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AGRICULTURE is becoming a risky source of livelihood in Pakistan, as the sector is prone to seasonal contractions owing to its exposure to a range of climatic and non-climatic risks.

Climate-induced changes such as untimely rains, short winters, heatwaves and drought are making agriculture produce unpredictable, with serious implications for small agro-food producers.

Nearly 90 per cent farmers have observed that crop pests and diseases have increased owing to change in climatic conditions, particularly because of increasing temperatures.

In addition to these long-term climatic changes, the sudden environmental threats like untimely rains and windstorms are frequently found among the farmers’ risk matrix. These two can potentially destroy whole crop depending upon their severity.

Increase in temperatures, lengthier summer season and shorter monsoon include some of the common climate-induced changes that farmers believe are taking place. A new study while reviewing the risk coping mechanisms found that there are some risks which farmers fail to manage, including windstorms, untimely rains and the poor quality of inputs.

A fresh feasibility study, entitled ‘Risk Management Practices of Small Farmers’, for introducing the R4 Rural Resilience Initiative in Punjab unveiled jointly by the World Food Programme (WFP) of the United Nations and Oxfam finds that the higher incidence of agricultural risks, both climatic and non-climatic, warrants the provision of crop insurance product to farmers for transferring their risks.

“Understanding the potential impact of climate change on food and nutrition security, and the populations most likely to be affected by it, allows us to identify what interventions need to be prioritised to help manage and mitigate the risks,” says Finbarr Curran, WFP’s Country Director in Pakistan.

A new feasibility study finds that the higher incidence of agricultural risks, both climatic and non-climatic, warrants the provision of crop insurance product to farmers for transferring their risks

“The study highlights the vulnerability of the lives and livelihoods of smallholders owing to the compounded risks brought on by climate variability. It also provides guidance on innovative risk management strategies designed to enhance resilience to shocks and stresses,” he notes.

As the majority of agriculture specific schemes, including zero mark-up loans, are being offered under the umbrella of Kissan Package, a majority of small farmers, despite having knowledge about it, did not access owing to procedural issues like registration. Small farmers face a mixed set of risks like market, climatic and institutional risks.

The study says that the process of resilience building can further speed up if farmers avail themselves of the risk reduction tools being offered under Kissan Package like soil testing, subsidy for relay crops, zero mark-up loans.

The study was shared with the Punjab government earlier this month, and the benefits of the global R4 Rural Reliance Initiative have been introduced. Strategies relating to risk reduction and risk transfer, if implemented correctly, can significantly augment small farmers’ capacities to withstand shocks.

The study took into consideration the various risks confronting smallholder farming systems and ways in which farmers cope with these risks. R4 aims to benefit the agriculture sector, which is the mainstay of Pakistan’s economy as it contributes 19.8pc to GDP and employs 43.5pc of the labour force.

R4 is an integrated agriculture risk management model whose target beneficiaries are small farmers of developing countries. Punjab has a pivotal share in the country’s agriculture output, with a share of 76pc in wheat, 72pc in cotton, 65pc sugar cane, 81pc in maize and 51pc in rice.

Nearly two-thirds of farmers in the province have landholdings of up to five acres. Small holdings naturally entail diseconomies of scale for farmers, exposing them to risks and vulnerabilities.

The WFP-Oxfam study was carried out in agriculture production areas of Muzaffargarh and Rahimyar Khan districts.

The farmers were highly concerned about the quality of inputs being provided. Nearly one-third reported the non-availability of quality inputs as a major challenge confronting them. They expressed serious concerns over the quality of inputs available in the local markets. Although production increases significantly with the application of fertilisers, the obtained yields are far below their expectations.

The study suggests that the Punjab government should link up R4 in its existing initiatives and schemes aimed at reducing risks and complement the micro-insurance initiative by ensuring mandatory coverage of the recipients of micro-insurance under those schemes and initiatives too.

To ensure coverage, there is a need for raising awareness among the micro-insurance beneficiaries about risk reducing schemes by the provincial government.

The study emphasises that there is a need for trust building between public service providers and the farmers for reducing institutional risks. For that, public-private partnerships should be encouraged. The private sector can support the government in filling the human resource gaps, and it can assist by training the farmers on pest protection, crop diversification and mechanisation. It can also provide agriculture services like pest scouting, livestock check-ups and assisting the uptake of recent agriculture research.

Moreover, the R4 programme should strengthen collaborative efforts by Agriculture Department, Meteorological Department, the private sector, irrigation department and multilateral development agencies so that they can share their experiences, which is essential for integrated risk management.

The study assessed the viability of integrated risk management approaches which could be used to enhance the resilience of smallholder farmers in Punjab. Looking at the relevance of the WFP and Oxfam’s global R4 Rural Resilience Initiative, the study found the approach to be relevant to the Punjab context. In particular, strategies relating to risk reduction and risk transfer could significantly augment smallholders’ capacities to withstand shocks.

Published in Dawn, The Business and Finance Weekly, March 26th, 2018