ISLAMABAD: A new World Bank report says Pakistan’s agricultural marketing is wasteful due to a number of constraints such as poor infrastructure, high market margins, poor post-harvest management and non-implementation of grades and standards.

There is a need to modernise and upgrade fresh produce marketing systems by removing these constraints, adopting market-oriented practices and improving business skills among all stakeholders, emphasised the report, “Enhancing Smallholder Incomes by Linking to High-Value Markets in Pakistan’s Punjab and Sindh Provinces”.

Equally, the ability of producers to supply new markets and meet the commercial realities of modern supply chains needs to be critically assessed to determine whether the target farmers can fulfill the requirements in terms of quality, quantity and timing of delivery, it says.

The present agricultural marketing systems in the country involve numerous actors performing different functions along extended supply chains that add costs and inefficiencies before reaching the final consumer.

The current marketing systems in Pakistan have not been able to provide the consumer with a more diverse food supply, leading to suboptimal nutrition results, and depriving farmers of additional income opportunities. In turn, this inhibits agricultural growth. Pakistan needs innovation in its agricultural marketing in order to insert more dynamics into the sector.

Mechanisms are needed to strengthen the linkages among government agencies responsible for agribusiness development. The reinforcement of such inter-agency linkages would improve the business-enabling environment to encourage more private investment in the local agriculture sector.

The report recommended some approaches and potential interventions that project partners could utilize to assist the creation and enhancement of links between farmers and the private sector.

It says previous public and private initiatives in this field have successfully demonstrated the market possibilities available to small farmers in Pakistan; however, promoting formal and complex marketing schemes may not always work for smallholders, particularly when trying to link them to higher-value markets. Traditional marketing channels certainly have to become more sophisticated if they are to compete with modern food supply chains.

But they continue to offer considerable market opportunities for smallholders, and donors and governments can facilitate their improved operation. Even within the more vertically-connected supply systems that have created dynamic industries in Pakistan like citrus exports, milk and potato processing, these supply systems are still intertwined with traditional marketing channels, the report observed.

Pakistani agriculture is not realizing its full potential. Although there is agricultural activity in all areas of Pakistan, most crops are grown in the Indus River basin of Punjab and Sindh producing roughly 80 percent of the national output. The agriculture sector is operating below the potential yields that the well-irrigated and fertile soils of the Indus irrigation system could produce when compared to productivity levels in similar regional and global farming systems.

Consumption trends in Sindh for animal-based foods have increased, although most consumers still prefer raw, warm milk, live chickens and unpacked meat. The lack of modern infrastructure and services along key commodity supply chains contributes to these trends.

About 20 percent of the national ruminant livestock herd is located in Sindh. Meat is the main source of protein in local diets and Sindh supplies about 30 percent of national production. The bulk of expected future demand for aquaculture products will need to be met by fish farming. The volumes of marine captured fish have remained steady at around 500,000 tonnes for the past decade and are unlikely to grow considering coastal fishery stocks are over-exploited and cannot sustain the current levels.

The report recommended project activities based on the lessons learned from previous market linkages, and suggested establishing a permanent project management unit for institutionalizing market integration work in the provincial governments. The PMU would be established within the Agriculture Marketing Secretariat under a Board of Directors chaired by the Secretary, with members from the farm community, the private sector, NGOs, and the government.

Published in Dawn, October 30th, 2022

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