Understanding the arthi and the mandi
The commission agent is not simply a middleman. He supplies credit, guarantees payment and controls the scale — and replacing one of those three does nothing.
The Commission agent · brokerآڑھتیarthiSets the farm-gate price, controls weighing and payment.Glossary → is the most criticised figure in Pakistani poultry and the least understood. He is usually described as a middleman who takes a cut for doing nothing. That description is wrong, and believing it is why attempts to remove him keep failing.
What he actually supplies
Credit. This is the real product. Feed and chicks are bought on credit, and that credit is priced silently into the invoice rather than charged as interest. Formal bank lending reaches under 2% of the sector’s invested base — for most independent farms, dealer and arthi credit is the working capital.
Payment certainty. A buyer who collects birds and disappears is a catastrophe. The arthi stands between the farmer and that risk, and he is repeat-dealing with both sides, which is what makes the guarantee worth anything.
A scale, and a settlement. Someone has to weigh the birds and agree the number. In practice that someone is usually him.
Replace only the matching and you have replaced nothing. A farmer who finds a buyer online still needs the credit, still needs the payment guaranteed, and still needs the weight agreed.
Where it costs you
Information. He knows the rate across twenty farms. You know yours. That is the whole asymmetry, and it is worth more to him than the commission.
Weighing. Shrinkage between farm and mandi is real — birds lose weight in transit — but so is a scale nobody audits. The two are hard to tell apart from the farm end.
Credit priced as product. When feed arrives "on credit" with no stated rate, the cost is in the feed price. Work out what you paid versus the cash price and you have your effective interest rate. It is usually high.
Working with one, better
You are unlikely to trade without an arthi in the near term, and treating him as an adversary tends to cost more than it saves. What changes the balance:
- Weigh a sample yourself before loading. Not to accuse anyone — to know your own number. A hundred birds across the shed, not the ones nearest the door.
- Record every settlement. Date, weight, rate, deductions. Six cycles of records turns a vague sense that you are being squeezed into an argument with evidence.
- Separate the credit from the sale. Ask what feed costs for cash. If the spread is large, the credit is expensive and worth financing another way.
- Know your Break-evenThe sale rate per kilo below which the cycle loses money. Equal to your total cost divided by total live weight — most farms only find it out after selling.Glossary →. It is the only number that makes an offer objectively good or bad.
The mandi itself
Live birds clear in wholesale markets — Shahpur Kanjra in Lahore, the Landhi zone in Karachi, and equivalents in Faisalabad and Rawalpindi. Prices differ between provinces enough that birds move across them to arbitrage the gap.
What the mandi does not have is a record. No published volumes, no settled prices, no audit trail. Every participant knows their own trades and guesses at everyone else’s — which is precisely why the person with the widest view of the market holds the advantage.