Abstract: This study was undertaken to determine the marketing margins for Kaja apple in two common marketing channels. These are: (1). Producer-Pre-harvest contractor-commission agent-Wholesaler-Retailer-Consumer, and (2). Producer-Commission agent-Wholesaler-Retailer-Consumer. The net marketing margins for Kaja apple are, 69 % when the produce is marketed through pre-harvest contractor and 57 %, When the growers perform self marketing. Farmer’s share in consumer’s price is, 31 and 43 % which indicates that the rest 69 and 57 % of consumer price is going to different marketing middlemen.
Introduction
Due to favorable soil and climatic conditions, Balochistan produces a wide range of fruits and vegetables of good quality, and in quite sizable volumes. From horticultural point of view Balochistan can legitimately be called as the “Fruit Basket of Pakistan”. Balochistan is the major producer of apple in Pakistan, it produced 480 thousand tones of apple from an area of 35 thousand hectares apple which constitutes about 70% of the deciduous fruits in Balochistan, (GOP, 1997).
District Pishin is the major producer of apple in Balochistan. It produces 1, 16, 120 tones apple from an area of 7600 hectares in 1996-97, which contributes about 24% of the total production of the province (GOB, 1997). There are a number of popular commercial apple varieties grown in Pishin district. Which are, Kaja which is a newly introduced variety is grown on 8 % area while Tor Kulu (Red Deliscious), Shin Kulu (Golden Delicious), Amri, Mashadi and Kashimiri are grown on 75% area (FAO, 1990).
Farmers of the area are confronting various apple marketing problems. Poor and inadequate roads, lack of credit facilities, poor grading and cold storage facilities for perishable products and shortage of warehouses are the common marketing problems eroding the farmers incomes and leading to big marketing margins as reported by Bashir et al. (2001), Singh and Sikka (1991), Singh et al. (1990), Sharma and Subrahmanyam (1988) and Thakar (1985). They further argued that in the marketing process various marketing intermediaries are involve who receive the major share in the farmer’s income from apple sold in the market, they are organized, whealthy and informed about market conditions, marketing system and price behavior while the farmers on the other hand are generally disorganized, financially weak and ignorant about market conditions. These conditions cause wide marketing margins which results in the exploitation of farmers. Iqbal (1989) and Ranasinghe (1988), reported that the presence of pre-harvest contractor is a distinctive character of marketing in Pakistan. Iqbal further reported that various marketing intermediaries are exploiting both farmers and consumers.
Many studies have been undertaken in the past to find out the marketing margins of different fruits and vegetables ranged from 10 to 70 % of the consumer price and showing big marketing margins exist for various agricultural commodities and hence indicating that farmers are exploited by the various marketing middlemen. (Bashir et al., 2001; FAO, 1990a; Iqbal, 1994.
This study is important to sort out the producer’s share in consumer’s rupee and also to know the shares of different intermediaries involved in the marketing process and the returns made by them. This study will also help to find out the costs incurred at various stages of marketing process.
Materials and Methods
This study was conducted in Pishin district of Balochistan in 1998. A well structured questionnaire was used to collect data from producers, pre-harvest contractors, commission agents, wholesalers, retailers and consumers. A list of major apple producing villages in sub division Pishin were obtained from the Extra Assistant Director of Agriculture Pishin. Five villages were selected through random technique out of entire population. These villages were, Manzaki, Huramzai Samzai, Kakazai and Alizsai. Stratified random sampling technique was used for the selection of apple producers. The 45 apple producers were selected, 30 pre-harvest contractors, 10 commission agents, 10 wholesalers and 30 retailers were selected randomly from Quetta market where the apple growers of Pishin supply their produce. Weighted averages were used for analysis and interpretation of the data.
Results and Discussion
Marketing Channels: The marketing channels common in Pishin are;
| 1. | Producer- Pre-harvest contractor- Commission agent-Wholesaler - Retailer-Consumer. About 80 % of apple producers market their produce through pre-harvest contractors. |
| 2. | Producer-Commission agent-Wholesaler-Retailer-Consumer. 20% farmers undertake self marketing and get 12 % higher net margin than those marketing through pre-harvest contractor. Henceforth, the first marketing channel will be called as channel-1 and second marketing channel called as channel-2. |
Marketing channel for tor kulu apple in pishin |
Marketing Margins: Marketing margin is the difference between the price received by the producer and the price paid by the consumer of produce. It is also computed as the percentage share of final price received by each marketing intermediary.
| Table 1: | Marketing costs and margins for Kaja (Rs./crate) |
| Source: Annexure-I &II | |
| Annexure-I: | Marketing Margins and Costs for Kaja Apple. (Rs/crate) |
| Channel 1: | Producer, Pre-harvest, Contractor, C. Agent, W. Saler-Retailer, Consumer |
The volume of marketing margins reflect the efficiency of marketing system i.e., the higher marketing margins reflect less share of producer in consumer’s rupee and more benefits to marketing middlemen and vice- versa. The marketing margins for Kaja apple were, 69 and 57 % for channel-1 and channel-2 respectively (Annex.I&II).
Apple Producer Margin/Cost: In channel-1, apple producer received 31% of the price paid by the consumer, his marketing costs were zero, because he market his produce through pre-harvest contractor.
| Annexure-II: | Marketing Margins and Costs for Kaja Apple. (Rs/crate) |
| Channel 2: | Producer, C. Agent, W.Saler, Retailer, Consumer |
For the produce marketed through channel-2 the farmers received 43 % of the price aid by the final consumer. The farmer’s cost per crate (of 18 kgs)was Rs. 109.20 and a net margin of Rs. 207.80 per crate in this channel (Table 1).
Pre-harvest Contractor Margin/Cost: In channel-1 pre-harvest contractor received 12.45% of the price paid by the final consumer. Per crate cost incurred by him was Rs. 259.50 and net margin was Rs. 60.50 Pre-harvest contractors are not involve in channel-2 (Table 1).
Commission Agent Margin/Cost: Commission agent charge his commission at the rate of 10% of the auction price for the produce. His share in channel-1 and channel-2 was 5.14 and 5.08 % of the consumer price (Table 1).
Wholesaler Margin/Cost: Wholesaler’s share in consumer price was 6.66 and 6.80 % of consumer price in channel-1 and channel-2. The cost per crate incurred by wholesaler was Rs. 337.65 and 334.65 (Table 1).
Retailer Margin/Cost: Retailer received 13.37% of the consumer price or a margin of Rs. 65 per crate (Table 1).
Other Marketing Costs: These costs include orchard management, picking, packing, sorting, grading, taxes, transport, rents, labor, haulage and cold storage expenses, losses and other costs are 36.66% of the losses consumer price or Rs. 178 per crate, in both the channels.