Govt pulls middlemen out of farm-to-market equation

KARACHI: The men who connect farmers with customers are unhappy with the government’s new laws that effectively kick them out of the equation. But if implemented properly, the legislation could possibly mean more income for farmers and cheaper prices for customers.

A middleman will earn between eight to 10 per cent in a commission on produce from farmers; this differs depending on the vegetable or fruit crop in question. The farmers effectively surrender their harvest to the middleman, who sells it to the wholesaler at for example, Sabzi Mandi, and then it makes its way to the retailer who takes it into town where customers can buy it. If for example, a farmer brings in a load of mangos for Rs30 per kg, by the time it gets to the customer, it costs Rs60 per kg. Nearly 10 rupees could be cut out of this equation if the middleman disappears.

For its part, the the Sindh government wanted to end the kind of exploitation that middlemen are associated with. The Sindh Wholesale Agriculture Produce Markets (Development and Regulation) Bill 2010 was unanimously passed in the Sindh Assembly on June 28.

The bill was welcomed by the treasury and opposition benches alike as members from both sides criticised middlemen, accusing them of dominating the trade in agriculture produce.

While the growers are now free to sell their produce in the market, there are hundreds of growers in Karachi’s Sabzi Mandi who are complaining about the new bill. They believe that without middlemen, no grower will be able to sell their wares.

“We are the facilitators so the growers will face difficulties if the system is abolished,” argued the chairman for the All Traders Alliance at the New Sabzi Mandi, Haji Abdul Razzaque Shahid.

According to Shahid, all landlords in the province get loans from middlemen to cultivate various crops. After the harvest they bring the crops to the markets and the middlemen sell them to the consumers. Shah claimed that middlemen receive only a five to six per cent commission for this service while the government accuses them of sucking up all of the profits that are meant to go to farmers.

The role of the middlemen is not only restricted to local consumers as they have been helping wtih exports since Pakistan came into being, argued the general secretary of the Karachi Fresh Fruit Association, Akhtar Baloch.

He believed that if middlemen are removed from the system not only will the country’s exports go down but the growers may also produce less if they do not get enough loans from them to start sowing in the first place.

“The influential landlords of Sindh get loans from middlemen to buy fertiliser, seed and pesticides,” said Baloch. “We are doing what the government should do.”

Baloch believes that this legislation is the outcome of poor advice given by unskilled bureaucrats.

For its part, the government appears to mean well. An official at the agriculture department told The Express Tribune that the role of the middlemen is not being eliminated but is being reduced. “Earlier on, the role of the middleman was necessary for selling products but now the grower can sell directly to the traders or the consumer,” said Deputy Secretary Agriculture Ashfaque Ahmed Soomro.

According to him, a new market committee has been formed and he is the acting administrator of the committee. The committee comprises nine growers, six middlemen and two consumer representatives. The committee has yet to nominate a chairman. This committee will be later converted into a market company that will implement the new legislation.

Published in The Express Tribune, July 4^th, 2010.