AGRICULTURE is the prime sector of Pakistan's economy. It accounts for nearly 23 per cent of the national income (GDP) and employs 42 per cent of the country’s workforce. Agriculture also supplies raw material to various industries, mainly the textile sector. Nearly, 67.5 per cent rural population is dependent on agriculture for its livelihood.

Although low agricultural productivity results in lower income generation for the farming community, it is further aggravated by inefficient marketing system. The present farm marketing system is deficient in many aspects and so far has shown a nominal performance in materialising benefits from the agriculture sector. The agricultural marketing system is designed to plan, promote and distribute the produce at a suitable price from farm to the ultimate consumers and industrial users. Market information is crucial to enable farmers and traders to make decisions about what to grow, when to harvest, where to market the produce, and whether or not to store it.

The present agricultural marketing system needs a lot of improvement to prove real potential of this sector. There are many hurdles in the improvement of agriculture sector and these must be removed to put this sector on road to progress. Our traditional inheritance system has resulted in land fragmentation which is mainly responsible for low agricultural productivity.

Pakistan’s 93 per cent farmers are small land-holders with an average of less than 12.5 acres. This land fragmentation has also created a lot of problems for the farmers. Due to small size of land-holding per acre yield is very low. The farmers with such small land holdings cannot afford inputs 'like fertiliser, hybrid seeds, pesticides, diesel and agricultural machinery. The insufficient use of input and poor management practices result in low per acre yield with poor quality.

Post-harvest losses are also very high 30per cent because of poor infrastructure (from farm to market) and poor transportation facilities especially in case of perishable commodities such as fruits and vegetables. Storage facilities are very costly and small farmers can hardly afford it.

Marketing problems gets intensified after the harvest of crop when farmers want to sell their produce in the market in order to fulfil their financial obligations. The small land-holders, who are in majority, have marginal income which makes them vulnerable to all kinds of marketing risks. Prices of agricultural commodities are related to supply and demand, as a result a glut of commodity occurs in the market. In this country there are cyclical trends in the arrival of agricultural commodities in the markets.

Some times there is glut resulting in depressed prices, whereas shortage of commodities at other time pushes the prices up. In case of fall in the prices farmers get less value of their output. The middlemen avail this opportunity and purchase that commodity in bulk and store it to sell it at the time of shortage. These situations of glut and shortages in the market make a non-sustainable agriculture sector which is a big hurdle in the way of development.

Agricultural marketing has dual role to play in the input as well as output sectors. However, there are some problems which results in their poor performance. In the first sector non-availability of inputs at critical times is a big problem. In a crop season there is a critical time when fertiliser, pesticide and seed are needed to be applied. At this time the input suppliers create artificial scarcity to increase its price and reap high profits. The farmers have to purchase the input at high prices otherwise all their previous investment would go to waste. Wholesalers and retailers also try to maximise their profits through illegal practices like adulteration especially in fertiliser, pesticides and seeds.

In the output sector, there is price instability throughout the year. There is lack of free flow of information about daily market prices of agricultural commodities. Farmers (especially smaller ones) have least access to market information and fetch low prices of their output. Secondly, marketing cost of the agricultural commodities is very high which shows inefficiency in performing marketing functions throughout the supply chain. Thirdly, due to poor post-harvest management, product losses are very high. Major causes of post harvest losses are poor transportation system, inefficient grading, storage, packaging etc. Poor infrastructure and transportation not only reduce the marketable surplus but also deteriorate its quality especially in case of perishable commodities. Fourthly, the major reason for the price instability is lack of storage facilities near the production points. Fifthly, the middlemen, especially the processors, are supposed to add value to the product especially to the export items. Unfortunately we have not been able to earn name for any of our agricultural export item as value added in the international market.

Establishment of marketing cooperatives can be the solution to many of the marketing problems. Purchase of inputs in bulk and their sale to members only can provide them agricultural inputs at right time and at minimum possible price. After harvest of the crop, these marketing cooperatives could accumulate the marketable surplus of farmers and send it to big markets and consumer cooperatives at maximum prices as they have the bargaining power. Also the post-harvest losses are reduced to minimum. In this way the farmers will get maximum reward for their output. When these marketing cooperatives become so much developed they can perform other market functions like storage, grading and packaging etc. In this way the return of the farmers can further be increased. The experience of marketing cooperatives had not been very much successful in the past but that failure was due to mismanagement and poor implementation in the real concept.

Other way round, the government should strictly monitor the supply of agriculture inputs at right time, of right quality and at subsidised prices. Agricultural credit facilities should be available for value-addition of agriculture produce especially for export items. There is also need to subsidise the imports of processing machinery especially for agriculture export items i.e. citrus, mango, rice etc.

In recent advancements the government has taken some initiatives in many respects like many agribusiness development projects are in progress. Punjab Agri. Marketing Company (PAMCO) has taken some initiatives in publicprivate ventures and other academic institutions like University of Agriculture, Faisalabad, are playing their role in providing a quality research work on problems of agricultural marketing. At market level, market committees are governing the marketing functions related to agricultural commodities. To overcome the inefficiencies at each level in the market, these market committees need to be reorganised, as they have failed in real representation. Then, farmer organisations should be made more functional in order to save the farmer's interest.

In a nutshell, an integrated management with equal weightage to all stakeholders would be best in overcoming the problems of agricultural marketing and in the supreme interest of Pakistan.