April 29, 2002	Monday	Safar 15, 1423

PAKISTAN produces a wide range of fruits and vegetables annually. In many cases, production surpasses domestic requirements, thus leaving sizeable export surplus.

Around 15 to 25 per cent is lost on account of wastage caused by rottening for the want of adequate cold storage and transport facilities. Solution to this problem lies in the proper preservation of fruits and vegetables through processing. This industry is not sufficiently developed to utilize the production otherwise going waste.

According to the federal marketting department’s information, there are about 55 large and modernized processing units in the organized sector with 29 in Punjab, 12 in Sindh, 11 in Balochistan and 3 in the NWFP. Majority of these units are operated irregularly and some during particular seasons only.

The main reason for the slow progress is the industry’s subservient status vis-a-vis fruit and vegetable marketing. Experts have stressed the need of establishing processing facilities to put the surplus into profitable use, or in other words to ward off against the glut periods of supplies causing low prices and inadequate market outlets. Ostensibly, no industrial unit operating on seasonal surplus can sustain. None of the experts and decision-making authorities have given thought to make the existing fruit and vegetable processing an independent, self-sustaining viable industry. Much has been talked about the ‘vertical integration’ or linking processing with production under one venture. But it could not be brought about in practice as the small scale operations of these units could not afford to expand their activities. The medium/large sized units either, could do nothing.

A British-owned firm called Mitchell’s operating in Okara, since pre-independence days, had the benefits of vertical integration and of the economy-of-scale. This company was sold to Pakistani nationals but without fruit farms. The present owners, therefore have to depend on the open market for raw material supplies.

Government policies and concern: The government has been alive to develop this industry but only for utilizing and absorbing the surplus production, and the qualities rejected in the fresh market. In almost all development plans stress has been laid to bring about improvement in and expansion of fruit and vegetable processing industry. Various concessions and incentives have also been allowed from time to time. These include easy credit availability, issue of sugar quota (when sugar distribution was subject to rationing), tax holiday in certain cases, sanction for establishing new units accompanied with the permission to import necessary machinery, spares, material for manufacturing containers. But all these efforts failed to produce the desired results. Further, baring a few, majority of the processing units are just working at the cottage industry level.

Benefits of change in approach: Unlike existing processing units depending for raw supplies on the surpluses and the leftovers of the fresh market, those established on specific supplies from farms producing particular varieties/qualities well-suited to processing, shall have the following advantages:

a) Stability in operation because of the assured supplies of raw material.

b) Economy-of-scale while obtaining large quantities of fresh fruits and vegetables which is denied to most of the existing units in periods of crop failure.

c) Better quality of the end-products depending on the quality of fresh commodities, especially produced for the processing market.

d) Lower cost of production due to the economy-of-scale and consequently lower prices of the end-products.

e) Expansion in domestic market for the processed products on account of their lower prices.

Suggestions: As it will take a long time to establish fruit and vegetable farms meant for producing exclusively or partly for the processing market, it is suggested that the existing bigger processing units should adhere to contract purchase and procurement system for supplies of fresh stuff from large orchard owners and pre-harvest contractors and big farmers in order to ensure both regularity in the supply and better quality of the raw products. In order to make this arrangement viable and successful the processors shall have to enter into agreement with the producers well in advance of the marketing seasons.

Credit facilities and the supply of other inputs, including improved seeds of vegetables to the producers by the processors shall further strengthen the business ties, eliminating the middleman for their mutual benefits. Contract-buying in corn processing industry has been quite successful and advantageous. The same system be adopted and emulated by the existing fruit and vegetable processing units having comparatively large operations.