The food and fibre market system in Pakistan works with the
participation of both public and private sectors.
In the public sector, its functions are shared by the federal
and provincial governments, which relate to agricultural
administration, crop prices, procurement, data collection, and
dissemination. These are performed through a number of
departments, directorates and autonomous and semi-autonomous
Agricultural administration: Although, agriculture by
constitution is a provincial subject but the federal
government has taken upon itself to develop a policy framework
in consultation with the provincial governments.
At the federal level it is the ministry of food, agriculture
and livestock (Minfal) which is headed by a cabinet minister.
Agricultural Price Commission is another important
organization of Minfal.
The ministry works in close cooperation with the Planning
Commission. Besides, there are a number of semi-autonomous
bodies and most permanent among them are Wapda, the ADBP now
renamed as the Zarai Turraqiati Bank of Pakistan (ZTBP) and
the Pakistan Agricultural Research Council (Parc).
One of the most important functions of the federal government
is to provide and manage food security by fixing production
targets and ensuring the supply of inputs. Any shortfall is
met through imports.
The government keeps a watch on production and in case of a
pessimistic production outlook arrangements are made to import
food grains and other essential commodities.
The involvement of the public sector in the storage, and
distribution varies. Most imports and local supplies are
handled by the government. Their retail marketing and sales
are done through private sector.
Production, storage and distribution of seeds are also in the
public sector although private sector is now being encouraged
to enter into this area. The Punjab and Sindh Seed Development
Corporations produce recommended variety of seeds through the
registered growers which are then distributed through their
own retail outlets.
Water is a major input and its resources are developed by the
government. About a quarter of the total water available at
the farm-gate is made available by the tubewells in the
Crop prices and procurement: Crop prices and procurement
programmes were started in early 1950s. Over the time these
covered all major crops like wheat, rice, cotton and even the
non-traditional oilseeds such as sunflower, safflower and
Among minor crops potatoes and onions were covered. The
marketing of wheat, rice, cotton and surgar cane were handled
through the Rice Export Corporation of Pakistan (RECP) and the
Cotton Export Corporation (CEC) which have now been disbanded
and their functions are performed partially by the Trading
Corporation of Pakistan (TCP).
The Pakistan Central Cotton Committee advises the government
on various matters of cotton marketing. A cotton grading
institute has also started working since two years back.
Data collection: Various agencies, both at federal and
provincial levels are engaged in data collection and
dissemination. Crop production estimates are prepared by Crop
Reporting Services in Punjab, the Bureau of Statistics in
Sindh and the Statistical Sections of Agriculture Departments
in the NWFP and Balochistan.
These estimates are sent to the federal ministry where these
are consolidated. Their publication is the responsibility of
the Federal Bureau of Statistics (FBS) The arrangements for
collecting harvest prices are, however, very weak. Most of the
data is collected on the daily, weekly, and monthly basis.
However, many commodities experience seasonal shifts in supply
and demand that are not actually reflected in the reported
prices. In general, flat price trends across a crop suggest
that the price levels are not being reflected due to either
the non-representative samples or the misquoted prices.
The methods for averaging prices, over time, are also flawed
because of the non-monitoring of quantities being sold in
different markets at various times. Functions performed by the
private sector in the food and fibre system are enumerated and
specified in brief as under:
1. Production: Agricultural commodities production is a
private activity. It benefits from public investments in
supporting infrastructure and services but responds directly
to investments in farm capital.
Agricultural technology introduced so far, seems to have
reached a plateau. Further increase in production will
probably be not so fast and easy as the public policies and
investment programmes attempt to secure a much wider adoption
of the proven technological packages.
It will also be useful to improve the technological package.
The present package is chartered by tractors, cultivators,
tubewells, plant protection and improved seed supported by
relatively stable prices. This has served usefully in the case
of four major crops (wheat, rice, cotton and sugar cane) but
the gap between potential and actual achievements is still
Private sector plays an important role in providing various
agricultural inputs. About 30 per cent of the fertilizer is
manufactured in private sector. The importance of a sound seed
programme capable of supplying quality seed to farmers cannot
be over-emphasized. Despite its vital importance the
percentage of improved quality seed in the total is pretty
2. Transportation: The private sector largely contributes in
transportation to far flung areas where means of
transportation are scarce or defective, farm products are
generally sold in the primary markets.
These markets are capable of absorbing small and large
quantities which are moved to secondary markets. All transport
between villages and markets or villages to sugar mills,
cotton ginneries and rice husking mills is done by private
3. Storage: Farmers and village traders have developed little
storage capacity. It is difficult for small farmers to
withhold small marketable surpluses for better prices.
Grains are stored in earthen containers, in pots and jute bags
or underground pits. It is estimated that the producer gets
upto 65 per cent of the consumer price for non-perishable
commodities and about 25 per cent for perishables.
Storage capacities present in markets can be attributed to
private sector alone. Private sector carries credit in
providing storage arrangement for the perishables as a number
of firms have constructed cold storages in and around fruits
and vegetable markets.
4. Processing: At present all flour mills are in private
sector, along with rice husking and sugar mills. Other
industries include jute goods, cotton ginning, cotton textiles
and meet processing.
5. Trading/marketing: Marketing structure ranges from free
operations to substantial government intervention by way of
fixation of floor prices, procurement quotas and prices,
export quotas and credit control.