Hashim GHAZNIVAL Chairman of the Board Afghanistan Flour Mill Association (AFMA) Dear Miller Magazine Readers, Located in the heart of Asia, Afghanistan is known as the gateway to both Central and South Asia. A country rich in resources but poor in capacity due to years of war, Afghanistan remains an import-driven economy even for its most basic needs- such as wheat and flour. The current demand for flour is 6.5 million tons in Afghanistan making flourmills an extremely important industry for the country’s future. However, despite having over 300 functional flourmills (with over 30 equipped with large-scale production) we are able to utilize only a fraction of our estimated 40% production capacity. This is due to competition from neighboring countries providing low quality flour at subsidized rates. It is also due to informal flour production across Afghanistan that continues to destabilize the market and cost the government millions in tax revenue. Without developing strong mitigation strategies to tackle these issues, the Afghan flour milling industry will continue to underperform and run at a loss. Below I outline three important mitigation strategies to help us achieve competitive advantage and full capacity production in a cost-effective way 1. POLICY REFORM The current policy of the Afghan government is not conducive to the empowerment of the local Afghan flourmill industry. Important policy reforms such as higher taxes on imported flour, and lower tariff on imported wheat is imperative to tip the scales in the favor of the Afghan flourmill industry. Not only does this encourage the local populations to buy Afghan, it also incentivizes the creation of more flourmills. Our current government recognizes the need for self-sufficiency in the flourmill industry; however, the struggle remains in adopting relevant policies to facilitate this process. Another issue is also, corruption, due to which local mills incur additional costs due to which most mills are running at a loss. 2. ADVANCED MACHINERY We have a great need for acquiring high quality advanced machinery at cost-effective prices. Currently many mills fail to meet international standards due to which they cannot bid for major contracts, leading to a monopolization of an already limited industry. This is something our partner countries can support us in by providing us competitive packages in terms of convenient payment plans, discounts and installation services of machinery. 3. CAPACITY BUILDING Most countries encourage technical degrees, skill development and trainings in agriculture, engineering and chemical sciences. Unfortunately in Afghanistan our capacity development in this field remains limited. Despite being the largest employer of the working population, agriculture remains at the bottom of the value chain, with the flourmill industry taking the brunt for it. Local and international institutions can first support the agriculture industry by encouraging the cultivation of wheat instead of poppies. They can also fund scholarships for young men and women interested in the flourmill industry, open universities and provide loans and grants for starting up businesses throughout the value chain. By implementing change in these three areas, we can effectively start revolutionizing the landscape of the flourmill industry in Afghanistan.