The second annual AgriTech Conference was held in Islamabad, the capital of Pakistan, on 15th June 2023. It hosted several stimulating and informative panels on revitalizing agriculture in Pakistan using Financial Technology (FinTech) with experts from the banking, agriculture, and technology sectors. The ability to use FinTech to improve the performance of the agricultural sector in terms of productivity, yield, and farmer financial health were debated extensively while acknowledging the nuances of the Pakistani agricultural industry.
During the conference, several comparisons were drawn with the cooperative farming societies of India, Morocco, the United States of America, and Japan. The panelists recognized the need for the government to make amendments to the age-old Cooperative Societies Act to increase the number of farmer co-ops. With reference to the high annual turnovers of Amul in India and Land ‘O Lakes in the U.S.A and their associated yields, the panelists elaborated on the benefits of the co-op production model. From facilitating market linkages to providing access to credit and technical assistance for smallholder farmers, farmer cooperatives have been instrumental in reforming the agricultural sector through helping smallholder farmers in obtaining international certifications and meeting stringent quality standards. Farmer cooperatives also enhance market linkages, reduce transaction costs, and eliminate middlemen, which is particularly advantageous for small farmers facing high transaction costs. These cooperatives have played diverse roles, such as promoting new crops, advocating for lower taxation, and improving transportation efficiency. However, Pakistan has lagged in establishing farmer cooperatives, primarily due to a lack of government support and awareness among farmers. Studies have shown that cooperative models have yielded positive results, increasing yields, benefiting farmers financially, and fostering the adoption of modern farming techniques. To enhance market efficiency, access to credit and technology, and the empowerment of smallholder farmers, the panelists agreed on Pakistan’s need to embrace the cooperative model and create awareness about its effectiveness.
Another topic discussed extensively was the role of the Arthi in agriculture marketing and the need to leverage the platform they have built. “Demonizing the Arthi is an act of laziness,” said one of the panelists. Indeed, the microfinance institutions, the banks, and start-ups who have tried by-passing them in not only Pakistan, but other similar markets, have failed miserably. The Arthi is not just a lender and a purchaser of producer, but a “360-degree service provider” who advises the farmer, arranges transport, offers protection, and enables him to earn a living. Moreover, the Arthi is trusted by the community, speaks the same language, provides instant relief, and is easily accessible. For banks and microfinance institutions to reach the Arthi’s customers – small-holder farmers – they need to create products which provide the same, if not greater value to them, and must find a way to work with the Arthis that creates a win-win situation for both.
Finally, the panelists conversed on the need to take a collaborative approach which aligns the efforts of each player in the ecosystem towards creating an environment that allows for secured lending, improves transparency, and empowers the farmers. Several recommendations regarding public-private partnerships, patent protection for seed manufacturers, depoliticization of microfinance institutions, the provision of insurance and advisory services for farmers, and conducting regular censuses for better planning, were made.
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