Abstract
Limited progress has been made in the area of risk management for small farmers in Pakistan. Thus, in this review based study,
maximum efforts have been made to collect relevant information on the topic from available published sources over last two
decades. The local information is supplemented by synthesis of information about regional as well as non-regional countries.
In the country, wide gap in agricultural productivity exists between average and progressive farmers that is causing difficulty
for small farmers in managing risks. Small farmers are unable to access and compete in high end agricultural markets.
Profitability of major crops is quite low and producers’ shares in consumer rupee are also quite low for fruits and vegetables.
It affects farmers’ capacity to invest in the sector. While, in the farming business, disbursement of right amount of credit at
appropriate time is a key challenge. Similarly, cost of borrowing is inversely related to size of land holding. Thus, small farmers
are to rely on informal sector for finances and bear high interest rate on small size loans. Their crop choices depend on
productivity and price risks and prudent risk sharing among themselves. Furthermore, their choice to diversify farms also
depends on consumption price risk. Illiteracy and inability to read or write make them susceptible to various personnel and
human health risks. Crop and livestock insurance schemes, Kissan package, value chain contract financing are the initiatives
taken by the public and formal sector banks to support small resource poor farmers. However, there is lack of coordination
among agriculture related provincial institutions, provinces as well as with and within federal institutions. Similarly, absence
of institutional arrangement and regulatory framework is resulting in vulnerability of livelihood for small farmers as well as
undue pressure on natural resources.
Keywords: Finances, health, Insurance, Management, Small farmers, Natural Resources, Pakistan, Productivity, Price, Risks
Abid Hussain, Waqar Akhtar, Abdul Jabbar. (2022) Risk management for small farmers in Pakistan: A review, Pakistan Journal of Agricultural Sciences, Volume 59, Issue 2.
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