Karachi: Proposed agricultural market likely to shake up existing markets structure

[Naveed Yaseen]

By Qadeer Tanoli
The Agricultural Produce Markets (Amendment) Act, 2009, which aims to promote private sector participation and allow the procuring of rural agriculture produce without government interference, is likely to be presented for approval before the Sindh Assembly during its next session. The bill has created plenty of uncertainty among market stakeholders.

The Sindh cabinet has already approved the proposed, “Establishment and Management of Wholesale and Bulk Market by Private Sector Amendment of Purchase Agriculture Produce Market Act 1939” in its meeting.

According to official documents obtained by The News, the proposed Act will also look to reduce the role of middlemen in the agriculture sector.

According to these documents, the cabinet meeting was told that the Asian Development Bank (ADB), Rural Revitalisation Programme mission visited Sindh in July 2008 and put a precondition on future finances, which would be contingent upon the elimination of market distortion and barriers for promotion of private sector participation. The ADB had insisted that the government of Sindh submit to the cabinet an amendment in the Agriculture Produce Market Act to, “enable the private sector to establish and manage the wholesale market and bulk market.”

The news of this proposed amendment has spread fears among stakeholders that around 2.5 million people will lose their jobs due to the elimination of the role of government-run market committees.

In this connection, early this month a handwritten pamphlet was being distributed among the dealers of New Sabzi Mandi, Super Highway, and the traders of Jodia Market in which it was alleged that the proposed Act will cause great joblessness in the province due to the direct dealing of multinational companies with the growers. According to this pamphlet, this Act is being proposed on the directives of the “World Bank”, which will establish wholesale markets on the pattern of Makro and Metro across the major cities of Sindh including Karachi and Hyderabad.

The pamphlet further states that the role of commission agents would be eliminated and subsequently the existing wholesale markets would gradually be made non-functional in three years in according with the Act. The pamphlet also contends that the wholesalers, grocers, small traders of fruits and vegetables would cease to operate in the aftermath of this Act.

Chairman Karachi Wholesale Grocers Association, Anis Majeed when contacted by The News to get his view point on this proposed Act and whether it could indeed have such consequences, said that he recently learnt about the bill, but had not been able to read it in detail.

He did however maintain that companies that operate on the pattern of Metro or Makro have massive overhead charges compared to local wholesalers, which he said would not allow the former to compete. “How can such companies compete with the present setup of wholesale markets due to their huge overhead charges?” he questioned.

He said that, as a stakeholder, he was not approached by any official of the government for his input on the bill. Majeed also said that the present setup could not be changed overnight, and added that systemic changes brought over time would help stakeholders better adapt to the changes. He admitted that laborer involved in the wholesale market would be affected if the wholesale markets are made nonfunctional.

“First we need to see every point of the bill and then to analyze every item separately,” he commented.

On the other hand, President Malir Fresh Fruit Merchant and Growers Association, Muhammad Javed, appreciated some points of bill.

He said that 71 government-run market committees are operational in the entire province and they are inefficient and corrupt. He said that these market committees embezzled funds given by programmes, such that of the ADB, which were meant to help them streamline their affairs.

He, however, stressed that, even if it is attempted, the role of commission agents ñ i.e. the middlemen ñ could not be eliminated in the present circumstances given that, in many cases, the middleman pays the grower in advance for his crop besides helping him to get seeds and fertilizers as well.

http://www.thenews.com.pk/daily_detail.asp?id=200072