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Small farming – emergence of production clusters

In a previous article (https://tribune.com.pk/story/2370062/te-need- give priority to agriculture -development) I pointed out what’s in pakistan failed to build up a dynamic, export-oriented manufacturing and service sector. Consequence of It was failure to move people out of Agriculture. Proportion of work force working in agriculture fell by only 7 percent points in three decades compared to 30-35 percent points over same period in fast growing, export oriented countries such as China and Vietnam.

And not only too much people in agriculture, most of they have limited access to key Agriculture asset – land. land holdings in pakistan highly unfair with 2% of farmers owning 45% of all agricultural land, while 98% own the remaining 55%. pakistani farm economy dominated by 7.4 million small holders who cultivate less than 12.5 acres. Most of these small farmers use rudimentary technologies, face inefficient input and output markets and rely on on high-cost informal credit markets. They can barely out life and it reflects in alarming indicators of health and nutrition in rural areas.

I claimed that in long term Pakistan has no alternative building export-oriented sector of production and services; move people out of Agriculture; and consolidate existing landholdings into larger more effective units that could use better technology, more technology and thereby increase productivity and income.

However, building up an export-oriented manufacturing and service sector will require effort, time and investment. In short, the development of agriculture, especially small-scale agriculture, allow country to achieve several high-priority goals such as reducing poverty, food insecurity and malnutrition; and employment, especially for young people. With the right management of agriculture also has the potential to increase exports, reduce imports and improve the balance-of-payment situation is a chronically weak aspect of Pakistan economy.

A lot of of background for the changes were in place for some years. Requirement for high-value products, both crop and livestock, rising quickly both within Pakistan and in in region. At the same time, road infrastructure has improved. improved logistics links between manufacturers in rural areas and consumers in urban areas, while smartphone-based information sharing provides real time information on prices and market capabilities.

Farmers and value chain participants across the country are benefiting of these improved links between producers and consumers moving into high quality products to meet market demand and at the same time improve efficiency of value chain from farm to fork.

One way it happens through creation of production clusters – geographic area specialization in one specific harvest. Some areas have local soil, water and climate conditions suitable for for some cultures and access to the road network. In these areas there are many small medium farmers quickly moving in specialized production – bananas in lower Sindh, mango in southern Punjab and upper Sindh, cherries and apricots in Gilgit-Baltistan, dates in Khairpur, Kinos in Sargoda areapeaches in Khyber Pakhtunkhwa and apples and grapes in Balochistan. list goes on. farmers who specialize in these cultures can earn returns of 5-10 thousand rupees per acre, which means that even with 10-15 acres they can earn Rs 0.5 crore to Rs 1 crore. in a good year – a tidy sum indeed.

Similar developments are taking place place in livestock sector with specialized production units of Raising 5-50 dairy animals up in and around urban centers. They followed lead of the poultry sector, which has been a pioneer in this creation of commercial manufacturing units.

Compact manufacturing clusters have started a virtuous circle. He had attracted suppliers of raw materials and equipment, processors and contractors for harvesting, packaging and transportation. Market Agents also active and provide delivery services national as well as overseas markets. These market agents – merchants and wholesalers – are often the main source of Credit to farmers and livestock breeders.

Dynamism of these production clusters recently also attracts both tech companies and venture capital firms. A lot of young entrepreneurs with top-notch qualification and formidable tech and fintech experience become active in sector. They work on improvement in all aspects of supply chain of planting materialstechnical services, alternative energy solutions, soil fertility profiles, weather forecasting, advice on growing methods and on wholesale and retail marketing opportunities. profitable business models being tested and tested development this is good for in future.

Whether there is a government there is role in what seems pretty much private sector and market controlled process? It is important to remember that many of in technologieslanding material and production methods used by farmers today were introduced government and donor projects over in last several decades. National agencies such as the National Center for Agricultural Research and provincial and specialized community research units have made huge contribution with financial and technical help from external partners. And it must go on through public- funding efforts to identify, adapt and popularize new cultures, especially in view of changing of the climate; develop and popularize new production technologies that make more effective use of scarce resources, especially water; and improve storage and transportation technology which would help reduce very high levels of spoilage and waste.

Individual assistance also necessary for the further development of production clusters and new entrepreneurs are both of which are in their infancy. Among the most critical action for in government is to create an appropriate business environment with regulations on dispute resolution, on conservation of natural resources, on genetic improvement, on marketing, on food safety and on certification, labeling and traceability. government also needs to work with banks and insurance companies provide risk control mechanisms. Specialization in a single product in horticulture or animal husbandry is inherently risky due to possible attacks by pests and diseases; or unfavorable market terms; or increasingly frequent extreme weather events. Insurance, in in one form or another is essential for growth.

Moreover, it is essential that government provides favorable environment to help farmers and tech/growing fintech companies — for For example, sponsoring fairs, exhibitions and other events where synergy and partnership can be built; helping to get access to national as well as international financing; and encouragement of foreign private companies to participate for example via creating special production areas similar to what is being done for production.

Published in Express Tribune, 2 September.th2022.

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Derrick Santistevan
Derrick Santistevan
Derrick is the Researcher at World Weekly News. He tries to find the latest things going around in our world and share it with our readers.

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