SEED POTATOES SUPPLY-SOURCES, CHANNELS AND MARKETING STRATEGY FOR KALAM, SWAT, PAKISTAN.

 

1.      INTRODUCTION:

The potato (Solanum tuberosum) originated from Central and South America. The crop was grown by Indians on the high lands in Peru, Bolivia and Columbia. Many wild species still exist in these areas. After the discovery of America, the potato spread all over the world. The potato was grown in Europe in the 16^th century.

In sub-continent, the potato was introduced by Portuguese. However, its cultivation was encouraged by the British in 19^th century. In the earliest days, it was grown in botanical gardens as a curiosity plant and the potato tubers were exhibited in horticultural shows organized in big towns. Later it was accepted as vegetable. It is considered an important vegetable at present also and is generally called as King of vegetables in Pakistan.

 

In 1947-48, a total yield of 27000 tons was obtained from an area of 15000 hectares in the country. With the passage of time, the area and production got increased considerably. The statistical figures of 2010-11 is a clear manifestation of increase in potato production (3491700 tons) and area (159400 hectares) in the country (Agricultural Statistics of Pakistan 2010-11). Among provinces, Punjab is the leading province, which produced 3339900 tons from an area of 148100 hectares followed by KP with 118200 tons production from an area of 8900 hectares. The province of Baluchistan remained third in this respect with a yield of 29700 tons from an area of 2000 hectares which was followed by Sindh province 3900 tons from 400 hectares. 

2.      HISTORY OF POTATOES IN KALAM, SWAT:

In Kalam, the potato was brought by Haji Hazrat Faqir and cultivated at Utror village in 1964. The potato, he brought was white colour. Since he was having no experience of raising potatoes, his endeavours did not yield well in the first instance. However, this effort was proved a turning point for inception of commercial cultivation of potato crop in Kalam, which is now grown there as summer crop.

3.      SUMMER POTATOES PRODUCTION IN HILLY AREAS OF MALAKAND DIVISION:

In Pakistan, 3 crops of potatoes are grown; autumn, spring and summer crop. autumn and spring crops are grown in the plains of Pakistan and summer crop is grown in hilly areas of the country. The area and production details of summer crop, grown in Malakand division, are given in the following table:

Table 1.          Summer potato production in Malakand division.

District	2007-08		2008-09
	Area (ha)	Production (ton)	Area (ha)	Production (ton)
Malakand	0	0	0	0
Swat	893	16119	903	16595
Bunir	0	0	0	0
Shangla	70	545	77	598
Dir Lower	0	0	0	0
Dir Upper	765	6273	763	6256
Chitral	780	16401	982	23568
Total

Source: Crop statistics, agriculture Livestock and cooperation department, Khyber Pakhtunkhwa.

4.      SEED POTATOES IMPORT:

In Pakistan, the general lack of high quality seed is perhaps the most important single factor reducing yield. No aspect of potato growing is more important than selection of the best possible seed as the yields are directly related to the quality of seed planted than any other single factor. Total seed need of Pakistan was 498125 tons in 2010-11. A small quantity of stock seed is imported annually which is multiplied in plain areas of Pakistan up to fourth generation and sold to the farmers. The details of seed potatoes imported in last three years along with its value is given in the following table:

Table 2.          Seed potatoes imported from 2008 to 2011.

S. No	Year	Seed quantity (tons)	Value Rs. (Millions)
1.	2008-9	5600	345.2
2.	2009-10	5700	570.3
3.	2010-11	3900	401.7

Source: Pakistan Bureau of Statistics.

5.      OBJECTIVES OF THE STUDY:

-           Explore the recent trends in production, seed supply channels and its distribution.

-           Identify seed supply sources to Kalam.

-           Identify present marketing trends in potatoes marketing produced in Kalam.

-           Identify potential markets at present in Pakistan. 

6.     SURVEY IN KALAM AND WHOLESALE MARKETS:

A survey was conducted in Kalam Tehsil and wholesale markets for achieving the objectives, identifying the problems and suggesting ways and means for its solution. In the first leg of survey, potato Beoparis/Middle Man (the person, who purchases seed potatoes from the market,  supply to the field for sale and then sends the produce to the wholesale market for marketing) belonging to Kalam, who are currently involved in seed potatoes supply and marketing business, were identified and interviewed in detail. The findings gotten in the wake of interviews are presented below in detail:

6.1    Noorul Amin, Beopari:

He belongs to Kas, Kalam and doing business of seed potatoes supply and marketing there for 8-10 years. He also sends the potatoes, produced in Kalam, to the shops of the Commission Agent in wholesale market in Lahore for sale. A long discussion was done with him on 04-05-3013 in regards to seed purchase, selection of producer, seed supply to Kalam and distribution among growers, which is presented below in detail:

-    He gets loan from Commission Agent in Lahore in the month of March and goes to the vicinities of Lahore or Sialkot to buy seed potatoes from the old piles (Gara) of the autumn crop from the farmers.

-       -     The price ranges from Rs.1050 to 1250/bag, having 100 kgs seed potatoes. The weight of the bag is not static. Its weight ranges from 90 to120 kgs/bag. The price of the bag is included in the total price.

 -    The shifting of the potatoes from pile to the collection point is the responsibility of farmer. The labor charges Rs.10/100 kg bag and Rs.15/120 kg bag from the Beopari  for loading the truck. In the truck, 100 bags having weight of 120 kg/bag are loaded. The transportation charges of the truck from Lahore and Sialkot to Kalam range between Rs.50,000 to 55,000/truck.  

 -          The entire process of purchase, filling bags, shifting to collection point from the pile and loading the trucks takes 15-30 days in the field.

 -          In the year 2013, he purchased 560 bags and sold to the farmers on loan basis with the promise to send the produce to the Commission Agent from whom he (Beopari) had taken the loan for purchasing seed potatoes.

 -          The Commission Agent charges 7 % commission, Market fee @ Rs. 2/bag and Munshiana (fee of the clerk and other staff members working with Commission Agent)  @ Rs. 0.25 from the producer.

 -          Last year (2012) the price of potatoes ranged from Rs.800 to 3200/bag in Lahore market depending upon the demand and supply situation.

 -          The Beopari lends out a bag of seed potatoes to the farmers on a premium of Rs.120/bag. He also sends 4000 to 5000 bags of potatoes to the Commission Agent for sale in Lahore market.  The fare of truck from Kalam to Lahore ranges from Rs.40000 to 60000. A total of 150 bags of potatoes, each weighing 60-70 kgs/bag, are loaded in a truck when it is sent to Lahore market. In Kalam Tehsil, 70-100 Beoparis, like him, are dealing in potato business.

 -          The farmers in Kalam prefer to plant red skinned varieties like Rocco, Raja, Desiree and Aladdin. The yield potential of these varieties is given below:

 Table 3.          Yield potential of different potato varieties at Kalam.

S. No	Variety	Yield potential	Opinion
1.	Rocco	1 bag of seed potatoes give 5 to 12 bags of potatoes.	This is early variety and the preferred on presently.
2.	Raja	1 bag of seed potatoes give 5 to 10 bags of potatoes.	Yield of this variety has gotten reduced.
3.	Desiree	1 bag of seed potatoes give 5 to 12 bags of potatoes.	This is old variety.
4.	Aladdin	1 bag of seed potatoes gives 18 to 20 bags of potatoes.	This is new variety but seed is not available in the market.

 -           The farmers apply only 2-4 bags of urea to an acre of land depending upon their financial capacity of the farmers. The reason for imbalanced use of fertilizers is the expensiveness of fertilizers. However, the farmers apply Farm Yard Manure before sowing of the crop. If the balanced dose of fertilizers recommended by Agriculture Research is applied, an increased production can obtained. 

 -          Minimum application of the required sprays and the use of substandard pesticides is also one of the reasons. He gave an example of Ridomil Gold in support of his statement. Ridomil Gold is of two types; the price of one kind is Rs.1200/kg and the other is Rs.3200/kg.

 -          Approximately 2000 truck of red skinned potatoes are sent from Kalam Tehsil to Lahore and Rawalpindi markets for sale, which includes produce from Peshmal and Laikot (Bahrain Tehsil) also.

 -          White skinned potatoes are not planted in Kalam, because they are not traded in the markets of upper Pakistan. The best market for white skinned potatoes is Karachi at the moment. White skinned potatoes can also be exported to Afghanistan as it is preferred there but the Commission Agents are not interested in investing money in this business.

 -          In Kalam, the first crop is sown in the month of April and May, depending upon the weather conditions. This crop is harvested in the month of July up to 10^th of August. While the second crop is sown in the end of July up to 10^th of August and harvested in the month of October and November. The production of second crop is associated with the application of regular sprays for insect pests and diseases. A total of 10-15 trucks of seed potatoes are brought to Kalam for sowing second crop.

 -          The imported seed is planted for multiplication as first generation, which is further multiplied till producing 4^th generation, which is sold out to the farmers in Kalam. The potatoes of third generation are also sold @ of Rs.2000/bag, which is expensive and called ration potatoes because of its big size.

 -          The potatoes from Kalam are competed by Gilgit potatoes in the market. The produce from Hazara is not in competition to that of Kalam because it is harvested a bit earlier, when it gets finished, the potatoes from Kalam enter in the market. India is the big competitor now in the market. Stiff competition was also observed from Afghanistan before, which would usually come through Kurram Agency.

6.2    Valayat Khan, Beopari

He belongs to Matiltan, Kalam and involved in the business of seed potatoes supply and sale in Matiltan. Discussion was done with him in regards to seed purchase, selection of producer, seed supply to Kalam and distribution among growers on 04-05-3013.  He gave the following statement during the interview:

-          He purchases 100 bags (one truck) of seed potatoes from old piles (Gara) from Sialkot and brings to Matiltan, Kalam. The weight of bag is 100-120 Kgs and the price ranges between Rs.800-1200 Kg/bag. The transportation cost of the truck from Lahore to Matiltan is Rs.55000/ and loading and unloading charges are Rs.15/bag.

    -          He sells the same seed potatoes to the growers in Matiltan @ of Rs. 2000-21000/bag on seasonal loan basis. The price is fixed after deducting all the arrival costs at Matiltan with keeping in view his premium over a bag as Beopari, which is up to 200 rupees a bag.

 -          Preferable varieties are Rocco, Raja, Desiree and Aladdin. Variety Aladdin has good yield potential as 1 bag of seed potatoes gives 10 bags production but its seed is not available. Rocco is highly preferred due to its yield potential and availability. The seed that is brought from Lahore or Sialkot is given on loan basis to farmers in Matiltan with the condition that the produce should be taken to the shop of the Commission Agent for sale who has lent out money to the Beopari for the purchase of seed potatoes.

 -          The sale rate of potato produce from Kalam is Rs.1500-1800/bag in Lahore Market. The weight of the bag is 60 to 65 Kgs. The market expenses are mentioned below:

o   Commission is 7 %

o   Munshiana 2 %

o   Market fee Rs.5/bag

o   Labour charges Rs. 5/bag.

6.3    Haji Abd-ur-Raziq, Beopari:

He also belongs to Matiltan, Kalam and purchases seed potatoes, supply and sell there for 10-12 years as a big Beopari. A long discussion took place with him on seed selection, purchase, supply and sale to the growers in Matiltan.  He gave the following information during discussion:

 -          He gets a loan of Rs. 30,00,000/- to 50,00,000/- from Commission Agent in Lahore. He purchases seed from Daska, Sialkot and Lahore and brings 12 to 13 trucks to Matiltan.

-          He stated that the preferred varieties in Matiltan are Rocco and Aladdin. One kg of Rocco gives production   of 8-10 Kgs and one kg of Aladdin gives 7-10 kgs. Rocco is preferred for sowing in the first crop and Aladdin in the second crop in Kalam. Moreover, Aladdin is early variety.

 -          The transportation cost of a truck from Lahore to Matiltan is Rs.55000/-.  The loading charges are Rs.1000/truck and unloading also costs Rs.1000/truck.

 -          A truck loaded at Lahore with 100 bags is partially off-loaded (25 bags) in Charbagh, Swat and the remaining 75 bags are shifted to Matiltan. The rest of 25 bags are again brought by the same truck to Matiltan, which is a clear manifestation of the dilapidated conditions of the road from Khwazakhela town to Matiltan and Utror valleys.

 -          The Beoparis in Matiltan charges Rs.150-200/bag extra from the farmer as premium and it is given on seasonal loan basis.

 -          A total of 8000 to 13000 bags of potato produce are sent from Matiltan to Lahore market for sale by this Beopari. The market cost at the following rates is deducted on spot from the output of sale:

-           Commission @ 7% is deducted on spot. Out of this, 1 % share is given to the Beopari, who has sent the stuff to him from Matiltan

-           Munshiana is deducted @ of Rs. 1 to 2/bag.

-           Market fee is deducted @ of Rs. 2/bag. 

-       -    There are a total of 100-130 Beoparies who are operating in Kalam Tehsil. A total of 10000 bags, having 118-120 kg/bag, of seed potatoes are brought to Matiltan.

 -          The seed is judged from the skin and eyes. If the seed is new, the tuber will have thin and smooth skin and the eye buds are outside (at the level of the skin) and if the seed tuber is old, the eye bud is inside (a bit deep) and the skin becomes a bit rough also.

 -          The seed potatoes of third and fourth generation are sold. The third generation tubers are called ration potatoes due to its large size and fourth generation is usually seed size.

 6.4    Haji Dastiar, Utror:

He belongs to Utror valley, Kalam.Usually he would sell 22-23 trucks of seed potatoes to farmers in Utror. But this year he has sold only 4 trucks of seed potatoes. A detailed discussion was done with him, which is presented below:

 -          He gets loan from  a Commission Agent in Lahore market, and purchases seed potatoes in Daska.  He supplies the same to Utror for sale.

 -          The price/bag in Utror is Rs.1850 while in Daska the price is Rs.1150/bag. The cost of a bag escalates and goes up to Rs.1700 as it reaches to Utror. This includes all the loading and unloading, transportation to Utror and storage charges at Mingora, which is Rs.10/bag for a month or two. While selling it to farmers at Utror, Rs.100 to 150/bag is charged as premium and sold on loan for that particular season.

 -          The farmers in Utror need 100 to 125 trucks while those of Gujar Gabral need 400 to 500 trucks of seed potatoes.  Mostly Raja and Rocco varieties are planted here. The Beopari gives Rs.10/bag for uploading and Rs.15/bag is given to labor in Utror as unloading charges. However, the truck is unloaded in Mingora to store the potatoes either for a month or two, depending upon the weather and consequently road conditions.

 -          The produce is sent to Commission Agent for sale and the price of seed potatoes, given on loan at the beginning of season, is deducted and rest of the money is paid to the farmers.

 -          In early season, the price in Lahore market is Rs. 2400/bag while in later stages it ranges from Rs. 800 to Rs.1100/bag. A clean and transparent open-auction takes place in the market.  The market cost is Munshiana Rs.2/bag, Commission is 7 % and market fee is Rs. 50/Voucher.  According to his statement, a total 15000 to 20000 trucks are sent to down country market from Utror valley for marketing.

 -          The transportation Charges from Daska to Mingora is Rs 50000/truck loaded with 100 bags. While from Mingora to Utror the transportation cost is Rs.200/bag (Rs.20,000/truck). In Utror Rs. 10/bag is charged by the godown owner.

 -          Haji Dastiar said that approximately 150 small and big Beoparis are involved in this business in Kalam Tehsil. The big Beoparis may be 50 to 60, who control most of the business.

 -          The seed potatoes are purchased from Gara (the big heap or pile) in the Month of February and March. The cost of transportation from Gara to the collection point is the responsibility of the owner.

 -          The truck fare from Utror to Lahore is Rs.45000 to 50000. In commission one rupee is given to Beopari. Consequently, the Beopari earns approximately Rs.100000 to 150000 in a year.

 -          Fertilizers is applied at the ratio of 2:1 e.g. if 2 bags of potatoes are planted, 1 bag of fertilizer, mostly urea, is applied. But not necessarily, it depends upon the economic conditions of the farmer. If one kg of Rocco variety is planted, it produces 5 to 10 kgs potatoes.

 -          The fourth generation seed is given to Beopari and goes up to 5^th generation in Utror. He informed that negligible number of farmers store there potatoes in pits.

  6.5    Akhtar Iqbal, Commission Agent, Wholesale Market, Mingora:

His father is working for 40 years as Commission Agent in wholesale market of Fruits and Vegetable, Mingora. He has worked with potato farmers for long time in Kalam Tehsil, however, he seemed to be little bit disappointed due to the selling attitude of those growers. A long discussion took place with him on 24-08-2013 in his Commission shop, which is presented below:

 -          In 2013, he has also sold 300 bags of seed potatoes to the growers in Gabral valley, having 110 kg weight/bag. The sold seed potatoes were mostly Raja, Kuroda and Rocco. The seed potatoes were purchased from Daska, Punjab. He sold the seed potatoes to 6 farmers in Gabral on seasonal loan @ of Rs.1600/bag.

 -          On the date of meeting with the Commission Agent, potatoes from Gat and Amni, Malam Jabba were auctioned at Rs. 1200/bag at Mingora market, having weight of 35 kgs/bag. Some potatoes were brought from Bishban, Poran and Topsin villages from Shangla district. In the beginning of season, the price was Rs.1600/bag of the same weight. As supply got increased, the prices got decreased.

 -          Rate dependents on the season mostly and higher number of clients. Beoparis rush to the place and main market where production season starts.

 -          In Rawalpindi market, commission is not charged from the farmers however, market fee and munshiana each is charged @ of Rs.50/-. In Mingora market, the following fees are deducted from the farmers on their produce:

                  o   Commission:   10%

o   Loading unloading charges:    Rs.10/bag

o   Munshiana:      Rs. 1/100 ( however, the  rate of Munshiana is not fixed)

o   Market fee: 0

 -          At time of interview small bags of potatoes, weighing 35 kgs, were lying in his shop. He said that packing in small bags of 35 kgs is not liked in the market. The feathered potatoes were sold @ of Rs.900/bag of 25 kgs and un-feathered (potatoes with adhered skin) of the same weight was sold @ of Rs.800/bag in Punjab because consumers like to eat a bit immature (feathered) potato.

7.      MARKETING TRIALS:

Since the farmers do not care for grading their potatoes rather they do not think for this practice. The tubers they dig out from the field, whatever it may be, are kept in the bag weather the tuber is cut, bruised, infested with diseases, injured and wet. Moreover, small size, medium size and large size potatoes are packed in a bag together. When it is brought in the market for sale on the dilapidated roads, the produce further gets damaged and as it is offered for auction, the Beoparies keep the lowest bid price and thus the auction ends on low price. Consequently, the income of the producer gets reduced. The objectives of grading trial were to:

            -           educate the producers on grading.

-           show the impact of grading practically to the producers in market.

-           educate them on selection of Commission Agents in the market, having good reputation.

-           give them a round in the market for seeing auctions of different vegetables. 

Keeping in view the importance of grading, this study was conducted in wholesale Fruit and Vegetable Market at Mingora with two Commission Agents. In this trial, three types of grades; A, B and C were made and offered for auction. Each grade comprised of two bags, having weight of 75-80 kg/bag. The detailed particulars of all the grades are given below:

 Table 4.          Details of various grades of potatoes prepared for marketing at Mingora.

S. No.	Types of grades	Details
1.	A	This grade was consisted of large and medium size potatoes, having no damaged, bruised, cut and injured tubers.
2.	B	This grade was consisted of all sizes: large, medium and small size potatoes, having no damaged, bruised, cut and injured tubers.
3.	C	This grade was consisted of small size potatoes, having no damaged, bruised, cut and injured tubers.
4.	Farmer style	This grade was consisted of large, medium and small size potatoes, having damaged, bruised, cut, wet and injured tubers. However, very small size was not included as C grade.

The auction took place on the same time and day with two Commission Agents. The prices at which the produce was sold are given in the table below:

 Table 5.     Sale/auction rates of various grades of potatoes in wholesale market at Mingora. 

Farmer Adam Khan (Lot number 1).
S.  No.	Types of grades	Price/bag (Rs.)	Gross total (Rs.)
1.	A	2500	5000
2.	B	2100	4200
3.	C	762.5	1525
4.	Farmer style (2 bags)	1700	3400
Farmer Abdul Malik (Lot number 2).
1.	A	2200	4400
2.	B	2100	4200
3.	C	650	1300

 In lot number 1, the difference in the premium over the farmers stuff was 800 (47.06%) rupees in a bag in A grade and in B grade it was 400 (23.53%) rupees. While in lot number 2, the difference was 500 (29.41%) and 400 (23.53%) rupees respectively, which is a clear manifestation of the fact that grading enhances the worth of the farm produce in the market to a greater extent. The stepwise potatoes auction/marketing activities are shown below:

8.      LESSONS LEARNT:

During the interaction with different stake holders, few lessons were learnt, which may be treated as problems also. The lessons learnt are presented below:

 -          Road from Khwazakhela town to Kalam and onward is in dilapidated conditions. Owing to the reason, the prices of agricultural inputs and daily use items are sky- rocketing to unbearable limits.

 -          Natural disasters are occurring from time to time, which has enhanced the miseries of the dwellers of Kalam.

 -          The yield of potatoes has gotten drastically dwindled due to high costs of fertilizers in the country. The farmers are unable to apply the recommended doses of fertilizer due to high prices.

 -          Pesticides are also expensive, which has made it difficult for farmers to apply to their crops on time and in some cases these are adulterated where the quality cannot be relied upon. This situation has paved the way for escalating the attack of insects and diseases on the crop.

 -          The potatoes of Kalam are sold in the market according to the well of Commission Agents as the seed had been given to them on loan, which has made him obsessed with the idea that the growers cannot take the produce to other shops as he has given them loan. Due to the reason, the growers do not get the premium their produce deserves.

 -          The farmers do not grade their potatoes in the field. All sorts of potatoes; cut, bruised, damaged and wet, are put in the bag and send it to market for sale.

 -          Most of the farmers buy seed potatoes from the Beopari on loan and he directs them to send their produce to the shop of the Commission Agent, from whom he had taken advance, for sale.

 -          Farmers’ unity is seriously lacking in Kalam. They do not have a joint voice and due to the reason they are not heard.

 -          No adequate seed potatoes production, storage and sale system exists in Kalam at local level, which has made the farmers vulnerable to the intentions of Beoparis and Commission Agents jointly as they are dependent on their loans.

 -          Farm to market costs have gotten increased many folds e.g. transportation, loading & unloading charges and the cost of packing material. Moreover, all the costs are escalating from time to time due to sliding of rupee in the financial market. The details are given the table below:

  Table  6.         Transportation costs from Kalam to Lahore market.

S. No	Items	Unit cost (Rs.)	Total cost (Rs.)
1	Truck charges from Kalam to Lahore Market	55000	55000
2	Loading charges/bag (100 bags/truck)	15x100	1500
3	Price/bag (Rs.88)	88x100	8800
Total			65300

9.      RECOMMENDATIONS:

In the light of lessons learnt, the following recommendations are given to get the farmers relieved from this bonded marketing system:

1.      Roads play a vital role in the development of an area. The construction of an all season road, right from Mingora to Kalam town and onward to valleys, along with a permanent system of its maintenance for their socio-economic uplift is of utmost importance for bringing the area at par with other parts of the district.

2.      Of course, occurring of natural disasters cannot be averted but quick rehabilitation response of development organization and Government can mitigate the miseries of affected people.

 3.      For relieving potato farmers from the exploitation of the Beoparis/middle men and Commission Agents in the market, a permanent seed potatoes production and its distribution system may be established at local level. 

 4.      Establishment of Farmers Cooperative Society/Societies for seed production, storage, its distribution among the farmers and ware potatoes marketing in the down country markets is the need of the hour. If necessary, it should be registered also.

 5.      The farmers of Kalam purchase fourth generation seed from the Beoparis for potatoes production.  Third generation seed potatoes may be brought, multiplied at Kalam till fourth generation, which may be sold to the growers for producing fifth generation for commercial purpose.

 6.      A fully ventilated storage facility, having the capacity of accommodating 500 - 1000 tons, may be of more, seed potatoes, may be established in Kalam so that the seed potatoes produced by the farmers can be stored at local level.

 7.      Permanent linkages between the producers and Commission Agents may be established in order to avoid meddling of middle men/Beopari.

 8.      Potatoes may be stored in upper areas of Kalam Tehsil in pit storages, which is also one of the ways to reduce the dependency on seasonal loans. However, this activity may need a robust campaign for creating awareness among the growers.