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Improving agriculture marketing                                        

IT is the responsibility of the government to stabilise prices, protect growers and consumers so that vulnerable segments in the economy are protected from market players who are ready to take advantage of loopholes in the system.

This aim is, however, difficult to realise. Recently, the government failed in its attempt to protect consumers from unexplained shortages and increase in price of flour when wheat was being harvested. It tried to support growers when prices of paddy plunged below support price but again failed in its objective. And the paddy growers are likely to suffer loss an estimated of Rs41 billion in Sindh alone.

One can go on listing the problems and challenges faced by the consumers and the growers. When these two major players are given raw deals, there is an automatic spill over of this on foreign exchange earnings and the cartels of hoarders and middlemen create a parallel economy.

In addition to this, it is estimated that approximately 35 per cent of agricultural production is wasted because of the lack of storage, pre-post harvest technology, temperature-controlled storages and transportation, know-how etc. On this count, the estimated losses are at Rs800 billion.

With these huge losses, the investment available for the agricultural sector shrinks. Lack of investment lowers the average crop yields, which are one of the lowest in the world. The agricultural economy suffers from different shocks. The first shock is the lack of transparent and effective institutional support and government intervention; the second is the loss of wastage, the third is lack of adequate investment and the fourth is abysmally low national yields. This creates a vicious cycle. These issues need to be tackled.

There is need for an efficient, productive, and pro-active marketing government department. Typically defined as function of a product are price, promotion, place, people and performance (6Ps). This definition, strictly speaking, may not come into the realm of the government. But the government needs to handle the lacunas in the commercial system. Marketing provides ground to dissect each and every function, tackle problems, create efficiencies, and remove distortions , which are threatening the poor the most.

The existing agricultural marketing departments are being handled by provinces through the directorate of marketing,which works under the Director General Extension. In Punjab, PAMCO has been created with a limited mandate. In Sindh, they are governed by“Agriculture Produce Market Act of 1939”. Not different from any other public sector organisation, the marketing department is focusing for gaps in the letter that distorts the spirit of the act.

Marketing is one of the major problems of agriculture, while organisations responsible for the limited role of managing wet markets, do not take care of poor infrastructure and the rights of growers.

First, the marketing function needs to be broadened and revamped. Second, appropriate legal and administrative changes need to be made to carry the agriculture reforms. Third and the most important factor in realising the goal is the commitment of politicians to implement the reforms. Let us very briefly discuss them one by one.

Marketing function needs to be understood or categorised so that relevant responsibilities can be assigned. Agriculture sector provides a wide variety of products; they can be divided into three broad categories. The first category is commodities e.g.: wheat, paddy; second is, horticulture produce such as fruits and vegetables; and the third is livestock including dairy and meat.

These categories or clubbing of products is done according to similarities in nature, perish-ability (shelf-life), consumers, and distribution channels. The marketing requirements in the perspective of a product, place, price, promotion, people (consumers) and performance are different from each other in each category e.g.: Wheat is a staple food. It can be stored for longer periods of time and is widely produced; the handling and supply chain is totally different than that of either horticulture produce or livestock.

It may be argued that even within commodities or a given category, there may be many products; yes, there will be many products but the general nature and handling requirements for each proposed category will be more or less the same. If the broad clubbing of products is not done, then there will be too many categories that would create redundancies and huge inefficient establishment.

The products clubbed together in a single category will also help in formulating specialised services, law and regulatory environment. Within a given category, the 6Ps of marketing can be handled separately.

The second step after categorising agricultural products will be as to who will handle what. Currently, many departments are doing similar things without one knowing what the other is doing. Some of the ministries and departments handling marketing functions are as follows: federal ministry of food & agriculture, department of agriculture, government of Sindh, Trade and Development Authority of Pakistan (TDAP), Pakistan Horticulture Development and Export Board; Passco, TCP etc. All these departments are trying to do their bit without creating synergies and sometimes working in different directions, creating planning and co-ordination hazard.

To address the problem of coordination, as a first step, every province should set up a powerful specialised agriculture marketing board, comprising members from the private and public sectors and headed by a private sector chairman. All the marketing functions should be parked in this organisation. This board should have members from the federal government because it provides finance and coordination for similar efforts in different provinces to eliminate redundancies, etc. This will also broaden the base of ownership and effectiveness. The budgets given for marketing of the products in different departments should instead be given to marketing boards of different provinces.

It should be amply clear that no extra budget is required for the new organisation. It will be carving, cutting and pasting of the current marketing establishments.

The third step is that there should be a wide ownership of the reform process. The reform process is not easy, there is always resistance by vested interests. The challenges can be faced with a clear mind set and determined pursuit of the reforms.

Courtesy: The DAWN;

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