The informal regulation of the onion market in

Nangarhar, Afghanistan
G. Minoia, W. Mumtaz & A. Pain
Afghanistan Research
& Evaluation Unit
The first of a series of studies part of the
SLRC_Afghanistan research programme that
will explore key activities rural people engage
with
Guiding questions:
How is economic life structured from the actors
perspective?
How to improve understanding of the diversity and
complexity of commodity markets?
How to drive more realistic policymaking?
Engaging with the view donors propose on
markets
lack of information on prices and lack of access to
credit preventing smallholder farmers from taking risks
and access markets
strengthening markets to combat opium poppy
cultivation supporting selected value chain production
(CARD-F, 2013)
Two other key dimensions regulating
agriculture commodity markets (other than
information flow)
Traders are setting the terms of the trade influencing
profits, investments and returns;
Exchanges are embedded in relationships related to
credit, networks and power.
Political and economic market place in
Nangarhar are closely intertwined - same
actors have prominent positions in each
market
Methodology: 2 rounds of fieldwork (56 + 14)
interviews
December 2013
21 traders, Jalalabad vegetable market,
8 traders, Peshawar vegetable market,
18 traders and farmers in Sukhrod, Rodat, Dar i Noor and
Bihsud districts.
February 2014
14 between traders in Jalalabad and Peshawar and Farmers in
Sukhrod and Rodat.
Why onions in Nangarhar?
Overlapping with SLRC_A political analysis;
One of the richer agricultural areas of Afghanistan, with low
altitude and relative reliable irrigation good potential for
agricultural based growth;
The onion cultivation has increased after the decline of opium
poppy cultivation as a response to a market opportunity;
Onions and Shallots are the 5
th
ranked commodity in the Afghan
exports to Pakistan (PAJCCI 2012);
Jalalabad is a key hub between the East and the West, a port
between Pakistan and Afghanistan;
Jalalabad onion traders
The sabji mandi of Jalalabad and its traders - Space allocation as
manifestation of power;
The key features of Jalalabad elite traders Key players over the
last decade Exile in Pakistan during the Russian invasion and
prosperity under Sherzai Governorate Still influencing the
regulation of cross border informal and formal taxation
Networks, language and family ties behind
the Pak-Afghan trade;
Social regulation and exclusionary practices -
Avoiding the potential for a competitive
market - Control over Torkham border
revenues;
Prices, Trust and Risks - Market
collusion in price fixing When is it
profitable to enter a market?
Conclusions
Information on prices is widely available but significance of
informal credit makes relationships critical.
Elite traders can maintain control of imp/exp, they can negotiate
over border revenues and keep traders in the districts in a
subordinated position.
Afghan traders in Peshawar made advantage of their refugee
status with benefits of traders in Jalalabad and of their Pakistani
counterparts.
The control of the onion market is deeply embedded in the social
relations within Jalalabad these structural dimensions of the
market are a constraint for smallholder farmers and traders.
there is evidence of some forms of risk taking in those niches
where the onion production is particularly favorable, where traders
have established connections with Kabul and Peshawar to avoid
patron-client relationships with the Jalalabad elite of traders.
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