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COOPERATIVE FARMING IN PAKISTAN

PROF. SAEED AHMAD SIDDIQUI


(feedback@pgeconomist.com)
Sep 3 - 9, 2012

Cooperative Farming is the voluntary organization under which the farmers, through accumulated
resources and mutual help, cultivate having a common objective so that the agricultural production may
be improved and increased with the help of new methods and techniques.

Agriculture, directly or indirectly, is the occupation of entire rural population and most of the industries are
also agro-based in Pakistan. In other words, agriculture is the biggest sector of production activities but it
is not under the control of the government. The farmers cultivate freely on the individual basis.
Nevertheless, the government has established different institutions for providing assistance and advisory
services in the agricultural sector. Cooperative farming is the scheme introduced by the government for
seeking participation of the farmers in developing and modernizing the agricultural sector of the country.

It should be noted at this stage that cooperative farming is not the only solution to all the agricultural
problems but simply an effort which can make the economic condition of the rural community/farmers
better.

The cooperative society pools its resources through different methods; first, through acquiring the
proprietary rights of lands and management of the lands of its members second, through acquiring the
management rights of the member's land and third, through leaving the rights of ownership and
management of the lands of the members with them but acquiring the rights of providing agricultural
inputs, seeds, fertilizers, water, machines and sale of products and last, acquiring the rights of provision
of agricultural inputs only.

The first two types of cooperative societies are not found in Pakistan because Pakistani farmers, being
emotionally attached with the rights of ownership on their lands, do not agree to forego these rights. The
last two types of societies can easily be introduced under which agricultural inputs and seeds are
provided by the cooperative society to the members.

The first experience of cooperative farming was made in 1948 which, due to reasons, could not be a
success and refuge was sought in converting the term 'cooperative farming' into 'group farming'. After the
implementation of Second Five Year Plan, cooperative farming program was adopted on the large scale
under the Federal Government. Pilot projects of cooperative farming were initiated in all the four
provinces of the country.

ADVANTAGES OF COOPERATIVE FARMING

By adopting cooperative farming, advantages of enhanced and quality agricultural production can be
achieved like:

1. PROSPECTS OF MECHANIZED FARMING

As a result of division, sub-division and fragmentation, the farm sizes have been squeezed to the
minimum on which mechanized farming is neither feasible nor possible but cooperative farming, through
consolidation of holdings, can make it possible through enlarging the farm sizes.

2. COLLECTIVE INTEREST
When the objective of small farmers becomes common, their gains and losses also become common and
so they work with the mutual cooperation. Consequently, collective interest is preferred over the individual
interest which can guarantee the safeguard of individual interest too.

3. CURTAIL IN COST

It is not possible to spend heavy amount individually on the purchase of machines used in mechanized
farming but pooling of resources of many small farmers can make it possible to purchase tractor,
harvester, thresher etc. Mechanized farming, in this manner, curtails not only the cost of production but
improves and increases its volume also.

4. REASONABLE PRICES

As a result of cooperative farming, the middleman ship is eliminated guaranteeing genuine and
reasonable prices for cultivators. Reasonable prices can improve living standard cultivators through
increased income.

5. BETTER TECHNOLOGY

Cooperative farming makes not only the future of mechanized farming bright but also creates opportunity
of research. The farmers, in this way, leave the old and traditional methods of cultivation and adopt new
and modern technology of production increasing per hectare output.

6. AVAILABILITY OF AGRICULTURAL INPUTS

As a result of cooperative farming, shortage of finances does not block the way of development.
Agricultural inputs (irrigation water, testified seeds, insecticides pesticides etc.) are provided timely and
promptly when and where required.

FAILURE OF COOPERATIVE FARMING

Advantages of cooperative farming, no doubt, are unlimited but they could not be cultivated in Pakistan.
Different cooperative farming societies came into being but they could not survive because:

1. There is a lack of sense and feelings of cooperation and brotherhood amongst the Pakistani farmers
due to their division into various casts, creeds and groups.

2. Consolidation of small holdings is necessary for cooperative farming but the farmers of Pakistan don't
want to forego the rights of ownership on the landed property because owning the land is taken as the
sign of prestige in the rural community.

3. Generally, the officer bearers of the societies turn into dishonest. Unjust partiality of the friends
members, favoritism and patronizing the relatives are the causes of cooperative farming failure in
Pakistan. Once a member assumes the office, he wants to retain this position throughout his life using
every fair and fowl for this purpose.

4. Pakistani farmers are generally illiterate and tied with the apron of traditions and customs therefore,
they do not welcome any radical and constructive change.

5. The cooperative farming societies, due to financial constrains, are not capable to afford and adopt
modern and rapid changes in the existing cultivation methods and techniques.
What is Co-operative farming or What are the causes of failure of
cooperative farming and suggest the measures to improve it
Cooperative Farming :-
Co-operative farming is a voluntary organization in which the farmers pool their resources. The object of this
organization is to help each other in agriculture for their common interests. In other word it is a co-operative
among the farmers of limited means.

IMPORTANCE or ADVANTAGES OF CO-OPERATIVE FARMING :-


The cooperative farming has been tried successfully in various countries like United Kingdom, Germany,
France and Sweden. Following are the main advantages of cooperative farming :

1. Consolidation of Small Units of Land :-


Majority of the farmers keep the small units of land. So they cannot employ the improved methods of
cultivation. Cooperative farming enables them to consolidate their small units of land for better utilization.

2. Use of Machinery :-
A poor farmer cannot purchase the machinery but a cooperative society can easily purchase the various
machines. The use of machines will not only reduce the cost of production but will increase the per acre yield.

3. Supply of Inputs :-
A cooperative farming is in a better position to get the adequate and timely supply of essential agriculture
inputs like fertilizer and seeds.

4. Creates Love and Brotherhood :-


A cooperative farming society creates the brotherhood and love for the members because they work for their
common interest.

5. Fair Price of the Product :-


A co-operative farming society will bargain in the market and will sell the product at maximum price. The
income of the individual farmer will increase.

6. Guidance and Training :-


A co-operative society guides the farmer to increase their efficiency and production.

CAUSES OF FAILURE OF COOPERATIVE FARMING

1 Attachment With Land :-


The farmers are not willing to surrender the rights of land infavour of the society because they have too much
attachment with it.

2. Lack of Cooperative Spirit :-


The spirit of cooperation and love is lacking among farmers. They are divided in various sections on cast basis.
There is no unity among them, so they are not ready to become the member of the society.

3. Illiteracy :-
In poor countries farmers are mostly illiterate and they are not ready accept any change in the cultivation
process. Still some of them are using the old methods of cultivation.

4. Lack of Capital :-
The co-operative farming societies are also facing the capital shortage problem and these are unable to meet
the growing needs of agriculture. Credit facilities to these societies are also not sufficient.

5. Dishonesty :-
The management of cooperative often turns out to be dishonest. The selfishness of the members make the
cooperative farming society ineffective.

6. Re-Payment of Debt :-
Sometimes debt is not re-payed in time which creates many problems for the financial institutions. Some
members do not realize their responsibility and it becomes the cause of failure.

MEASUREMENT FOR COOPERATIVE FARMING

1. Increase in Education :-
The government should increase the rate of education to make the cooperative farming more effective.
Importance of cooperative farming society should be explained to the farmers.

2. Changes in the Recovery Process :-


The government should remove the defects in the recovery process. It will increase the efficiency of financial
institutions and there will be reduction in defaulters.

3. Moral Persuasion :-
The management can ask the members of the society in friendly manner for the re-payment of debt. When crop
is in the market, loan can be recovered easily.

4. Removal of Corruption :-
The government should discourage corrupt people and people should also be co-operative with the
government to make cooperative farming more effective.

COOPERATIVE FARMING ALTERNATE TO CORPORATE


FARMING
April 17 is the International Day of Peasant Struggle, commemorating the massacre of 19 peasants
struggling for land and justice in Brazil in 1996. Every year on that day actions take place around the
world in defense of peasants and small-scale farmers struggling for their rights.

In recent years, we have suffered from the implementation of new policies and of a new
development model based on land expansion and land expropriation, commonly known as land
grabbing. Land grabbing is a global phenomenon led by local, national and transnational elites and
investors, with the participation of governments and local authorities, in order to control the worlds
most precious resources.

Land grabbing has resulted in the concentration of the ownership of land and natural resources in
the hands of a variety of pressure-groups which include, large-scale investors, plantation owners,
logging, hydro-power and mining companies, tourism and real estate developers, port and
infrastructures authorities, and so forth. This has led to the eviction and displacement of the local
populations usually farmers, the violation of human rights and women rights, increased poverty,
social fracture and environmental pollution. Land grabbing goes beyond traditional North-South
imperialist structures: the involved transnational corporations for example, are based in the United
States, Europe, Chile, Mexico, Brazil, Russia, India, Pakistan, China, South Africa, Thailand,
Malaysia, Indonesia and South Korea, among others.

Land grabbing in relation to the corporate sector is a global phenomenon based on the corporate
domination of agriculture through control over land, water, seeds and other resources. It is justified
by many governments and policy think-tanks through claims that agri-business will modernize
backward agricultural practices, and guarantee food security for all. However widespread those
claims may be, they have been shown to be entirely false in the real world.

The fundamental thought behind corporate land grabbing prioritizes profit over peoples well-being. It
will produce agro-fuels if this is more profitable than food production, and they export their food
production if this is more lucrative than selling it at home, even if either action is against the interests
of the local people and especially of the farmers. This is a reality that is to be seen all over the world.

In this race to profit, the corporate sector is increasing its control over food production systems,
monopolizing resources, and dominating decision making processes. Business lobbies have strong
political influence that often overrides democratic institutions; in addition, they act with the complicity
of local and national elites (traders, politicians and community leaders) who fail to protect their own
people from predation.

National Peasants Coalition of Pakistan (NPCP) or Pakistan Kisan Sangat (PKS) organized a
seminar on April 17, 2012, at Hyderabad Press Club, to commemorate this day. On this occasion,
NPCP/ PKS launched an OPEN LETTER to political parties and civil society in order to set the tune
of the political agenda in favour of peasants struggle in Pakistan.

The role of corporate sector has become very critical in Pakistan agriculture scenario, with the Board
of Investment (BOI) of the Government of Pakistan also offering a package of attractive incentives to
investors who wish to initiate large-scale farming in Pakistan.

The main purpose of such corporate farming appears to be to grow food grains / crops and export to
countries where food production is modest or absent, such as Middle East Gulf region. While this will
apparently yield foreign exchange earnings, it is potentially also a dangerous trend, as it can have a
direct impact on the future food security of our own people.
Further, the peasants and small farmers risk being the direct causalities of large-scale farming, as
the large farmers will lease their lands to investors, who will replace peasants with modern
machinery, and in this way the large landlords will get rid of peasants conveniently. In the face of
corporate farming, small farmers will find farming business not viable against high-tech corporate
sector and will be forced to sell their lands to them cheaply, to migrate to already heavily populated
troubled urban towns.

Corporate farming can also pose a serious threat to the environment as deep-drilling will exploit
fossil water and high concentrations of chemical-based pesticides and fertilizers will pollute agro-
ecology and the food-chain.

Photo Credit: StudioFarazBashir

On the International Day of Peasant Struggle, it is most appropriate that the concept of corporate
farming is reviewed and reconsidered, and if it deemed necessary, then first all the stated concerns
are addressed satisfactorily. Cooperative farming is an effective alternate to corporate farming, as in
cooperative farming, the small farmers and peasants can work together.

Policy makers are well advised to give thorough and serious consideration to promoting cooperative
farming in existing farm lands and planning for corporate farming in the vast lands still available that
are not already under the plough. However even with this approach, it will first of all be necessary to
first create sufficient new supplies of water to meet the substantial needs of corporate farming.
Rainwater harvesting, saving water through stopping seepage in canals and other means can easily
be adopted to create new water, for the increasing demand and for future needs.

Cooperative farming only way to prosperity


(DAWN-May 10, 2012)
LAHORE, May 9: Only cooperative, not corporate, farming provides solution to problems of Pakistans
farmers and farming, says Asad Umar, Chairman Pakistan Business Council.

Explaining his vision of development in a presentation Agriculture a mainstay of Pakistans economy,


here on Wednesday he maintained that since majority of farmers could not stand market pressure
generated by corporate farming.

Corporate farming might be a good idea for niche products (horticulture or medicinal) crops, but opening
up major farming to huge corporations would dangerously marginalise the small farmers socially and
economically a risky proposition.

Much quoted failure of the cooperatives is misnomer; the failed ones were banking cooperatives, not
producers. What Pakistan needs is bring producers together, who can join hands to take charge of their
own destiny, as done in other countries, he suggested Substantiating his point of view, he claimed that
Indian cooperatives get around 50 per cent of total agricultural credit disbursement and procure 60 per
cent of sugarcane. In France, he maintained, 75 per cent of all agricultural producers are members of at
least one co-operative and co-operatives handle 40 per cent of food and agricultural production.

Unfortunately, he said, cooperative role model has been misunderstood in Pakistan and that is small land
and animal holding leads to highly inefficient farming practices.

Existing legislation in Pakistan allows formation of farmer cooperative bodies which can buy inputs, sell
produce and obtain credit for member farmers, he pointed out. Pakistani farmers can get benefit from this
model by ensuring lending to cooperatives from commercial bank and provision of crop insurance.

He was of the view that funding is needed to develop physical structures for cooperatives where farmers
can be trained, inputs can be distributed and agricultural produce can be traded.

About problems afflicting the sector, low productivity is the major problem. Sugarcane yield is 40 per cent
lower if compared with global benchmarks, wheat yield is 20 per cent lower, non-basmati rice yield is 40
per cent lower, cotton yield is 20 per cent lower and milk yield per animal is 90 per cent lower, he said.

To make the matter worse, the sector faces huge post-harvest losses ranging between 40-80 per cent if
compared with global benchmark. This double blow (low output and high losses) causing poverty, he
maintained.

Credit, which can solve such problems with better use of inputs and mechanisation, has been in very
short supply, and being squeezed by the day.

Agricultural credit disbursed to farmers in Pakistan declined from $3.4 billion in 2007/08 to $3.1 billion in
2010/11. During the same period, Indian agricultural credit increased from $63.3 billion to $103.4 billion,
he said.
In Pakistan, agricultural credit is eight per cent of agri-GDP while in India it is 31 per cent of agri-GDP.

Umar said irrigation water losses were as high as 40 per cent before reaching farm gate. He stressed the
need to plug these wastages on priority basis.

Emphasising efficient use of water for reaping optimal benefits, he said irrigating additional five per cent
land can generate Rs100 billion farm income.

He said economy of scale in agriculture sector can be achieved by forming vibrant clusters of farmers.

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