Problems Of Agricultural Marketing In Pakistan



Most of the agriculture commodities are perishable goods. The farmers lacking enough financial resources, fail to construct the warehouses. After harvesting, they have to keep produces at the farms or in their old and deserted houses where such produce is at the mercy of natural vagaries, rats and creeping insets etc. Accordingly, they have to face the losses even before it is sold. The farmers, in such situation, lacking the staying power have to sell their products at the price given by the bookers and commissions agents. The reduced prices means thecontinuation of poverty of the farmers.


There is another problem of agriculture marketing that the markets do not provide the fair prices to the farmers. The situation is attributed to the lack of competitiveness in the agriculture markets of Pakistan. A market becomes competitive if the buyers and sellers are well informed with the market conditions ; they must be having full information regarding the prices prevailing in the market and ; there must be the availability of transport facilities to the buyers and sellers. As regards market information, they are poorly available to the small farmers. As far as transport facilities are concerned, in the rural areas, they are still inadequate. Except those villages which are near to the major towns and cities, the farm to market roads are either non – existent or of very low quality. According to 5th plan, only 16% of the villages lie on all – weather roads and only 20% have all weather connections to wholesale market. The inadequacy of road net – work and transport facilities forces the farmers, particularly the small farmers, to rely on local traders or brokers for the disposal of their produce.


Because of reduced information regarding market conditions, lack of storage facilities and lack of transport facilities, the farmers have to depend upon brokers, local middlemen, traveling representatives, traders and commission agents of small and local market. Such middlemen not only give the low prices to the farmers but also make a lot of deductions in the “form of “Arith”, brokery, accounts charges and labor charges etc. As a result, the farmers always remain underpaid and under priced. On the other hand, because of a long chain of middlemen, the price of agriculture products in urban markets is highly inflated affecting the urban consumers. As it has been observed that the farmers in Punjab only receive 44% while the middlemen take away 37% and rest of the amount is spent to cover the marketing expenditures at various stages. In a study made by Sindh Agricultural University, it has been told that the producers obtain 31 to 46% of the final price of onions, chillies and potatoes and 22 to 32% of mangoes, dates and bananas. This situation is attributed to “producer’s low share in the final price because of lack of warehousing facilities and cold storage for perishable goods ; the lack of grading ; the poor road system ; and the long distances from the market”. The view that middlemen earn extra—ordinary profits is, sometimes, criticized. It is said, in this respect, that middlemen are large in number and lack the monopolistic powers. Whatsoever profits they earn are attributed to their command over capital which is a scarce resource in isolated rural communities, and their own skill and knowledge of market trends and conditions in which they have a definite edge over the illiterate and unbusiness minded farmers.


Our markets are characterized by wide seasonal variations which deprive producers of the benefits of the higher off—season prices. In this situation, the middlemen earn substantial profits which the otherwise were to be earned by the farmers. The middlemen involve themselves in hoarding and speculation. This is particularly observed in the months of December to March when a shortage of wheat rises in the country encouraging the speculation and hoarding of wheat etc. One can also conclude that the richness of the urban commission agents and brokers can also be attributed to the poor and weak staying powers of the farmers. Moreover, in case of agriculture products, one often finds the role of cobweb fluctuations. In our country, such fluctuations are visibly discerned in case of vegetables. In one year if there is a shortage of supply of tomatoes, — the price of tomatoes will rise. Next year, it will result in more cropping area and bumper crop of tomatoes. Tills will result in low prices for tomatoes. This means that agriculture products are always at the mercy of uncertainties regarding prices and outputs. Such variations have hardly benefited the growers and the farmers. More particularly, the benefits of effseason and reduced supplies are accruedto those persons who are engaged in their business. While the disadvantages of excess supplies are faced by growerseand farmers.


Most of the products sold in our markets are sub – standard and ungraded, primarily because the market does not reflect price differential for quality nor does the farmer perceive significant advantages in improving the quality of the produce. As a result, the farmers become indifferent between producing high quality varieties. Moreover, they adulterate high quality with low quality. This situation not only creates so many problems in domestic markets, but it also leads to create disruptions in foreign markets reducing the export prospects.


The agriculture markets in Pakistan are furnished with limited or no government control. As a result a lot of malpractices can be observed in our markets. As one finds sub -standard weight and measures, levying of various unjustified charges on farmers by market functionaries, price fixation in an underhand manner and the under — weighing by the weigh – men at the time of selling the produce and over – weighing at the time of purchasing the produce by the farmers. The market committees do not play their required role. There are no regulations to check the adulteration. The fraudulent practices are rampant and the farmers especially the small farmers are at the mercy of middlemen.


As it was told earlier that the farmers are always in need of money. Accordingly, being convenient, they often rush to commission agents and ‘arthis’ to get the loan. The loans are conditional in the sense that after harvesting, the farmers will sell their produce to commission agents whomfrom they have borrowed. Accordingly, the poor borrowers have to do so. But the farmers are not given the due price of their produce. Had the farmers been provided with adequate credit facilities, they would not have to be prey of malpractices on the part of commission agents and arthiyas. Thus the compulsory marketing, which is mostly followed in the South Punjab and ‘Interior Sindh’ has resulted in under – pricing of the produce sold by the financially weak farmers.

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