Marketing of Date Palm in Pakistan

Marketing of Date Palm in Pakistan

Agricultural marketing in Pakistan is not sophisticated and there is a series of intermediaries between producers and consumers. This large market chain along with lack of storage facilities result in the spoiling of 30-40% fresh produce before reaching the consumer (PHDEB, 2008).

 Like other horticulture crops, dates trade is with the private sector. However, Government assists the system by offering physical infrastructure particularly wholesale markets and communication, market promotion, market intelligence and regulatory measures to remove the difficulties in business operations (PHDEB, 2008). Date producers often rely on relatively high-cost informal credit sources and advances from date contractors because they face many difficulties in marketing their produce. They have little access to the credit and other facilities in wholesale and assembly markets; and are treated as temporary clients (Khushk et al., 2006).

This section, from my thesis, presents results of a qualitative survey conducted in different parts of Pakistan. This master’s research was funded by the International Centre for Development and Decent Work (ICDD), Germany (http://icdd.uaf.edu.pk/Publications/006.pdf). This section is "exploratory" in nature; further research is required to investigate many aspects presented hereunder

STAKEHOLDER IN MARKETING CHAIN OF DATE PALM

1.     SINDH PROVINCE

Sindh province had the highest share in total date production of Pakistan; however its total cultivated area is less than that of Balochistan. The major date growing areas in Sindh are Khairpur and Sukkur. The district of Sukkur was surveyed for the present study.

1.1  Farmers

The farmers in Sukkur are producing a huge quantity of dates. The varieties reported to be best marketed were Aseel and Karbalain. Many farmers said that demand of these varieties is increasing so almost all newly cultivated plants are of Aseel and Karbalain varieties. During the survey it was noticed that many farmers were bound to sale their produce to commission agents because they received loan from commission agents except those who gave the contract of their orchards to the contractors. The contractors paid an amount of Rs 1000-1600 per plant to the growers. On the other hand, the farmers who manage their own orchards faced the problems like lack of finance, transportation, post harvest losses, natural hazards especially monsoon rain and price uncertainty during the auction. Among all these problems, the lack of finance was reported to be the most serious problem which, in turn, affects the market choice of the farmers. A farmer Ghulam Murtaza in Sukkur said,

 “many farmers in Sukkur are aware of other markets of dates other than terminal market of Sukkur where they can get relatively good price of their commodities but because they received the loan from a commission agent so they are bound to sale the dates through him”.

One of the most effective ways that farmers have of getting the best price for their produce is for them to sell it themselves directly to final consumers at rural or urban markets, and thus bypass the normal marketing system (Hine and Ellis, 2001). Commenting on the role of commission agents a farmer said,

 “You (researcher) must spend some time in this area (Sukkur) during the harvesting season and observe how difficult is for us (farmers) to see that fruit of our hard work is eaten by them (commission agents)”.  

According to farmers, the interest rate of commission agents was 10-13% per month and farmers generally return the amount after 3-5 months. Another farmer during discussion said,

“Provision of credit facilities by the government is the only way to get rid of loans from informal sources and to ensure farmers’ profit”.

The credit provided by the commission agents, contractors and traders was the major source of finance for the producers. However small or more remote farmers often had limited access to credit and, in many cases, with unfavorable credit conditions (Pearce, 2003).

1.2  Contractors

Contractor plays an important role in the marketing chain of dates. A contractor estimates the potential yield of date orchard and considers expected costs for transportation, supervision, labour, and marketing (Khushk et al., 2009). The contractors of Sukkur had more resources and marketing knowledge than growers but not as much as a commission agent had. They usually get advances from commission agents and sell the dates through them and after selling they paid the amount of loan plus interest rate to commission agents. During the survey, some contractors were found to sell the dates on wholesale in Punjab province. A contractor of Sukkur selling the dates in the wholesale market of Dera Ghazi Khan said “we get the loan from commission agents of Sukkur, provide them jewelry of family women as a guarantee of loan recovery, and get the contract of a date orchard in Sindh before the pollination which is done manually. After harvesting we load dates in trucks and bring to Dera Ghazi Khan Market where we pay 7% of total price of dates in the truck to commission agent of Dera Ghazi Khan and he allows us to sale dates in his shop” .

1.3  Commission agents

A commission agent is a person who provides his services to sale the dates brought by the farmers or contractors on commission basis (Khushk et al., 2009). They were found to be the owner of shops in the Sukkur market. They were financially stable and had enough knowledge about marketing situation in the country. They had enough storage facility for the farm produce. They also had contact with some agents in India and export Chuharas according to the demand.

1.4  Exporters

They export fresh and Chuhara to other countries. An exporter may be a commission agent or an owner of date processing or storage companies. According to respondents, many commission agents were in fact exporters who export dates mainly to India.

2.     DERA ISMAIL KHAN

2.1  Farmers

Farmers produced a large quantity of dates in Dera Ismail Khan. Dhakki was the prominent date variety grown by most of the farmers because of its increasing demand in the area, other provinces and abroad as well. Most of the farmers claimed that there was no proper facility for the processing and storage of fresh dates due to which there was an increasing trend of making Chuhara (dried dates). According to a progressive farmer Haji Muhammad Aslam, “There is no proper processing facility in the area and fresh dates get spoiled, therefore we have started making Chuhara and 90% dates are converted into Chuhara which can be stored and sold for a long period of time”. Another reason of less fresh date production was that of monsoon rain. As Dhakki, the most prominent variety of the area was found to be a late variety so it damaged seriously during this season.

The small farmers often sell their produce themselves in the market either in their own shops or shop of others, while the large landholder often relies on contractors to escape from complications of harvesting and marketing. Many farmers and contractors sell the dates in Sukkur (Sindh) market where they faced the problem like uncertainty in prices of dates during the auction. According to a farmer Muhammad Iqbal “farmers from D.I Khan are treated well initially in the Sukkur market, keeping this in view many other farmers also reach there with the hope to get a good price but this time prices become low and farmers have no choice other than to sell their produce at low prices”. A great variation in market prices showed that food marketing is inefficient and is subjected to monopolistic practices (Hine and Ellis 2001).  

2.2  Contractors

The contractor is one of the major players in the supply chain of dates (Khushk et al., 2006). There were two types of contractors in Dera Ismail Khan, local residents and those coming from Sindh. The contract of a date orchard started just before the pollination which was done by the contractors. Local contractors often sell dates and Chuhara to the wholesale market where an auction of dates and Chuhara was done through commission agents. The contractors coming from Sukkur were reported to sale the dates in Sukkur market or export it to other countries mostly to India.

2.3  Commission Agents

Commission agents performed their activities on commission basis while selling the produce brought by producers or contractors in the wholesale market of Dera Ismail Khan and terminal market of Sukkur (Sindh). They charged 10-11% commission.

2.4  Wholesalers

The wholesalers buy and sell large quantities of dates. They usually buy dates from wholesale market or sell their own produce in the main bazaars and other locations of the district. Most of them faced the problem of fresh dates shortage especially of Dhakki variety, and sell mostly Chuhara or fresh dates of other provinces especially that of Sindh.  According to a wholesaler at Topanwala Bazaar “availability of fresh dates in the area is continuously decreasing and we buy fresh dates from other provinces to fill the gap between demand and supply”.

2.5  Retailers and Hawkers

Retailers and hawkers buy and sell a small amount of dates. They usually buy dates from the wholesale market. Hawkers move from street to street to offer dates for sale.

2.6    Markets

2.6.1        Wholesale Market

The wholesale market was found to be the main assembly centre for fruits and vegetable surplus of surrounding areas. The growers and contractor sell their products in this market giving 11% commission on sale revenue. In the wholesale market, major players were contractors, commission agents, wholesalers, and retailers. Wholesalers and retailers were the main buyers here.

2.6.2        Main Bazaars

The main bazaars in the District were in Dhakki, Panyala and Daraban. Wholesalers and retailers were found to sale dates there. Consumers generally buy dates from main bazaars. Market chain of dates in Dera Ismail Khan is presented in the figure below. 

3.     BALOCHISTAN PROVINCE

Balochistan has the highest cultivated area under date palm (Govt. of Pakistan, 2009). Mekran division is considered as a hub of date production. The climatic and geographical location of this region is most suitable for the growth of date palm (SMEDA, 2009). As Mekran does not fall into the southwest monsoon ranges, (Rahim, 2003) therefore, unlike the other date-producing areas of Pakistan, there is no serious damage to this crop because of monsoon rains. In spite of this natural advantage, the growers in the province faced many problems like lack of finance, lack of processing facilities, lack of road facilities in the rural areas and unawareness about production technology. The farmers usually sell the dates in the nearby market. The contract system was not reported by the respondents. Many farmers were reported to sell the dates to some processing companies of Sukkur and Karachi and demand increases when production of dates in Sindh decreases due to monsoon rains.

An Agricultural Officer at Turbat during a telephonic interview said,

“Farmers of this area (Turbat) are very poor and cannot afford fertilizers and modern production technologies. The performance of agricultural department is adversely affected due to the lack of funds by the government”.

He further stated,

“There are about eight date processing plants in Balochistan but almost all of these are not working properly. There is an urgent need for the proper working of these plants which is possible through public and private sector partnership”.  

 The illegal trade of dates between Iran and Balochistan was also reported.

4.     SOUTH PUNJAB

South Punjab comprises divisions of Dera Ghazi Khan, Multan and Bahawalpur. For the present study two districts of Dera Ghazi Khan namely Dera Ghazi Khan and Muzaffargarh were surveyed. The majority of the date palm trees in South Punjab were found to be in scattered pattern with little attention paid by the growers and government regarding production technology and marketing. Most of the trees were propagated through seed and well-developed orchards were few in number; but in spite of all this the total production of these areas is sufficient as dates were not only found to be sell in this region but also a large quantity of dates were supplied to other regions especially to Tank, Bannu, Ramuk (Khyber Pakhtunkhwa) and Rawalpindi (Punjab). The pollens of date palm were also supplied to Sindh. The marketing chain can be classified into two categories;

i)                   dates of other provinces (Sindh and Balochistan)

ii)                 local varieties

 In general, the dates of Sindh and Balochistan were brought by the traders and/or wholesalers to “Ghala Mandi” of Multan from where these dates are supplied to other surrounding areas like Muzaffargarh, Khanewal etc while these dates reached directly to fruits and vegetable market of Dera Ghazi Khan from Sindh brought mainly by the traders.

The stakeholders in the supply chain of dates in South Punjab were the following

4.1  Farmers

     Majority of the farmers considered the date palm as a wild tree and a source of extra income. In most of the areas of South Punjab, farmers harvest and market the dates themselves. In some areas, small farmers hired skilled labours to harvest the trees and farmers’ share, in this case, was 50%. They usually sun dried the dates and sometime use it as a food with bread, especially during the offseason while large farmers sometimes gave the contract of their trees. The contractor paid an amount of Rs. 100-800 per tree in two or three instalments; first at the time of the contract, second at the time of half harvesting and third after complete harvesting. If a contractor is not a local person, he would pay the amount before complete harvesting. 

4.2  Contractors

  The role of contractors was more prominent in low date-producing areas of south Punjab where local people could not climb on tree or date trees had low-income returns. The contractors harvest the dates in Doka (immature) or Pind (fully repined) stage. They generally brought the fully ripened dates in the local market and Doka, after some treatments, were supplied to other regions especially to Taank, Ramuk, Bannu and Rawalpindi. The local herdsmen were also found to be contractors of especially inferior quality dates to feed their animals. 

4.3  Commission agents

Commission agent received 6.25% from the seller and about 1% from the buyer to provide his services in the local markets.

4.4  Skilled labours

During the harvesting season (July-August) some people who know how to climb on a date tree move from field to field on a cycle and asked the farmers about the harvesting in the condition that they would receive the half of the total produce harvested.  The small farmers usually agreed with them. After harvesting these labours then sell their dates in nearby fruits and vegetable market. However, this trend was confined to only some areas.

4.5  Wholesalers

 Usually the wholesalers of Muzaffargarh and Layyah reached Multan to buy dates of Sindh and Balochistan and sell on wholesale in their respective areas.

4.6  Beopari

They usually buy dates from the market where they found a low price of the commodity and sell where prices were relatively high. They brought dates from Sindh and Balochistan to Multan or from Multan to other surrounding areas. They also supply pollens of date palm to Sindh. 

4.7  Retailers and Hawkers

The retailers in this region may be a contractor or a member of a farm family who sells the dates in different places. The hawkers sell the dates either on a cycle or put a basket full of dates on their head and move from one location to other.

5.     FAISALABAD

Faisalabad is the third largest city of Pakistan as far as population and industrial growth is concerned and is located in central Punjab (City district government Faisalabad, 2010). Faisalabad is not included in the major date producing areas. The dates of other regions mostly Sindh and Balochistan satisfy the demand of the consumers. During the survey, the “Gol Kiryana Market” was found to be the main date market where wholesalers sell the dates. The main buyers in this market were retailers and street hawkers. The varieties found there were Aseel and Karbalain of Sindh, Begum Jhangi of Balochistan and some dried varieties of Iran. Aseel, Karbalain and Chuharas reached the market from Sukkur. The wholesalers reached Sukkur market to buy Aseel, Karbalain and Chuharas while they purchase Begum Jhangi and dates of Iran from Quetta mostly through traders. They also had contact with the contractors and farmers of Dera Ismail Khan to get the Chuharas of Dhakki variety which was reported to be best in terms of popularity as compared to Chuharas of other varieties of Pakistan. Most of the wholesalers claimed that Iranian dates are best marketed in the area. According to a wholesaler Abdul Sattar,

 “The demand and availability of Iranian dates is more as compared to Pakistani dates because these are processed and have a long shelf life”.

The Aseel were found to be the second best variety in terms of marketing and ranked first among Pakistani dates. The dates were reported to be available in this market throughout the year. The other products of date palm fruit were dates filled with almond, date jams, date syrup and date Halwa, which were brought by wholesalers mainly from Dera Ismail Khan. The hawkers buy dates from “Gol Kiryana Market” and move from street to street to sell these dates. Retailers sell the dates in their shops. Relatively small business of dates in “Ghala Mandi” and “fruits and vegetables market” were also reported where an auction of dates was carried out through commission agents. There were also shops of wholesalers there. The main buyers found there were retailers and hawkers. The overall supply chain of dates in Pakistan is presented in the figure below