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Marketing of farm produce faulty




  • PAKISTAN is now shaking off age-old practices and adopting some degree of scientific approach in agriculture. This change has brought appreciable dividends to the big farmers but the small ones have been left behind.

    As the small farmers constitute the bulk of farming community (about 75 per cent), and are engaged in agriculture not as a profession but as a way of life, the constraints in bettering their lot must be removed. It is, therefore, necessary to modernise our agricultural marketing system, giving top priority to the development of small farmers.

    So, the government authorities — responsible for formulating policies in various socio-economic fields – and concerned related NGOs should endavour to improve the marketing system with special treatment to be given to the farmers having limited resources to carry on their operations efficiently.

    Almost majority of experts and consultants, both foreign and local, are of the view that to obtain the desired outcomes it is necessary that marketing improvements may be made distinctly at policy, managerial and grass-root/farm levels.

    At the policy level, it is necessary to formulate an effective medium-term policy on agricultural marketing under which various components of marketing programmes and activities can be integrated and coordinated.

    At managerial level, the management and technical capabilities of technical bodies, involved in the implementation of the marketing policies, should be improved to enable work to be carried out more efficiently and economically.

    While pursuing the official socio-economic objectives at grass-root/farm level, the marketing policies and programmes should assist farmers in selling their produce, purchasing their inputs and raising their incomes.

    At this level, the government policies and programmes often lose their impact, especially for those farmers whose marketable surplus is too small and least market-oriented. Many rural development projects and programmes designed for the benefit of small farmers fail because of market-related problems.

    The most critical problem is the lack of marketing extension service. Although crop production extension services do exist at the village and farm level to a certain degree, marketing extension work designed to provide guidance to particularly small farmers does not exist. To establish and strengthen field level marketing extension service is an important priority area so as to make government efforts in marketing effective at the village level and to provide direct benefit to the small farmers.

    Typical problems faced by the small farmers in dealing with the marketing of their comparatively small quantities of produce mostly relate to: production-orientation; small marketable surplus; inefficient produce preparation; ineffective rural assembly markets; lack of credit availability, group action and vertical co-ordination of marketing channels.

    Production-orientation: Many farmers, especially the small ones adapt more slowly to changes in marketing. They produce crops or products that they have been producing traditionally since long. Naturally, they try to find markets for their produce only when the market requires improved or entirely different produce. It is essential that marketability be considered along with the production planning. This is particularly relevant for the highly perishable produce such as fruits and vegetables where variety, quality and timings of supplies matter so much.

    Small marketable surplus: A critical marketing problem for the small farmers is his small marketable surplus. Often he does not produce sufficient cereals even for his own family consumption or has only a small surplus to sell. He may produce cash crops for the market such as sugarcane, tobacco, oilseeds etc., but the quantity harvested from his small landholding, is still too small for efficient marketing.

    For effective marketing, the economy of scale is a critical element. A small marketable surplus implies a weaker basis to bargain with merchants or wholesalers. Direct marketing by small farmers thus becomes impracticable because of high marketing costs. Therefore, small farmers have to depend traditionally on village assembly traders or itinerant merchants to market the produce.

    Even when the farmers are aware of an opportunity of getting better price by selling their produce somewhere else, the traditional “customers relationship” established with certain other traders, prohibits the farmers from seeking a more advantageous alternative opportunity.

    Inefficient preparation: Due partly to the small marketable surplus and partly to lack of awareness, the inefficient marketing practices employed by the small farmers, result in higher post-harvest losses, higher marketing costs and lower prices. Efficient methods for harvesting, sorting, grading, storage and packaging are essential. Without such efficient methods, the small farmers are bound to receive lower prices resulting in their weak competitive position.

    Ineffective rural assembly markets: At various places, periodic (five days or weekly) rural markets are held which are mostly patronised, per force by circumstances, by small farmers. Such markets serve as assembly points that are linked with large secondary markets or urban wholesale markets.

    Some bigger farmers with larger marketable surpluses bypass the rural periodic markets. The small farmers remain the main users of rural markets, both for disposing their small marketable surpluses to meet immediate cash requirements as well as for procuring daily necessities such as clothing, salt, shoes and other consumer’s items. Most rural markets have no marketing facilities such as storage and many do not even have the shelters. Malpractices such as under-weighing, dubious sale and weighing practices are freely used against the interests of the farmer-sellers.

    Credit availability: The Agricultural Development Bank of Pakistan (ADBP) and commercial banks provide credit to the farmers on completion of a number of formalities against acceptable collaterals. In principle, such loans are available to small farmers as well. But in practice it is pretty difficult for them to obtain the required loan on time with the result that small farmers are unable to bring any improvement in their operations and ultimately to enhance incomes.

    The two loan-giving agencies do not advance marketing loans. Thus, the farmers, in particular, the small ones, deal with the commission agents and wholesalers to obtain the marketing credit from them usually on terms not favourable to the farmers.

    Lack of group action: For obtaining the benefits of economy of scale, group action is a critical factor to successful small farmer’s marketing. Unfortunately, co-operative effort has not been successful in agricultural field due to various reasons. The farmers have no hesitation in joining action groups for various socio-religious activities or for various crop production operations such as labour-sharing in planting and harvesting. But when it comes to economic functions such as marketing, the response of the farmers is not encouraging. Here the group actin should be better understood by its members and management should be relatively more ‘sophisticated’.

    Lack of co-ordination: The success of marketing by small farmers depends on the degree of vertical “co-ordination in the marketing channels”. Some marketing functions often focus only on one link of the marketing system. As such uncoordinated marketing channels are a great constraint on small farmers’ development.

    Even the most ambitious and reasonable pricing and marketing policies of the government have not produced tangible results in increasing the incomes of small farmers, mainly due to the absence of an effective field-level marketing system.

    It may be emphatically stated that the establishment of ever-important field-oriented marketing extension system (so far conspicuous by its absence in Pakistan), especially designed to assist the small farmers is a critical factor in making rural development programme a success.

    Courtesy: The DAWN

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