Research Article

Resource Use Efficiency in Dates Production in Sindh Pakistan

Waqar Akhtar1*, Munir Ahmad2, Nadeem Akmal1, Hassnain Shah1 and Asif Ali Mirani2

1Social Sciences Research Institute, National Agriculture Research Center (NARC), Pakistan; 2Agricultural Engineering Division, Pakistan Agriculture Research Center (PARC), Pakistan.

Received | April 11, 2019; Accepted | May 08, 2019; Published | June 17, 2019

*Correspondence | Waqar Akhtar, Social Sciences Research Institute, National Agriculture Research Center (NARC), Pakistan; Email: viqars71@gmail.com

Citation | Akhtar, W., M. Ahmad, N. Akmal, H. Shah and A.A. Mirani. 2019. resource use efficiency in dates production in Sindh Pakistan. Pakistan Journal of Agricultural Research, 32(3): 416-421.

DOI | http://dx.doi.org/10.17582/journal.pjar/2019/32.3.416.421

Keywords | Resource use efficiency, Dates, Policy analysis matrix, Competitive advantage, Comparative advantage, Private Cost Ratio (PCR)

Introduction

Pakistan Horticulture Sector is promising sub sector of agriculture economy of Pakistan with great potential of multiple employment opportunities throughout the supply chain and increasing export earnings. Lack of value addition, under developed value chains and limited market opportunities remained a foremost post-harvest management challenge of horticulture sub sector in the country. Now it is well recognized fact that due to issues in post-harvest management of horticulture sector post-harvest losses ranges from 20-40% of fresh produce. There is also lack of storage facilities and efficient marketing system in agriculture commodities which allowed large number of market actors involved in shifting agricultural produce from growers to consumers (PHDEB, 2008; Mohy-ud-Din and Badar, 2011).

Date Palm (Phoenix Dactylifera L.) is a most important food for human in number of countries of the world particularly in tropical and subtropical regions. Dates Palm recognized as important domesticated fruit trees because of its implications in human societies, productive capacity in arid environment and continued an important agricultural activity in many countries which improves foreign exchange earnings for them (Lemlem et al., 2018). Date palm as a labor intensive industry contributes in income generation and also contributing in food security of many countries (Hodder and Hodder, 2016). It has also strategic importance in development of the some countries (Amor et al., 2015). The date sector is one of the most important activities in Arabian Peninsula (Dhehibi et al., 2018). Agricultural resource use efficiency in the Middle Ghors region in Jordan can be enhanced with the planting of Medjool date palm because dates have comparative advantage(Altahat, 2015).Pakistan is among top six date producers in world. Due to post harvest management issues in dates the quality remained low and a portion remained uneatable for human (El-Sayed et al., 2002).

Date farming occupied a prominent position in some parts of Pakistan. Sindh province of Pakistan is top dates producers with 60 percent of the country produce. District Khairpur and Sukkurproduce 97 percent of Sindh production and about 46 percent national production. Ecological and livelihood importance of date palm cultivation is well recognized where it is grown traditionally (Hodder and Hodder, 2016). Increasing resource use efficiency becomes critical issue on the policy agenda for enhancing overall competiveness of the domestic resources and its measurement (Masters and Winter-Nelson, 1995). Competitiveness mean secures efficiency in domestic resource use in production of commodity in the global context.

Based on the post-harvest processing, Pakistan produced two distant products i.e. fresh dates and dried dates (Chohara) in study area. Due to the importance of the commodity this research assesses farm level resource use efficiency of date’s production and processing system with the motivation by two reasons: the interest in knowing the differences between the competitive advantage in both the commodities i.e. fresh dates and dried dates on the profitability and efficiency of this production and processing system. Competitiveness of agriculture covers a number of factors includes exchange rate, relative prices of inputs and outputs and cost of production (Dohlman et al., 2003).

Pakistan ranks among the five largest exporters of dates (FAO, 2018). During the period under analysis Pakistan was the net exporter of dates (GOP, 2016). Due to the importance of the commodity this research assesses farm and national level resource use efficiency in date’s production system (for fresh and dried dates).

Material and Methods

This research uses primary farm level data on inputs and outputs variables collect from dates fruit catchment area Khairpur and Sukkur Districts, Sindh through structured questionnaire from 114 dates farmers randomly selected. On the basis of operational holding the farmers were categorized into small (<12.5 acre), medium (12.5<25 acre) and large(≥25acre). The secondary data was collected from different national and international sources. To address the resource use efficiency issue in the study area a comparison of three farm size levels (small, medium, large) and two dates products (i.e. fresh dates and dried dates) were included in the analysis.

Resource use analysis at farm level was conducted by using the methods of (Monke and Pearson,1989). The required ratios were deduced from PAM framework to measure the farm level resource use efficiency of the date’s products in the target area. In recent past number of studies used this analysis (Akhtar, et al., 2016; Akhtar et al., 2007; Khan and Akhtar, 2006). The input and output of dates farming in PAM framework are divided into two systems the tradable and non-tradble variables as suggested by (Monke and Pearson,1989; Appleyard, 1987)

The PAM model provides different indicators which are practicable to assess resource use efficiency at farm and national level of any farming system, these are as under.

Private profitability D=A-(B+C)

Represent private efficiency and it indicates how much one can afford to pay domestic factor and still remained competitive (Monke and Pearson,1989).

Table 1: Policy Analysis Matrix (PAM) Framework.

Table 2: Resource use efficiency in dates farming in Sindh.

Table 3: Protection coefficient and incentive of dates production in Sindh.

EPC measures the effect of intervention both in input and output market. EPC is the ratio of value added measured at market prices (A-B) to the parity prices(E-F). An EPC >1 suggests the government policies market scenario provide positive incentives to producers or net subsidy to value added (Beghin and Fang, 2002), while EPC<1, indicates that producers are dis- protected effect of all policies and market failures effects.

Domestic resource Cost=G/(E-F)

DRC is extensively used in developing countries to measure efficiency of domestic production in term of international cost competitiveness or comparative advantage. It reflects the domestic resource efficiency of the farming system at efficiency prices. DRC ratio is defined as the shadow value non-tradable factors inputs used in any activity per unit of tradable value added. DRC indicator showed that whether the use of domestic factor is alternatively profitable(DRC<1) or not (DRC>1).

Private cost ratio=C/(A-B)

Resource use efficiency of cost competitiveness at farm level can be measured through PCR. This measured is used to evaluate competitiveness at farm level of any agricultural commodity. (Joubert and van Schalkwyk, 2000) argued that PCR is a measure which tells how much cost the sector can afford to pay for domestic factors of production and still remain competitive. If the value of PCR <1, then the system will be competitive. In this research competitiveness is the ability of the Date palm growers to produce and process a product at so low cost that the production activities are profitable at the market prices or it survive in domestic market it is also a measure of competitive advantage. All the ratios are interlinked in the framework of policy analysis matrix.

Results and Discussion

The date growers were divided into three categories to facilitate a detailed analysis. The results of random sample distribution showed that in the sample there was 79 percent small, 11 percent medium and 10 percent large farmers. In the study area from date fruitthere were two types of dates products were processed by primary processing i.e. fresh dates dried date. The harvesting season of dates in the study area clashes with the monsoon rains. To avoid the monsoon rain damage the farmers harvest fruits at khalal stage (before ripening) to make dried dates (Chohara) through the process of boiling and sun drying this practice is induced by risk reduction is done by processing of commodity into dried dates to secure something out of produce rather facing a great loss. This also implicates that there is lack of appropriate dates drying/processing technologies which result a large portion of the dates commodity (84 percent) is processed into dried dates and only 16 percent of the farm produced was converted into fresh dates. The result revealed that all farm categories attained positive private profitability both the dates products under study. This finding argues that the date’s production system has secure competitiveness at farm level. However fresh date product has secured more competitiveness with less PCR value 0.62 as compared to dry dates with PCR value 0.75. This result also showed economy of scale in the processing of fresh dates. The DRC or comparative advantage indicator is less 1(0.39) for fresh dates and 1(0.72) for dried dates, which means that the production and processing of both products secure resource use efficiency has a comparative advantage. Fresh dates have more efficiency in the use of domestic resource as compared to dried dates. Farm size has little bit influence in resource use efficiency. However, the extent of indicators implicates low level of competitiveness and resource use efficiency far below its potential.

Nominal Protection Coefficient (NPCs) was 0.64 on fresh dates and 0.98 on dried dates less than 1. This implicates that there is implicit taxation on output for both products however fresh dates face more dis-protection as compared to dried dates. Similarly, EPCs were less than 1(0.63), implying that the combined effect of transfers and tradable inputs is reducing the private profitability or competitiveness of the fresh dates. It implies that under the existing market conditions, there is a net disincentive to producers of fresh dates in the study area. It is obvious that government policy has impact on prices of inputs and outputs, farm profitability, resource use efficiency, technology and trade variables this all come under policy environment. Negative value of output transfers(OT) revealed that dates producers are not protected and resources are coming out from commodity system to economy through policy environment and market conditions. Negative values of input transfer (IT) revealed that producers received a subsidy on cost of tradable inputs but it could not offset the dis-protection in the commodity system. Therefore, the overall impact of the policy was not in the favor of the producers.

Conclusions and Recommendations

Dates production system in the study area is resource use efficient at margin based on the current level of technology, prices of inputs and outputs and policy environment. However, fresh dates had more efficiency as compared to dried dates. The study also indicates that there is presence of economies of scale in the prevailing production system of dates. However overall the system has low level of resource use efficiency at farm and national level as only 16 percent of the farm produce was converted into fresh dates which was relatively more resource use efficient product as indicated by estimated ratios i.e. PCR and DRC in this research. A number of factors i.e. high post-harvest cost, low quality and low level of price are the sources of low level of resource use efficiency in dried dates. Protection coefficients determined through this research revealed that policy environment or prevailing market conditions had no positive impacts on dates growers and its even reduced competitiveness of date’s production at farm level. This situation reflects policy distortion because prices of inputs, output and trade variables are sensitive to government policy. Protection coefficient reveled that growers bear negative incentives in the production and marketing of both products in the present policy scenario. This implicates that under free trade, producers of dates could make more profit in contrast to the existing policy environment. Farmer’s incentives can be enhanced by removing existing implicit taxation by policy support. Post-harvest technologies for processing and value addition in the date fruit is recommended to enhance overall efficiency of the dates production system in the study area.

Author’s Contribution

Waqar Akhtar: Conceived the idea, overall management of the article, initiated and finalized the paper.

Munir Ahmad: Provided technical input, supervised the research work, provided technical input at every step.

NadeemAkmal: Data analysis, technical input.Hassnain Shah: Technical Input, Write up.

Asif Ali Mirani: Data collection and References.

Acknowledgments

The authors gratefully acknowledge funding support from the SAARC Development Fund(SDF) in data collection under the project title Post-harvest Management and Value Addition of Fruits in Production Catchments of SAARC Countries (Pakistan Component).

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