Sarhad J. Agric. Vol. 30, No. 2, 2014 COSTS OF PRODUCTION AND MARKETING OF PEACH IN SWAT KHYBER PAKHTUNKHWA ADALAT KHAN 1* and MUNIR KHAN 2 1. Department of Agriculture Extension District Swat Khyber Pakhtunkhwa 2. Department of Agricultural & Applied Economic, The University of Agriculture, Peshawar, Pakistan *Corresponding Author: kadalat1@yahoo.com ABSTRACT The current study was conducted to investigate the costs of Peach production and marketing in Swat, Khyber Pakhtunkhwa. The objectives of the study were to calculate the cost of production and marketing, profitability and constraints. The study used primary data collected through well-structured interview schedule from 270 respondent growers having established peach orchards in six villages of District Swat during year 2010-11. The results revealed that average peach production and marketing cost per acre were Rs. 34,100 and Rs. 94,955 respectively. The major production factors were farm yard manure, various fertilizers, different pesticides and hiring of labour for application of FYM, fertilizers, pesticides and irrigation while the marketing cost include purchase of empty cartons, picking, packing, decoration materials, transportation, loading, un loading and market charges or commission. The average total gross income per acre from all peach varieties was Rs. 250,510, while the average net profit per acre from peach orchard was pointed out Rs. 121,455. Major constraints were lack of financial resources, high cost of agriculture inputs, perishable nature of the produce, pests and natural calamity attack, lack of market information, price fluctuation in national markets and high transportation cost. High yielding and disease resistance peach varieties should be introduced in the study area. Postharvest losses may be reduced by value addition and potential for export should be explored for fetching the highest returns to the peach growers. Key words: Production, Marketing, Costs, Peach, Economic Analysis. Citation: Khan. A. and M. Khan. 2014. Costs of production and marketing of peach in swat Khyber Pakhtunkhwa. Sarhad J. Agric. 30(2):277-282 INTRODUCTION Pakistan has many advantages for growing fruit and vegetable, which are very much important for our economy. There are various types of fruits, vegetables, different flowers and other ornamental plants. The fruit sector has shown excellent development in the last few years. Farming Sector plays a central role in our economy and is considered the most important pillar of the country s economy, with contribution of approximately 21 percent to GDP. This sector gives employment to nearly 45 percent of the labour force. It is believed that approximately 62 percent people of our country are living in rural areas and earn their income through agriculture and its related businesses. It is also noted with great concern that this sector has not been utilized to its maximum potential as evident from the data. Agriculture is the major provider of agricultural raw materials to other relevant firms and thus plays its vital role in increasing our exports getting higher returns from abroad. It also plays an important and huge market for industry items like chemical fertilizers, pesticides, farm machinery (GoP, 2012). Peach ( Prunus persica) is the most important among the stone fruit and is temperate in nature. It is considered the native of China and probably developed in Persia. (Jahan and Khan, 2008). Peaches and Nectarines are vital fruits and are among the two to three top fruit produced in Khyber Pakhtunkhwa. The area of peach fruit is increasing for the last few years. This is mainly because of its economic value, introduction of improved peach cultivars, prolong bearing season, adaptation with the climate and abundant water application sources, skillful farmers of the area, technically sound experts in the area etc. That is why there is a meaningful change in production but also in area of peach crop. Planted area has also been increased from 3211 acres in 1999-00 to 15314 acres in 2008-09. Sufficient and excessive quantities of various fruits and vegetables are grown and produced in Pakistan for its local needs and markets. It is high time for federal Government to initiate several steps to channelize these abundant quantities of fruits and vegetables in international market for export and fetch higher returns to the country and thus to accomplish this important assigned task. (Ahmad. et,al 1994)
Adalat Khan and Munir Khan, Costs of production and marketing of peach in swat 278 The Peach fruit production and marketing may be considered as series of actions and activities during the crop husbandry and after harvesting to the end user. The low level of growth in fruit production in general and peach fruit production in particular shows that the benefits for the growers should be increased for fruit produce which is less. (Akçay and Meral. 2005) Government of Khyber Pakhtunkhwa 2009-10 Table 1 District wise peach areas and production in Khyber Pakhtunkhwa Name of district Area in acre Production in tons Swat 9263 17625 Mardan 924 3617 Haripur 294 1018 Buner 272 1066 Upper Dir 245 891 Peshawar 200 930 Nowshera 185 750 Charsada 156 679 Orchard owners and farmers usually consider the agricultural input prices or costs as routine helplines to evaluate the successes or otherwise in their fruit orchards farming. The costs of agricultural raw materials are classified into two categories namely variable and fixed costs. The variable costs consist of chemical fertilizers, chemical pesticides, casual hired labour, farm machinery, tractor, other tools and interest rate on working capital. The fixed costs include interest on investment, depreciation of assets, payment of utilities, storage for equipment, insurance payments, purchases and repair of farm vehicles and other maintenance costs of all moveable and non-moveable assets. Marketing of farm products in Pakistan in general and fruit in particular varies from commodity to commodity and market place to place is characterized by the presence of numerous intermediaries performing at various distribution stages, thus adding to marketing costs and directly affecting the price received by the farmers and paid by the consumers The peach fruit is highly perishable in nature. The quality of this commodity begins to deteriorate from the moment of harvest and continues throughout the marketing process. It is common perception among the fruit growers that the production per hectare is less in our country as compare to the advanced and developed nations. There are many factors limiting the profitability of cultivation of fruit orchards such as yield, input costs, availability of marketing facilities and absence of any incentive from the government to the peach growers. Other parameters like land, environment of the locality, weather conditions and the location where buying and selling take place may also affect the profitability of growing fruits orchards (Bakhsh, 2006). Objectives of the Study 1. To estimate the costs of production and marketing of established peach orchards in Swat, Khyber Pakhtunkhwa. 2. To find out the per acre profitability of peach orchards in the area. 3. To identify the major constraints if any in Peach Production and Marketing in the study area. MATERIALS AND METHODOLOGY The study was conducted in district Swat Khyber Pakhtunkhwa where peach is the leading fruit crop among the fruit crops /orchards of all categories. Five (5) villages from the Swat district were selected based on more peach fruit plants, large number of practicing peach growers and orchard owners in these villages, which were Barikot, Charbagh, Khwaza Khela, Matta and Kabal. The data about peach crop for the year 2010-11 was collected through well-structured interview schedule from two hundred and seventy (270) randomly selected peach growers in the study area. The respondents were interviewed about their peach crop, the production and marketing costs, profitability from the fruit / crop and major constraints in the production and marketing.
Sarhad J. Agric. Vol. 30, No. 2, 2014 279 Analytical Frame work for Production and Marketing Costs (i). Production Cost: c n i1 Ci ------------------------------------- (i) Here, P c = Sum of Peach Production Costs of the different activities. C i = Costs of the activities carried out in peach fruit orchards including farm yard manure, labour used for application of FYM, hoeing, pruning, pesticides sprays, labour used for pesticides application, fertilizers, labour used for fertilizer application and labour charges for irrigation. (ii). Marketing Cost: c n i1 Ci ------------------------------------- (ii) Here, M C = Sum Cost of shifting of the peach produce. C i = Cost of the commodities incurred by peach growers during the marketing of peach product up to the end user as costs of empty cartons, picking & grading, decoration materials, transportation, loading & unloading and other market charges. RESULTS AND DISCUSSION Various agriculture activities were carried out in peach production and Table 2 shows peach production activities and their costs incurred on these activities which were pesticide sprays, labour applied for the pesticide sprays, farm yard manure, labour for its application, labour for hoeing, pruning, fertilizers and labour for fertilizers application and labour for irrigation application. The per acre costs of these activities were Rs. 8400, Rs. 2400, Rs. 5600, Rs.1200, Rs. Rs.1800, Rs.1500, Rs.11100, Rs. 900 and Rs.1200 respectively. Among all the production activities, maximum amount of Rs. 11100 per acre was spent on fertilizers followed by pesticides spray cost of Rs. 8400. The overall average peach production cost per acre was Rs. 34100 Table 2 Average Peach Production Costs per acre in the study area Name of Activities No/ Qty. of Agri. Av. Price per unit Total Cost in Rs. inputs in Rs. Cost of Pesticides 8 No 1050 8400 Labour Cost for Pesticides application 8 No 300 2400 Cost of FYM 140 donkey loads 40 5600 Labour Cost for FYM application 4 300 1200 Labour Cost for hoeing 6 300 1800 Labour Cost for pruning 3 500 1500 Cost of different Fertilizers 6 bags 1850 11100 Labour Cost for Fertilizer application 3 300 900 Labour Cost for Irrigation 4 300 1200 Total 34100
Adalat Khan and Munir Khan, Costs of production and marketing of peach in swat 280 There were some important post picking and marketing activities and Table 3 reflects these major activities involved in marketing of peach fruit in the study area which were purchase of empty cartons, cost of picking and grading, cost of decoration materials, transportation and market charges or commission agents charges. The costs per acre of these activities were Rs. 29095, Rs. 8800, Rs. 10439, Rs. 24035, Rs. 5060 and Rs. 17526 respectively. The highest cost per acre among the marketing activities was Rs. 29095 of purchase of empty cartons and followed by Rs. 24035 of transportation cost of different peach varieties from farm to different national markets. The average peach marketing cost per acre was Rs. 94955 for all the marketing activities. Table 3. Marketing Costs of Peach fruit per acre in the study area Name of Activities/items No/ Qty. of Agri. Av price/ unit in Rs Total Cost in Rs Per Acre Inputs Cost of Empty cartons 1265 Cartons 23 29095 Labour of picking and grading 22 Nos 400 8800 Cost of decoration materials lump sum - 10439 Cost of transportation 1265 Cartons 19 24035 Cost of loading & un loading 1265 Cartons 4 5060 Commission agents charges @ Rs. 8 per cent of total sale 17526 Total 94955 It was noticed that producing peaches have been enhanced in the study area as potential and progressive producers search for profitable crops to grow on their land. Peaches are commercially produced in the areas of district Swat that have the environmental features necessary to produce high quality Peaches. A sizeable investment is required to establish and develop a Peach orchard. The study revealed in Table 4 that the average total revenue per acre of mid-season peach variety (Sohani) was the highest Rs. 338333 with 851 numbers of carton production followed by early season peach varieties Carmen and Early grand with Rs. 266513 and Rs. 266109 respectively. The overall average total revenue from peach orchard per acre was Rs. 250510. The average net profit per acre from peach orchard was pointed out Rs. 124860 after deducting the production Rs. 32943 and marketing costs Rs 92706.59. Table 4. Average Revenue per acre from different Peach Varieties in the study area during 2010-11 Name of Peach Varieties sown Av. Yield/ Acre in Cartons (8kg) Av. Price per Carton in Rs. Av. Revenue per Acre Early Grand 898 Cartons 296 Rs. 266109 Spring Crest 936 Cartons 255 Rs. 239391 Carmen 878 Cartons 304 Rs. 266513 NJC 84 916 Cartons 311 Rs. 248904 Elberta 1018 Cartons 239 Rs. 243410 Sohani 851 Cartons 398 Rs. 338333 Maria Delezia 843 Cartons 383 Rs. 238457 Indian Blood 1167 Cartons 207 Rs. 241328 Total 938 Cartons 267 Rs. 250510 It was revealed from the study as shown in Table 5 that 50% respondents in the area were facing high cost of all agriculture inputs namely fertilizers, pesticides, empty cartons and packaging materials etc. 45 % peach farmers considered high perishability nature of peach fruit is big problem as this fruit cannot be stored for long period while 45% respondents have also pointed out that they were facing financial resources constraints and fulfilling their need from taking loans from the middlemen. 40 % peach farmers in the area have reported major constraints high cost of transportation of their product to the national level markets namely Peshawar, Rawalpindi and Lahore etc. 33 % respondents were facing pests, diseases and natural calamity problems due to severe weather and other unfavorable conditions. Similarly 30 % farmers have also reported high price fluctuation of the product in all market is a major problem in their marketing. 25% peach growers were not knowing exact the market information about prices and supply and they were total dependent on the commission agents in the big markets.
Sarhad J. Agric. Vol. 30, No. 2, 2014 281 Table 5. Major Constraints in Peach Production and Marketing Name of Constraints No of Respondents Percentage (%) High costs of Agri. Inputs 150 50 Perishable nature of Product 135 45 Lack of financial resources 135 45 High transportation cost 120 40 Pests and natural calamity attack problem 99 33 Price fluctuation in markets 90 30 Lack of market information system 75 25 CONCLUSION AND RECOMMENDATIONS The study was conducted in five villages of district Swat Khyber Pakhtunkhwa namely Barikot, Charbagh, Khwaza Khela, Matta and Kabal. It was aimed to estimate the costs of peach production and marketing, its profitability and major constraints in production and marketing of peach fruit. 270 peach growers were randomly selected as respondents through proportional allocation technique. The costs were estimated through applying production and marketing cost model. The results showed that the average production and marketing costs per acre were Rs. 34100 and Rs. 94955 respectively. The major components of production cost were expenditures on the purchase of various fertilizers, followed by the cost of pesticides and their application. The major part of marketing cost was the expenditures on the purchase of empty carton, followed by the transportation cost of the peach fruit from farm to national level markets. The average revenue of peach orchard per acre was Rs. Rs. 250510 while net profit from the orchard was Rs. 121455 which is higher than the income from vegetable and cereal production. Major constraints were lack of financial resources, high cost of agriculture inputs, perishable nature of the produce, pests and natural calamity attack, lack of market information, price fluctuation in national markets and high transportation cost. Following suggestions are to improve the profitability of peach production and marketing for the producers in the study area: REFERNCES High yielding and disease resistance peach varieties should be introduced in the study area. Post-harvest losses in peach fruit during the peak season may be reduced by value addition by infrastructure development and processing facilities. New and potential export markets should be explored for fetching highest returns to the peach growers. The agriculture inputs may be provided on reasonable rates during growing season. Financial support in form of production loans at lower interest rate may be started. Technical guidance and knowledge of the growers should be enhanced through regular trainings and exposures to institutions. Ahmad, B., M. A. Chaudhry, and S. Hassan, 1994. Cost of producing major crops in Punjab. Deptt. Farm Management, University of Agriculture, Faisalabad, Pakistan. Akçay, Y. and U. Meral. 2005. An Investment Analysis of Peach and Cherry Growing in the Middle Black Sea Region of Turkey', J. Agric. Food Info. 7(1): 57-65 Bakhsh, B., I. Hassan and S. Akhter, 2006. Profitability and cost in growing mango orchards. J. Agric. Soc. Sci. 2: 46 50 Gangwar.L.S; S. Dinesh and G. Mandal. 2008. Economic Evaluation of Peach Cultivation in North Indian Plains. Agricultural Economics Research Review Vol. 21 January-June 2008 pp 123-129. GoKP 2010-11. Agricultural Statistical Data of Crops. Crop Reporting Services Department Khyber Pakhtunkhwa Peshawar.
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