- Investments in modern farming and processing technologies can transform red chili industry
As a crop, red chili has a distinctive recognition globally due to its natural flavor, pigments, colour, food additive properties, and pharmaceutical uses. It is an important horticultural crop consumed as a spice in various forms, including fresh, dry, powder, paste, or as a sauce. Across the globe, Chilies are mainly cultivated in tropical and sub-tropical countries with warm, humid climates. It is a rain-fed crop, allowing it to be grown in all soil types, but sandy and clay loams with proper drainage are best suited for its optimum cultivation.
The red chili is considered an important cash crop and holds significant status in Pakistan. Its cultivation and trade contribute to supporting rural livelihoods, improving food security, and earning export revenues. The agro-climatic conditions of Pakistan allow the cultivation of chilies as a significant cash crop in all four provinces of Pakistan, including Punjab, Sindh, Khyber Pakhtunkhwa, and Balochistan. In 2022-23, chilies were grown on 48.7 thousand hectares with a production of 109615 tonnes (Table 1), with an average yield of 35-50 maunds per acre. Among all the provinces, Sindh is the leading chilies-producing province followed by Punjab, Balochistan, and Khyber Pakhtunkhwa. Historically, the chilies-producing cluster in Sindh was considered Asia’s largest red chili trading market.
Table 1: Chilies Production and Area under Cultivation | ||
---|---|---|
Year | Production (tonnes) | Area under cultivation (Hectares) |
2018-19 | 129643 | 47349 |
2019-20 | 141541 | 60752 |
2020-21 | 105401 | 46805 |
2021-22 | 144160 | 58189 |
2022-23 | 109615 | 47870 |
Source: Ministry of Food Security and Research (MNFSR, 2023), Government of Pakistan. |
Due to its unique flavor, aroma, and taste, Pakistani red chili has earned a reputation and demand in foreign markets. Pakistan is the sixth largest chili-producing country after India, China, Thailand, Ethiopia, and Bangladesh, supplying around 7.2% of the international market. Pakistan’s red chili exports totaled 2,053 metric tons and generated 4.3 million USD in income. The exports included whole chilies, chili seeds, and powdered chilies. Most exports consisted of whole chilies mainly exported to Saudi Arabia, the United Arab Emirates (UAE), and Mexico. Other significant markets included Iraq, Kuwait, and Afghanistan.
The red chili industry in Pakistan comprises various stakeholders, including producers, traders, processors, and exporters, who are interconnected through various value chains. These value chains generate employment opportunities across the production, processing, and distribution phases. Different types of value chains operate within Pakistan’s red chili industry and can be broadly classified as local and export chains. The traditional value chain primarily addresses the demand of local markets, while the export value chains are more export-oriented. Along with the other agro-industry that have modernized in general, red chili also has improvisation in its value chain(s) through the adoption of better crop management practices, post-harvest management, and value. This has resulted in various processed and value-added products such as sauces, paste powder, flakes, oil, spice mixes, etc. However, Pakistan is still not at par with its competitors such as India and China.
Despite having immense potential, the red chili industry in Pakistan is confronted with several inefficiencies hindering its marketability, profitability, and productivity. The value chains within the industry are fragmented and dominated by small-scale growers who are resource-constrained. These small-scale growers have limited access to modern agricultural technology and high-quality inputs, including seeds, fertilizers, pesticides, and financial scarcity. Their traditional practices result in low yield and poor quality, which directly impact the productivity and marketability of red chilies. The limited availability of extension services and inadequate post-harvest infrastructure, including drying, storage, and processing facilities, aggravate post-harvest losses which significantly reduce the competitiveness and stakeholders’ performance.
The stringent red chili quality assurance requirements often challenge Pakistan’s ability to meet international quality standards. Contamination issues such as aflatoxin due to poor drying and storage techniques are the major constraints on red chili exports. Inadequate emphasis on research and technological development, and the changing climatic conditions have negatively impacted productivity and quality. Inadequate training programs, weak institutional support, poor credit access, and a lack of a robust marketing strategy are also important causes of the sluggish export growth of red chilies. Unnecessary intermediaries along the value chain further reduce the returns to red chili producers.
A stakeholder-centric strategy is crucial to overcoming these challenges. High-yielding and disease-resistant varieties of red chilies are urgently needed to improve productivity and quality. This would require an investment in research and development. There is also a need to increase resource use efficiency and crop quality by promoting modern agricultural technologies and practices such as drip irrigation, integrated pest management, and precision agriculture. Efforts are needed to promote the farmers’ cooperatives and producer organizations, particularly among smallholders. This would enable them to pool resources, lower input costs, and increase their market negotiating powers with buyers. To meet international standards and quality farmers must be trained for quality certification, post-harvest management practices, and other modern farming techniques
To compete in the international red chili market, which is highly competitive and is dominated by large producing countries such as India and China, better quality management systems, well-established chains of production, and other value-addition capabilities are needed. Investments in cutting-edge drying, storage, and processing infrastructure must be made to reduce post-harvest losses and to increase value addition. The introduction of traceability and quality certification systems will not only help to comply with international standards but also increase market access and customer satisfaction. Public-private partnership (PPP) ventures to develop a cluster of export-oriented firms can also help improve competitiveness in international markets.
The private sector must be taken on board to invest in processing plants, post-harvest management infrastructure, research, and marketing that can create a win-win situation for all. Promoting innovation and entrepreneurship within the red chili industry can ensure long-term competitiveness. Small and medium enterprises (SMEs) should be encouraged to capture value-addition opportunities, such as producing chili powders, oils, sauces, and other red chili products in higher demand in international markets. and transparency among the value chain actors and stakeholders. In conclusion, all these measures are needed to foster competitiveness within the red chili value chains which will in turn substantially increase the socio-economic contribution of the red chili industry in the economy of Pakistan.
Muhammad Talha Azeem (mtazeem@uok.edu.pk) is a PhD (Agribusiness) Student at the Institute of Business Management Sciences, University of Agriculture, Faisalabad.
Dr. Hammad Badar (hammad.badar@uaf.edu.pk) is an Associate Professor at the Institute of Business Management Sciences, University of Agriculture, Faisalabad