A Diagnostic Analysis of the Role of Middlemen in Financing and Marketing of Agricultural Business: A Case Study of Potato Farmers in Punjab, Pakistan

The potato is the primary root and tuber crop globally, cultivated in over 125 nations and eaten daily by more than one billion people. Developing nations lead in worldwide potato production and distribution, since potatoes are crucial for smallholder food security owing to their cost-effectiveness and nutritional benefits. In Pakistan, the potato is a significant horticultural crop, mostly grown in Punjab, Khyber Pakhtunkhwa, and Balochistan, encompassing over 200,000 hectares and yielding over 5 million tonnes yearly. The crop plays a crucial role in rural lives, job creation, and national food security, while also facilitating exports to regional markets such Afghanistan, the UAE, and Sri Lanka. This research performed a diagnostic examination of the potato value chain in Punjab, emphasising the role of intermediaries in financing and marketing activities and their influence on various stages of the value chain. Data were analyzed by descriptive, inferential, and value chain methodologies to assess the responsibilities, costs, revenues, and profitability of farmers, commission agents, wholesalers, retailers, and consumers. Research indicated that commission brokers levied an average fee of 4–6.5% from both buyers and sellers, generating daily earnings ranging from PKR 39,155 to 44,029. Retailers obtained profit margins of PKR 5–10 per kilogramme, whilst consumers favoured medium-sized potatoes, paying an average price of PKR 48/kg, with significant price fluctuations across market channels. The mean expenditure for cultivating one acre of potatoes was around PKR 170,719, accompanied by a benefit-cost ratio (BCR) of 1.72, substantiating the crop's profitability despite elevated input expenses and intermediate fees. Identified key restrictions were restricted access to certified quality seeds, insufficient training in post-harvest management, price volatility caused by inadequate market knowledge, limited access to agricultural equipment during planting and harvesting, and the ineffectiveness of subsidies in reaching farmers. Market middlemen exploited producers, while market committees levied fees without offering sufficient facilities, resulting in inefficiencies and diminishing farmers' profits. The research highlights the need for specific legislative measures to enhance market transparency and the well-being of farmers. Recommendations encompass the implementation of electronic auction systems and local mandi platforms to mitigate exploitation, guaranteeing the availability of quality agricultural inputs, augmenting farmer training in post-harvest techniques, and facilitating direct market access to fortify the potato value chain in Punjab.