The shrinking international market space for Pakistani kinnow (mandarin) is leading to a crisis on the domestic front, pitching the growers against the exporters.

Though there is nothing new about hostilities between farmers and supply chain stakeholders, as in cotton and sugar cane crops, it is not a phenomenon that has occurred between kinnow growers and processors since the early 1990s when the country began exporting processed and graded citrus fruit.

Kinnow is grown over about 6.67 million acres with a yield of over 26m tonnes per anum, making Pakistan the 12th largest producer in the world. Punjab’s Sargodha district contributes around 80 per cent of the country’s mandarin produce. Processors and exporters of kinnow have unilaterally fixed its purchase price by at least 25pc less than last year.

The All Pakistan Fruits and Vegetable Exporters, Importers and Merchants Association (PFVA) and processing plant owners recently held a meeting at the Sargodha Chambers of Commerce and Industry. It was decided that Rs600 per 40 kilograms will be offered to kinnow growers this year though it was Rs800 last year. The reasoning was that exporters suffered losses last season because of poor international rates and costlier domestic purchases.

Processors and exporters of the citrus fruit have unilaterally fixed its purchase price about 25pc less than that last year

“Russia and Ukraine gave us only half the rate promised before the shipments, resulting in at least 40pc financial losses last year,” says Qasim Aijaz, a representative of the exporters. Pakistan exports around 5,000 containers, roughly 0.13m tonnes, of kinnow per annum to Russia which is an important market for citrus fruits.

The director of Roshan Enterprise Mr Aijaz explained that exports were paid $3-3.5 per kg against the promised price of $7.0 offered at the onset of the season since the Russian ruble had devalued against the US dollar.

On the other hand, exporters also have to pay for packaging and shipping in dollars which the rupee’s devaluation has made more expensive. Thus, offering last year’s purchase price of Rs800 per 40kgs has become completely unfeasible, he argues.

Exporting to other countries is not a viable alternative either. For the last couple of years, the European Union has become a no-go area for Pakistani mandarins while Iran is also not allowing imports of the fruit. Mr Aijaz claims that the export ban to European markets is self-imposed on federal authority advice to avert a permanent ban owing to fruit fly infestation and other diseases.

However, growers are not convinced by this argument. They demand the concerned authorities to address their grievances and announce reasonable rates for their produce. To put pressure on stakeholders, the growers are planning protest marches and sit-ins at some major kinnow processing units.

“The [processing] factories’ owners are committing economic murder by reducing the purchase price by over 20pc. Keeping in view the inflationary trend in rates of farm inputs even the previous price of Rs800 per 40kgs is an injustice,” bemoans Ahmed Yar Haral, a leader of the Kinnow Growers Association.

“We’ll take out processions and stage sit-ins outside the factories to press the owners to pay due prices for our produce. The rate of Rs600 is simply unacceptable and we won’t let them steal from us; the association will finalise the protest decision within days,” vows Mr Haral, who is also a former nazim of Mattela Union Council in Kot Momin tehsil.

Supporting their cause, ex-chairman of the Federation of Pakistan Chamber of Commerce and Industry’s standing committee on horticulture exports Ahmad Jawad says the rate of Rs600 is unjustifiable as the prices of di-ammonium phosphate (DAP), potash and urea have gone up compared to last year. Furthermore, price of diesel has reached record high levels.

Previously, urea and DAP prices were Rs1,200 and Rs2,380 per bag respectively, while their current prices are Rs1,925 and Rs3,395.

Mr Jawad alleges that certain political lobbies and officials are trying to extend favours to the processing factories at the cost of growers.

Sensing that the situation may lead to a crisis defaming the incumbent government, some ruling PTI parliamentarians of the district have sprung into action in a bid to defuse the tensions.

MPA Ghulam Ali Asghar Lahri claims that he, along with a couple of other legislators and representatives of growers, has met with the Sargodha deputy commissioner to resolve the issue. He hopes that the kinnow procurement price may be fixed at Rs1,100 per 40kgs as the authorities have assured them about positive developments in this respect.

However, the growers are sceptical of the credibility of the ‘intervening’ legislators. Sheikh Ahmed Sher, an orchard owner and ex-nazim of Lalliani union council in Bhalwal tehsil, says Mr Lahri’s constituency doesn’t fall in the kinnow-growing belt so it is unlikely he will sympathise.

Furthermore, Mr Sher says that the district administration does not have the means and resources to solve their issues so that the claim of obtaining higher rates through the deputy commissioner is unfounded and misleading.

Published in Dawn, The Business and Finance Weekly, September 2nd, 2019