AN ESTIMATION OF MARKETING MARGINS IN THE SUPPLY CHAIN OF TOBACCO IN DISTRICT FAISALABAD, PAKISTAN

This paper attempts to estimate marketing margins of major intermediaries involved in the supply chain of tobacco in Faisalabad district using primary data. Formal interviews were conducted from a representative sample of 80 farmers, 40 wholesalers and 40 retailers that represent middlemen in the supply chain of tobacco. Findings of the study indicated, wholesalers earned Rs.11 and Rs.18 per kilogram as net margin in the case of tobacco choora and tobacco rope respectively. Similarly the net margin of retailers was estimated as Rs.23 and Rs.17 per kilogram for choora and rope types of tobacco respectively. High marketing margins beyond the limits is just the exploitation for the tobacco farmers as well as consumers. The government should adjust the marketing margins to a reasonable level in order to smooth facilitation of the marketing functions in the tobacco supply chain.