Sci.Int.

(Lahore),28(3),2775-2779,2016 ISSN 1013-5316;CODEN: SINTE 8 2775

PROFIT EARNED BY DATE PALM FARMERS AND CONTRACTORS IN

DISTRICT KHAIRPUR, SINDH, PAKISTAN
Tehmina Mangan1, Abdul Shakoor Jamro1, Mehar ul Nissa Rais1,
Muhammad Ismail Kumbhar3, Abdul Ghafoor Kalwar1
1
Department of Agricultural Economics, Sindh Agriculture University Tandojam,
2
Department of Farm Power and Machinery, Sindh Agriculture University Tandojam,
3
Department of Agricultural Education & Extension, Sindh Agriculture University Tandojam
Corresponding Author E-mail: [email protected]
ABSTRACT: Dates are an ideal food item due to their contents of essential nutrients and resulting health benefits for
humans. This study is conducted to study the prevailing date palm garden contracting system in Sindh and estimate marketing
margins earned by farmers and contractors involved in date garden contract in District Khairpur. For current study primary
data was collected from Khairpur district. Through multistage sampling method a samples of 60 farmer respondents including
20 contract farmers, 20 non-contract farmers, and 20 contractors of date palm. Respondents of this study are mostly small
farmers and average farm size of contract farmers and non-contract farmers was 2.5 and 3.5 acres respectively. Results show
that per acre average revenue earned by non-contract farmers earning high (Rs. 163881) as compared to contract farmers
(47475) although they are paying higher cost of production as mentioned above. Net revenue earned by the contractors is
higher as compared to contract farmers because they do not invest in maintenance of orchards, while contract farmers incur
all the expenses of maintenance of their orchards but cannot reap the proper benefit. More than 80 percent contract farmers
told that they sell their orchards to contractors to avoid risk of price fluctuations and about 19 percent farmers respond that
they sell their orchards to avoid weather risk.
Keywords: Date palm, contractors, net revenues, farmers, marketing
1. INTRODUCTION 15°N and 35°N, from India in the east to Morocco in the west
Dates are an ideal food item due to their contents of essential [23]. Since 1962 date production has increased worldwide
nutrients and resulting health benefits for humans [9]. Apart from 1,809,100 to 6,914,300 t in 2012 [11]. In 2012 the
from a high percentage of carbohydrates (total soluble sugars, leading ten date producing countries were Egypt (23.5%),
44-88%), dates also contain fat (0.2-0.5%), protein (2.3- Iran (17.0%), Saudi Arabia (16.8%), Algeria (12.6%),
5.6%), dietary fiber (6.4-11.5%) and vitamins. The quantity Pakistan (9.6%), Iraq (8.1%), Oman (4.2%), UAE (3.0%),
of dietary fiber in dates depends on ripeness and variety. The Tunisia (2.7%), and China (2.4%) [11]. Distribution of date
flesh of dates contains 0.2-0.5% oil, whereas the seed palm by region shows that Asia stands first with the 60
contains 7.7-9.7% oil. Dates contain at least fifteen minerals million date palms mostly grown in Saudi Arabia, UAE,
whereby their concentrations vary from 0.1-916 mg/100 g dry Bahrain, Iran, Iraq, Oman, Kuwait, Pakistan, Yemen, and
matter [9]. Many date palm varieties have high Turkmenistan; Africa comes second with 32.5 million palms
concentrations of potassium in the flesh (0.9%) and seeds grown in Algeria, Egypt, Morocco, Mauritania, Libya, Mali,
(0.5%). Other salts and minerals present in dates are boron, Niger, Sudan, Chad, Tunisia, and Somalia. USA and Mexico
calcium, fluorine, magnesium, cobalt, copper, manganese, have 600,000 date palms followed by Europe (Spain) with
sodium, zinc, and phosphorous [9]. Dates contain flavonoids 320,000 and Australia with 30,000 date palms [22]. Over the
(ß-carotene, zea-xanthin, and lutein), which have the ability past 40 years the world’s total export of dates has
to protect cells in the body from harmful effects of free experienced an annual increase of 1.7% [9]. Rapid increase in
oxygen radicals and dates are an excellent source of iron export has been noticed in the UAE, Oman, Egypt, and
(0.90 mg Fe/100 g) of fruit [19]. Date palm is socio- Pakistan [5].
economically important for local inhabitants wherever it is
cultivated [15]. Date palm provides food and feed to a large Pakistan is the 4th largest producer of dates with total annual
part of the populations living in the dry lands of the Middle production at around 650,000 tons [20]. In 2012, Pakistan had
East, southwestern Asia, North Africa, and the Arabian a date production of 600,000 t and had an increase in the area
Peninsula [8]. Date palm has numerous usages and produces under date palm cultivation from 41,240 ha in 1992 to 95,000
many useful products for human [6]. Leaves are used for ha in 2012 [11]. The main date palm growing areas of
making roofs, mats, staple dishes, hand fans, baskets, Pakistan are: Muzaffargarh, Jhang, Bahawalpur, and Dera
packaging material, and also for ropes and fences [18]. Ghazi Khan (Punjab), Turbat and Panjgur (Baluchistan), Dera
Trunks can be used as a construction material for houses and Ismail Khan (Khyber Pakhtunkhwa), and Khairpur and
bridges, and as packing material for local transportation of Sukkur Sindh [1]. More than 300 date palm varieties are
vegetables and fruits [2]. Date cultivation and production grown of which the twelve commercially important are:
offers many jobs in groves during fruit harvest and Karbalaen, Aseel, Muzawati, Fasli, Begum Jhangi, Halawi,
processing [15]. Dashtiari, Sabzo, Koharba, Jaan Swore, Rabai, and Dhakki
Date palm (Phoenix dactylifera L.) is one of the earliest [3]. However, some cultivars, grown in specific areas, such as
cultivated plant species and approximately 100 million date Dhakki in Dera Ismail Khan, Aseel in Khairpur, and Begum
palms belonging to different cultivars are planted worldwide Jhangi in Panjgur, have a particularly high market demand
[23]. In 2012, global date production was about 7 million t, and some of them have the potential to compete with the
equivalent to a market value of >1 billion US$ [11]. Most of world’s best quality dates [18]. Dates are important as a
date palms are grown in the world’s arid regions between subsistence crop in Pakistan and marketed all over the

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country. Its utilization is at peak during the month of growers used a big portion of their dates for self-
Ramadan in Muslim countries and during the celebrations of consumption. Hawkers were buying dates directly at the farm
Diwali in India. Even in drought and salinity affected areas, gate or from small wholesalers within the district and were
date palm is a component of agricultural development and moving street to street for selling them. Most retailers who
considered a symbol of life [24]. Date production fetches owned small nut shops were buying dates from small
maximum returns to the community living in areas which are wholesalers within the district while retailers who owned
characterized by adverse climatic and soil conditions [10], hypermarkets or superstores were buying dates from big
[7]. wholesalers within provinces [13].
In Southern Punjab, dates and their by-products are the third Sustainable value chain is regarded as fair distribution of
most important contributor to people’s food and income [4]. revenues / profits earned by different actors / stakeholders in
Date Palm is also an important fruit crop of Sindh province, the value chain [21]. In order to achieve a significant
Sindh produces 350,000 tons of dates annually where 85% of contribution to decent work within the context of value chain
total dates are produced in the Khairpur district [20]. There is development, several socio-economic criteria need to be
a rapidly increasing demand of the offshoots of the locally taken into account such as industry growth prospects,
grown cultivar Dhakki in Dera Ismail Khan [1]. The diverse employment and income creation, reducing incidences of
uses of date palm in Pakistan demonstrate the importance of child labor, promoting gender equity, improving occupational
this fruit in the daily lives of rural communities [4]. Date health and safety, social protection for families, enhancing
growers in Pakistan often depend on advanced payments and skills, and poverty reduction [14]. Improper fruit harvesting is
other informal credits from commission agents, wholesalers another problem in the groves as it affects date quality and is
and contractors with unfavorable conditions [3]. Furthermore, one of the major reasons for low demand of Pakistani dates in
date palm growers face problems in marketing their products the international market. According to [12], Pakistan is
given their poor education [16]. The prevalence of traditional exporting dates at a price of 565 $/t, which is very low as
marketing structures therefore results in 30-40% deterioration compared with other date producing countries (Tunisia, 2433
of fresh produce before it reaches the consumer [18]. Other $/t; Iran, 1430 $/t; Saudi Arabia, 1109 $/t; Egypt, 1186 $/t;
limitations in date palm cultivation areas include low quality and Oman, 1257 $/t). Pakistani dates are harvested and
date palm cultivars, poor farm management, processing marketed at three stages (khalal, rurtab, and tamar) of their
facilities, uncertainty in prices at the time of selling and development. The choice for the harvesting stage depends on
shortage of qualified trained labor [17]. cultivar characteristics, climatic conditions, and market
demand [1].
Generally, date palm growers preferred to sell fresh dates In Sindh contracts of date palm orchards are generally verbal
because of scarce availability of labour, storage houses, and based on mutual trust between contractors and farmers.
processing facilities. However, especially large scale growers Literature highlights that more than 90 percent contracts of
tended to process their dates prior to selling them; they either date palm orchards are verbal and based on mutual
made chuhara -a special type of dried date which is prepared understanding (Khushk and Smith, 1996). In order to avoid
by boiling premature dates and adding Rang kat (sodium risks during marketing of date palm, farmers prefer to sell
formaldehyde) -or sold dried dates. Most of the date palm their date palm orchard on contract to contractors before
growers were selling their dates to contractors, commission harvest. The duration for contract is decided contracting
agents or wholesalers in Punjab, Sindh and Baluchistan parties i.e. farmers and contractors. Mostly contracts are for
province. Many Households were bound to sale their dates to single production season. Sometime farmers contract out their
commission agents, because of the already taken loans from orchards at flowering stage. Under existing contract system
them with a 10-11% interest rate compared to agricultural contractors pay some of the contract amount in cash at the
banks charging 13-15%. It was observed that contractors had time of contract and remaining amount is paid to farmers in
more knowledge of date palm sale, resources, and market installments [16].
access than growers. According to the contractors’ response, Contract system is the major marketing system in the supply
prices of dates in wholesale market were under the control of of date palm because; producers usually avoid the marketing
wholesalers rather than fixed by the Pakistani government. In of fruit by themselves as they do not want to be involved in
the date palm market chain, the wholesalers are working as the complication of the marketing system. Due to that reason
intermediaries between growers / contractors and retailers / middlemen/ contractors become share partners in their profit/
buyers. Exporters were either commission agents or owners marketing margins earned from the sale of date palm crop
of processing units and were mainly selling chuhara to India. therefore date palm farmers have less income and investment
Major players of wholesale market were commission agents, for date palm orchards. Contractors do not take interest in
contractors, wholesalers, and retailers, whereby the two first proper management of date palm trees management therefore
bought highest quantities. Farmers gave various reasons for yield of date palm orchards is affected. This research attempts
entering a contract agreeing to sell the entire production of to compare marketing margins earned by contract farmers
their grove: particularly prominent was the distance to the (farmers who are involved in contract system), non-contract
next market. The results also illustrate that only small scale farmers (farmers who are involved in contract system), and
and medium scale date palm growers traded with commission contractors in Dadu district of Sindh Province of Pakistan.
agents while only medium scale sold fruits to hawkers,
markets, and directly to consumers. Small scale date palm

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2. OBJECTIVES RESULTS
Specific objectives of the study are as under: The result pertains in Table-1 regarding demographic
characteristics of sample respondents. According to the data
1. To study the prevailing date palm garden contracting the average age of the contract farmers (who do not
system in Sindh. marketing themselves and contract out their date palm
2. To estimate marketing margins earned by farmers orchard to the contractors) were highest i.e. 41 years while
and contractors involved in date garden contract in the average age of non-contract farmers (who do marketing
District Khairpur themselves) and contractors were same i.e. 40 years.
Education plays a very important role for the uplift
3. METHODOLOGY particularly in agriculture sector because education helps
This study is conducted to study the prevailing date palm farmers to take various decisions regarding input choices and
garden contracting system in Sindh and estimate marketing farming activities. It was found during the survey that the
margins earned by farmers and contractors involved in date average years of education of contract farmers and non-
garden contract in District Khairpur. For current study contract farmers were same i.e. 9 years and average years of
primary data was collected from Khairpur district. Through schooling of contractors were 8 years. According to the data
multistage sampling method a samples of 60 farmer the average number of family size of contract farmer were
respondents including 20 farmers who are involved in less (5.5) than contractors (6.6) and non-contract farmers’ 7.3
contract system (contract farmers), 20 farmers who do not members. The result shows that the average number of
sell their date palm orchards on contracts and do all the educated persons and number of earning member in family of
operations of business by themselves (non-contract farmers), non-contract farmers were highest (3, 2.5), contract farmers
and 20 contractors who purchase date palm orchards from (2.7, 1.4) and contractors were (2.3, 1.6) respectively.
farmers on contracts and conduct marketing process. Initially, Average farm size of contract farmers which they contract
an informal survey of study area was carried out in order to out the contractors were 2.5 acres, non-contract farmers
pretest the questionnaires to interview 60 respondents. The owned 3.5 average acres of land and contractors bought 2.4
collected data was tabulated, analyzed and interpreted to meet average acres. The contract farmers respond that they selling
the objectives of this study. The data was collected through their orchard to the contractors since 4.5 average years, non-
personal or face to face contact to the respondents in study contract farmers farming since 7 average years and
area. contractors involved in contract business since 3 average
years
.Table 1 Demographic characteristic of respondents
Contract farmer Non contract farmer Contractors (who purchase
(Farmers who sell their (Farmers who do not sell orchards from farmers on contract)
orchards to contractors) their orchards to contractors)
Variables Mini Maxim Mean Minimu Maxim Mean Minimum Maxim Average
mum um m um um
Age of respondents in years 30 52 41 28 55 40 29 60 40
Years of education 0 16 9 0 16 9 0 16 8
Family size 2 10 5.5 4 14 7.3 4 10 6.6
Number of educated family 0 6 2.7 1 4 3 0 5 2.3
members
Number of earning 1 3 1.4 1 5 2.5 1 3 1.6
members in family
Number of acres on 0.25 6 2.5 1 10 3.5 1 6 2.4
contract
Years of farming/ 2 8 4.5 3 15 7 1 8 3
contracting experience

4.1 Per acre average cost labour, maintenance of date palm orchard, packing material
Per acre average production and marketing cost of sample cost, loading & unloading, transport and commission in
respondents are shown in Table-2. The result revealed that market.
per acre average cost incurred by the contract farmer for 4.2 Per acre average revenue
different activities (farmyard manure, wages for hired labour, Table-3 shows the per acre average revenue earned by the
orchard maintenance and etc.) were Rs.1675, while the per sample respondents. The result revealed that non-contract
acre average cost incurred by the non-contract farmers was farmers earning high (Rs. 163881) average revenue per acre
Rs. 69266 for production and marketing and contractor paid than contract farmers (47475) and average revenue earned per
Rs. 123133 average cost per acre for production and acre by contractors was Rs. 210896 respectively
marketing cost including farmyard manure, wages for hired
.

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Table 2 Per acre average cost incurred by respondents
Non contract farmer
Contract farmer (Farmers
(Farmers who do not sell Contractors (who purchase
who sell their orchards to
their orchards to orchards from farmers on
contractors)
contractors) contract)
Per acre average cost Per acre average cost (Rs.) Per acre average cost
(Rs.) (Rs.)
Cost of production 1675 30355 91450
Packing -- 13380 26108
Loading & unloading -- 505 652
Transport -- 25026 4923
Grant total 1675 69266 123133
Table 3 Per acre average yield in (40kg), price/40kg and revenue earned by the respondents
Per acre yield in mounds Price per 40 kg Per acre revenue (Rs.)
(40 kg)
Farmers involve in contract -- -- 87475
Farmers not involve in 83.4 1965
163881
contract
Contractors 98 2152 210896

4.3 Per acre gross margin and net margin earned by the contractors was Rs. 119441. Similarly per acre
Per acre gross margin and net margin earned by the sample net margin of non-contract farmers was also high Rs. 94615
respondents is presented in table-4. It is investigated that per than contract farmers (Rs. 85800) while per acre net margin
acre gross of non-contract farmers was high (133526) than earned by the contractors was 87758 rupees.
contract farmers (Rs. 85800) and per acre gross margin
Table 4 Per acre gross margin earned by farmers and contractors of study area

Per acre gross Per acre Per acre net

Per acre Per acre price
margin marketing margin (E) E=C-
Respondents price paid received
earned (C) costs D
(A) (B )
C=B-A (D)
Farmers involved in contracting --
1675 87475 85800 85800
their farms to contractors
Farmers not involved in
contracting their farms to 30355 163881 133526 94615
contractors 38911
Contractors 91455 210896 119441 31683 87758

5 DISCUSSION high (Rs. 163881) as compared to contract farmers (47475)

This study is conducted to evaluate the prevailing date palm although they are paying higher costs of production as
garden contracting system in Sindh and estimate marketing mentioned above. Average revenue earned per acre by
margins earned by farmers and contractors involved in date contractors was Rs. 210896. Similarly, per acre net margin
garden contract in District Khairpur. For current study earned by non-contract farmers was also higher i.e. Rs. 94615
primary data was collected from Khairpur district. Through as contract farmers who earn Rs. 85800, while per acre net
multistage sampling method a samples of 60 farmer margin earned by the contractors was 87758 rupees. Net
respondents, including 20 farmers who are involved in revenue earned by the contractors is higher as compared to
contract system (contract farmers), 20 farmers who do not contract farmers because they do not invest in maintenance of
sell their date palm orchards on contracts and do all the orchards, while contract farmers incur all the expenses of
operations of business by themselves (non-contract farmers), maintenance of their orchards but cannot reap the proper
and 20 contractors who purchase date palm orchards from benefit. More than 80 percent contract farmers told that they
farmers on contracts and conduct marketing process. sell their orchards to contractors to avoid risk of price
Respondents of this study are mostly small farmers and fluctuations and about 19 percent farmers respond that they
average farm size of contract farmers and non-contract sell their orchards to avoid weather risk.
farmers was 2.5 and 3.5 acres respectively. The result
revealed that per acre average cost incurred by the contract 6. ACKNOWLEDGEMENT
farmer for different activities of farming business were It is acknowledged this research is based on the data collected
Rs.1675, while the per acre average cost incurred by the non- by the co-author of this research paper, Mr. Abdul Shakoor
contract farmers was Rs. 69266 for production and Jamro under supervision of Dr. Tehmina Mangan in the
marketing, while contractor incur Rs. 123133 as average cost Department of Agricultural Economics, Sindh Agriculture
per acre for production and marketing. Results show that per University Tandojam.
acre average revenue earned by non-contract farmers earning

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