Making farmers’ cooperatives work

Updated July 15, 2019


In Pakistan the model of famers’ cooperatives has failed repeatedly. It is now assumed that cooperatives are not suitable for the local environment as we do not have the required temperament or mindset to work in associations. The lack of understanding amongst farmers results in a fear of losing ownership of their land if they become part of a cooperative.

However, the reality is that successive governments never made the effort to properly educate farmers on the structure and working of the model. Furthermore, the private sector is disengaged with agriculture and does not play a role in this regard.

Farmers, the most important component in the food supply chain, are generally the weakest link. As long as they remain fragmented they are subjected to exploitation of the worst kind, especially in countries like Pakistan where the average farm size is small and further shrinking with every passing generation due to the natural process of inheritance.

As long as farmers remain fragmented, they are open to exploitation

Land O’ Lakes and Amul Dairy are two glaring examples from two very different cultures that display the power of cooperatives in agriculture. These, and many other cooperatives, have grown to become large international entities offering diversified product ranges and operating in multiple geographies. Unfortunately, Pakistan has so far failed to produce even a single farmer cooperative of national standing, let alone of international stature and size.

The failure of farmers’ cooperatives is due to the inability of the concerned government departments to educate the farming community on the benefits of this cooperative model and to use it for sustainable development in agriculture. Small farmers in particular require education and capacity building.

A project done for the Sindh Government Agriculture Department about seven years back provides evidence that the concept of farmers’ cooperatives is not only applicable in Pakistani society but also hugely welcomed by small farmers once its structure and benefits are explained to them in simple terms.

Extraordinarily heavy rains during the summer of 2011 had a devastating effect on agriculture in Sindh, leaving the left bank of Indus severely damaged. A year earlier almost the entire right bank of Indus had been destroyed by heavy floods. In response, a cooperative was formed comprising of three hundred subsistence farmers in remote areas of Khairpur district.

The biggest challenge for the farmers’ cooperative project was to have 50 per cent female participation which was considered nearly an impossible task. However, as team members came in contact with the communities, and the objectives of the project were explained, huge numbers of women came forward and were enrolled.

This came as a surprise as the project was operating in an extremely conservative area in rural Sindh and fairly strict criteria was defined and followed for enrollment. However, the female members were not only more ambitious but also far more active than their male counterparts.

One possible reason for this was believed to be that women were more severely hit by poverty than men as they were mostly confined to their homes. Also, it seemed that women were more motivated to go the extra mile for improving lives of their children.

The cooperative members were trained for vegetable farming using modern techniques. In addition to routine vegetable crops produced for domestic markets, high value crops like iceberg lettuce, broccoli and cherry tomatoes were grown keeping in mind their export potential.

Members of the cooperative were connected with vegetable exporters as well as with superstores in Karachi and Lahore. The results were successful because of the efforts put in to explain to the participants the concept and benefits of working under a cooperative model right from the beginning.

If the government is genuinely interested in revolutionising agriculture then it must make efforts to remove bottlenecks at the grass root level by thinking out of the box. Areas like access to finance, training, alternate marketing channels and efficient procurement of inputs could be smoothened out for farming communities by encouraging them to organise themselves as cooperatives.

Successful cooperatives can also improve agriculture credit disbursement through the formal channel as in the long run banks may find them worth lending to on the strength of their balance sheets.

A few successful models need to be created for them to serve as examples for others. Here, the private sector with interests on the farming side may be able to provide assistance. Food processing companies involved in producing and selling packaged milk, spices, pickles, potato chips, juices etc. must be encouraged to play their role, along with the government, in inculcating the cooperative culture within the farming communities across the country.

In turn, this process will improve the supply chain of raw material for companies using agricultural inputs. If done effectively this could play a big role in overall economic development of the country in general and agriculture sector in particular.

The writer is a banker-turned-agribusiness specialist

Published in Dawn, The Business and Finance Weekly, July 15th, 2019