Beyond Subsistence: Linking Citrus Smallholders to High-Value Markets for Sustainable Supply Chain Development in Pakistan

Abstract

Recent evidence suggests that Modern Supply Chains (MSC) in the agrifood industry have the potential to improve production efficiency and scale. However, the inclusion of smallholders for Sustainable Supply Chain Development (SSCD) is a growing concern for policymakers aiming to increase the profitability of farming communities. This study investigates the efficiency and inclusiveness of farmers in the citrus supply chain at the upstream level and factors responsible for SSCD using survey data from the Punjab province of Pakistan. The study employs endogenous treatment effect and principal component analysis apart from the descriptive analysis to explore study objectives. Results indicate that large farmers with abundant resources tend to participate in MSC, whereas smallholders are more likely to be inclined to Traditional Supply Chain (TSC) networks. The study also finds that participating in MSC has a positive impact on farmers' efficiency, and factors such as off-farm income, orchard size, education level, and access to extension services significantly affect profitability. The results of the principal component analysis revealed that for SSCD, six sets of factors, such as performance and quality, risk and climate, economics and market exploitation, knowledge and information, geographic and transportation, and innovation capability, are addressable. Therefore, these results suggest that policymakers should provide training programs, agriculture extension services, improved infrastructure, and educational facilities in rural areas to help smallholders alleviate poverty by creating sustainability in the agri-food industry.