|
Cut-flowers:
marketing prospects
Flowers are useful in many ways.
Their cultivation in Pakistan is increasing day-by-day, due to
the growing demand of fresh flowers for garlands, bouquets,
wreaths.
These are not only cultivated for domestic purposes but also
for export. The dried ones are exported to the US and other
countries as their essence is used in food products.
The flower-farming is neither capital- nor labour-intensive
but lies in-between the two ends with the skilled labour force
and modern farming techniques. Investment in this sector is
evident from the increased number of nurseries, green houses,
flower markets and flower auction centres and the production
of cut-flowers turns out to be about 10,000 to 12,000 tons per
annum.
In cut-flower, marketing is carried out by individual, private
organizations and exporters. Flower producers belong to
farming families. Around 80 per cent producers sell their
produce to the Kantay Wallahs, while only 12 per cent to
contractors, and 8 per cent to wholesalers.
Kantay Wallahs assemble produce from growers and sell directly
to wholesalers or processing factories. They are located at
strategic road junctions in the rural areas, often close to a
teashop. They do not arrange transport from the farm gate but
from their site to a wholesaler and a processing factory.
A contractor performs a key role and possesses enough
knowledge about market conditions. He estimates the yield and
considers expected costs for supervision, labour,
transportation and marketing. Wholesalers buy and sell large
quantities of farm products.
They deal in several commodities such as fruits, vegetables
and other agricultural produce within inter-regional markets
and also supply produce to processing industries, exporters
and retailers according to their demand. All market activities
come to an end with the retailers. They buy small quantities
according to the demand of consumers in the area. Retailers
buy flowers from wholesalers on credit and repay the amount
the next day.
The absolute cash margin of producers is calculated on the
sale price of flowers and the total volume harvested by the
producer or a contractor. The margin of profit of contractor
varies from one farmer to another and from early to late
morning. The net margin is the earning gained after paying all
marketing costs.
The production cost of flowers are estimated at Rs150-160 per
40kg, which includes ploughing, planking, farm yard manure (FYM),
fertilizer, pesticide and management of labour during the
year. The cost for the contractor is Rs60 per 40kg, whereas,
for wholesaler it is Rs17 perkg - including transportation,
rent of the shop and the license fee-, for Kantay Wallah it is
Rs28, and a retailer pays Rs58 per 40kg.
It has been found that in cut-flower marketing, there is
competition at each stage. No strong evidence was found of
collusion among agencies, with prices at each stage normally
set by supply and demand factors. The spread of information
regarding quantity and price is fast and rapid amongst all
marketing agencies. The results presented in this study are
not consistent with other similar researches in the region.
In case of flower cultivation, producers earn the highest
share of 55 per cent. In flower marketing an important channel
such as a commission agent is excluded. Instead, Kantay Wallah
is engaged in this business whose function is to buy produce
from growers and transport for sale among wholesalers and
processing factories. They do not extend any input or credit
among growers to bind them for output sale. This reflects
their grater costs and risk compared to commission agents.
Marketing of cut-flower is exclusively in the private sector,
with price determined through supply and demand. In cut-flower
marketing, producers receive the highest margins compared to
other market intermediaries, but this reflects their cost and
level of risk.
Flower marketing system is sufficiently competitive to prevent
market traders from reaping excessive margins. A large number
of buyers and sellers participate and none is able to corner
exclusive access to large suppliers. There is competition at
each stage of the marketing chain.
No strong evidence was found of collusion among market
agencies with price at each stage normally set by supply and
demand factors, and no intermediaries are able to manipulate
prices. Spread of information regarding quantity and price is
rapid amongst all marketing agencies.
Investigation is required before making judgements about the
efficiency of the cut-flower marketing in Sindh. Analysis is
needed on transaction costs and risks for producers and market
intermediaries.
There is a need for collaboration between private and public
development programmes, particularly for the use of technology
and focus on improving existing planting material keeping in
view the demand for exportable quantity.
Efforts are required to improve grading, packing and product
presentation, that is, to educate growers and contractors and
show them why their profits are reduced by not following
proper grading, packing and presentation.
Courtesy Dawn March
26, 2002
|
Pakissan.com;
|
