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Improving agriculture marketing
 IT
is the responsibility of the government to stabilise prices,
protect growers and consumers so that vulnerable segments in
the economy are protected from market players who are ready
to take advantage of loopholes in the system.
This aim is, however, difficult to realise. Recently, the
government failed in its attempt to protect consumers from
unexplained shortages and increase in price of flour when
wheat was being harvested. It tried to support growers when
prices of paddy plunged below support price but again failed
in its objective. And the paddy growers are likely to suffer
loss an estimated of Rs41 billion in Sindh alone.
One can go on listing the problems and challenges faced by
the consumers and the growers. When these two major players
are given raw deals, there is an automatic spill over of
this on foreign exchange earnings and the cartels of
hoarders and middlemen create a parallel economy.
In addition to this, it is estimated that approximately 35
per cent of agricultural production is wasted because of the
lack of storage, pre-post harvest technology,
temperature-controlled storages and transportation, know-how
etc. On this count, the estimated losses are at Rs800
billion.
With these huge losses, the investment available for the
agricultural sector shrinks. Lack of investment lowers the
average crop yields, which are one of the lowest in the
world. The agricultural economy suffers from different
shocks. The first shock is the lack of transparent and
effective institutional support and government intervention;
the second is the loss of wastage, the third is lack of
adequate investment and the fourth is abysmally low national
yields. This creates a vicious cycle. These issues need to
be tackled.
There is need for an efficient, productive, and pro-active
marketing government department. Typically defined as
function of a product are price, promotion, place, people
and performance (6Ps). This definition, strictly speaking,
may not come into the realm of the government. But the
government needs to handle the lacunas in the commercial
system. Marketing provides ground to dissect each and every
function, tackle problems, create efficiencies, and remove
distortions , which are threatening the poor the most.
The existing agricultural marketing departments are being
handled by provinces through the directorate of
marketing,which works under the Director General Extension.
In Punjab, PAMCO has been created with a limited mandate. In
Sindh, they are governed by“Agriculture Produce Market Act
of 1939”. Not different from any other public sector
organisation, the marketing department is focusing for gaps
in the letter that distorts the spirit of the act.
Marketing is one of the major problems of agriculture, while
organisations responsible for the limited role of managing
wet markets, do not take care of poor infrastructure and the
rights of growers.
First, the marketing function needs to be broadened
and revamped. Second, appropriate legal and
administrative changes need to be made to carry the
agriculture reforms. Third and the most important
factor in realising the goal is the commitment of
politicians to implement the reforms. Let us very
briefly discuss them one by one.
Marketing function needs to be understood or
categorised so that relevant responsibilities can be
assigned. Agriculture sector provides a wide variety
of products; they can be divided into three broad
categories. The first category is commodities e.g.:
wheat, paddy; second is, horticulture produce such
as fruits and vegetables; and the third is livestock
including dairy and meat.
These categories or clubbing of products is done
according to similarities in nature, perish-ability
(shelf-life), consumers, and distribution channels.
The marketing requirements in the perspective of a
product, place, price, promotion, people (consumers)
and performance are different from each other in
each category e.g.: Wheat is a staple food. It can
be stored for longer periods of time and is widely
produced; the handling and supply chain is totally
different than that of either horticulture produce
or livestock.
It may be argued that even within commodities or a
given category, there may be many products; yes,
there will be many products but the general nature
and handling requirements for each proposed category
will be more or less the same. If the broad clubbing
of products is not done, then there will be too many
categories that would create redundancies and huge
inefficient establishment.
The products clubbed together in a single category
will also help in formulating specialised services,
law and regulatory environment. Within a given
category, the 6Ps of marketing can be handled
separately.
The second step after categorising agricultural
products will be as to who will handle what.
Currently, many departments are doing similar things
without one knowing what the other is doing. Some of
the ministries and departments handling marketing
functions are as follows: federal ministry of food &
agriculture, department of agriculture, government
of Sindh, Trade and Development Authority of
Pakistan (TDAP), Pakistan Horticulture Development
and Export Board; Passco, TCP etc. All these
departments are trying to do their bit without
creating synergies and sometimes working in
different directions, creating planning and
co-ordination hazard.
To address the problem of coordination, as a first
step, every province should set up a powerful
specialised agriculture marketing board, comprising
members from the private and public sectors and
headed by a private sector chairman. All the
marketing functions should be parked in this
organisation. This board should have members from
the federal government because it provides finance
and coordination for similar efforts in different
provinces to eliminate redundancies, etc. This will
also broaden the base of ownership and
effectiveness. The budgets given for marketing of
the products in different departments should instead
be given to marketing boards of different provinces.
It should be amply clear that no extra budget is
required for the new organisation. It will be
carving, cutting and pasting of the current
marketing establishments.
The third step is that there should be a wide
ownership of the reform process. The reform process
is not easy, there is always resistance by vested
interests. The challenges can be faced with a clear
mind set and determined pursuit of the reforms.
Courtesy: The DAWN
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