Pakistan's Mandi System Blocks Tech Disruption in Agriculture

According to The Express Tribune, industry analysts say that although digital marketplaces and quick-commerce services are expanding in Pakistan's major urban centres, their presence in the fresh produce trade remains extremely limited.

Most fruits and vegetables still pass through conventional wholesale markets where commission agents largely determine trading volumes and pricing.

Growers' representatives believe that online platforms currently account for only a tiny share of the total produce trade.

Sindh Abadgar Board (SAB) President Mahmood Nawaz Shah recently stated that digital platforms handle only around two to three per cent of Pakistan's fruit and vegetable supply.

He argued that the broader structure of the market makes it difficult for technology companies to significantly disrupt the system.

A major obstacle lies in the regulatory framework governing agricultural trade. Under provincial laws commonly referred to as the Market Produce Act, fruits and vegetables must be traded within officially designated wholesale markets.

These markets operate under government-controlled committees, which effectively centralise large-scale trading in specific locations and maintain the traditional mandi system.

Within this system, commission agents play a dominant role. They often provide farmers with advance credit for crop production and, in return, require growers to sell their harvest through them.

Farmers say this arrangement traps them in a cycle of dependency, limiting their bargaining power and keeping them tied to the same intermediaries year after year.

Infrastructure constraints further strengthen the hold of the mandi network.

Karachi, with a population exceeding 20 million, relies primarily on a single wholesale fruit and vegetable market covering roughly 100 acres, as cited by The Express Tribune.

Farmer groups argue that such limited infrastructure concentrates trading power and restricts competition within the supply chain.

While technology firms claim that digital procurement systems, cold-chain logistics and direct sourcing could improve efficiency and reduce waste, experts believe real change will require regulatory reforms and stronger investment in agricultural logistics, as reported by The Express Tribune.

- ANI