Modernizing Punjab’s Agriculture Will Benefit Farmers and Consumers: World Bank

Punjab has entered a new era of farming and food security, ensuring that farmers generate better income from the sale of crops, and consumers get better deals when they shop for food, noted World Bank.

According to a blog on the World Bank’s website, the reform establishes a new and more transparent legal regime to market agricultural products to help safeguard the free flow of crops and stimulate food supplies. It also comes at a critical time as the COVID-19 pandemic is disrupting socio-economic activities and threatening food security.

World bank highlighted that Pakistan’s agricultural marketing system has long been shaped by the heavy hand of the government and marked by a lack of transparency, the dominance of vested interests, unfair treatment to producers, and welfare losses to consumers.

Punjab has replaced a nearly century-old law with the PAMRA Act—short for Punjab Agriculture Marketing Regulatory Authority Act 2020— which was approved by the Punjab Assembly last March.

Farmers’ produce used to pass through seven or eight different hands before reaching the consumer. Consequently, market margins were high, but producers were left with little.

Amid the COVID-19 outbreak, PAMRA has ensured that the trade of agricultural produce continues without comprising quality and safety. Disinfectant tunnels and temperature scans have become routine. Social distancing is enforced, and auction times are scattered to avoid congestion in the market yards. Direct trading arrangements and product standards defined through PAMRA provide more flexibility to farmers and traders and reassurance to consumers.

Overall, PAMRA will help enrich Pakistan’s food basket and provide a better deal for the farming community and consumers. These modernization efforts received support through the World Bank-funded SMART (Strengthening Markets for Agricultural and Rural Transformation) Project.

The blog said that the new law presents opportunities to catch up with neighboring countries that are moving toward electronic settlement and e-auction systems.

How Will PAMRA Act Transform Pakistan’s Agriculture Marketing?

The PAMRA Act allows the emergence of non-traditional market channels such as supermarkets, virtual markets, and farmer markets, changes the power structure of the market, and enhances financial efficiency and transparency, said the World Bank.

It will do so in the following ways:

  • It mitigates the role of middlemen and changes the power structure of the market. It reduces government intervention, which always benefited vested interests at the expense of small and medium producers.
  • The PAMRA Act ensures gender representation in the governing body of the Authority.
  • It confines the role of market committees to governing and improving the efficiency of the market yards, but with broader representation of key stakeholders, including farmers and brokers.
  • It reduces market fees and regulates grading and packaging standards. Only the first transaction between the grower and the trader will be charged; and the fee will be directly credited to the banks, reducing the need for coins and bills.
  • It improves physical infrastructure and processing equipment for more reliable grading and inspections and for the recording of financial transactions.
  • It allows multiple marketing channels to exist in parallel, replacing the monopoly of the mandi system. The private sector will be allowed to establish markets and collection centers. Farmers will be allowed to sell directly to retailers, bypassing the wholesale markets without having to register with PARMA.
  • It will help expedite bulk warehousing services in the private sector and promote the development of Electric Warehouse Receipts.
  • Producers will benefit from better access to formal credit.
  • It establishes a robust agricultural market information system for Punjab province.