Friday, 24 March, 2023

Promoting Farmers' Cooperatives

Uttam Maharjan


Nepal is a predominantly agrarian country where over 65 per cent of the population is engaged in agriculture. In a country which has a weak industrial base and which has to depend on exports, the importance of agriculture can hardly be overstated. But the agricultural sector is not up to much as the country has to import a large quantity of agricultural products from foreign countries every year. However, in the past the country was self-sufficient in agricultural produce and would even earn foreign currency by exporting agricultural products to other countries.

One of the means for increasing agricultural production is through farmers' cooperatives, otherwise known as agricultural cooperatives. Farmers' cooperatives make farmers aware of how to be self-dependent economically, make them feel proud of their hard work and production and help in improving their lot. The most important aspect of farmers' cooperatives is that they actively contribute to mitigating poverty among farmers.
Farmers' cooperatives provide diverse kinds of services for farmers. It is a no-brainer that what farmers require are agricultural inputs like seeds, fertilizers and pesticides as well as agricultural tools and machinery and irrigation facilities. As things stand, farmers almost always face a shortage of fertilisers during the plantation season. This year, too, the government has failed to supply required fertilisers to farmers.
The farm size in Nepal is small. Further, farms are being fragmented into small plots, which have affected agricultural production and productivity. Due to problems with transportation, the market for farm products is limited. It is an irony that when agricultural products produced in various districts of the country are rotting away for lack of markets, such products are being imported from India and other countries.
Farmers' cooperatives can help their member farmers by supplying them with agricultural inputs like seeds, fertilisers and pesticides in time. As farmers' cooperatives can drive deals with suppliers on better terms, the prices of such inputs come down. Even high-quality inputs can be procured. At the national level, Agricultural Inputs Corporation has responsibility for supplying agricultural inputs to farmers but it has not been able to manage the supply of such inputs. This year, the government has thrown up its hands at not being able to procure agricultural supplies in time, disappointing farmers all over the country. So farmers' cooperatives should take the initiative in procuring agricultural supplies so that farmers can have seeds, fertilisers and pesticides as and when they require.
In developed counties, farmers' cooperatives are run by professional managers. On the contrary, most farmers' cooperatives are managed by farmers themselves in Nepal. Running an organisation requires business skills. So the time has come for farmers' cooperatives to be professionalised by hiring skilled manpower. Moreover, to make farmers' cooperatives efficient and sustainable, bigger farmers' cooperatives need to be developed.
There are several methods of solving farming problems in the country. Lease farming may be adopted to solve the problems associated with small or fragmented farms. Under this method, a land-lease corporation is set up. Farmers lease their farmland to the corporation for a fixed term. The corporation, in turn, leases the farmland to others, who pool and consolidate the farmland into a bigger farm. Thus, agricultural production can be greatly enhanced. The farmers can get their land back at the end of the lease. Another method is contract farming. Under this method, interested buyers guarantee to buy agricultural products provided quality standards are met. They also arrange for the supply of agricultural inputs and give farmers technical advice and suggestion on how to enhance production. Such a practice helps in developing commercial farming.
Farmers' cooperatives can contribute to Goal 2 of Sustainable Development Goals (SDGs). The goal is related to zero hunger, implying that the goal is aimed at eliminating hunger from the world by 2030. As per the World Food Programme, 135 million people are suffering from acute hunger due to factors like conflicts, climate change and economic downsides. It is projected that the COVID-19 pandemic would add another 130 million people to the tally of acute hunger by the end of 2020. To steer clear of such a looming problem, food production needs to be enhanced by adopting innovative methods of agriculture.
In order to boost rural development in the country, farmers' cooperatives need to be promoted in rural areas at an accelerated pace. Such cooperatives take care of farmers' needs. The rural farmers are provided with loans for agricultural purposes like the purchase of machinery, seeds and fertilisers. They are also supplied with required inputs at affordable prices. Every year, farmers face a shortage of fertilisers in the plantation season. Farmers' cooperatives come in handy in such a situation.
The COVID-19 pandemic is likely to increase poverty in the country as many people have lost their jobs due to the closure of factories, industries and other businesses. And many migrant workers are back in the country. It is not certain whether they will be reinstated in their jobs after the situation has limped back to normal. So the government should ensure that those thrown out of a job due to the COVID-19 pandemic, whether domestic or migrant workers, are attracted to agricultural and allied activities. This is the right time, too.

In fact, enhancing agricultural production and productivity should be the top priority of the government. At a time when the country has to import a vast array of agricultural products, the need for the agricultural revolution has been acutely felt. In this regard, the role of the government is crucial. It is not that the government has done nothing. The provision for banks to make a certain percentage of investments in the agricultural sector indicates that the government is serious about agricultural development. But this is not enough. The government should step in to strengthen farmers' cooperatives to improve the lot of farmers by increasing agricultural production and productivity.

(Former banker, Maharjan has been regularly writing on contemporary issues for this daily since 2000.