:

Such closures increase spoilage of perishable commodities and thereby reduce incentives for farmers to grow and trade perishables. Traders are also prone to losing contracts for the supply of nonperishable commodities that have been voided by late delivery. For instance, one trader reported that the “closure of Torkham border … delayed for 20 days my loaded vehicle [shipment of almonds and pistachios to India] and as a result of which the deal with the Indian importer was terminated because of late delivery.” Another firm reported that “it lost US$150,000 because its shipment of apples and grapes spoiled due to closure of Waga port.”

Over the years, closures at Spin Boldak have exacted a heavy toll on Kandahar’s agriculture sector, with estimated daily losses of USD three million, according to Zubair Motiwala, chairman and president of the Afghanistan-Pakistan Joint Chamber of Commerce and Industry, which he said had left “hundreds of stranded goods trucks loaded with fresh fruits, vegetables, poultry and other edible items” to rot at the gate in 2017 (see VOA report).

There are bilateral agreements between Pakistan and Afghanistan, but so far, they have failed to make exporting more reliable and efficient. These include the Afghanistan-Pakistan Transit Trade Agreement (APTTA) which aims to “facilitate [the] uninterrupted flow of transit trade between the two countries” as well as bilateral accords reached in the Pakistan-Afghanistan Trade and Investment Forum which was held during the two-day visit of Pakistan’s Prime Minister, Imran Khan to Kabul in January 2021.

In 2015, Pakistan was Afghanistan’s main export destination,[2]This and other export calculations are according to official trade data available on UNCOMTRADE (see here). but by 2019, India had overtaken it, with a share of 47 per cent or USD 410 million. Pakistan was pushed to the number two spot with a share of 34 per cent or USD 298 million (see here). The increase in exports to India was largely thanks to a bold move in 2017 to establish an air corridor between Kabul and New Delhi, which improved access to the lucrative Indian markets for Afghan farmers and their perishable produce (see here). As a result, exports of Afghan fruits and nuts to India nearly doubled from USD 114 million in 2016 (the year before the air corridor was established) to USD 232 million in 2019. Pakistan logged USD 82 million worth of imported Afghan fruits and nuts in 2019, about the same as it had done in 2016 (USD 84 million). While there were hikes in the value of Afghanistan’s export of fruits and nuts to Pakistan in 2017 ( USD 158 million) and 2018 (USD 131 million), these figures were well below the value of the same exports to India in the same period which stood at USD 225 million and 215 million respectively.

The onset of the Covid-19 pandemic further confounded political efforts to keep the customs checkpoints open to trade. Pakistan closed the Spin Boldak/Chaman crossing on 2 March 2020 (see here). It did not re-open for six months (see here) and continued to sporadically close to trucks and pedestrians as new waves of the Covid-19 pandemic took hold in early 2021. Pakistan closed the gate again on 14 July 2021 when the Taleban captured the Spin Boldak crossing (see here). It briefly opened for a few days on 14 August after two rounds of negotiations between the Taleban and Islamabad (see here), but closed again in early September after clashes broke out and several people were injured in a stampede as tens of thousands of Afghans tried to flee the country (see here, here, here and this video).

In Kandahar, many were hopeful that the takeover of the Taleban, a close ally of Pakistan, would herald a new era of genial relations between Kabul and Islamabad and bring unremitting closures at Spin Boldak to an end. Those who had managed to bring in a harvest, despite the fighting and drought, were optimistic that they would be able to get their produce to market in Pakistan and beyond. Their hopes soon faded and optimism gave way to frustration as the gate remained largely closed for several months (see here and here). When it finally did open on 2 November, it was too late to save most of the harvest. The extended closure also led to clashes, as the thousands of Afghans trapped behind closed gates began to protest, demanding Pakistan and the Taleban re-open the gate.

Pakistan closed the Spin Boldak gate again on 24 February 2022 after clashes erupted between the Pakistani and Taleban forces at the border, following Pakistani attempts to repair a damaged fence along the Durand Line (see VOA Deewa Radio report). “Both sides blamed each other for starting the clashes that later spread to several nearby villages,” reported Reuters. “Two civilians were killed and 22 wounded on [the] Afghan side, a local Taleban spokesman Mohammad Asif Hakimi said. Five Taleban soldiers were also wounded…. Pakistani officials said several wounded includ[ing]four security officials,” Reuters reported. According to reports from Kandahar, the crossing was reopened after the Nawruz holiday (21 March) to trade traffic, with the two countries agreeing on temporary licences for lorry drivers to facilitate the transit of goods (see Tolonews here).

Ongoing disputes over the siting of the border itself have stymied negotiations between the Taleban and Pakistan. In October 2021, a Taleban official, Rahmatullah Naraywal told the Institute of War and Peace Reporting (IWPR) that negotiations were underway and looking promising (see Etilaat-e Roz report here). However, according to another unnamed local source cited by Etilaat-e Roz, negotiations broke down after Pakistan insisted that a barbed-wire fence it has constructed along the Durand Line remain in place for nine years, a demand that, given the controversy over the Durand Line among Afghans of all political stripes, the Taleban government rejected.

The ongoing controversy about border closures has exposed existing fault lines. Pashtun nationalist politician and former Pakistani senator in the Pakhtunkhwa Assembly, Afrasyab Khatak, for example, has slammed Islamabad on ethnic lines for closing the gates. He told Khabaryal newspaper in 2020: “In addition to terror-lordism, Pakistan is economically murdering the great Pashtun nation” (see report here). Several farmers whom AAN spoke to echoed similar sentiments; they also accused Pakistan of using the closures, particularly during the harvest season, as a tool to exert political pressure on successive Afghan governments and a way to try to weaken the country’s economy.

On the ground, the closures hit farmers hard. Haji Nany Agha, the head of Kandahar’s Fresh and Dry Fruits Association, reiterated to AAN how this year the closing of the Spin Boldak gate fell right in the middle of the grape harvest (July to October). As a result, fresh grapes either spoiled in the trucks as they were waiting for the gate to open or were left to spoil on vines by farmers who did not even bother to pick them.

The owner of a large vineyard in Zheray district told AAN that his grapes had made him 2,000,000 AFS (around USD 11,500) in profits last year, but in the 2021 season, he had only earned 100,000 AFS (around USD 570). He blamed the closure of transit routes for the losses. There was no fighting in his area and he was able to bring in the harvest as usual, he said, but Spin Boldak closed in early July and he had had to send his grapes to Pakistan through Abadini, a crossing point in the Shamulzai district of Zabul province that leads to the Killa Saifullah district in Pakistan’s Balochistan. However, this was not an ideal option; for one thing, Abadini is far from Zheray and without refrigerated trucks, much of his harvest rotted during the several days-long journey. For another thing, the cost of transporting his grapes using this route was much higher, eating into his profits.

In October 2021, with the country’s banking sector paralysed, trader Jalalulrahman from Kandahar told the London-based Financial Times that “his latest consignment of lorries carrying figs and raisins took eight days to cross the Wesh-Chaman border with Pakistan, instead of the usual two hours” (see here). He commented on the difficulties traders face as a result of the collapse of the banks:

“There is no transfer of white [legal] money to banks…. Half of our money is blocked here in the banks and half is back with our customers in India…. We still try to export just to survive, but there are too many problems.”

He said the only alternative to banking was the region’s ‘underground’ hawala system, in which informal money transfers are arranged through a network of dealers. However, his customers were hesitant to use the system, which is illegal in India and Pakistan.

Mung beans being dried at a (still operating) factory on the Kandahar industrial park. Photo: Abdul Rawouf Danish, March 2022

The impact of the near-collapse of Kandahar’s industrial park on agriculture and food processing

Kandahar’s industrial park also suffered the ill effects of the fighting, recurrent closures of the Spin Boldak crossing and the country’s sudden change in fortunes. Many factories were forced to cease business activities as electricity supplies became increasingly expensive and unreliable and raw materials (such as for poultry feed and packaging) harder to source. The impact of its collapse is wider than just on agriculture, but as it has been so important for processing crops, it is included in this report.

Kandahar’s industrial park, established by the Karzai government, is located in the Shur Andam area along the Kandahar-Spin Boldak road. The Ghani government had plans to further develop the area by establishing a fire brigade, a hospital and paving the roads. These plans, however, did not materialise – only one kilometre of road was asphalted. Haji Sayed Muhammad, a factory owner, told AAN that the central government asked factory owners repeatedly to invest in the park, telling them this would improve the image of the private sector in the province. However, he said, the lack of political will, mismanagement and corruption at the provincial level made them reluctant to do so.

The industrial park had long been on shaky footing and struggling to live up to its potential. Faizullah Mashkani, the head of Kandahar’s Industrial Association, told AAN that 600 factories had been built by the 776 people who had received parcels of land from the government. These factories, which he said employed 5,000 people, processed foodstuffs such as fruit, oil, grain and snacks as well as non-food items such as polyvinyl chloride (PVC), paint, shampoo and soap. However, only 375 operated year-round. The others were active only seasonally, for example, after the harvest to dry and package fruit.

Mashkani emphasised that times have been hard and many factories have either collapsed or are near collapse. A few factory owners, he said, had tried keeping their factories running by installing their own solar panels or generators, but the rising cost of fuel was outpacing their profits, making it difficult if not impossible to continue their operations. Currently, about half of the 375 factories that had been active before the fall of the Republic have closed down, including some which only needed a little power to operate and some whose owners had installed their own solar panels, factory owner, Haji Sayed Muhammad told AAN. The rest are only partially functional.

Originally, the park was powered by massive generators supplied by the US aid agency, USAID. They ran for ten hours per day, one factory owner told AAN. However, after the withdrawal of US forces in 2014, USAID stopped providing fuel (see here). The Afghan government stepped in to supply the park with fuel at the cost of seven afghanis (around USD 0.09 based on the exchange rate before the takeover) for each unit of power and installed supplemental solar panels to power the park with three hours of solar energy each day. However, the solar panels could only run with the help of external power, according to Haji Qasam Khan, who is a member of the industrial park’s management committee. When the government installed the solar panels, it did not install the power inverter needed to convert DC (direct current) into AC (alternating current), leaving the park to rely either on electricity provided by the national power grid or the generators for the five megawatts needed to use the solar panels.

Problems with a stable electricity supply are far wider than just for the industrial park. Most notably, technical issues at the Afghanistan power company [Da Afghanistan Breshna Sherkat (DABS)] mean that a significant amount of the power generated by the USAID-funded 10-megawatt Dynasty solar power plant go to waste. A 21 April 2021 SIGAR (Special Inspector General for Afghanistan Reconstruction) report found “almost half of the electricity generated by the solar power plant is being wasted due to technical problems with the Kandahar electrical grid” (see SIGAR report here).

After the collapse of the Republic, supplies of fuel from the government ceased and the generators stopped working. As donor assistance dried up, neighbouring countries who were selling electricity to Afghanistan either cut off or reduced the flow of electricity to Afghanistan and Kandahar’s power shortage worsened (see here). In addition, the drought reduced the flow of water in the Helmand River and the Kajaki power plant could not generate enough energy for Kandahar city to support the solar system in the industrial park.

Muhammad told AAN that people in the industrial park still hold out hope that things will improve and are trying to keep operations going to protect their, often significant, investments.

A group of factory owners had recently met with Taleban officials to ask for electricity for the park, Haji Qasam Khan told AAN. The Taleban, he said, had promised they would look into solutions for their electricity problems, including the possibility of buying a power inverter for the solar panels at the cost of one million US dollars. Nothing has yet transpired.

The industrial park was an important source of income, not only for the traders and the people who worked there but also for farmers from Kandahar and other provinces who sold their produce and grains to factory owners for processing. Now, many factory owners are looking to relocate their operations across the border to Pakistan or Iran, taking their capital and badly needed jobs and taxing the province’s already ailing economy (see this Tolonews report).

Conclusion

The cessation of fighting should mean that farmers in Kandahar, as elsewhere in Afghanistan, have at least a chance for better harvests this year. However, what looked to be a wetter winter and spring for snow and rain is now looking less hopeful, expert on Afghanistan’s climate, Mohammad Assem Mayar, has said – February and March were drier than usual, with drier predictions for April and May as well (see his twitter feed here). Moreover, as Mayar also commented, in a report for AAN on climate change, Afghanistan’s long-term prospects for precipitation are not good. While the hope must be that Afghanistan does not return to active conflict, global warming means more droughts coming more regularly are anticipated in the coming decade. Meanwhile, exporting produce remains difficult and unreliable because of the unpredictability of crossing into Pakistan and there is no sign, as yet, of any solution to getting Kandahar’s industrial park back up and fully running. Farmers in Kandahar, as in the rest of Afghanistan, still face worryingly uncertain times.

Edited by Roxanna Shapour and Hannah Duncan


Annex: The impact of border closures on imports from Pakistan to Afghanistan

In September 2020, the Express Tribune reported that about 15,000 Afghanistan-bound shipping containers, which is more than double the normal number, were stuck at Pakistani ports, including 3,500 containers stranded in Peshawar and Chaman. According to this report, the backlog resulted from COVID-19-related border closures and a decision by the Pakistani Federal Board of Revenue to ensure a 100 per cent scanning of all Afghan cargo.

A year later, things had not improved: “A number of traders say that they have suffered huge losses as a result of transit problems on [the] Chaman-Boldak route,” reported Pajhwok news. Haji Abdul Rahim, a trader who imports cooking oil from Malaysia through Pakistan’s Karachi port to Afghanistan, told Pajhwok: “In the past, 500 containers of transit were transporting on the route on [a] daily basis, but now only 70 to 80 of them are allowed,” adding that on the day of the interview, only “22 containers entered from Pakistan to Afghanistan.”

Abdul Rahim said that truck drivers’ associations had also increased transport fees. In the past, they charged 150,000 Pakistani rupees (USD 850) to transport one container from Karachi port to Spin Boldak but said the cost had now increased to between 250,000 to 300,000 Pakistani rupees (USD 1,400 to 1,700).

Haji Jalaluddin, a transit trader in Kandahar, told AAN that Afghanistan imported a mere 20,000 to 25,000 containers of food and non-food items via Spin Boldak this year compared to last year’s 130,000 containers. Jalaluddin said that these delays had increased the cost of doing business for traders who import raw materials from China, Japan, Dubai and Korea. Not only do they have to pay higher rents for the containers, which they use to import raw material and export Afghan products, but they are also charged USD 150 demurrage per day for not returning the containers on time. He said traders used to return the containers in seven days, but border closures made it impossible to meet this deadline and the shipping companies extended the time, first to 21 days and then to 28 days.

To make matters worse, the Covid-19 pandemic has created a global shortage of containers (see here and here). For this reason, local sources told AAN, shipping companies are disinclined to rent their containers to Afghan traders and blackball those who fail to return containers by the 28-day deadline. The result, according to Jalaluddin, is that many Kandahari-owned export and import companies with offices abroad, for example, in Japan, China and Dubai, closed their businesses in 2022. He said this had further damaged Kandahar’s prospects for trade and reduced job opportunities for the province’s workforce.

References

References
1 For an in-depth discussion on the province’s economy and labour force, see this 2011 Samuel Hall report commissioned by Mercy Corps and this undated GRM International profile of Kandahar province.
2 This and other export calculations are according to official trade data available on UNCOMTRADE (see here).

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Authors:

Ali Mohammad Sabawoon

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