Domestic Rice Marketing Structure and Marketing Margins in Pakistan

Abstract

Agriculture plays a key role in the economic development of Pakistan. Its contribution to GDP in Pakistan accounts 25% and it is a major source of raw material for different industries in Pakistan. Punjab is one of the four provinces of Pakistan and is a major producer of agricultural commodities. Rice is one of the most important agricultural commodities in Pakistan. The Punjab province produces 56% of the total rice in Pakistan as well as this province is solely producer of basmati rice variety which is a type of fragrant rice and is very famous for its aroma. For the development of agricultural sector, the importance of agricultural marketing cannot be ignored. In developing countries like Pakistan where the population is growing rapidly, an efficient internal agricultural marketing system for agricultural commodities can be very useful for not only to meet the domestic food needs but also for the development of rural economy. The aim of this study was to analyze the current status, structure and operations of rice marketing in Pakistan as well as to explore the marketing margins of different marketing intermediaries and to identify the respective marketing problems faced by those marketing intermediaries. Three districts famous for rice production were purposely selected for this study and a sample of 120 small, 45 medium and 45 large farmers was obtained from the study area. Along with the rice growing farmers, 45 commission agents, 45 rice millers, 45 rice traders, 45 whole sellers and 45 retailers in the study area were also contacted for the purpose of data collection. Three majorly grown rice varieties of basmati and non basmati rice were found being cultivated in the study area. The results revealed that majority of the rice producers were involved in selling their produce (paddy) to commission agents at their farm gate. The absolute cash margins for different marketing channel members were estimated and it was found that the rice producer was earning the maximum share for both varieties in the marketing chain i.e. 62.57% and 47.71% respectively for basmati and non basmati rice varieties. Along with the absolute cash margins, the net marketing margins were also calculated by deducting the marketing cost of respective marketing chain members. The overall domestic rice marketing structure was found to be efficient yet there is need for further improvement in order to enhance the rice production and exports from Pakistan.

Keywords: Agricultural marketing, Rice, Rice marketing, marketing margins, Rice marketing problems