Muhammad, Fida

English

Research Papers in Economics

 
 
 
 
 
 
Integrated Marketing Services as an Approach to Sustainable 
Horticultural development in NWFP, Pakistan 
 
 
 
 
 
Fida Muhammad  
 
 
 
 
 
 
Paper prepared for presentation at the 13
th International Farm Management Congress, 
Wageningen, The Netherlands, July 7-12, 2002 
 
 
 
 
 
 
 
 
Copyright 2002 by Fida Muhammad.  All rights reserved.  Readers may make verbatim 
copies of this document for non-commercial purposes by any means, provided that this 
copyright notice appears on all such copies.  
 
 
 
 
 
 
 1
Integrated Marketing Services as an approach to Sustainable Horticultural
Development in NWFP, Pakistan
Fida Muhammad
Marketing Economist
IMS, PHP, 38 D1, Old Jamrud Road,
University Town, Peshawar, Pakistan
Tel: 92 91 9216939-41 Fax: 92 91 845572
e-mail: phpcu@pes.comsats.net.pk
Pakistan, a country in South Asia, lies on the equator at latitude 24
o to 37
o N and longitude 60
 o to 75
 o E.
Its climate is semi-arid. Agriculture continues to be the single most pre-dominant sector of the economy
and it accounts for nearly one-fourth of GDP. It absorbs about 46% of the labor force of the country and
it, along with small-scale rural enterprises directly or indirectly depending upon agriculture, is a major
source of earning for about two-thirds of the rural population. Likewise, its contribution to the foreign
exchange earning is substantial.  Approximately 80% of the exports are agro-based.
The agricultural policy of Pakistan calls for A DIVERSIFICATION OF PRODUCTION SYSTEMS
INTO HIGH VALUE CROPS. Fruits and Vegetables are to play a significant role in this strategy
specifically in the North West Frontier Province where this sub-sector represent, along with hydro-power
and minerals, the main potential for economic growth and development. Major thrust of the national
development policy is to emphasise on promoting efficiency and fostering growth through privatisation,
decontrols, market liberalization and private sector involvement. In horticulture, the overall development
is, to a large extent, due to private sector initiatives. This consideration was in 1988 the starting point for
the Pak/Swiss Partnership for joint horticultural development in the name of Pak-Swiss Malakand Fruit
and Vegetable Development Project (MFVDP) later renamed as Pak-Swiss Project for Horticultural
Promotion in NWFP (PHP). Apart from its main goal of promoting profitability and sustainability of the
horticultural sector in NWFP, the common initiative also aimed at fostering ecologically sound and
sustainable production practices, at meeting the requirements of resource poor actors in horticulture, and
at increasing the women’s share in development. It further envisaged to strengthen partner institutions and
to promote the role of the private sector. The project promotes the economic potential of horticultural
production, post-production and marketing, which are functions of the private sector.
The two major aspects of agriculture viz. production and marketing, by their very nature, are inextricably
intertwined with each other and in the process they yield a synergistic impact on the overall agricultural
sector of the economy. A marketing oriented approach in symbiosis with a production propelled
marketing strategy can go a long way towards making the farming sector both farmer-friendly and
consumer responsive. Marketing as a link between the farmer and the consumer, brings value-addition to
a product through a proper market-mix (product, price, place and promotion-a realistic enterprise
development strategy). Thus horticultural marketing and the spectrum of activities under its canopy (post
harvest management, economic analysis, marketing systems analysis, marketing development, credit
facilitation and group development) can never be left aside. As the economy moves from a static and
regulated focus to that of a free play of market forces, the whole system of agricultural marketing has to
necessarily undergo a paradigm shift in its priorities, approaches and focus. This necessitates redefining
marketing in the new contexts and the role and functions of the agencies dealing with marketing in the
new context.
During the planning process of the Pak-Swiss Project for Horticultural Promotion (PHP), different
implementation strategies for the marketing wing of the project were carefully investigated. Preference2
was given to link the marketing specialists either with a mandated institution for horticultural promotion
or a private marketing services provider. However, no adequate parent organization could be identified.
IMS was therefore to be given the necessary degree of operational independence as a subprogram of PHP
and later to be established as a self-sustaining private entity.
At a project level emphasis is placed on the promotion of decentralisation and the development of small
farmers, small entrepreneurs, and the population of marginal areas. The guiding principles of the donor
organisation (SDC), economic viability, poverty alleviation, gender equity, strengthening civil society and
sustainability are the main cross cutting themes, which are followed
The production of horticultural crops has assumed great significance in the North West Frontier Province
(NWFP), Pakistan due to the diversified topography, agro-climatic conditions, good quality irrigation
water and soil type. The profitability from horticultural enterprise is not substantially good due to
numerous factors major among which are invariably marketing related.
To address the major problems an integrated approach was developed which has proved to be highly
successful in terms of providing specialized services and increasing profitability of the horticultural
related communities.
Integrated Marketing Services:
The approach towards, as the name indicates, is integrated and composed of a set of pre-requisites for
effective development of marketing oriented system for horticultural production. The integration is
having the following set of inter-related activities:
•   Credit and Group Development
•   Post Harvest Management
•   Marketing Development and Support
•   Market Systems Analysis
•   Economic Analysis
•   Enterprise Development
1.  Group Development and Credit Facilitation:
The producers have limited withholding capacity due to both perishability aspect of the produce and
need of cash. In certain cases the produce is
sold out even before harvest on extremely
low prices. Producers are very often not
aware of the financial institution and the
prevailing procedures. For small farmers,
credit availability has been identified as an
essential pre-condition of production, post-
production and marketing. The credit
problem is still more aggravated for women
folk, who do not even have access to
informal sources. Likewise, the isolated
small farmers and women do not have a
marketable surplus from their limited
resources, and remain marginalized from the
Farmer Development Society
A marginalized group was organized in Tangi Mansoorabad
area mostly producing off-season tomatoes, having no
access to market. Land holding in the area is extremely
small with an average farm size of 2.5 acres. Growers were
found to be unaware of the proper post harvest
management practices. Produce was to be directly put into
used tin containers (ghee/cooking oil) and sold in the local
area through middlemen. To adopt any packaging and
directly marketing in the wholesale market was not
affordable for the growers community due to poor financial
status. Individual surpluses are too little to market. The
group was organized and needs assessment was done.
Training was provided in production and linkages were
developed with both input and output market. Credit
facilitation was provided to the growers from local bank.
Th f ti i d d li3
Polyethylene Net Bags-Improved Packaging
Citrus is one of the major fruit crop of NWFP, Pakistan.
Important varieties cultivated are Blood Red and Sakri.
Grading and sorting were not common practices. Wooden
crates and polypropylene bags (fertilizer and sugar bags
re-used) has been the packing material used which
neither protect nor promote the produce. Net bags were
imported and introduced in 1995 as improved packing for
citrus fruit. The initial results were encouraging and
fetched 40% premiums over the traditional packaging. Its
use has tremendously increased. In the year 2001, its use
increased to 40000 bags from a mere 2000 in 1995.
Besides being beneficial these bags are protective and
grasp attention being attractive. IMS promoted these bags
initially be demonstrating to the farmers, conducting
marketing trials (farmers observing the actual benefit)
and facilitating provision. The success of the activity can
be gauged from the fact that a manufacturing company is
mainstream of economy unless they are instituted into collective groups. The necessary focus in this
regard has to be placed on formation and strengthening of Interest Groups, needs assessment of
groups, development of linkages, credit facilitation, and capacity building in credit and group
management.
2.  Integrated Gender Enterprise Development:
The small-scale enterprise sector carries a tremendous potential. The first step is to develop a cadre of
entrepreneur in the rural
areas whose know how are
enhanced in the first
instance. A two-pronged
approach has to be adopted
to enhance the skills, so that
maximum benefit is
provided to the
communities. On the one
hand skills development of
the communities has to be
undertaken whereas on the
other hand service providers
have to be trained. Training
to communities included communities level organization, groups, CBOs, VO. Through training to
other service providers and Training of Trainers (ToT) a multiplier effect can be achieved.
Similarly the role of women in the overall development of the horticultural sector is very important as
they are actively involved in a range of activities and can play a decisive role in the development of
the sector. In food preservation women have a traditional stake. Therefore, specialized skills are
crucial for the rural women in order to integrate them into the income generating focus. The
integrated enterprise development programme must be highly participatory, identifying enterprises by
matching entrepreneurial competencies, entrepreneurship development, enhancing particular technical
skills needed and linkages development with markets.
3.  Post Harvest Management:
The horticultural crops are characterized by peculiar problems being of highly seasonal, perishable
and bulky in nature. This necessitates efficient
means of transportation and protective
packaging. Most of the growers of fruit and
specially vegetables are small producers
whose surpluses are not marketable (smaller
quantities) and hence cannot afford the costs
of transportation. Due to perishability,
horticultural produce needs high degree of
care during its post harvest. Losses in post
harvest of vegetables are estimated at about
35-45% as the product moves from farm to
ultimate consumers. Activities like sorting,
grading and standardization, packing is not
taken care of by the growers resulting in
decreased profitability. Most of the
DEWA-Women Enterprises
Fruit and vegetable losses reach upto 35-40% in the post harvest. Similarly
commercial on-farm food preservation is uncommon. Women have been
traditionally involved in the processing of fruit and vegetable but mostly for
household consumption in the off-season. However, this area has never
been given an enterprise outlook.
IMS initiated enterprise development programme with a segregated group
of organized community in Haripur, the eastern region of NWFP. Five
groups were trained to run their own enterprises at five different locations.
Training input included entrepreneurship development, marketing, food
preservation and business management.
The enterprise was given a strong footing as emphasis was place on
technical and technological feasibilities, cultural acceptability and4
traditional/conventional packing is developed on the basis of easy availability. Growers are not
familiar with Maturity Indexes and produce of differing maturities, grades and conditions are packed
together. Post harvest handling is one of the weakest areas, which invariably results in losses to
farmers especially in the perishables. Critically important, in this respect, are the mismanagement
during the post harvest like untimely picking/harvesting, no grading/sorting, faulty packaging etc.
Necessary guidance to the grower communities in improved handling and developing appropriate
packaging for reducing losses are crucial.
Produce harvested at the correct maturity stage, sufficiently pre-cooled, well graded and packed
according to its requirements, can guarantee a profitable return.
Growers’ capacity building in post-harvest management of horticultural crops, development and use
of improved techniques pertaining to harvesting, pre-cooling, grading and packing, and ultimately
linking the communities with the input supply system is extremely important.
4.  Market Development and Exploration:
The Marketing Support function is crucial for the successful commercialization of horticultural crops.
For the inculcation of enhanced operational efficiency, familiarity with marketing operations, new
market explorations, human resource development and linkage development with market institutions
are of utmost significance. New products are to be trailed for consumer response and market
acceptance.
5.  Economic Analysis Support:
The awareness of producers needs to be raised regarding` the economics of production and marketing,
and the selection of suitable, viable products through the process of economic analysis. It is widely
agreed that the adoption of an activity (new practice, package or enterprise) largely depends upon the
extent of the actual or potential benefit to be gained and the costs to be incurred. However, to achieve
this, much analytical work is necessary regarding interventions like crop management, test marketing,
value addition and enterprise identification. It is here that the role and utility of economic analysis
comes to the forefront. Product profile development, business plan development and economic
analysis under varying market scenarios have to be given weightage when deciding about commercial
enterprise development.
6.  Marketing System Analysis:
An understanding of the market system is vital for the overall development of any sector. Regularly
updating all the relevant information for guidance in the development of marketing strategies and
tactical planning are again critical. Moreover, the operational planning is adapted to the specific
conditions of the various markets. Farmers usually make future decision on current year prices. The
prices therefore have been exhibiting a cyclic behavior i.e. one year the prices are very high whereas
in the following year the prices are too low. To reverse this trend farmers and support organization
must be well informed to make appropriate strategic, operational and tactical decisions.
Regularly updating studies on dynamics of markets, consumer behavior, price information and other
market information are indispensable for developing strategies for sustainable crop planning and
enterprise selection.

Integrated Marketing Services as an Approach to Sustainable Horticultural Development in NWFP, Pakistan

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