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Promoting Agricultural Value Chains

In the OIC Member Countries

109

Figure 5-19 Cotton value chain in Pakistan

Source: Authors’ elaboration

There are approximately 1.6 million cotton producers in Pakistan, of which farmers cultivating

less than 2 ha account for 49 percent of the total cotton growing farms and contribute close to

20 percent of the total cotton output. Producers sowing on approximately 5 ha or less

constitute more than 80 percent of all cotton farmers (Salam, 2008). In contrast, farmers

growing on 20 ha or more account for only 2 percent of farmers but produce on 14 percent of

the entire cotton growing area (Salam, 2008).

Particularly small-scale farmers are highly vulnerable to the risks involved in cotton

production stemming from the devastating impact of pest infestation. While extension services

are offered by both public bodies (e.g. provincial agencies) and private organisations (e.g.

NGOs), pest control remains problematic due to its high costs, the sophisticated nature of the

methods and technologies involved – farmers are often illiterate – and the proliferation of

substandard pesticides in the market (Salam, 2008; Khan et al., 2011).

After hand-picking the cotton through seasonal, often female employment and family labour,

most farmers sell their product to middlemen, so-called village beoparis, who collect the

cotton directly at the farm gate (Kahn et al., 2011). Especially small-scale farmers depend on

the beopari and are obliged to sell their crop immediately after harvest, as they lack the

physical facilities for storage and do not have the financial capacity to hold onto their product

for better prices (Salam, 2008). Some middlemen offer credit to help with pre-harvest liquidity

constraints, in return for the marketing rights to the harvest. Contracts do not exist within this

chain and little information is transferred between the actors, so that farmers are not aware of

the prices and margins along the chain (Ghulam, 2014). This situation makes smallholder

farmers vulnerable to exploitation.

After weighing the seed cotton, the beoparis transport it to the ginning factories.

Contamination levels at this point of the value chain are high due to improper on-field

treatment and post-harvest management by the farmers, and inadequate methods of transport

and storage used by the beoparis. Studies indicate that this leads to relatively small margins

for beoparis, as they are penalised for contaminated seed cotton at the ginning factories (CABI

South Asia, 2010; Khan et al., 2011).