MARKETING OF WHEAT SEED IN DISTRICT JAFFARABAD, BLOCHISTAN BY

HABIB KHAN
2K8-SS-92

At
AGRICULTURAL PRODUCTION, MARKETING AND VALUE CHAIN PROGRAMME SOCIAL SCIENCE RESEARCH INSTITUTE NATIONAL AGRICULTURE RESEARCH CENTRE (NARC) ISLAMABAD

MARKEETING OF WHEAT SEED IN DISTRICT JAFFARABAD

DEPARTMENT OF AGRICULTURAL ECONOMICS SINDH AGRICULTURE UNIVERSITY TANDO JAM
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CERTIFICATION This to certified that Mr. HABIB KHAN BURIRO (Reg. # 2K8-SS-92) is a student of department of AGRICULTURE ECONOMICS,Sindh Agriculture university tando jam , has completed his internship on MARKEETING OF WHEAT SEED IN DISTRICT JAFFARABAD in Social Sciences Research Institute (SSRI), National Agricultural Research Centre (NARC), Islamabad.

Director, SSRI (NARC, Islamabad)

_______________________ Dr. Ikram Saeed

Supervisor,

_______________________ Mr. Hassnain Shah PSO (SSRI, NARC)

Co-Supervisor,

_______________________ Mr. Waqar Akhtar SO (SSRI, NARC)

Supervisor at SAU Tandojam,

_______________________ Mr. Sanaullah Noonari Chairman Department of Agriculture Economics SAU Tandojam.

I DEDICATE THIS HUMBLE EFFORTSTO MY LOVING AND AFFECTIONATE PARENTS WHO ALWAYS PRAY FOR ME AND SUPPORTED ME IN EVERY STEP OF LIFE

ACKNOWLEDGEMENTS
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In the name of ALLAH, the merciful and the compassionate who bestowed upon me the will and the ability to carry out this task. Countless salutations are upon the HOLY PROPHET (P.B.U.H) who enabled me to recognize my creator and declared it to an obligatory duty of every Muslim to acquire knowledge. I feel highly privileged to express my profound and sense of obligation to my supervisor Sir. Sanaullah Noonari, Chairman, Dept of Agri. economics, Sindh Agricultural University Tandojam, and for their kindness and constant help during the completion of work. The words are inadequate to express my deepest sense of appreciation and devotion to my external supervisor Mr. Hassnain Shah, PSO, SSRI at National Agriculture Research Centre, Islamabad. I am extremely grateful to his sympathetic attitude and dynamic supervision during the internship. I would like to thank sincerely to Mr. Imran Ullah Yousafzai who worked very hard with me and trained me skillfully. I have deepest words of thanks to my parents for their help and constant moral encouragement during the completion of work. Words cannot express my feelings of love and devotion. Thanks to my friend for their support. May ALLAH bless them with good health, prosperity and long lives AMEEN.

HABIB KHAN BURIRO

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CONTENTS CHAPTER NO. NARC INTRODUCTION WORK DONE AT SSRI 1. INTRODUCTION 2. RIVIEW OF LITERATURE 3. MATERIALS AND METHODS 4. RESULTS 5. CONCLUSIONS AND RECOMMENDATIONS LITERATURE CITED PAGE NO. 1 6 8 10 13 14 17 18

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INTRODUCTION TO NARC, ISLAMABAD

Introduction of Internship Program The B.Sc.(Hons) degree in Agriculture Economics provides an opportunity to the students for internship in some research institute/organization during the last semester which helps in gaining practical skills and techniques, and is beneficial for future career. Therefore internship has an important place in any degree program. As an essential requirement of internship program for the B.Sc. (Hons) Agriculture degree, I joined Social Sciences Research Institute (SSRI)),National Agriculture Research Centre(NARC), Islamabadas an internee. During this internship program, I learnt lot of skills and techniques practically, which are very beneficial and useful for my future career when Ill put step in the practical field. Introduction to NARC Pakistan economy is agro-based. Agriculture stimulates growth in other sectors also. With increasing population food security and unemployment are and will remain key concern for the nation. Future agriculture is thus intended to become more efficient, eco-friendly, capable of meeting demands of increasing population and acting as a major instrument of desired socio-economic transformation of society. Agriculture research has been and will remain a driving force for sustained development of agriculture sector and hence the country. Mandate: Strategic Research on National and Provincial Priorities Emerging Challenges in Agriculture

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Organizational structure The centre is headed by Director General who is helped by Institute Heads. The research activities are organized into 12 institutes grouped under seven sectors: Crop Sciences Animal Sciences Agricultural biochemistry Agricultural Informatics Natural Resource Farm Mechanization Social Sciences

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Director General

Institutions

Planning and Research monitoring

Crop sciences

Animal sciences

Administration

Plant and Env. protection

Natural resources and env.sciences

Finance and Accounts

Agri biotechnology and genetic resources

Horticulture

Farm operations and Services

Water Resources

Farm machinery

Works and Estate management

Soil sciences

Agro informatics

Technology transfer

Aquaculture and Fisheries

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SOCIAL SCIENCES RESEARCH INSTITUTE

Social Sciences Research Institute (SSRI) located at National Agricultural Research Centre (NARC), is the field research wing of Social Sciences Division of Pakistan Agricultural Research Council (PARC). PARC is the countrys leading agricultural research organization at federal level with the responsibility to steer the National Agricultural Research System (NARS) through strengthening and coordinating its various components. Being the prime institution of agricultural research, the main focus of the council is to undertake and promote research in the areas thatdo not fall under the priority research Program of other components of the NARS. PARC perform such role through its research establishments located at different agro-ecological zones of Pakistan. NARC is one of the largest research establishmentsin Islamabad. SSRI was established in July 1990 as an important component of NARC.Master Research Plan with specific Mandate to ensure active participation of multidisciplinary team of scientists from social, biological, natural resources and farm machinery disciplines to conduct priority research for NARS. SSRI operates through several research Programs involving sister research institutions, development, agencies, NGOs and other stakeholders. The mandate of the SSRI is as under: 1. Mandate Undertake research on different priority issues of national and regional importance in the disciplines of agricultural social sciences; agricultural social sciences; Provide research feed-back to the biological scientists working on different crops and livestock; Develop and strengthen linkages with research and extension for technology transfer; Teaching at Applied Economics Department.Included M.Phil and Ph. D. Program
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Functions
To identify on-farm problems and farmers research needs and translate them into research priorities for appropriate recommendation domains; To determine the socio-economic viability of alternative technologies identifying farm level constraints in their adoption, specifying requirements for technology redesign and highlighting areas for policy interventions; To evaluate social benefits and costs of new technologies; To arrange training workshops/symposiums/conferences in order to assist biological and social scientists in their respective covering concepts relevant to agricultural research priority areas; and Programs of SSRI 1.Agricultural Production, Marketing & Value Chain Program 2. Agricultural Pricing and Trade Policy Program 3. Agricultural Science, Technology & Innovation Program 4. Gender and Development Program

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WORK DONE AT SSRI DURING INTERNSHIP

Preparation of proposal for study Data collection through field survey Data entry in SPSS Internship Report

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MARKETING OF WHEAT SEED IN DISTRICT JAFFARABAD, BALOCHISTAN

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I. INTRODUCTION* Agriculture is a major source of livelihood for majority of population in Pakistan representing two-third of total population of the country. It is the single largest sector of our economy assuming the responsibility of food security of entire population, employment generation and provision of raw material to agro-based industries and sustains agro-based exports for providing hard earned foreign exchange for the country. Its share in national GDP accounts by 20.9% and employing 45% of work force (Government of Pakistan, 2010).Pakistan directly or indirectly depends on agriculture for their livelihood. However, the performance of the agriculture sector is relatively poor and as a consequence agricultural families have low levels of income. The country is not producing enough commodities like wheat, rice, pulses and edible oil .The food supply and demand gap is getting larger. In order to reduce this gap and to decrease the poverty in general and specially the poverty in rural areas, agriculture has to grow faster and at a sustainable rate. Production of minor crops was found highly reduced in last two years pulses are declined 18% (Government of Pakistan, 2010). Wheat plays a central role in Pakistans food economy, both in terms ofproduction and consumption. Because of the importance of wheat,

successivegovernments of Pakistan since Independence have intervened heavily in wheatmarkets, procuring wheat at administratively set prices to support farmerincomes and subsidizing wheat sales to flour mills or directly to consumers withthe objective of stabilizing prices at levels affordable to consumers (Cornelisseand Naqvi, 1987; Hamid, Nabi, and Nasim, 1990; Dorosh and Valds, 1990;Ashfaq, Griffith, and Parton, 2001; Ahmad, et al.,2005). Balochistan is a wheat-deficit province which depends on Sindh and Punjab to meet its requirements. There is no permanent system of irrigation here except in Naseerabad district. Wheat is grown over 4, 08,913 hectares. According to the agriculture department, the province produced 8, 72,066 tons of wheat (2,133 kg per hectare) in fiscal year 2006-07.
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Today self-sufficiency in food grains, especially in wheat, is the major goal of our country. One of the causes of stagnation on agricultural output has beenthe inadequate supply of improved seed. The use ofimproved seed can serve as backbone ofdevelopment in agriculture leading to break throughfor self-sufficiency. Just as productive agriculture isessential to our success and prosperity of the nation,quality seed is essential to productive agriculture. Itwas lately realized that improved seed is essentialpre-requisite to attain maximum productively fromthe investment made in water supply, fertilizer andfarm mechanization etc., and without it the potentialgrowth rate in farm sector can never be achieved.The requirements of improved wheat seed ascompared to distributed, are very high. Therefore, itis high time to act before it is too late. There is a direneed to organize the seed production and marketingin such a manner that maximum quantity of qualityseed of improved varieties is made available to thefarming community so that Pakistan could meet thegoal of self sufficiency on sustainable basis.The above given assumptions gave rise to the ideaof conducting the present study with the objectiveto study the existing marketing channels of wheatseed, to appraise the role of public and private seedagencies in the production and distribution of wheatseed, to identify the constraints in seed distributionand suggest recommendations. Objective The specific objectives of the study are given as follow 1. To study marketing of wheat seed in district Jaffarabad 2. To determine the level of improved seed use and variety replacement at farm level 3. To suggest possible interventions for adoption of improved wheat seed at farm level.

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II.

RIVEW OF LITERATURE

Annual wheat production in Pakistan from 2002 through 2004 averaged19.0 mn tons, about 80 percent of which was produced in Punjab. Over thisperiod, currentproductionaccounted forabout 90 percent of total supply, withthe remainder coming from imports and drawdown of government stocks.Provincial governments, particularly the government of Punjab, interveneheavily in wheat markets. Government procurement averaged 4.0 million tonsper year in 2002 and 2003, about 25 percent of production in these years.Punjab alone accounted for almost 90 percent of procurement, equivalent to 27percent of its production.Pakistan Agricultural Prices Commission (APCOM) surveys in majorwheat surplus districts in Sindh in 1997 and in Punjab in 1998 indicate that 42percent (Sindh) and 55 percent (Punjab) of wheat production sold within fourmonths of harvest (Salam, et al.,2002). The strength and efficiency of support servicessuch as extension, credit, and input supply cancondition the effectiveness of research resultsemanating from experiment stations. The role ofimproved varieties of crops, particularly wheat andrice, in alleviating poverty has been widely debated(Dasgupta 1977; Singn 1990). Ellis (1993) outlined the social and economic impact of improved varieties in countries where they have been widelygrown, and it is commonly observed that the dissemination of improved seed andcomplementary inputs has removed the shadow offamine from the lives of millions of poor farmers.According to Jaffee and Srivastava (1992),improved seed embodies the genetic potential of aplant; it determines the upper limits on yield andeven the productivity of other inputs. Shah et al., (2007 revealed that gave rise to certainimplications crucial for policy makers intending toimprove the seed distribution system. Atgovernment level effective changes have beenmade by declaring the seed business as seedindustry. PSC has also made positive changes inthe system of multiplication and distribution ofimproved seed and private sector is also growing ata faster rate but still the share of formal sector inimproved wheat seed marketing remained almoststagnant. Therefore, the distributions
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network ofPSC should be strengthened with sufficientmarketing and field development staff that cansupervise sales operations effectively. Also the saleof seed by PSC is on 100 percent cash basis andunsold stock is not lifted back by PSC. While theprivate companies are selling seed at about 50percent credit and also unsold stock with thedealers is lifted back. All these factors restrict manydealers from lifting more seed, as they do not wantto block their working capital in a business wherethe rate of return is very low.Most of the private seed companies are small insize with little seed production/procurementcapacity along with limited sale promotioncapability, which needs to be strengthened. Privatesector should be strengthened to bridge the gapbetween requirement and actual distribution ofseed. As farmers were willing to pay someadditional cost for village level delivery of wheatseed hence its use can be increased if the seed ismade available at village level or at least at unioncouncil level. High price of seed was reported asmajor reason for not using the improved wheatseed in spite of the fact that there was significantyield difference with improved wheat seed.Keeping in view the importance of wheat in theeconomy of Pakistan, prices of improved seedshould be kept low in lieu of developmental aspectrather than commercial. As still majority offarmers use farm produced seed from last yearpurchased wheat seed the extension staff shouldadvise the farmers in developing improvedmethods of seed selection and preserving practicesto farmers when they keep their own seed. Kauret al., (2010) found that, seed rate contributed negatively to the cropproduction in the mixed and cotton-wheat and rain-fed zones and the coefficientswere significant for mixed and rain-fed zones. However, seed rate had a positive andsignificant contribution to wheat production in rice-wheat zone.Weed control cost, fertilizer use and have contributedpositively and significantly, while seed rate contributednegatively and significantly towards wheat productionin the mixed cropping zone.

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Babar et al., (2005) revealed that progressive farmers sowed wheat in time and applied better seed rate. The use of seed drill was alsofound more prevalent among the progressive farmers and the application of fertilizer and irrigation was also better thantraditional farmers. High price of fertilizers particularly of DAP, delayed payments and low price of wheat were the mainmarketing related grievances expressed both by the progressive and traditional farmers.

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III. Sample Size

MATERIALS AND METHODS

The present study was confined to Jaffarabad district and was based on the primary data. A sample of 40 wheat farmers and 6 wheat seed dealers were randomly selected. Datawere collected through the questionnaires which includedquestions relating to adoption and marketing channels of different wheat seed varieties followed by the farmers. The data were then analyzed byemploying simple statistical techniques like averages,percentages and frequency distribution by using statisticalpackage SPSS. The Questionnaire The questionnaire was developed in a format to identify high yielding varieties used by the local farmers and to identify different market channels through which farmers got wheat seed. Some questions about wheat seed prices, suitable packing size and difficulties in the marketing of approved varieties of wheat seed were also included in the questionnaire. Techniques Softwares used The results of the study were explained through descriptive statistics and simple percentage and average methods. The data was analyzed by using Statistical Package for Social Scientists (SPSS) and Microsoft excel.

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IV.

RESULTS

Yield Performance of Different Wheat Varieties During the survey it found that Sehar-2006 was the dominant wheat seed variety used by 47% of the host farmers, Inqilab-91 stood at second used by 27% of the farmers, 20% of the farmers used Zardana (a local wheat variety) and 5% farmers used Abdul Sattar variety (Table 4.1). 4 The data reveals that the Sehar-2006 was the top yielding variety in the study area with an average yield of 26.05 mounds per acre. The average yield of Inqilab-91 variety was observed 23.57 mounds per acre. The yield of the wheat variety Sehar-2006 remained on top in Jaffarabad district wherein, variety Inqilab-91 was the second top yielding variety in the study area with an average yield of 23.57 mounds per acre. Table 4.1 Different varieties used Variety Sehar-2006 Inqlab-91 Zardana(local) Abdussattar Total Source: Field survey No. of respondents 19 11 8 2 40 Percent 47.5 27.5 20 5 100

Table 4.2 reveals that 17.5% of the farmers purchase wheat seed from general seed dealers, 50% purchase from grain dealers, 7.5% exchange their grain to others fellow farmers and 25% farmers used their own gain as a seed kept from last year produce. Table 4.2 Seed sources General Seed Dealer Number of respondents Percentage Source: Field survey 7 17.5 Grain dealer 20 50 Fellow farmers 3 7.5 Own Total

10 25

40 100

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Current wheat seed distribution system Despite the crucial importance of improved seed inbettering the welfare of smallscale farmers, accessto this invaluable technology can be constrained bymany factors, including an undeveloped seedindustry. A seed industry essentially consists of allenterprises that produce or distribute seed (Prayand Ramaswami, 1991), and at aminimum theindustry has four components: 1) plant breedingresearch, 2) seed production and multiplication, 3)processing and storage, and 4) marketing

anddistribution.The industry's overall performance depends on theefficiency of each component, and each componentpossesses different economic and

technicalcharacteristics that determine the roles that publicand private organizations will play in the seedindustry. These characteristics include economiesof scale, externalities, excludability, and problemsof information or quality (Alemuet al.. 1998).In the context of the present paper, marketing ofimproved seed of wheat is defined as the process of transferring the improved wheat seed to the farmers.There are two subsystems of seed distribution; a)Farmer based or informal system consisting of farmerto farmer exchange, farmers keep own seed andfarmer buy seed from local market and b) Formalsystem consisting of public seed agencies and privateseed companies. The main agencies involved in seeddistribution operations under formal seed system are: Federal Government For controlling imports and distribution of foreignoriginated seeds, enforcement of seed act andregistration of new varieties through Federal SeedRegistration Committee (FSRC). Prices of Improved Wheat Seed The sale price of quality seed is always higher ascompared to grain because quality seed production isa highly technical and institutional activity. The seedpricing system is not a very systematic in the country.Various seed agencies both public and private workout seed prices differently based upon their specificseed production, procurement circumstances,competition among each other and demand andsupply basis.
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The

cost

of

production,

processing,marketing,

incidental

charges

and

other

overheadexpenses are reflected in the price. The price ofimproved wheat seed of PSC and private seedcompanies along with grain and seed price ratio isgiven in Table II. The seed/grain price ratio for PSCremained less overtime depicting low seed pricesthan the private companies seed providing a goodcompetitive environment. Seed Dealers The share of seed in total business of PSC registereddealers was 15 percent while the share of seed in totalbusiness of other private seed dealers was 10 percentof total business. The PSC dealers had to carry seedat 100 percent cash while the other private dealerswere supplied seed by the private agencies at 50percent credit. PSC Seed Dealers sold 90 percentseed of Inqlab 91, 6 percent Parwaz 94, 4 percentPunjab 96 and the remaining 0.5 percent Wattanvariety while other private seed dealers sold 58percent, 23 percent, 14 percent and 4 percent ofInqlab 91, Punjab 96, Parwaz 94 and Wattan varietyseed respectively during the survey period. Themargin of PSC dealers between the purchase andsale price was 40 Rs/100 kg bag while it was 87Rs/100 kg for seed dealers of private seedcompanies. About 87 percent of the dealersrecommended 100 kg bag of wheat seed and 13percent recommended that wheat seed bag sizeshould be of 50 kg.

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V.

CONCLUSIONS AND RECOMMENDATIONS

The conclusions of the study gave rise to certainimplications crucial for policy makers intending toimprove the seed distribution system. Atgovernment level effective changes have beenmade by declaring the seed business as seedindustry. PSC has also made positive changes inthe system of multiplication and distribution ofimproved seed and private sector is also growing ata faster rate but still the share of formal sector inimproved wheat seed marketing remained almoststagnant. Therefore, the distributions network ofPSC should be strengthened with sufficientmarketing and field development staff that cansupervise sales operations effectively. Also the saleof seed by PSC is on 100 percent cash basis andunsold stock is not lifted back by PSC. While theprivate companies are selling seed at about 50percent credit and also unsold stock with thedealers is lifted back. All these factors restrict manydealers from lifting more seed, as they do not wantto block their working capital in a business wherethe rate of return is very low.Most of the private seed companies are small insize with little seed production/procurementcapacity along with limited sale promotioncapability, which needs to be strengthened. Privatesector should be strengthened to bridge the gapbetween requirement and actual distribution ofseed. As farmers were willing to pay someadditional cost for village level delivery of wheatseed hence its use can be increased if the seed ismade available at village level or at least at unioncouncil level. High price of seed was reported asmajor reason for not using the improved wheatseed in spite of the fact that there was significantyield difference with improved wheat seed.Keeping in view the importance of wheat in theeconomy of Pakistan, prices of improved seedshould be kept low in lieu of developmental aspectrather than commercial. As still majority offarmers use farm produced seed from last yearpurchased wheat seed the extension staff shouldadvise the farmers in developing improvedmethods of seed selection and preserving practicesto farmers when they keep their own seed.

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LITERATURE CITED Government of Pakistan, 200304. Economic Survey of Pakistan. Finance Division, Economic Advisers wing, Islamabad, FAO, 2002. The State of Food and Agriculture. FAO, Rome Gill, A.D., 2002. Role of State in Wheat Management. Paper presented atNational Institute of Public Administration (NIPA), Lahore. Government of Pakistan, 2002. Economic and Marketing Review of Agri.Commodities. Directorate of Agriculture (E&M), Lahore Ellis, F. 1993. Peasant economics, farm households andagrarian development. Wye Studies in Agric.and Rural Dev. UK: Wye College. GoP. 2002. Agric. Statistics of Pakistan, 2001-02,Economic Wing, MINFAL GoP. 2002. Economic Survey 2002-03, Govt. ofPakistan, Finance Div. Economic AdvisoryWing, Islamabad. Badar. H. and Qamarmohy-ud-Din. 2005. Wheat production and marketing: a comparative study of traditional and progressive farmers in Faisalabad (Pakistan). Department of marketing and agribusiness, university of agriculture faisalabad 38040, Pakistan. Pray, C.E. and B. Ramaswami. 1991. A framework forseed policy analysis in developing Countries.Washington, D.C. Intl. Food Policy Res. Institute.(IFPRI). Alemu, H., H. Verkuijl, W. Mwangi and A. Yallew.1998. Farmers' wheat seed sources and seedmanagement in the Enebssie Area, Ethiopia.Mexico, D.F. Institute. Agric. Res. and CIMMYT. Shah, H., Q. Mohy-ud-Din., W. Akhter. and M.Ansar. 2007. Marketing of improved Seed of wheat in the punjab province. Sarhad J. Agric. Vol. 23(4).

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