OPINION
Muhammad Ali Ilahi
The need for farmer cooperatives in Pakistan
groups is important in meeting the increased demand, while at the same time improving market linkages and input access for the local farming communities In the past 60 years, the share of agriculture in Pakistan's total GDP has decreased from ~43% in 1960 to almost 22% in 2019 (World Bank, 2019). However, despite the reduction in the GDP, the economic contribution of agriculture has increased, ~$1.6 billion in 1960 to $71.9 billion in 2019 (World Bank, 2019). Similarly, the proportion of the urban population in the country has been on an upward trajectory. The population in Pakistan has increased from 28.3% in 1981 to 36.38% in 2017 (Pakistan Bureau of Statistics, 2017). As a result, the average annual urban population growth over the past 20 years stands at 2.7%. akistan currently is in a stage of development where The agricultural labor force has been shifting its economy is transitioning from a primarily agricultowards the manufacturing and the services sector. tural base to that of value addition and services. Our The total population employed by agriculture has biggest problem has been our willingness to simply dropped from 44.81% in 1991 to 36.9% in 2019 (World sell our core products and allow others to use them Bank, 2019). This drop in the agricultural workforce to gain more profits from them, when we should have has been well captured by the country's services and been investing in our own resources. manufacturing sectors with a current share of 38.6% There are multiple national indicators that show an increase and 24%, respectively. in incomes and aggregate demand, and a push towards rural to Pakistan has also seen an increase in incomes urban migration. In this context, the role of farmers and farmer as GDP per capita has increased from $83 in 1960 to $1482 in 2018 (World Bank). The rising incomes have led to an increase in higher value agricultural and processed goods and have contributed towards diet transformation in the country. Euromonitor reports an increase of over 150% in conMuhammad Ali Ilahi sumption of packaged foods in Pakistan over the past decade. To meet this increased demand, there needs to be a reform in the agriculture sector to ensure sufficient and is a Research Support suitable supply. One way to achieve this is through the farmer cooperatives and FarmSpecialist at the er Producer Organizations (FPOs).
As the economy goes through a structural transformation, farmer cooperatives are more important than ever before
P
Tata-Cornell Institute
Agriculture sector growth and development remain critical for Pakistan’s economic growth. 68% of the farmers in the country own a farm size smaller than 2 hectares, and are classified as smallholders. Cooperatives and farmer groups provide these smallholder farmers the ability to pool resources, access credit, inputs and technology and obtain certifications. Since the bulk of farmers in Pakistan are smallholders, this model could prove to be an important linkage in empowering the rural populations,
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