In citrus group, Kinnow is the largest produced fruit in Pakistan. During 2001-2002, total Kinnow production was 1.168 million tons, having market value of Rs. 8.92 billion. During the same year, the fruit amounting Rs. 5.083 billion was exported, out of which citrus exports accounts to Rs.1.238 billion. The domestic per capita availability of citrus was estimated as 8 kg/annum. About 95% of the total citrus area lies in the Punjab. The productivity of citrus in Pakistan is lower than in other countries of the region. Substantial scope exists in terms of income and employment generation in the farm and non-farm sectors through the development of citriculture in Pakistan. Improving citrus productivity can enhance Pakistan’s competitiveness in the international markets. However, the information on agronomic and economic aspects of production and functioning of the domestic and export market in Pakistan is highly scantly. This creates fluctuation in production and prices, produces often mismatch in supply and demand both in terms of quality and quantity, and generates disincentive for the investor to invest in the sector. All these factors keep the productivity of the sector far below its potential. This study aims to fill the information gap in production and marketing of citrus in Punjab. We have specifically generated quantitative data on citrus production, domestic and export marketing system in Pakistan’s Punjab. It is expected that these data will be useful for policy planners to improve the efficiency in citrus production and marketing in the province, enhance its contribution in income and employment generation and poverty reduction, and improve country’s competitiveness in international market.
This study concentrates on Punjab as this is the major citrus producing province. Both primary and secondary data were used in this study. The primary data were collected through a formal survey consisting of interviewing citrus growers (125), pre-harvest contractors (25), commission agents (20), wholesalers (44), retailers (41), Kinnow processing and exporting factories (19). The purposive stratified random sampling was used in selecting the citrus growers. The survey was conducted in Sargodha district as it is the largest citrus growing district of Punjab, and most of the citrus processing/export were collected from Government of Pakistan’s publications such as the Agricultural Statistics of Pakistan and the Economic Surveys.
The citrus nursery business was found highly informal. No information exists in the nurserymen about the type of rootstock or the productivity record of the scion. On sample farms, Kinnow is the only dominant variety planted and the mean plant population per hectare was nearly 241 trees/ha. Wheat and Berseem were two crops planted in citrus orchards. The NPV of the flow of costs and returns clearly indicate that sole orchards were more profitable than intercropped ones. The NPV technique gives equal value to the future 20 years. However, more risk averse farmers, go in for intercropping because they value the immediate future more highly. This justifies the existence of intercropping despite low NPV. The optimum economic life of citrus orchard was estimated as 20 years.
In the production function analysis, the variables positively and most significantly affecting citrus production were number of sprays, tree population and total nutrients applied. This signifies that farmers should concentrate relatively more on plant protection measures and tree population along with total nutrients applied. The estimates on allocative efficiency parameter illustrates that the growers were under-utilizing spraying and plowing while over-utilizing all other inputs. The underlying reason of sub-optimal use of inputs is the lack of orchard management knowledge of citrus growers in the area. In domestic citrus marketing, the overall producer’s share in consumer rupee was 35% followed by contractor and retailer obtaining 32% and 20% respectively. The further deconstruction of these margins into the components of marketing activities performed revealed that (i) profit absorbed most the marketing margin; (ii) retailers received the highest gross returns; and (iii) the highest rate of wastage occurs at the level of contractor. Therefore, efforts are required to minimize the post-harvest losses through making improvements in packing methods and material. The market integration analysis showed that Sargodha market is relatively better integrated with Faisalabad (0.98) and Lahore (0.96), however, the statistical test on the coefficients for integration did not support this. This signifies that further research on fruit marketing integration is required. Perhaps daily price data may give better results than the weekly or monthly data. In any case, it is clear that certain markets in the province are not integrated, requiring policy steps to improve market integration.
On the export side, the net returns to the exporters amounting Rs. 5.01, 4.66, 4.37 and 4.90 per kilogram were estimated for Middle East, Far East, Europe and Russain markets, respectively. At Karachi port, the trade-off between selling the export quality Kinnow locally or exporting it to various destinations of the world revealed that the overall rate of return on the additional costs incurred by exporter was 9%. Based on these estimates, the returns to additional costs (i.e. sea transport, taxes and duties etc) incurred by the exporter were computed as Rs. 260 million, which is the earnings to the society from the citrus exports by sacrificing the domestic consumption of export quality fruit.
In the light of above findings, the farmers need to be educated on the optimal use of various critical inputs and not practicing intercropping in mature orchards. Special orchad care is recommended for the gardens aged more than 20years. The Department of Agriculture, Livestock Products Marketing and Grading (DALPMG) is suggested to disseminate the marketing related information to all stakeholders in more effective manner by establishing Agricultural Marketing Information System (AMIS). There is a need for citrus varieties such as seedless Kinnow that have small canopy size, high yield, salt tolerant and disease resistant varieties. The horticultural research work under the National Seed Registration and Certification Department (NSCRD), Agricultural Extension Department, Pakistan Horticulture Development and Export Board (PHDEB), DALPM and the citrus exporters should be coordinated.
The development of the market will provide an initiative for the private sector to step in. This includes certification laboratories and nurseries. With a well functioning market farmers will be able to buy quality certified stock and maintain quality. They will also be able to meet the sanitary and phytosanitary measures required under the WTO. It is, therefore, important that the impediments to the development of these markets be addressed.
Our estimates of the different measures of protection indicate that the Kinnow is largely a dis-protected crop. Based on these estimates, Punjab has a tremendous potential to increase the welfare of its people by maximizing on this comparative advantage through international trade.