MDF partners with chili business to revamp one of Pakistan’s largest horticulture industries
By Aimen Butt
MDF Pakistan has signed a partnership with spice company National Foods, to sustainably source and process high quality and export grade chilies in Sindh Province, in the countries South.
Pakistan is one of the largest producers of chili in the world with potential to be a large chili exporter in the international market. But problems related to chili cultivation and drying techniques has seen chili yields and quality deteriorate in recent years.
Local companies that previously exported chilies are now importing to meet demands for good quality products resulting in income losses for local chili farmers, who currently produce low yielding and poor quality chilies.
Chili production in Sindh is predominantly undertaken through sharecropping. Landless farmers work on land owned by a landlord and the cost of inputs along with income are shared equally by both. Chili is one of the main cash crops for farmers in Sindh, and improving chili production and farming is an important step to improving the livelihoods of many people in the region.
The three main challenges faced by chili farmers are the use of low yielding seeds, lack of access to modern farming practices and techniques, and the high levels of aflatoxin in locally dried chili, which don’t meet international export standards.
Aflatoxins are naturally occurring toxins produced by molds in chilies and other foods. High levels are carcinogenic and can cause cancer. Aflatoxin levels in chilies are regulated in many countries and international standards restrict producers in Pakistan from exporting to the international market.
Traditional practices by Pakistani producers of drying chilies on the ground can result in the produce being infested with high levels of aflatoxin. MDF is facilitating National Foods in providing geotextile sheets to the farmers to dry chilies on, allowing them to produce aflatoxin-controlled chilies that meet international standards.
To complement this effort, MDF has also assisted National Foods to extend technical support to farmers on improved harvesting and drying practices through services offered by field agents who work directly with the farmers and their crops.
To further strengthen National Food’s efforts in sourcing quality chilies, MDF is assisting National Foods in setting up a research, development and demonstration farm to improve the quality of chili seeds and to provide training on best production techniques that can be passed on to farmers.
For aflatoxin free chili, National Foods will pay a premium of PKR 15 per kg (14 US cents) incentivising farmers to produce the higher quality produce. National Foods will also buy the produce at the farmer’s doorstep, eliminating the transportation costs and commission payment to middlemen at the market.
Through joint investment between National Foods and MDF, National Foods targets to procure 580 tons of aflatoxin controlled chili for export by the end of 2016. National Foods is the first spice company in Pakistan to work on backward linkages to improve the quality of chili crop. Its success in penetrating the international market can pave the way for other spice companies to access the international market to follow suit.
Early signs of success are already evident through an increase in the incomes of 373 sharecroppers in 2014 and a further estimated increase in the incomes of 806 sharecroppers by the end of 2016. Additional temporary as and permanent jobs have already been created at National Foods and two field agents have been hired to work with farmers.