Helping small farmers move forward

In 2023-24, the agriculture sector grew at 6.25%, the highest increase in two decades, and was hailed as the "savoir" of the economy. The Finance Minister proudly celebrated the resilience of farmers and the strength of the agriculture sector.

In 2024-25, the sector grew by 0.56, the lowest in about a decade, and was said to be in "crisis". Obviously, weather and other contingent factors played a role in the massive swing in performance. However, the honourable Finance Minister also blamed the farming community for inefficient practices, stressing that the low productivity was caused by outdated techniques, poor seeds, inadequate fertiliser use and limited knowledge of modern agricultural practices.

The problems that the Finance Minister identified are, of course, critical. And, unless these are solved, the agriculture sector will not achieve the growth that it is capable of. Nor will it develop the resilience needed to face the growing challenges of climate change and extreme weather events.

However, one critical problem that the Honorable Minister did not point out relates to the small size of land holdings in Pakistan – the recent Agricultural Census indicated that 97% of farmers hold less than 12.5 acres of land, with an average of 5.1 acres per farm.

A small number of farmers could be financially viable with this small farm size. They can do this by using better inputs and technologies such as greenhouses and drip irrigation; and by focusing on the growing of high value products such as vegetables, fruits, flowers or poultry. However, for the bulk of small farmers it is very difficult, if not impossible, to be financially viable. In fact, most small farmers face poverty and all the evils that go with it including poor health, poor nutrition, poor education and social exclusion.

So the question arises is whether there are some clear pathways out of this situation that have proved successful in other countries. The answer is a clear yes and, in fact, some are already starting to take root in Pakistan. Three key features of this transformation are: creation of larger operational holding; arrangements that can facilitate the greater use of modern machinery; and use of digital platforms to bring new technology and knowledge closer to the small farmers.

The first change that would help is the creation of larger farms through land consolidation. In the simplest case, farmers could trade operational rights for scattered plots to build a farm with contiguous land. In this case, the total farm size does not change, but farms are compact and better suited for mechanisation, as well as for better use of soils and water. Alternatively, land from small holders could be rented or leased by larger or more dynamic farmers who can thus create larger operational units. This process is already underway and increasingly one sees larger and more compact agricultural plots. The process could be accelerated through more supportive regulations by the Government, particularly with regard to registration of these agreements, and, more importantly, better mechanisms to resolve disputes which can arise from time to time.

The second change that would help is the creation of machinery hire units that allow smallholder farmers to access capital-intensive farm machinery and equipment without making large upfront investments.

Pakistan has taken its first steps in this direction. It is relatively easy to rent machinery and equipment for land leveling, ploughing and harvesting. However, the size of equipment is still small – one still does not see 400HP tractors pulling, for example, 25-foot-wide seeders, or combines working 16-20 hours a day using GPS-based control systems that can harvest a hundred acres per day. It is also difficult to rent or lease more sophisticated hardware, for example accessories to pick tomatoes or other soft products; drones to monitor soil conditions and crop growth, or eliminate weeds; or machines to sort and grade products.

In order to move up the technological ladder, there is a need: to review Government policies, in particular as regards taxes and import duties, as much of the machinery will have to be purchased from overseas; to encourage more technical fairs and exhibitions; and to get banks and other financial institutions to work more closely with machinery hire companies to help them expand.

The third change that would help is the democratisation of advisory and technical services. At present it is mainly the larger farms which benefit the most from skilled management; better access to technologies; and information about soil, water and weather conditions. In contrast, small farmers make decisions based on limited knowledge and outdated technology. They also tend to be very risk averse, avoiding innovations as the costs of failure are too high for them.

Public extension agents should, in theory, fill the technological gap for small farmers, but usually fail to do so. The reasons include the very limited technical knowledge of most field-level extension workers – these are often recruited on the basis of political connections rather than on the basis of merit or motivation. They also have little credibility with farmers, and tend to avoid visiting those that most need their help – the poorest farmers and those living in remote locations.

Digital platforms are increasingly providing better packaged and more timely information "on demand". Such services include soil testing and fertiliser application, green pest control, and other advanced production technologies. These platforms are also beginning to help small farmers on commercial aspects such as purchase of inputs and sale of produce. The government could certainly help this process of digitisation of agriculture through promotional efforts including funding for startups and establishment of innovation labs in rural areas.

The above changes would, of course, not solve all problems of small farmers but would certainly help move things forward.