RESERCH REPORT – TRTA IIeeas.europa.eu/archives/delegations/pakistan/documents/press... · trta ii policy reforms to enhance competitiveness and exports of horticulture (kinow and

TRTA II

POLICY REFORMS TO ENHANCE

COMPETITIVENESS AND

EXPORTS OF HORTICULTURE

(KINOW AND MANGO)

DECEMBER 2013

RESERCH REPORT – TRTA II

POLICY REFORMS TO ENHANCE COMPETITIVENESS AND EXPORTS OF HORTICULTURE

TRTA II – RESEARCH REPORT (MANGO AND KINNOW) Page 2

TABLE OF CONTENTS

1. Executive Summary 4

2. Purpose / Objective of the Study 9

3. Methodology and Approach 9

4. Stakeholders 10

5. Situational Analysis 11

a. Behind the Border 11

i. Production – Geography, Volumes, Seasonality and Quality 11

ii. Landholding Structure 12

iii. Main Varieties 13

iv. Export Volumes 14

v. Production Methodology and Farming Practices 17

vi. Ownership / Management Structure 19

vii. Post Harvest Fruit Handling 20

viii. Logistics & Infrastructure 23

ix. Quality of Extension Services 23

x. Quality of Inputs 25

xi. Awareness about International Quality Standards / Requirements 25

xii. Connectivity between farmers and Exporters 25

xiii. Availability of Good quality Fruit for Exports 26

xiv. Incentive for Producing Good Quality Fruit 26

xv. Research and Development 27

xvi. Lack of Initiative to Introduce New Varieties 28

xvii. Role of Trade Promotion Institutions 28

xviii. Availability and Quality of Finance 29

xix. Ineffective Crop Insurance Coverage 33

xx. Small Capacity of Fruit Processing Segment 34

xxi. Ineffective Wholesaling Infrastructure and Process 34

xxii. Multiple Roles Played by Commission Agents 36

xxiii. Quality of Exporters 37

xxiv. Lack of Business Acumen Amongst Farming Community 39



xxv. Farmers Opting for Easier Option to make Money 39

xxvi. Certification 40

b. At the Border 41

i. Airport and Seaport Handling 41

ii. Availability of Airspace 42

iii. Customs 43

iv. Plant Protection and Quarantine 44

c. Beyond the Border 46

i. Poor Image of Pakistan as Supplier of Fresh Fruit 46

ii. Ineffective Role Played by Pakistan Trade Missions 47

iii. Heavy Dependence on Few Markets 47

iv. Penetration only into the Ethnic Markets 48

v. Competition 48

6. Main Markets 50

7. Potential New Markets 51

8. Major Challenges 53

9. Recommendations 61

10. Conclusion 75

Appendix

Questionnaire – Exporter 78

Questionnaire – Middleman 80

Questionnaire – Grower 82

List of Interviewees 85



1. EXECUTIVE SUMMARY

This research study has been carried out as a component of “Trade Related Technical

Assistance” (TRTAII) program. The project is funded by European Union and its aim is to

strengthen the capacity of Pakistan to participate in international trade.

This report presents the finding of research carried out to evaluate competitiveness and

export potential of mango and kinnow segments of country’s horticulture sector. All relevant

aspects of the supply chain of selected fruits have been investigated and findings have been

carefully analysed to assess the real potential of mango and kinnow segments and also to

figure out the impediments in its progress particularly with respect to export related growth.

Critical analysis of current regulatory framework dealing with horticulture exports in general

and mango and kinnow segments in particular has been carried out with the objective of

identifying gaps, if any, and proposing practical modifications in the prevalent regulatory

framework to encourage growth in exports.

Keeping in line with the set out objectives of the project the research exercise was structured

to identify major obstacles behind the border; at the border; and beyond the border.

Serious gaps were identified throughout the supply chain. All segments of supply chain

ranging from methods of farm management which was found to be hugely dominated by the

practice of leasing out orchards to independent farm contractors; finance and credit structure

available to growers; harvesting practices; post harvest fruit handling; transportation;

packaging; wholesaling; grading; airport and seaport handling; and research, development



and extension services require careful intervention. On the regulatory side too bold and

drastic measures would be required to ensure quality of fruit exported from Pakistan and also

to strengthen the production base by introducing innovative financing and crop insurance

solutions.

Practice of focusing narrowly on ethnic markets by most existing exporters is a major

impediment in progress and growth of horticulture exports in general. Reasons for this

phenomenon and recommendations for overcoming it are also presented in the report.

Need for encouraging fresh blood into the processing and exporting segments was also badly

felt. Conspicuous absence of well known and successful business groups belonging to

different sectors of the economy from the horticulture processing and exporting sector, in-

spit of its huge commercial potential, has been identified as a major reason for below par

performance of horticulture processing and export industry.

Findings of this research study would form the basis for carrying out the Public Private

Dialogue (PPD) which would be overseen by the Public Private Dialogue Steering

Committee. Recommendations received in the PPD sessions that get endorsed by the

stakeholders would be incorporated in the final report. ITC the execution agency would

present the final set of proposals to the relevant departments in Pakistan for implementation.

Synopsis of some of the major challenges identified during the course of the study and

recommendations presented to overcome these challenges is presented in the following chart:



CHALLENGES RECOMMENDATIONS

Poor Quality of Fruit Being Exported a. Integrated approach to fix all

identified gaps in the supply chain in

one go

b. Improvement in existing

infrastructure such as airport and

seaport handling, commercial

warehouses etc.

c. Quality inspection authority

d. Farmers Training

e. Mango / Kinnow research institution

f. Hot water treatment must be made

mandatory for exports

g. Ban on use of calcium carbide for

ripening of mangoes

Mediocre Quality Exporters a. Encourage successful business groups

to invest in mango / kinnow export

business – business case must be

made and presented to potential

investors

b. Road shows to attract foreign

investment into Pakistan horticulture

sector



Lack of Presence in High End Markets a. Trade targets for trade missions

b. Outsourced marketing campaign

c. Encouraging successful business

groups to invest in mango and kinnow

sectors

Disproportionate Power of the Middleman a. Develop financing solutions to

replace middleman credit

b. Restructure agriculture credit regime

c. Restructure crop insurance products

d. Develop farmers cooperatives

Outdated and Faulty Farming Operations a. Farmers training programs

b. Farmers / exporters connectivity

Non Availability of Seedless Kinnow

Variety

a. Commercial production of planting

material for seedless kinnow

b. Timely release of approved budgets

for public sector research institutions

c. Research institutions under public

private partnership structure

Ineffectiveness of Public Sector Trade

Promotion Institutions

a. Shift from public sector dominated

setup to one that is driven by private

sector

Lack of Interest Amongst Top Business

Groups in Horticulture Export Business

a. Seminars and road shows

b. Professionally developed business



case to be prepared and presented to

potential investors

Lack of airspace a. Freighter service

b. Rationing of available airspace to

accommodate small and new

exporters

Non Availability of Bank Financing a. Restructure agriculture credit regime

b. Develop financing solutions to

replace middleman credit

Ineffective Insurance Coverage a. Restructure the existing crop

insurance products to make them

more appealing to the farming

community by removing the defects

present in the existing products



2. PURPOSE / OBJECTIVES OF THE STUDY

Main purpose for carrying out this study is to evaluate in detail the mango and kinnow

segments of the horticulture sector of Pakistan agriculture with the objective of finding

practical ways to increase exports of these fruits from Pakistan. Key objectives of the study

include:

a. Identifying all gaps in the supply chain of selected fruits that currently hinder their

exportability

b. Studying the regulatory framework governing all aspects of mango and kinnow

supply chains as well as international trade of these fruits and present workable

solutions to overcome the identified obstacles / shortcomings.

c. Recommending new markets along with effective marketing strategies for these

markets.

d. Through carefully prepared recommendations form the basis for Public Private

Dialogue on the subject

3. METHODOLOGY AND APPROACH

Following methods have been employed for gathering data, carrying out situational analysis;

finding solutions; and preparing recommendations:

a. Primary research – studying the available data and literature pertaining to current

trends

b. Interviews

c. Physical visits – farms; processing facilities; wholesale markets; port facilities; and

export facilities



4. STAKEHOLDERS

For the sake of this study stakeholders in the mango and kinnow supply chains are defined as

under

a. Growers

b. Professional Farm Contractors

c. Provincial Government Agriculture Departments (Sindh and Punjab)

d. Public Sector Trade Development Agencies

e. Commercial Banks

f. Wholesalers

g. Processors

h. Regulators

a. Plant Protection and Quarantine Department

b. Customs

c. Narcotics Control

i. Packaging Material Manufacturers

j. Transporters

k. Exporters

l. Investors



5. SITUATIONAL ANALYSIS

Detailed survey was carried out to understand the real potential as well as the main

causes for below par performance of mango and kinnow supply chains. As required by

the project TOR, findings have been divided into “Behind the Border”, “At the

Border”and “Beyond the Border” sections. Outcome of the survey are presented in the

following passages:

a. BEHIND THE BORDER:

Following issues were identified by the survey team in “Behind the Border”

part of the supply chain that hindered the export growth in mango and kinnow

sectors:

i. Production – Geography, Seasonality, Volumes and Quality:

Both mango and kinnow are large fruit crops of Pakistan. Total annual

production of citrus according to Pakistan Bureau of Statistics was 1.98

million tons in 2010 – 11. (Since Statistics for kinnow is not available

separately and since kinnow constitutes the single largest portion of citrus

crop in Pakistan statistics for citrus would be used). Total area under citrus

plantation during the same period and according to the same source was

194,500 hectares. Sargodha District in Punjab happens to be the centre for

kinnow production in Pakistan. Sargodha alone contributes around 90% to

country’s total kinnow production.

Mango on the other hand grows in Punjab and Sindh provinces of the

country. Mango’s annual production according to Pakistan Bureau of



Statistics was 1.886 million metric tons. Out of this around 1.4 million

metric tons is produced in Punjab and around 400,000 metric tons is

produced in Sindh. Total area under mango plantation in Pakistan is

reported to be 172,000 hectares.

Kinnow’s season lasts from November to March whereas mango’s season

begins in May from Mirpurkhas / Hyderabad region in the south of Sindh

and keeps moving northwards and finally culminates in Multan region

around end of September. This around 1,000 KM long production stretch

helps prolong the seasonality of the crop which can be used as a huge

advantage in strengthening presence in international markets for longer

duration. This, on the other hand, also means that local buyers have to

continuously chase the fruit which can become a tricky proposition

particularly when one has to select location for setting up processing and

packing facilities.

Pakistani Kinnow is highly appreciated for its taste, appearance and

texture. Similarly many Pakistani mango varieties such as Sindhri,

Chaunsa and Anwer Ratole are highly valued for taste, texture and Aroma.

ii. Landholding Structure:

Structure of landholding in Pakistan requires careful attention if

performance of agriculture sector needs to be evaluated. Broadly speaking,



landowners in Pakistan are either too large or too small. Some well known

and influential families own thousands of acres of agriculture land. In

certain cases these family holdings are so large that significant part of

them are either contracted out to third party contractors are left

uncultivated.

On the other hand, there are segments within the farming community

where family holdings are less than 10 acres. Large landowners are too

well-off and therefore, are not too pushed about making optimum use of

their landholdings. The small farmers are too poor to make optimum use

of their landholdings.

Corporate farming has also failed to develop as a concept. All this

collectively has restricted any meaningful progress in the agriculture

sector.

iii. Main Varieties:

In case of kinnow there is only one variety. However, in case of mangoes

Pakistan grows a wide range of varieties. Some popular varieties grown in

significant volumes having export potential are:

a. Sindhri

b. Chaunsa

c. Langra



d. Anwer Ratole

e. Saroli

f. Bangan Pali

g. White Chaunsa

h. Fajri

iv. Exports – Volumes and Prices:

In-spite of large production base and good quality of end product Pakistan

manages to export only small volume. Particularly, in case of mango

exports volumes are extremely low. As apparent from the below tables

Pakistan only very recently (2011) managed to cross 100,000 metric tons

of exports. This works out to around 5% of country’s annual production.

Average per KG price that Pakistani exporters are currently fetching is

around USD 0.45 which is shamefully low if compared with average

export prices fetched by other mango exporting countries. As shown in

below tables average export price fetched by India in 2012 was close to

USD0.80 whereas, Brazil could fetch as high as USD 1.08 during the

same period.

Situation in case of kinnow seems slightly better but is still far behind

other citrus exporting countries in terms of country’s average per KG

export price. Presently Pakistan is exporting close to 370,000 metric tons

of kinnow annually at an average per KG export price of USD 0.40. As



against this, Spain earns USD 1.00, Israel USD 1.14 and Turkey USD

0.72. Kinnow’s export volumes as a percentage of total production looks

somewhat respectable. In 2012 Pakistan exported 370,000 metric tons

against a total annual production of around 2 million metric tons. This

works out to around 19%. Kinnow’s average per KG price has also

improved from USD 0.24 to USD 0.40, whereas in case of mango the

price has remained stagnant around USD 0.43

Following tables provide volume, value and per KG export price for

selected mango and kinnow exporting countries:



MANGO:

Year Export Volume (KG) Export Value (USD) Average Per KG Export Price

2012 101,173,869 44,301,651 0.44

2011 105,130,191 44,731,872 0.43

2010 82,913,517 28,401,741 0.34

2009 81,450,055 33,178,617 0.41

2008 62,751,223 26,787,458 0.43


2012 214,639,718 166,858,465 0.78

2011 229,192,497 200,957,907 0.88

2010 182,973,746 228,717,182 1.25

2009 267,616,525 205,435,888 0.77

2008 281,668,634 214,580,940 0.76


2012 196,440,814 128,138,959 0.65

2011 152,285,375 96,344,567 0.63

2010 144,566,153 80,366,080 0.56

2009 144,079,220 71,410,066 0.50

2008 61,608,343 37,367,509 0.61


2012 127,132,014 137,924,898 1.08

2011 126,568,229 141,210,391 1.12

2010 124,380,374 119,645,385 0.96

2009 110,355,255 97,685,923 0.89

2008 133,944,342 119,122,108 0.89

Brazil

Pakistan

India

Thailand



KINNOW

v. Production Methodology and Farming Practices:

Like most of agriculture in Pakistan, mango and kinnow farms are also

managed through conventional and outdated methods. Right from

developing planting material to, orchard management; irrigation;


2012 367,921,799 147,723,264 0.40

2011 324,961,686 120,896,093 0.37

2010 348,863,828 95,175,089 0.27

2009 247,718,982 69,207,224 0.28

2008 204,819,033 48,568,887 0.24


2012 1,670,511,629 1,668,620,614 1.00

2011 1,577,144,541 1,728,800,051 1.10

2010 1,483,928,323 1,697,554,045 1.14

2009 1,510,650,975 1,678,292,138 1.11

2008 1,513,980,815 1,808,456,012 1.19


2012 47,912,869 54,533,000 1.14

2011 43,947,624 38,224,000 0.87

2010 43,316,700 39,717,000 0.92

2009 37,175,167 35,881,000 0.97

2008 39,729,475 23,539,000 0.59


2012 406,438,967 293,091,295 0.72

2011 470,929,337 338,023,542 0.72

2010 429,152,917 290,588,799 0.68

2009 364,271,794 253,309,852 0.70

2008 301,318,840 196,085,893 0.65

Turkey

Pakistan

Spain

Israel



fertilization; and harvesting everything is done without employing modern

technology or scientific methods. There are no certified nurseries for

planting material and farmers select suppliers on the basis local reputation

only.

Lack of technological use in areas such as production of tissue cultured

plants; high efficiency irrigation systems; and use of basic tools for

harvesting is conspicuous. Flood irrigation and harvesting fruit manually

or in case of mango by using a metal hook tied to a long stick, is not only

common practice but many farmers, particularly in the small and medium

category, seemed unaware of any other methods for these practices. Some

large scale farmers have taken initiative and are now making efforts to

adopt modern farming techniques and technology. These farmers are also

making efforts to get Global GAP certification for their farms. This

category of farmers however, constitutes a very small percentage of the

whole farming community.

Pest management is another area that poses a huge challenge and is a

deterrent to export growth. Farmers seemed to lack understanding about

integrated pest management system and also the effect on fruit’s

exportability due to ill managed pest controls. Internationally banned

pesticides are commonly and excessively used.



Widespread infestation of fruit fly in mango orchards is a major threat to

Pakistani mango’s export potential.

vi. Ownership / Management Structure:

Almost all farms are inherited by their current owners and are owned in

individual names. Corporate farming is virtually nonexistent. Farm sizes

range from around an acre to few hundred acres. This means challenges

facing different farmers vary significantly as the needs and expectations of

landowner of few acres are very different from those owning few hundred

acres.

Practice of leasing out orchards for one or more seasons is a very common

practice in both mango and kinnow sectors. Under this arrangement

professional farm contractors (known as bekhars or thekaydars in local

terminology) take over management of the farm and buy the entire crop by

paying a fixed amount to the owner. The deal gives an opportunity to farm

contractors to earn some profit over and above the price paid for the

orchard as lease rental. Owner on the other hand earns a risk free return on

his asset. This arrangement is, however proving to be extremely damaging

for the sector in the larger context. Seasonal farm contractors have very

limited interest in long term wellbeing of the farm. Also, in most cases

these contractors borrow from middlemen / wholesalers to pay for the

contract price / lease amount of the farms they take on contract. In return



these contractors are bound to sell entire produce to the middleman

funding the transaction. This results in serious limitation with respect to

fruit being sold directly to exporters / large retailers. This issue and its

repercussions are discussed in more details under “Availability and

Quality of Finance” section.

vii. Post-Harvest Fruit Handling:

The entire supply chain was found to be in shambles. Starting from

picking of fruit from the tree to on-farm transportation; packaging;

grading; farm-to-market transportation; wholesaling; every step in the

supply chain contributes towards serious deterioration of fruit quality.

a. Fruit Picking:

Talking to farmers revealed that fruit picking is being done in most

crude manner. In case of kinnow, relatively smaller size of the tree

enabled hand picking however, large tree size in case of mango makes

it impossible to pick fruit manually. Generally a metal hook is tied at

one end of a long stick which is used by a semiskilled worker to pick

the fruit by pulling it sharply. Other workers hold a piece of cloth

under the tree and try to catch each dropping fruit into it. Many a times

fruit is made to drop off by shaking the whole tree or a branch of it.

The practice results in fruit getting damaged at this very early stage of

the supply chain.



b. On-Farm Transportation:

In order to shift the fruit to a central packing station fruit is filled into

wooden crates which are carried manually by workers. Some farmers

also put larger quantities directly into donkey carts or bullock carts and

transport the fruit from orchard to the packing station. This method of

fruit handling further damages the fruit as it is bruised and squeezed /

squashed in the process and is rendered un-exportable.

c. Pre Cooling

There is no concept of removing farm heat or cooling the fruit to halt

its ripening process.

d. Farm-Level Grading:

All grading is done manually by unskilled and / or semiskilled

workers. Varieties are separated and fruit is then further segregated on

the basis of size. However, in case of kinnow, mechanical grading is

done at processing stage.

e. Farm-Level Packaging:

Two very destructive activities take place at this stage. One, the

packing technique practiced is that small fruit is placed at the bottom

of the wooden box and the best quality fruit is placed at the top. The

basked is then covered with a wooden lid which is fixed by hammering



nails into the walls of the basket. Invariably these nails pierce through

basket walls and seriously damage the fruit inside it. Since the best

quality fruit is placed at the top, it is that quality that is lost by the

system.

Secondly, in order to save on the packaging cost, baskets are almost

always overfilled. Fruit level can be clearly seen over and above the

sides of the basket. In order to fix the lid fruit is pressed hard by

putting pressure from the top. These baskets are then stacked up in

rows of 10 to 12.

All this results in significant damage to the quality of fruit, which in

turn becomes a serious hurdle in the growth of exports.

f. Farm to Market Transportation:

Farm to market transportation takes place in dry trucks. Wooden

baskets, particularly in the lower rows, invariably break during the

transportation process and some fruit is further damaged during this

stage. Further, absence of cool chain accelerates the ripening process

which results in reduced shelf life and inferior quality fruit.



g. Ripening Process:

Outdated and internationally unacceptable method of ripening

mangoes through the use of calcium carbide is still common in

Pakistan. Many important mango importing countries are putting

restrictions on the use of calcium carbide for ripening fruit and this is a

huge challenge for the Pakistani mango sector.

viii. Logistics and Infrastructure:

Though refrigerated vans are commonly used by numerous food sectors

such as dairy, ready to eat frozen food, meat etc., their use for transporting

mangoes is almost nonexistent.

Kinnow’s only export consignments are transported in refrigerated vans

that too only after it has been polished and waxed in a factory.

Transportation prior to this stage takes place in dry trucks.

Infrastructure such as commercially available cold stores, ripening

chambers, packing houses, treatment facilities etc. are completely missing.

ix. Quality of Extension Services:

Provincial Governments run quite elaborate Agriculture Departments and

Agriculture Extension is usually the biggest part of Provincial Agriculture

Departments. However, in-spite of its size, extension services provided by



these offices are far below the required standards. There appeared to be a

complete disconnect between the farming community and the Agriculture

Extension Department.

Farmers frequently complained about incapability as well as lack of

commitment on part of agriculture officers. One of the common

complaints received about extension services was that concerned officers

lacked knowledge and aptitude to deal with complex problems like

breakout of new diseases. Also there was complaint that the Extension

Department generally comes into action when huge amount of damage has

already been done.

Extension officers on the other hand, complained that farmers do not fully

believe in modern concepts and follow instructions only partially and half-

heatedly which results in limited impact.

Many private sector companies also offer extension services but farmers

generally seemed to have very little trust on extension officers deputed by

private companies as they felt their sole aim was to promote their own

sales.



x. Quality of Inputs:

As already mentioned quality of planting material is an area that requires

urgent attention. Availability of high quality and disease free planting

material, preferably produced through tissue culture technology would

play a useful role in improving yields and maintaining fruit quality.

Penetration of counterfeit pesticides and other critical inputs is another

huge menace seriously damaging the fruit quality which in turn restricts

profitability of farmers.

xi. Awareness about International Quality Standards / Requirements:

Barring few progressive large ones, farming community in general was

found lacking in their understanding with respect to quality requirements

of international markets. Lack of having this orientation is believed to be

one of the root causes for poor post harvest handling of fruit.

xii. Connectivity between Farmers and Exporters:

Though, few exporters are working directly with growers and farm

contractors but it seems that their relationship is largely restricted to

purchase and sell of fruit. Long term engagement between the two

segments seemed lacking. Efforts on the part of exporters to educate

farming community in general about post harvest handling of fruit and the

quality requirements of international buyers seemed lacking.



xiii. Availability of Good Quality Fruit for Exports:

Limited availability of export quality fruit was one of the reasons

exporters mentioned for slow growth in mango and kinnow exports.

However, in-spite of having financial capability the exporters did not seem

to be too interested in reaching out to a wider base of growers to educate

them about their quality requirements. They seemed contended with the

volumes they were currently exporting. Bad security condition was sighted

as the main reason by exporters when enquired about the reasons for not

making all out efforts to reach out to the farming community and

educating them about quality requirements.

xiv. Incentive for Producing Better Quality Fruit:

A very common issue raised by farming community was that there was no

incentive for them to invest their resources in improving fruit quality as

they did not get any price advantage for better quality fruit that could

justify their efforts / expenses.

This issue is directly linked with quality of exporters and types of market

segments served by them. This topic is covered in details under “Quality

of Exporters” section of this report.



xv. Research and Development:

Lack of research and development initiatives on the part of both public

and private sector stakeholders is yet another weak link in the mango and

kinnow supply chains. Research wings of Provincial Agriculture

Departments clearly lacked impetus and whatever limited activity was

taking place was very run of the mill type of research focusing only on

technical aspects. Business and commercial aspects seemed lacking. Also,

whatever research and development is taking place it is in the public sector

which fails to reach stakeholders in the timely fashion. Main private sector

stakeholders namely growers and exporters had very little contribution if

at all in research and development related activities.

At provincial level Agriculture Research Wing of the Agriculture

Department is the main institution responsible for carrying out agricultural

research. Whereas, at the federal “Pakistan Agriculture Research Council”

(PARC) is the main research institution which was created solely for the

purpose of producing up-to-date and good quality agricultural research.

In addition to lack of technical capability to undertake quality research by

the public sector institutions, several structural and operational

shortcomings also hinder production of good quality research. Some

commonly identified issues responsible for below par research output by



public sector entities were: lack of answerability; lack of training; political

interference; lack of funds; delayed release of approved funds etc.

xvi. Lack of Initiative to Introduce New Varieties:

This problem is bigger in the Kinnow sector where there is an urgent need

to produce seedless varieties to be able to meet the international

preference. Though, government agencies claim that efforts have been put

in to produce the seedless version of Kinnow and reasonable amount of

success has also been achieved in this regard, on-ground reality differed

from this claim where farmers were clueless about any such development.

Even government did not seem to have any idea as to how the existing

plantation could be replaced with the new seedless variety albeit it has

been developed.

xvii. Role of Trade Promotion Institutions:

There are two prominent public sector institutions responsible for

promoting international trade from Pakistan. Trade Development

Authority of Pakistan (TDAP) is mandated with overseeing the task of

overall trade development and is not restricted to just export promotion.

Pakistan Horticulture Development and Export Company on the other

hand was created solely with the objective of promoting production and

exports of horticulture from Pakistan.



Talking to different stakeholders in the mango and kinnow sectors it

became apparent that both organizations failed to have any significant

impact on the progress and development of these crucial sectors.

Being part of the public sector both organizations seems to be under

political influence. Innovation clearly seemed to be missing in their

approach towards finding ways to promote exports not just for mango and

kinnow but for the entire economy in general. Instead of putting in efforts

to find solution to core issues such as availability of finance to the farming

community; creating awareness amongst farmers across the entire sector;

encouraging fresh investment into support sectors such as transportation;

packaging; warehousing etc. efforts are directed towards exhibitions and

trade delegations. Even while selecting members for international

delegations very little effort, if at all, is put in to encourage fresh blood.

Generally, same old faces are made part of most delegations.

xviii. Availability and Quality of Finance:

Middleman or wholesaler credit is the main source of finance not only in

mango and kinnow segments but in the overall agriculture sector of

Pakistan. Though, it is this mode of finance that has kept the agriculture of

Pakistan going so far and therefore, it is important to not only appreciate

the role it is playing in the overall economy but any effort to replace this

mode of financing must be done with utmost care. In-spite of its positive



contribution middleman credit is believed to be the root cause for most of

the problems faced by agriculture sector of the country. The problem lies

in the price the borrowing farmer needs to pay for utilizing this financing

option not in terms of interest cost but in the shape of limitation on

farmer’s ability to sell his produce to best paying buyer.

Structure of this mode of financing is so “user friendly” that it is next to

impossible for the formal banking sector to compete. The only condition

applied is that the borrowing farmer must sell his entire crop through the

lending commission agent.

To start with the middleman credit is available without any collateral. All

one requires to avail the facility is a guarantor. On the face of it the credit

does not carry any interest charge and the lending middlemen claim that

their only incentive for lending money to farmers is the commission they

earn when the produce is brought to their shop for auctioning. General

perception, however, is that the lenders in the transaction earn far more

than the going market interest rate by way of price and weight

manipulations. The credit facility offered under this arrangement is not

only collateral and interest free but it works like a “running finance

facility” under which borrower can keep drawing funds as and when

required up-to a certain agreed limit as long as he commits to bring all his

produce to the lending agents commission shop.



Not only growers but farm contractors freely and regularly avail this

finance facility. According to rough estimates more than 90% growers and

farm contractors depend on middleman credit.

In-spite of the fact that the credit facility currently being offered by

commission agents is despised by many due to misuse of power by

lending commission agents, the system is providing crucial lifeline to the

farming community in a situation where formal banking system has

completely failed.

The existing agriculture financing products available through the formal

banking sector have multiple structural shortcomings. Some of the major

shortcomings are listed below:

a. First of all, the agricultural loan can be availed only by pledging

original property papers commonly known as “Pass Book”. The per

acre maximum loan amount that can be availed for different types of

crops is predefined by State Bank of Pakistan. The approved amount is

far less than the market value of the land being pledged. When

enquired why farmers did not opt for bank financing, they invariably

raised the question how they could pledge property worth PKR

1,000,0000 – 1,500,000 to avail loan amounting to just PKR 15,000 –

20,000.



b. Secondly, in many cases agricultural properties are not in the name of

their existing owners i.e. properties are not always promptly

transferred into the names of heirs at the time of inheritance and

therefore even if farmers decide to opt for bank credit their documents

are rejected because they are either jointly owned by other family

members or are in the names of deceased elders.

c. Paper work involved for availing bank finance is too lengthy and

complicated for farming community which generally lacks capability

to meet such requirements. There were also reports of bank staff using

farmers’ lack of understanding to manipulate the process and fleece

the farmers by charging substantial amounts in the form of processing

fee. There were also reports of bank staff manipulating the repayments

streams. Extra amounts charged by bank staff through these types of

manipulations are pocketed by the corrupt staff at branch level and

therefore, top management of the bank most of the times remain

unaware of such misconduct.

These aforementioned reasons result in banking credit becoming

extremely unattractive particularly when compared with easily available

middleman credit.



xix. Ineffective Crop Insurance Coverage:

Crop insurance was recently introduced in Pakistan with lot of fanfare.

The product offered to farming community however, badly failed to take

off as there were serious structural shortcomings in the offered product.

Following list contains some of the obvious problems with the crop

insurance currently available to farmers:

a. Crop insurance is available only with bank credit i.e. only those

farmers who avail bank finance can also avail crop insurance and

farmers not borrowing from banks cannot buy the insurance even if

they wanted to.

b. In order for insurance claim to be entertained it is mandatory that the

entire area where the effected farm is located is declared calamity hit

by the provincial government. Governments are generally hesitant to

declare areas calamity hit because such areas are relieved from all

taxes.

c. Farmers are charged additional around 2 % over and above the interest

cost for the insurance cover. The insurance cover is mandatory and

bank credit cannot be availed without also taking the insurance cover.

With these conditions the farmers hardly get the protection that they look

for and hence the existing product ends up safeguarding interests of banks



than those of the farmers. Also, it makes bank credit, which is already not

popular at all, more expensive and unattractive.

xx. Small Capacity of Fruit Processing Segment:

There are very few factories both in mango and kinnow sectors that can

utilize excess fruit or low quality fruit to make value added products like

juices, jams, squashes etc. This results in farmers being forced to discard

the fruit that cannot be sold. Pickup loads of kinnow were seen dumped on

road sides in Bhalwal and Khan Garh. On enquiring why fruit was

dumped in such a manner it was explained that inferior fruit did not have

any market and it cost more to transport the fruit to the wholesale markets

than what it could fetch there.

xxi. Inappropriate Wholesaling Infrastructure and Process:

Visits to wholesale markets in all important cities reveal a very dismal

picture. Not a single wholesale market is equipped to handle the large

volume of fruits and vegetables that come there for wholesaling.

Mismanagement and chaos were order of the day in all the markets

visited.

All markets where characterized by narrow entrances and narrow roads

that were made narrower by encroachment and dumped garbage.

Commercially operated cold stores were present in almost all markets but



these cold stores could accommodate small quantities. Auction areas too

were inadequate. All commission agents seemed to be sharp businessmen

but lacked sophistication in their dealings and decorum.

Auction process in these wholesale markets is conducted in a standard

manner but clearly lacks regulatory oversight. Each market is managed by

a Market Committee which comprise of a government representative and

market participants. Though, technically the committee has representation

from farming community as well but these Market Committees have

become symbol of exploitation and are freely and frequently blamed for

becoming a mafia and working against the interest of agriculture on the

whole. It is alleged that all wrongs such as price manipulation go

unchecked due to incompetence and indifferent attitude of the Market

Committee. Government representatives on the committee are generally

appointed by powerful politicians of the area. The Market Committee is

responsible for collecting all revenues generated by the market such as

octroi, parking fee etc. The revenue generated by the market is supposed

to be invested in the upkeep of the market but it is alleged that these funds

are siphoned off by the committee members and hardly any funds are

invested for the maintenance of the premises.

Sindh Provincial Government has enacted law that requires all agriculture

markets to be either operated by private companies or under public private



partnership structure. This is a huge step in the right direction but on-

ground implantation is extremely slow. According to Sindh Agriculture

Department, one state of the art agriculture wholesale market is planned in

Khairpur under public private partnership structure and its international

tender for private investor would be floated soon.

Any development in agriculture in general and export related progress in

particular would definitely require massive revamping of not only

wholesaling infrastructure but also the entire wholesaling process.

xxii. Multiple Roles Played by the Commission Agents (Middlemen):

A huge problem confronting Pakistan agriculture which is also restricting

progress in mango and kinnow sectors is out of proportion dominance of

the middleman (commission agents) especially at the production stage of

the supply chain. Being the most powerful element in the supply chain,

commission agents are frequently seen playing multiple and overlapping

roles. Typically a middleman plays all or many of the following roles:

Financier

Wholesaler

Farm Contractor

Processor

Retailer



Exporter

This situation lands commission agents in a potentially exploitative

position. Many farmers complained that they suspected that commission

agents frequently kept the best quality fruit for their own export

consignments without even bringing it for auctioning. Any effort linked

with progress in any segment of agriculture sector must critically look into

curtailing the undue power of commission agents.

xxiii. Quality of Exporters:

Severe disparity was observed amongst the exporters, particularly in the

mango sector, with respect to quality of human resource and quality of

operations. Though, there are few companies that have potential to grow

and are even investing into technology, majority of existing exporters lack

capability to serve the high-end markets. A very huge majority has

evolved from wholesaling background. Whereas, there was nothing wrong

with exporters having their roots in the wholesaling profession, the

problem was felt in the fact that almost for all such exporters wholesaling

still remained the primary business. Secondly, lack of fresh blood in the

form of professional organizations joining the industry on its merit for

pure business reasons resulted in industry being dominated by wholesaling

mindset.



Another very common breed of exporters consists of such players who

entered into fruit export business primarily because they had a close

family relation settled in one of the countries which was importing fruits

from Pakistan. The convenience of a relation dealing with a wholesaler

abroad, also of Pakistani or Indian descent, encouraged initial trade which

later on became fulltime profession. Again, the problem with this kind of

evolution is that business initiation and progression are not based on in-

depth industry analysis; rather they are based on convenience of doing

business.

Exporters’ failure to collectively or individually endeavour into quality

research; invest into technology; attract well developed foreign players as

strategic partners; and attract quality human resource put a lot of blame on

large and well established exporters for current status of the industry.

To summarize this topic – there is no Pakistani Del Monte yet!

The association of fruit and vegetable exporters “All Pakistan Fruit and

Vegetable Exporters, Importers and Merchants Association” seems to be

lacking purpose and direction. The president of the Association was

contacted around half a dozen times for his views and comments to be

incorporated into this report but every time request for a meeting was

turned down with the commitment that he would himself get in touch with



the author. The commitment was however, never fulfilled. The fact that

association’s scope as apparent by its very name, has not been restricted to

just “Importers” and “Exporters” but it has been extended to also include

“Merchants” support the earlier argument of industry being dominated, or

at-least being influenced by wholesaling mindset.

Talking to other stakeholders it was revealed that association’s mere

contribution was to work on removing irritants after they have appeared

and completely lacked will as well as capability to tackle serious issues

before hand or to work on developing long term strategy for export

growth. In-fact, some stakeholders even went to the extent of blaming the

Association for lack of interest on part quality business houses in fruit

export business.

xxiv. Lack of Business Acumen amongst the Farming Community:

Huge amount of responsibility rests on the shoulders of farmers for below

par performance of both mango and kinnow sectors. Barring very few

farmers almost entire farming community seemed to lack the genuine

desire to break away from the vicious circle of poverty. Surprisingly many

very large farmers with landholding in hundreds of acres complained

about being financially weak and sighted this as the main reason for them

selling their crops in advance. However, on further probing it became



apparent that lack of business acumen as well as desire to change the

status quo was the main reason behind their dismal situation.

xxv. Farmers Opting for the Easier Option to Make Money:

Desire and capability to earn more through hard work was generally seen

lacking amongst the farmers of all sizes. It is believed that since an easier

and risk free option of selling away the crop in advance to Farm

Contractors was easily available, the farming community had become

somewhat lazy and complacent. They seemed to lack the spark to take up

the challenge of changing their lives by managing their own farms and

earning additional income.

xxvi. Certifications:

Many large exporters and processors have acquired certifications such as

ISO and HACCP to stand out as better managed organizations. This is a

positive step towards trying to meet quality standards of international

buyers but this also deals with food safety and quality of operations and

not with quality of fruit being exported and thus the issue of inconsistent

quality fruit being exported remains unresolved.

Similarly, huge amount of efforts were put in during last few years to get

some large orchards Global GAP certified. Again this is a positive

development but it is critical to understand that farm certification in



isolation would not help overcome the causes for limited progress in

export volumes. Farm certifications deal with traceability and not quality

of fruit which are more closely related with post harvest issues. Also, at

present Pakistan’s horticulture export industry is incapable of serving the

sensitive markets demanding Global GAP certification due to severe

structural shortcomings in the supply chain. It is therefore, more prudent

to first focus on rectifying issues pertaining to post harvest issues so that

there are exporters who are willing to pay premium for a Global GAP

certified fruit.

b. AT THE BORDER

Problems identified “At the Border” are listed below:

i. Airport and Seaport Handling

Extremely poor infrastructure for fruit handling especially at the airports is

one of the biggest hurdles in increasing the exports from Pakistan,

particularly in case of mango. Karachi airport from where bulk of export

consignments leave for international destinations does not have any cold

storage facility. There is a common cargo holding area for food and

nonfood goods. Even this open dry shed is poorly designed and cannot

even ensure cargo’s complete safety if there is a heavy rainfall while cargo

is waiting to be airlifted.



In the absence of proper handling facilities at the airport, there is very little

exporters can do to maintain the cool chain. Though, this trend does not

exist at the moment but even if a private sector exporter tries to develop its

own cool chain, it would break down once the consignment reached the

airport.

Most airlines require cargo to reach the airport around 4 – 5 hours before

the flight’s scheduled time. Flight delay is a common occurrence and

therefore, consignment’s stay in the dry holding area can extend

significantly.

ii. Availability of Airspace:

Shortage of airspace is another huge problem restricting growth of fruit

exports from Pakistan.

In last decades many airlines stopped their flights from Pakistan and shut

down their offices in the country. This was the outcome of inconsistent

geopolitical conditions as well as deteriorating security situation.

This phenomenon resulted in severe shortage of airspace especially during

the mango season. Some exporters complained that airlines, in this

situation, have a free hand and can charge exorbitant freight charges from

exporters who have very limited options in this regard. Due to the shortage



big exporters with better financial standing manage to book airspace in

advance leaving very little room for new comers and relatively smaller

players.

Sometimes even booked cargo is left behind by the airline if unexpected

government cargo has to be accommodated. In the absence of regular

flights with short intervals the left behind cargo has to stay at the dry cargo

holding area for ten to twelve hours resulting in severe damage to fruit

quality.

iii. Customs:

Pakistan Customs, one of the wings of Federal Board of Revenue, is the

primary body responsible for ensuring that all trades taking place from

Pakistani ports and land routes are according to the legal framework

applicable for such trades. Pakistan Customs Department is responsible for

playing this critical role in the horticulture sector as well.

Pakistan customs recently launched completely automated online customs

clearing system called Web Based One Customs or WeBOC. WeBOC is

the paperless system that provides real time integration of agents, brokers,

terminal operators, cargo handlers and customs officials for the clearance

of trade consignments.



In-spite of this upgrade in its operations, exporters had numerous

complaints against the way customs department was operating. According

to exporters the customs department needed to discontinue its highhanded

attitude and play a positive role in encouraging trade. Customs department

was blamed for corruption and complaints regarding mishandling

perishable consignments were common. Once a shipment was randomly

selected by WeBOC for physical inspection, the container was grounded

for customs officials to physically check it. It was alleged that during this

time even reefer containers were opened and were frequently left

unplugged which resulted in fruit experiencing thermal shock which in

turn deteriorated the quality. Exporters complained that though, inspection

was required to be completed within twelve hours it was common for

customs officials to take twenty four to forty eight hours to complete the

inspection. In addition to customs Anti Narcotics Force also independently

inspected the shipments. All costs pertaining to these inspections are borne

by the exporter.

According to the law customs role was to ensure all documentations were

in order and all applicable fee were collected for any particular

consignment and as such, customs department was not at all concerned

with the quality of product.



iv. Plant Protection and Quarantine:

Government of Pakistan is a signatory to International Plant Protection

Convention (IPPC) and therefore, all fruit exports are governed by the

IPPC rules prevalent at the time. Pakistan also has its own law on the

subject by the name of Plant Protection Act 1976 but IPPC override the

Act. Further, bilateral agreements such as Free Trade Agreements (FTAs)

dictate the quarantine and plant protection standards practiced at the exit

points.

Plant Protection and Quarantine Department is the government institution

responsible for overseeing that fruit exports took place according to

prevalent IPPC rules as well as bilateral agreements between countries.

However, in-spite of following IPPC rules by the Quarantine Department,

Pakistani fruit exports are facing constant challenge of failing to meet

phytosanitory standards. This is mainly due to lack of manpower available

with PPQD; insufficient technical capability as well as infrastructure; and

corruption at certain levels. Lack of strict controls at exporters’ end is also

causing breakdowns.

Additionally, it was also pointed out by the concerned officers at PPQD

that since hot water treatment was not a mandatory requirement for mango

exports it was practically impossible to eliminate the risk of fruit fly being



detected at the destination as it is impossible to detect fruit fly at larva

stage. PPQD is required to physically inspect a sample out of the entire

consignment and it is quite possible that sample may contain fruit fly larva

which goes without being detected by the PPQD officials even if the

inspection protocols are fully met.

Like customs department, PPQD is not concerned with quality of fruit.

Department’s role is to ensure consignment is fit for export to a certain

destination on the basis of prevalent IPPC rules and bilateral trade

agreements. Size and shape of the fruit; stage of ripening; and

appropriateness of packaging for example would not disqualify fruit

consignment by PPQD if it met other phytosanitory requirements such as

being free of fruit fly. Hence the issue of substandard quality being

exported does not get resolved by PPQD as well.

c. BEYOND THE BORDER

Numerous issues causing hurdles in export growth of mango and kinnow

segments appear at “Beyond the Border” part of the supply chain. These

issues are listed below:

i. Poor Image of Pakistan as Supplier of Fresh Fruit:

Pakistan’s diversified agro-climatic conditions enable it to produce

extremely fine quality fruits and vegetables but due to the reasons listed in



preceding sections quality of fruits, especially mangoes, when landed in

the international markets deteriorates far below the acceptable standards.

The fact that Pakistani exporters have consistently failed to serve the high

end markets and have remained focused on less quality sensitive ethnic

markets, Pakistan has over time earned the reputation of being supplier of

poor quality fruit. Additionally, the structure of agriculture sector in

general and very weak horticulture supply chain restricts the ability of

Pakistani exporters to commit consistent supplies of large volumes to big

size buyers.

Although Kinnow sector is comparatively far more developed than rest of

horticulture and the fruit is of acceptable quality, the quality issues

common in other fruits effect the image of Pakistani kinnow as well.

ii. Ineffective Role Played by Pakistan Trade Missions:

There was no major contribution made by Pakistani trade commissions

stationed in the markets where Pakistan was already exporting mango and

kinnow or where there was potential for such exports. A very run of the

mill type approach exists which confines to formal data sharing and

receiving delegations as and when they arrive.



iii. Heavy Dependence on Few Markets:

Studying Pakistan’s export trends for mango and kinnow makes it

blatantly obvious that there is over dependence on few markets having

large expatriate Pakistani population. Again, this is more so for mango

than for kinnow.

There is a fairly good geographic coverage but volumes exported to some

markets are extremely large and constitute a huge percentage of total

exports. This puts the entire sector at risk of collapsing in case that one

market for some reason stopped buying.

Looking at the per KG price obtained by Pakistan from some of these

markets raise the fear of dumping, particularly in case of mango. This

topic is covered more in detail in section “Main Markets” which comes

later in the report.

iv. Penetration only in the Ethnic Markets:

Not only Pakistani exports of mango and kinnow are over focused on few

countries, within these countries they are currently confined to only ethnic

markets consisting primarily of South Asian descent. Moving into markets

catering the western population is critical if exports of mango and kinnow

are to be increased both in terms of value and volume.



v. Competition:

There is stiff competition in both mango and kinnow from countries

having far better horticulture industries than Pakistan. India, Brazil, China,

Thailand, Maxico etc. are major competitors of Pakistan in mango

category whereas; China, Spain, Israel etc. are main competitors in the

citrus category. All these countries are ahead of Pakistan in almost all

respects as far as fruit trade is concerned. If Pakistan were to successfully

compete in the international markets it would be absolutely critical to

revamp the industry structure through intelligently developed policy

reforms dealing with sensitive issues such as:

Banning certain activities to safeguard against potential restrictions

on Pakistan

Making certain procedures mandatory to ensure only good quality

fruit was exported

Alter and amend role of regulatory institutions to ensure seamless

process at the border

Encourage professional business groups to invest in the sector.



6. MAIN MARKETS

Pakistan’s horticulture exports, particularly in case of mango are heavily skewed towards

few countries having large South Asian populations. As evident from the below table,

UK, UAE and Saudi Arabia collectively constitute about two thirds of Pakistan’s total

mango exports. UAE alone buys more than 40 % of Pakistan’s total mango exports. Not

only UAE is buying a huge chunk of total exports, the price paid by this market is lowest

too. UAE and Saudi Arabia together constituting 50% of total mango exports from

Pakistan happen to be paying the lowest price too.

Kinnow exports on the other hand seem to be a bit more diversified. Russian Federation

which is a relatively newer market happens to be the largest single market with around

18% of Pakistan’s total exports. The good thing in case of kinnow is that the biggest

buyer is also the best payer.

Kinnow 2012

Country Volume (KG) Value (USD) Per KG Price Percentage of Total Exports

UK 1,503,325 485,367 0.32 0.41%

Saudi Arabia 12,862,530 3,864,783 0.30 3.50%

UAE 28,926,621 8,385,074 0.29 7.86%

Sri Lanks 6,438,139 1,847,657 0.29 1.75%

Russian Federation 68,071,282 36,056,017 0.53 18.50%

Indonesia 10,211,223 4,072,096 0.40 2.78%



7. POTENTIAL NEW MARKETS

Pakistani mango and kinnow exports already have fairly wide geographic coverage. The

problem is with the market segment that is catered to by Pakistani exporters. Presently

majority of Pakistani exporters deal only with wholesalers of South Asian descent settled

in different markets. These wholesalers in turn deal mainly with retailers of same ethnic

background. Clientele for these retail shops mainly consists of South Asian settlers who

are not very quality conscious. This whole phenomenon germinates from relatively poor

quality of majority of Pakistani exporters who find it difficult to penetrate into the high-

end foreign markets.

While it might be a good idea to find newer markets, strategically it may make more

sense to develop strategy to capture high-end markets in countries where Pakistan already

has presence. Also, most of high paying markets that are still untapped by Pakistani

exporters are extremely quality sensitive too. Major reason for Pakistan’s lack of

presence in these markets is the inability of its exporters to meet the quality standards of

these high paying markets. Japan is a case in example. It is one of the most paying

markets in the world but requires “Hot Vapor Treatment” for mangoes. Pakistani mango

exporters at present do not have the ability to meet this requirement. Relevant offices of

Pakistan Government must be careful not to try and penetrate these markets without

preparing the exporters to meet the quality standards of these markets. Half baked effort

may result in country earning a bad image which may make it even harder for exporters

to penetrate these markets in future as well.



If efforts are made to capture high-end segments of markets where Pakistan already has

presence this will automatically enable Pakistani exporters to penetrate markets that are

currently not being served by them due to strict food standards.



8. MAJOR CHALLENGES

Having carefully studied the supply chain for mango and kinnow several gaps have been

identified that hinder the growth in these sectors. As evident in the preceding sections

dealing with “Situational Analysis” there are numerous challenges confronting Pakistan’s

mango and kinnow sectors however, some of the major ones are only being listed here.

Further, factors responsible for the identified problems have also been listed:

a. Poor Quality of Fruit Being Exported:

Though, quality of fruit is extremely good at the production stage, it deteriorates

significantly, especially in case of mango as it moves through the supply chain. Issues

linked with post harvest mishandling; limited use of technology; gaps in the

regulatory framework; and poor quality of majority of exporters result in serious

degradation in quality of fruit. As a result Pakistan fails to earn a respectable

reputation as a supplier of quality fruit. Without overcoming this challenge all efforts

in the direction of increasing exports would fail.

Probable Causes:

Poor Post Harvest Handling

o Faulty methods for picking fruit

o Improper on-farm movement

o Inappropriate packaging

o Inappropriate farm to market transportation

Poor logistics



o Inappropriate transportation

o Absence of cool chain

Poor Port Handling

o Indifferent attitude of customs towards the need for maintaining

quality / cool chain

o Lack of infrastructure

Corruption

o Quarantine Department

o Customs

Lack of capacity among exporters

o Lack infrastructure

o Lack capability to deal with quality sensitive buyers

o Lack professionalism

b. Mediocre Quality of Exporters

Mediocre quality of majority of fruit exporting companies is a big reason behind

limited growth in the mango and kinnow sectors. Bringing these companies at par

with fruit exporting companies from competing economies would require serious

efforts.

Probable Causes:

Absence of top tier business groups left the field open for mediocre

companies to dominate this sector



c. Lack of Presence in the High End Markets:

One of the biggest challenges faced by Pakistan horticulture sector is its inability to

penetrate the high-end markets. At present Pakistani mango and kinnow is shipped to

some of the best paying markets in Europe and Far East but invariably it is the low-

end ethnic market where Pakistani fruits are retailed. This has two detrimental effects

on the sector’s progress. One dollar value per KG of exports is very low and two

image of Pakistan is tainted as supplier of low quality fruit.

Probable Causes:

Non availability of good quality fruit in substantial volumes

Incapability of exporters

Indifferent Attitude of Pakistan Trade Missions

d. Disproportionate Power of the Middleman:

As already mentioned in the preceding chapters of this report whole of Pakistan

agriculture is characterized by lopsided balance of power which is disproportionately

skewed in favor of middleman or the commission agent. Overlapping and multiple

roles played by the commission agent give rise to conflict of interest at numerous

critical stages of the supply chain. Undue power vested with commission agent

provides him with frequent and regular opportunities to manipulate the system to his

advantage.



Probable Causes:

Weak financial position of farmers

Lack of well structured financing options available for farming business

Lack of awareness, aptitude and desire for progress on the part of farming

community

Absence of quality export houses having the desire and capacity to deal

directly with farmers

Lack of business acumen on part of farmers

Absence of farmers cooperatives

e. Outdated and Defective Farming Operations

Quality of operations at farm level is clearly one of the weakest links in the mango

and kinnow supply chains. There is much to be desired in the way farms are managed

Probable Causes:

Lack of awareness about development in the agriculture sector

Generally low level of education amongst farming communities

Low level of interest / motivation as farming profession is generally inherited

not selected

Exploitation of farmers by other players in the supply chain



f. Non Availability of Seedless Kinnow Variety:

This happens to be the biggest threat to Pakistan’s kinnow sector. Pakistani kinnow

which is highly appreciated for its taste and appearance is fast losing ground to

seedless varieties coming from Spain, Israel and other citrus exporting countries. At

present concerned government agencies do not seem to have any well thought out

plan for replacing thousands of acres of existing varieties with seedless one which is

equally good in taste and appearance as well.

Probable Causes:

Ineffective and outdated research setup

Lack of strategic focus on part of the government

Private sector research completely absent

Farming community financially too weak to take up the challenge on its own

g. Ineffectiveness of Public Sector Trade Promotion Institutions

Both TDAP and PHDEC are important institutions which have so far failed to play

any significant role in the progress and development of mango and kinnow sectors.

Revamping these institutions is a huge challenge which must be undertaken with the

will and capacity to root out all causes for their unsatisfactory performance up-till

now.

Probable Causes:

Corruption



Political interference

Low pay scales failing to attract talent

Lack of strategic direction / dynamic leadership

d. Lack of Interest Amongst Top Business Groups to Invest in Horticulture Export

Business

Lack of interest in horticulture exports from top tier business groups is one of the

reasons behind its limited progress. Attracting successful companies into horticulture

trade business by effectively demonstrating to them the available commercial

potential of this business would be a huge challenge for the government.

Probable Causes:

Lack of knowledge about commercial potential

Investor community generally belonging to urban centers – not too keen to

operate in rural areas

Poor law and order in rural areas

e. Non Availability of Bank Financing

Non availability of credit from formal banking sector which results in farmers opting

for middleman credit is the root cause for most problems being confronted by both

mango and kinnow sectors. Developing a workable financing structure acceptable to

both banking and farming sectors is critical to any progress particularly at the

production stage



Probable Causes:

Banking industry too narrowly focused on urban based industries

Bankers lack thorough understanding of farming sector

High risk of lending to farming sector

f. Unsatisfactory Research and Development Activity:

In-spite of their significant volume and trade potential there are no dedicated research

institutions for mango and kinnow in Pakistan. Research and development work

carried out by existing government institutions is of “run of the mill” quality and

plays almost no role in the progress of these important sectors. No major

breakthrough should be expected in these sectors unless the existing research and

development framework is thoroughly revamped.

Probable Causes:

Brain drain – poor socioeconomic condition of the country over last couple of

decades has resulted in migration of talent from the country

Low pay scales in public sector research institutions fail to attract talent

Politically influenced hiring in public sector institutions

g. Ineffective Insurance Coverage

As explained in “Behind the Border” section above, the existing crop insurance

products have serious problems and therefore, they do not effectively provide any

protection to the farming community and instead work solely to safeguard the



interests of the banks. The structure of the product not only fails to serve its very

purpose it also results in bank credit becoming more expensive.

Probable Causes:

Farming community not effectively represented at product development stage

Lack of understanding about agriculture and needs of farming community on

part of insurance industry and State Bank



9. RECOMMENDATIONS:

The list of recommendations presented in this section has been developed after carefully

studying the current status in both mango and kinnow sectors of Pakistan and analysing

the root causes for the prevalent situation. Efforts have also been made to understand the

reasons behind failure of past efforts to bring about improvement in the performance of

these sectors:

a. Holistic Approach:

There are numerous gaps in the supply chains of both mango and kinnow sectors and

desired results would never be achieved unless efforts are made to plug all of the

identified gaps.

A well thought out strategy that deals with all weak areas and is executed in a close

knit sequence must be developed in consultations with all stakeholders. During the

course of the study it was revealed that in the past some noble actions failed to

produce results because those actions were taken in isolation. A case in example in

this regard is efforts to get farms Global GAP certified without ensuring that there

was enough demand from exporters for Global GAP certified fruit at a price that

justified the cost and effort involved in getting farms certified. Also, there were no

concurrent efforts put in to augment the quality of logistics so that Global GAP

certified fruit did not have to travel in dry trucks and ripened through calcium

carbide. There is no difference between a rotten certified fruit and a rotten uncertified

fruit!



It is proposed that this time around all critical areas are studied concurrently and

serious efforts are put in to overcome all major challenges.

b. Infrastructure Improvement:

All efforts to bring about sustainable growth in mango and kinnow exports from

Pakistan would fail if logistical infrastructure, particularly at sea and airports is not

upgraded. If, for example, Karachi airport that handles around 80% of mango

shipments continues not to have a proper temperature controlled cargo holding

facility all efforts of private exporters to improve quality of fruit by maintaining cool

chain would yield absolutely no result as the cool chain would break once the fruit

reaches the airport. It is therefore, strongly recommended that government prepares

plans to improve cargo handling capability for perishable goods and brings it at par

with facilities available to exporters in competing economies.

Similarly efforts to develop temperature controlled warehouses, ripening chambers

and pack houses that are commercially available for third party use must be made on

priority basis. Efforts must also be put in to augment transportation segment. It is

recommended that private investors are encouraged to set up these facilities as viable

businesses.

c. Encourage Successful Business Groups to Enter Fruit Export Business:

Companies and business groups with successful track record must be made aware of

the commercial potential of fruit exports. A professional organization would have



both desire and capability to do things the right way. Special incentive package in the

form of tax holiday and subsidized funding should be offered to those companies that

commit to invest in technology such as cool chain, ripening chambers etc. and

procure at-least 50% of their fruit requirements directly from the farmers. However,

as mentioned in “point a” of this section, simultaneous efforts to overcome other

supply chain gaps is mandatory. It is therefore, critical that farmers are provided with

financing options that relieve them from the clutches of middleman so that they are

also in a position to sell their produce directly to the exporter.

A task force must be set up comprising of representatives from Chambers of

Commerce, Investment Banks, Ministries of Commerce and Agriculture, and aided

by specialists from International Trade, Agriculture and Agribusiness areas to

develop strategy for encouraging quality investment into horticulture export business.

A professionally prepared Business Case detailing all costs and returns of fruit export

business must be prepared and presented first at the Chamber of Commerce level and

then exclusively to interested business groups by the task force.

d. Quality Inspection Authority:

An independent institution formed under Public Private Partnership structure must be

set up to inspect all export consignments for quality parameters. This organization

should have powers to oversee that customs and quarantine formalities are carried out

without damaging the quality of goods.



In order to ensure that the proposed institution does not become an additional layers

in the bureaucracy that ends up doing more damage than good, it is critical that such

an institution is kept independent from government control and is structured under

public private partnership structure with sufficient leeway to the operating private

partner. Also, the Board of Directors of such a company must have members from all

segments of the supply chain.

e. Farmers Training:

Training on pre harvest and post harvest handling of fruit must be given to farmers

through electronic media. Training material must be developed keeping in mind the

need to make farmers aware about quality standards of international markets. Sector

specialist and media professionals must be used to develop the training program

instead of government departments.

f. Farmers / Exporters Connectivity:

Efforts must be made to bridge the gap between farmers and exporters. In this regard

association of farmers and exporters should be formed. The initial members of the

association must be selected carefully in order to keep such an association active and

effective. Farmers must be given equal representation to ensure their voice is heard

and points of view understood. The objective of the association should be to

overcome trust deficit between farmers and exporters and to find ways for improving

direct trade between them.



g. Commercial Production of Planting Material for Seedless Kinnow:

Efforts must be made on war footing to not just develop (if this is not already done)

but also make commercially available the planting material of seedless kinnow so that

at-least fresh plantations are done using the seedless variety. All efforts must be made

to ensure that taste as well as appearance of fruit is not compromised in order to

produce seedless varieties of kinnow.

Farmers must be made aware of the importance of adopting the seedless variety and

the risk associated with sticking to existing seeded variety.

h. Dedicated Mango and Kinnow Research Companies Under Public Private

Partnership Structure:

International standard research companies must be set up under Public Private

Partnership structure. International renowned research companies must be invited to

carryout quality research in mango and kinnow sectors. These companies must be

paid through Export Development Fund (EDF) and their performance must be linked

to clearly quantifiable milestones such as introduction of new varieties. This could

also be achieved by encouraging reputable international fruit trade companies to set

up their offices in Pakistan. These companies must be given special incentives should

they agree to invest significantly into research and development work.



i. Hot Water Treatment Must be Made Mandatory for Exporting Mangoes from

Pakistan:

Hot water treatment plants must be set up in sufficient numbers under Public Private

Partnership structure. Once the facility becomes commercially available to all

exporters, a complete restriction must be imposed on exporting mangoes without hot

water treatment (HWT). Companies providing HWT services should be allowed to

charge exporters on per KG basis. Government through a concession agreement must

guarantee a minimum return to companies setting up HWT plants.

j. Ban on Exports of Mango Ripened by Calcium Carbide:

Ethylene generators must be made easily available after which a complete ban should

be placed on ripening of mangoes, at-least consignments meant for export markets, by

using calcium carbide.

k. Outsourced Marketing Campaign:

Highly reputable marketing company must be hired through international tender to

market Pakistani mangoes and kinnow in carefully selected markets. However, in the

proposed sequence of events marketing campaign falls subsequent to improving the

supply chain so that marketing efforts are backed by quality fruit. The last thing

Pakistan fruit industry can afford at the moment is delivery failure to an ambitious

claim. Also, the marketing company must be given a free hand and there should be

absolutely no bureaucratic and political interference.



l. Timely Release of Approved Budget to Public Sector Research Institutions:

One of the reasons for below par performance of public sector research institutions

was delays in release of approved budgets. Agriculture research is very closely linked

to weather and climatic conditions. If public sector research institutions are to be

made effective then efforts will be needed to ensure timely release of approved

budgets to enable them to carry out research. Further, these institutions should also be

given measurable and verifiable targets.

m. Export Targets for Trade Missions:

Pakistani trade missions are the biggest source of marketing Pakistani mango and

kinnow in target markets. Pakistani Trade Commissioner in each target market must

be given a clear target of export value and volume for both mango and kinnow.

Future assignments and promotion should be linked to achieving the set targets. Also,

Trade Commissioners in target countries must complete a minimum of three year

term before they are moved to any other station or given any other assignment within

the same country.

Possibility of attaching financial incentives for trade mission’s entire team for

bringing about increase in exports mainly in value terms should be studied. Australia

successfully managed to revitalize its trade missions’ role in export enhancement

after linking their performance to financial benefits. It is strongly recommended that

Australian experience must be carefully studied and adopted for Pakistani trade

missions.



n. Local Manufacturing of Processing Equipments:

Efforts must be made to locally manufacture equipments such as washing and grading

machines; hot water treatment plant; ripening chambers etc. This will reduce the cost

for exporters on one hand and create business opportunity for manufacturers on the

other. In an environment where exports would be linked to fruit being treated /

processed using these equipments there would be a natural demand for such

equipments which would justify setting up the manufacturing facilities.

o. Develop Financing Solution to Replace Middleman Credit:

Finding alternative financial solutions for farming community so that they could be

relieved from middlemen credit is probably the single most critical success factor in

developing quality production base for mango and kinnow.

Success of any alternate financing structure would depend on two things:

Proposed solution should be as user friendly as the existing middleman credit

Proposed solution should not cost more than the existing middleman credit

One potential solution could be that private companies are set up at district level that

procure inputs such as fertilizers and pesticides directly from manufacturers and

supply them to farmers on credit at a price slightly higher than the prevalent retail

prices. The higher than market price charged from growers would cover the

companies’ financial cost for selling on deferred payment basis. Initially these

companies would provide inputs only to those farmers who get into an arrangement



with established buyers such as exporters or superstores for selling their produce

directly to them. The buyers in this arrangement would pay to the farmer after

deducting payment due to the company providing inputs. These buyers could deposit

the deducted amount from farmers’ payment directly into the bank account of the

company who sold goods to farmers on credit. Carefully designed regulatory

framework as well as oversight would be required to ensure these companies also do

not become exploitative and use their financial position to hurt the interest of farming

community.

p. Restructure Agriculture Credit Regime:

Along with finding alternative to middleman credit it is also critical that existing

agriculture credit is restructured to remove its shortcomings. Improving the existing

agriculture credit regime would call for:

Working with State Bank to overcome the issue of value of collateral being

much greater than the loan amount

Reducing the paperwork required to avail agriculture loan and make it easier

for the applicant to fulfil

Delinking insurance claim from government’s decision to declare any area

calamity hit

Working with land revenue department to resolve the issue of “foti khatay”

(ownership of lands in the name of the deceased)



q. Restructuring Crop Insurance Products:

Effective protection against unforeseen risks is a prerequisite for progress in any

sector. Well developed crop insurance products would be critical for sustainable

growth in mango and kinnow production segments. In order to develop the right kinds

of insurance products it is important that insurance companies work directly with the

farming community without any influence from the banking sector. Availability of

insurance must not be limited to those farmers who avail bank credit and claim must

be delinked from government’s decision to declare any area calamity hit.

r. Farmers’ Cooperatives:

Large number of small farmers and disparity in the landholding structure calls for

concerted efforts on the part of the government to encourage development of

cooperative culture in the agriculture sector of the country. Unfortunately no serious

effort was put in by the government to achieve this. As a result, small farmers have

failed to play constructive role in the progress and development of agriculture and are

invariably at the mercy of wholesalers / middlemen even for ploughing their fields

and purchasing basic ingredients like fertilizers and pesticides.

Absence of cooperative setup amongst the small mango and kinnow growers is one of

the major obstacles in progress and growth. Concerted efforts must be put in to

encourage small farmers to organize themselves into cooperatives so that they could

deal as institution with banks and other players in the supply chain.



Discussions with farmers revealed that they had absolutely no understanding of the

cooperative model. However, on explaining them the basic concept they seemed very

keen to adopt it.

In order to make it successful government would need to educate farmers on the

concept. State Bank of Pakistan must work with commercial and microfinance banks

to develop credit products that suit the structural and business dynamics of farmers’

cooperatives.

While working on this recommendation caution must be exercised to avoid pitfalls

experienced by countries that have already gone through the evolution of cooperative

structure in their agriculture sector. In Australia, for example, farmers’ cooperatives

are accused of selling their lowest quality fruit through cooperative and selling

premium quality directly in the market. In order to avoid such developments, the

cooperative law must be revamped to be more in line with current economic realities

as well as with the objectives that the government wishes to achieve through

developing the cooperative mindset amongst farmers.

s. Direct Exports by Farmers:

Around five large size growers of Mirpukhas region have formed their association

through which they have started exporting directly to high-end market segment in the

UK. This is probably the most encouraging development in the mango sector.



Interaction with these farmers revealed that they benefited huge deal from training

and infrastructure support they received from USAID mango sector support initiatives

and ASLP a joint initiative of Pakistan and Australian government to augment

Pakistan’s competitiveness in mango exports.

These farmers feel that they could export ten to twenty times more volumes if they

could have access to finance at reasonable rate.

Efforts must be made to educate more farmers to form such associations and start

exporting directly to international buyers.

t. Shift from Public Sector Dominated Setup to One that is Driven by Private

Sector

In order to bring about sizeable change in the overall functioning of horticulture

export industry in general and mango and kinnow sectors in particular public sector

will have to take the backseat and allow private sector to drive the sector. This would

necessarily call for huge change in the mindset of concerned institutions that would

require out-of-box thinking supported by political will.

Increased involvement of private sector under public private partnership structure in

areas such as research, trade promotion, infrastructure and logistics including airport

handling would be an effective way of moving away from public sector dominance

and towards increased private sector engagement.



u. Freighter Service During Peak Mango Season:

Overcoming shortage of airspace during peak seasons is critical for export growth.

All efforts of attracting fresh investment into the sector; infrastructure and logistical

improvement; marketing; and revamping of public sector institutions would fail if

there is not enough airspace available to meet buyers’ demand during peak seasons. It

is proposed that government arranges commercial air freighters to meet the demand

of additional airspace during peak mango season.

v. Rationing of Airspace to Accommodate New Entrants:

Till commercial freighters are made available by the government private airlines must

be instructed to earmark 20% of their available airspace to exporters having less than

five years of operational track record provided they book the airspace at-least 48

hours in advance. With less than 48 hours remaining to scheduled flight time airline

could sell this earmarked airspace to any exporter willing to book it. Systematic

checks would however, be required to ensure that existing exporters not qualifying

for the earmarked 20% airspace do not manoeuvre the system by creating new

companies.

w. Road Shows to Attract Foreign Investment into Pakistan Horticulture Sector:

Investment from well developed international horticulture trading companies would

be the shortest and safest way to bring about improvement in the systems and

processes linked with fruit export business. Lack of such investments due to uncertain



geopolitical and security conditions is, in-fact, one of the major reasons for slow

progress in the sector.

It is recommended that extremely well designed road shows are planned in carefully

selected targeted countries to attract investment into this sector. In-spite of lack of

security and political instability investment is flowing into some sectors such as

energy and telecom etc. It is strongly felt that if the real potential of Pakistan

horticulture sector is effectively marketed in carefully selected target markets enough

interest could be generated.



CONCLUSION:

Having gone through past studies and research reports of Pakistan’s mango and kinnow sectors

followed by on-ground research that included several approaches ranging from visits to farms;

interviews with stakeholder; visits to wholesale markets, ports and processing facilities following

conclusions have been reached:

Both mango and kinnow sectors have possess potential for significant export growth

There is no single factor that is restricting growth in mango and kinnow sectors rather,

there are numerous gaps in the supply chain which collectively keep pulling the sector

down

Overcoming some factors and leaving others unattended would not yield results, rather

the entire supply chain will need to be revamped

Kinnow sector is far more developed than mango sector – this could be due to a more

compact plantation in case of kinnow which makes setting up processing facilities easier

as compared to mango where plantation is spread over around a thousand kilometre and

where season keeps moving from south to north. This could also be the outcome of

kinnow being less perishable than mango

Making seedless variety of kinnow available to farmers is a prerequisite for long term

sustainability of the kinnow sector

Though, middleman credit is presently providing much needed credit to the farming

community, it is also the root cause for most of the problems faced by the sector progress

in both mango and kinnow sectors is closely linked to finding viable alternatives to

middleman credit



Farmers’ training on urgent basis to educate them about international quality

requirements is a must

Quality of exporters needs improvement

Encouraging successful business groups to invest in mango and kinnow export business

would bring about revolution in the sectors

Resurrecting trade missions supported by well planned marketing efforts would be

critical in achieving the desired results



APPENDIX



Questionnaire – Exporter

1. Size of operations – annual turnover

2. Number of years in business?

3. Type of entity – sole proprietorship / partnership / registered company etc.

4. Reason for being in the fruit export business?

5. Total number of registered exporters in the country? Mango? Kinnow?

6. Main markets serviced by Pakistani exporters? For Kinnow? For Mango?

7. Potential markets where Pakistani kinnow and mango can be sold but currently presence is low

8. Countries / region with high demand but where Pakistani mango and kinnow cannot be sold due

to some restrictions / failure to meet their food standards

9. Which govt. agencies exporters necessary deal with

10. Current level of investment into research and development – contribution of exporters?

11. How can the export volume / value be increased?

12. Level of satisfaction with quality fruit handling facilities at airport seaport

13. How can the infrastructure / process for fruit handling at airports and seaports be improved

14. Quality controls – current situation – what can be done to improve this?

15. Role of trade promotion agencies – how can they play a more effective role?

16. Airspace / shipping lines availability

17. Use of technology – cool chain / ripening chambers etc.

18. Payment terms normally in practice

19. Default rate

20. What interventions at policy level are required to improve the performance of the sector?

a. Quality improvement

b. Customs clearance

c. Airspace availability

d. Market access

21. Quality of packaging currently being used in Pakistan – comparison with packaging used in

competing countries like India, Thailand, Kenya etc.

22. Hurdles in improving the packaging

a. Cost

b. Availability

c. Awareness

d. Attitude of exporters



23. Branding – are exporters trying to develop their brands in the international markets? If not,

reasons?

24. Are there any existing well known Pakistani brands

25. Marketing strategy – well defined or ad hoc?

26. Dedicated marketing managers?

27. How can govt. help in the marketing efforts?

28. Currently how active are the Pakistani trade commissions in promoting Pakistani mango and

kinnow in the target markets?

29. Backward integration – production – how many exporters directly buy fruit from the orchard /

take farms on contract?

30. Issue of cool chain breaking on the way to the port – issue of transporters turning off truck

mounted genset – what are the solutions?

31. What are the three biggest treat to Pakistani fruit industry in general and mango / kinnow sector

in particular?

32. Reference of customs / SPS / transporters / clearing and forwarding agents

33. Wholesalers



Questionnaire – Middleman

1. Size of operations

2. Number of years in business

3. Approximate annual income?

4. Type of entity – sole proprietorship / partnership / registered company

5. Commission shop rented or owned?

6. What other facilities owned / leased along with the shop?

a. Cold store

b. Dry store

c. Auction area

d. Others

7. Value of commission shop? Ownership / rentals

8. Rate of commission charged?

9. Auctioning process – transparency (rate setting / weighing of consignments etc.)

10. What other roles are being played in the mango / kinnow supply chain

a. Grower

b. Farm Contractor

c. Financier

d. Processor

e. Exporter

f. Retailer

g. Other

11. Is credit being provided to farmers? At what rate?

12. What is the average outstanding amount lent out to farmers during any given year? Maximum?

13. Mechanism for recovery of loan from farmers?

14. How are defaulters handled?

15. Is lending to farmers a preferred option or is it compulsion for doing wholesaling business

16. Types of clients serviced?

a. Wholesalers

b. Retailers

c. Hyper stores

d. Exporters

e. International buyers (i.e. exporting directly)

f. Others



17. What are the major hurdles / problems faced by the wholesalers of mango / kinnow?

18. What role is expected of the government to improve the wholesaling business?

19. What policy interventions are required to improve the supply chain?

20. Any exposure of wholesale markets in the developed world?

21. Would Pakistani mango and kinnow sectors benefit if wholesaling segment of supply chain is

brought at par with international standards? What are the hurdles in achieving this? Any

suggestions in this regard

22. Given a choice what would the wholesalers like to see changed in the segment – (both in terms of

infrastructure and process)

23. Duration for which fruit stays with the wholesalers?

24. Handling of fruit during the time it stays with wholesalers:

a. Cold store availability

b. Loading and unloading

25. Wastage – approximately what percentage of fruit coming into the wholesaling segments gets

completely wasted i.e. fruit does not move further in the supply chain and is thrown away

26. What percentage gets damaged?

27. What happens to the damaged fruit?

28. Approximate percentage of wholesalers who are also in:

a. Retailing

b. Exports

c. Farm contracting

d. Financing credit to farmers

29. Overall condition of the wholesale market? Major handicaps like lack of storage facilities / roads

too narrow / inappropriate auctioning area etc.

30. What is seen by wholesalers as the biggest threat / risk to their business?



Questionnaire - Grower

1. Size of the farm?

2. Location

3. Self managed or contracted out?

4. Certification – Global GAP etc.

5. If contracted out, reason for contracting out?

a. Lack of finance

b. Lack of capability

c. Lack of interest

d. Lack of on-ground presence

e. Other

6. Awareness about the real potential of owning a mango / kinnow orchard?

7. Technical support (qualified agriculture specialist as farm manager) available?

8. Current practices of:

a. Sourcing planting material

b. Tree management

c. Irrigation

d. On-farm fruit handling

i. Method used for plucking the fruit

ii. On-farm transportation

iii. Packaging material used

iv. Packing house – availability / quality

v. Grading

vi. Pre-cooling

vii. De-sapping

9. Average yield per acre?

10. Approximate annual income?

11. How and who the fruit is sold to?

12. Sources of finance

a. Self financed

b. Middleman credit

c. Bank financing

13. Awareness and understanding about:

a. Best international farming practices



b. Quality requirements

14. Use of technology:

a. Irrigation

b. Harvesting

c. Pre-cooling

d. Grading

e. Packing

15. Willingness / ability to improve farm management practices?

16. What has so far restricted them from migrating to better farm management practices and use of

technology?

17. Any efforts made to introduce newer varieties e.g. seedless kinnow variety and internationally

known mango varieties

18. Percentage of farmers under middleman debt

19. What percentage of full year’s farm expense is borrowed from middlemen?

20. Awareness about the cost (both direct and indirect) of borrowing from middleman

21. Why other forms of financing are not opted for?

a. Not aware

b. Cost is higher than middleman credit

c. Too much paperwork required

d. Scared to borrow from bank – (I am not educated enough and will not fully understand

their products and therefore may end up making a mistake) / (banks are ruthless and may

confiscate my collateral if I lose my crop and cannot pay back the loan in time)

e. Cannot provide collateral acceptable to banks

22. Ability / willingness / past experience of interacting directly with exporters

23. Experience of running any other business – agricultural / non-agricultural

24. Any experience of participating in previous training / educational programs run by government /

aid agencies

25. What would it take mango / kinnow farmers to:

a. Self manage their farms

b. Move ahead in the supply chain – retailing / processing / exporting

26. Willingness to invest in technology / certifications etc. if business model with healthy returns is

explained

27. Is farming looked as a business proposition or just an activity that was inherited from past

generations?



28. What policy interventions are required to improve the farming business?

a. To improve quality of fruit

b. To restrict exploitation of farmers by middlemen / other intermediaries

c. Agri credit:

i. Increase the scope

ii. Collateral requirement

iii. Interest rate

iv. Paperwork

v. Security / law and order

d. Crop insurance

29. What form of research and development activities are being performed, if at all, by the farming

community

30. Role and quality of government extension services



List of Interviewees

S. No. Name Sector Date Phone Number

1 Mr. Noor Ahmed Nizamani Mango Grower

(small) Mirpurkhas

region

November 11, 2013 0313-3624668

2 Mr. Habib Shah Mango Farm

Contractor

November 11, 2013 0300-3792269

3 Mr. Mir Muhammad Mango Grower

(small) Mirpurkhas

region

November 11, 2013 0300-9111584

4 Mr. Wali Muhammad Mango Farm

Contractor

November 11, 2013 0301-3503230

5 Mr. Maula Bukhsh Khaskheli Mango Grower

(small) Mirpurkhas

region

November 11, 2013 0313-3210911

6 Mr. Tariq Khan Government (Plant

Protection and

Quarantine)

November 19, 2013 021-99248119

7 Dr. Usman Shar Government

(Agriculture

Entomology

Department, Sindh)

November 20, 2013 0300-3793712

8 Mr. Atta Husain Soomro Government

(Agriculture

Research Sind)

November 20, 2013 022-2765505

9 Mr. Mahmood Nawaz Shah Mango Grower

(Large)

November 20, 2013 0333-2602962

10 Mr. Ghulam Sarwar Abro Mango Grower

(Large)

November 20, 2013 0300-3002852

11 Mr. Khalid Ejaz Mango Exporter November 21, 2013 0300-8251062

12 Mr. Hashim Laghari PHDEC November 24, 2013

13 Mr. Malik Zafar Hussain Mango Grower –

Multan

December 04, 2013

14 Mr. Nazeer Ali Mango Grower –

Multan

December 04, 2013

15 Mr. Malik Nazir Ahmed Commission Agent

– Multan

December 04, 2013

16 Mr. Malik Altaf Mango Grower –

Multan

December 05, 2013

17 Mr. Arshad Mahay Mango Grower –

Rahim Yar Khan

December 05, 2013

18 Mr. Ghulam Muhammad Commission Agent

– Multan

December 05, 2013

19 Mr. Zafar Farm Contractor –

Kinnow

Kinnow Grower –

Shahpur Sargodha

Kinnow Grower –

Shahpur Sargodha



Kinnow Grower –

Shahpur Sargodha

Mian Nadeem Factory Owner – Al-

Makka Kinnow

Processing

Malik Iqbal Kinnow Grower –

Bhalwal Sargodha

Sarfaraz Kinnow Grower –

Bhalwal Sargodha

Shaukat Hussain Kinnow Grower –

Bhalwal Sargodha

Mr. Haji Javed Commission Agent

– Lahore

Mr. Nadeem Mango & Kinnow

Exporter - Lahore

Documents

RESERCH REPORT – TRTA IIeeas.europa.eu/archives/delegations/pakistan/documents/press... · trta ii policy reforms to enhance competitiveness and exports of horticulture (kinow and