Market Access for Farmers: Electronic Trading platform

Pakistan’s current wholesale markets inadequately serve those who are interested in high-quality produce grown to specifications. The quality of the product is not preserved as the traditional markets lack the appropriate infrastructure and expertise. Non-transparent pricing is the norm because of the concentration of market power among certain intermediaries. The market mechanism does not reward quality, which does not provide the farmer with an incentive to invest in modern and efficient agricultural practices..

Based on the above assessment, PAC decided to bring together different contributors to the agricultural value-chain in order to build an e-Trading Platform where high-quality standardized agricultural products are traded. The e-Trading Platform for red chillies was officially launched in October 2015, where PAC was able to secure the involvement of three specialized partners in this market model: Agility Logistics, SGS Pakistan, and Pakistan Mercantile Exchange (PMEX). The services, which constitute this model—world class testing by SGS, warehousing by Agility, Trading Platform by PMEX, and facilitation/extension services by PAC—are covered by a transaction charge. Even with this transaction charge the sellers are making a higher profit at the e-Trading Platform as compared to traditional markets as they are getting better price, quick payment, and no unfair deductions. Red chillies worth US$ 1.2 million were traded during this pilot. Farmers and traders who used this facility have responded very positively and around US $9.9 million worth of red chillies have been traded through the e-Trading Platform since. PAC is now working on replicating this model for other crops as well.