Food Loss Solutions for Tomato and Mango Chains

 

By Dr Aneela Afzal (Associate Professor Agricultural Extension)

 

Pakistan’s agriculture sector, particularly tomato and mango value chains, continues to face significant post-harvest losses. Drawing on findings from the Australian Centre for International Agricultural Research (ACIAR) supported project on food loss mitigation in Pakistan and Sri Lanka, experts are now emphasizing sustainable, business-oriented strategies to strengthen agricultural SMEs and empower women farmers.

 

 

Agricultural small and medium enterprises (SMEs) form the backbone of Pakistan’s rural economy. However, they face persistent structural and financial constraints.

 

One major issue is diseconomies of scale and scope, as small farm sizes limit cost efficiency and value addition. Most SMEs also struggle with limited capital, and even when financing is available, they are often unable to raise funds at competitive rates.

 

Additionally, many agricultural enterprises lack managerial and technical expertise, as well as proper accounting and tax compliance knowledge. This restricts them to operating within the informal economy. As these SMEs attempt to transition into the formal sector, they face another hurdle: moving from a zero-tax informal status to standard SME tax rates, which can be financially discouraging.

 

 

Globally, cooperative models have proven effective in addressing such challenges. A cooperative brings together multiple small producers—sometimes millions—who pool resources, consolidate produce, and gain access to professional management and technical expertise.

 

This structure improves bargaining power, reduces costs, and makes raising capital—both debt and equity—easier and more affordable.

 

India’s Amul Dairy is a prominent example. With over 12 million farmer members, primarily in Gujarat, Amul has transformed smallholder dairy farming into a globally competitive enterprise. Similarly, SEWA (Self-Employed Women’s Association) demonstrates how women-led cooperatives can thrive at scale.

 

In Pakistan, institutions such as SMEDA can play a facilitative role in developing cooperative frameworks while maintaining an arm’s-length position from day-to-day management to ensure professional governance.

 

 

The ACIAR project has also highlighted the growing importance of gender-responsive agricultural support.

 

Demographic shifts in Pakistan—particularly male out-migration from rural to urban areas—have resulted in women assuming greater responsibility in farming. However, cultural norms, limited access to extension services, and financial constraints continue to restrict their productivity.

 

Encouragingly, several corporate entities have recognized this gap and initiated targeted gender inclusion programs.

•Fatima Fertilizer through its Tabeer Program

•ZTBL via its Women Inclusion Program

•Bayer under its Female Farm Support Initiative

•Nestlé Pakistan through its Creating Shared Value framework

 

These initiatives aim to enhance women’s technical knowledge, improve farm productivity, and integrate female farmers into modern value chains.

 

 

Experts underline that government support remains critical in ensuring sustainable outcomes.

 

1. Female Extension Workers:

Given Pakistan’s cultural context, particularly in rural areas, the presence of female extension workers in both crop and livestock sectors is essential. Companies like Nestlé and Bayer have already demonstrated success by employing predominantly female field staff, enabling effective engagement with women farmers at the household level.

 

2. Tiered Taxation and Incentives:

A tiered income tax structure for agricultural SMEs could ease the transition from the informal to the formal economy. While the current lowest SME tax slab stands at 7.5 percent of taxable income and 0.25 percent of gross revenue, newly formalized enterprises may require significantly lower initial rates—potentially below 5 percent.

 

However, reduced tax rates alone may not be sufficient. Incentives such as access to cheaper financing lines (including schemes like the Prime Minister’s Youth Program), preferential access to government procurement, and relief on withholding and sales taxes could encourage greater formalization.

 

Currently, many informal SMEs indirectly pay taxes through electricity bills under categories such as Income Tax, Further Tax, and Extra Tax. A practical starting point could be exempting tax-compliant SMEs from these withholding taxes to create tangible benefits for formalization.

 

Way Forward

 

The ACIAR project’s findings make it clear that reducing food losses in tomato and mango value chains requires more than technical fixes. Sustainable progress depends on institutional reforms, cooperative business models, gender-inclusive policies, and smart fiscal incentives.

 

By integrating cooperative frameworks, corporate gender initiatives, and supportive government policies, Pakistan can significantly reduce food losses, improve SME competitiveness, and ensure inclusive agricultural growth.

 

As the country seeks to strengthen its agri-food systems, these evidence-based strategies offer a roadmap toward a more resilient and equitable rural economy.