Globalization
Panel 1: Regoverning Markets: Sharing Innovative Practices and Policy Lessons
Mango Market Integration in Pakistan: Implications for Export
Abdul Ghafoor*, Khalid Mustafa **and Khalid Mushtaq***
Mango is one of the most important fruits in Pakistan. Pakistan is the fourth biggest producer and exporter of mango in the world. Although there is lot of potential and scope of Pakistani mango in the international market, its real potential is yet to be explored. This is due to poor resource management on behalf of many of the mango producers and the segregated wholesale market network leading towards inefficiency in the export supply chain. Well-integrated domestic markets lead towards efficiency, an important parameter for exporting any commodity. In this background major mango markets in Pakistan will be tested for the presence or absence of integrating relationships among them. Monthly wholesale price data will be collected from 1990- 2006 from Agricultural and Livestock Marketing Advisor, Govt. of Pakistan. Employing the Johansen Cointegration Approach the Law of one price will be tested. Domestic market efficiency will also be tested and its implications for mango exports from Pakistan will be outlined for constructive policy guidelines.
* Abdul Ghafoor is Lecturer, Dept. of Marketing and Agribusiness, Faculty of Agri. Economics and Rural Sociology, University of Agriculture, Faisalabad, Pakistan.
**Prof. Dr. Khalid Mustafa is Chairman, Dept. of Marketing and Agribusiness, Faculty of Agri. Economics and Rural Sociology, University of Agriculture, Faisalabad, Pakistan.
***Dr. Khalid Mustaq is the Assistant Professor, Dept. of Agriculture Economics, Faculty of Agri. Economics and Rural Sociology, University of Agriculture, Faisalabad, Pakistan.
Impact of Price Variation and Market Distance on Returns in Potato Production
by Khuda Bakhsh, Sarfraz Hassan and Muhammad Waqas Alam Chattha*
Farm location and price of the produce are the two important factors determining the selection of a particular crop enterprise. These factors substantially affect the return in crop production and are considered to be crucial for vegetable production. In the present study, we have made an attempt to investigate the impacts of these factors on returns in potato production. Two districts, namely Kasur and Okara were randomly selected and data was collected during 2004. A total of 100 potato growers, 50 from each district were interviewed and detailed information about input and output quantities, time of harvesting, place of selling the produce and farm location were collected using pre-tested questionnaires. Results showed that although price of the potato produce was relatively high in the month of December, returns were comparatively higher for farmers who were harvesting potato crop during January. Out of the 100 potato farmers interviewed, 41 farmers were found selling potato produce at the district market and their total returns were considerably higher as compared to those selling at the village and local market. The largest amount of total returns was recorded for those selling their produce outside the district market, such as in big urban cities of Lahore, Faisalabad and Rawalpindi. Transportation cost involved was found to be a major deterrent. Results calls for strengthening market infrastructure in the study area. Timely market information, better transportation facilities and financial assistance could also contribute towards higher returns in potato production.
* The authors are part of the faculty of Agricultural Economics and Rural Sociology, University of Agriculture, Faisalabad, Pakistan.
India’s Agrarian Crisis and Smallholder Producers’ Participation in New Farm Supply Chain Initiatives: A Case Study of Contract Farming
by Vijay Paul Sharma*
Indian agriculture is at crossroads and one of the major challenges is to reverse deceleration in agricultural growth. One of the main reasons for deceleration in agricultural growth is declining investment, particularly public investment in agriculture research and development and irrigation, combined with inefficiency of institutions providing inputs and services including rural credit and extension. Other factors such as land fragmentation, out-dated tenancy laws, lack of modern market and rural infrastructure, inappropriate input pricing policies are also responsible for agrarian and ecological crisis in the country. The crisis of stagnation in agriculture needs urgent attention. The government has renewed its focus on agriculture and is promoting public-private partnerships to accelerate growth in the rural economy. Many Indian and multi-national agribusiness companies have entered Indian agribusiness sector. The Central Government has also initiated reforms in outdated laws such as Agricultural Produce Marketing Committee (APMC) Act, Essential Commodities Act (ECA), and given incentives like waiver of market fee, rural development tax for companies making investment in agribusiness sector. The central, as well as state governments, are promoting involvement of corporate sector in agriculture through contract farming with a view to enable farmers to have access to better inputs, extension services and credit from agribusiness companies. Contract farming is also supposed to eliminate and/or reduce markets and price risks, which farmers face. However, it all depends on the nature of contracts, legislation for regulation of contract farming, enforcement and dispute resolution mechanisms.
This paper tries to understand socio-economic implications of corporate-led initiatives in agriculture (mainly contract farming) in the state of Punjab, which has more experience in contract farming compared to other states. The results indicate that contract farming is a good initiative for medium and large-scale farmers producing for the market, but the long-term success of such initiatives will depend on how a large number of small and marginal farmers can be linked to restructured markets under changing market and policy environment. The study points out that it is important to provide an integrated set of services including credit and not just seed and limited extension services. Partnership between public and private sector companies/organizations is needed in order to provide these integrated services. Most important is to improve the bargaining power of smallholder producers, while also reducing transaction costs for companies through promotion of producers’ groups/ association/ cooperatives. Small farmers will be able to effectively participate in the changing markets and establish links with new market chains (supermarkets, agribusiness companies, processors, and exporters) only if they have access to basic infrastructure, quality inputs and services and are organized.
Acknowledgements:
The author would like to thank Regoverning Markets Program and International Institute for Environment and Development (IIED), London for financial support, Mr. K. S. Saroj, IAS, Managing Director, Mr. Pradeep Sharma, and other officials of Punjab Agro Foodgrains Corporation Ltd., Pepsi Foods Ltd., Naranjan Rice Exports Pvt. Ltd., and other agribusiness companies involved in contract farming in Punjab and respondent farmers. Research help provided by Mr. Perwinder Singh is duly acknowledged.
* Vijay Paul Sharma is the Chair, Center for Management in Agriculture Indian Institute of Management, Ahmedabad, India.
|
