Home' Partners : Partners: Pakistan – embracing change and transformation Contents PARTNERS ISSUE TWO 2016
All the good will in the world will fail at eliminating poverty if aid
is poorly targeted. Being strategic is key, but in research-for-development
work, even strategy requires innovation
n ACIAR has invested in developing tools to identify
the key factors that determine success
for smallholder farmers.
n The new method was trialled in Pakistan's
horticulture sector and the results have generated
BY GIO BRAIDOTTI
In just over a year, a small ACIAR pilot project
achieved something altogether new in
Pakistan that has important implications for
development work globally.
The project managed to both adapt and apply
the analytical methods used in business research
for use in development work. In the process,
the researchers demonstrated that it is possible
to rigorously identify the interventions and
investments most likely to impact on smallholder
The project ran during 2015, when 40 ACIAR-
funded surveyors used motorbikes to visit 850
smallholder farms in the horticulture sector. In
Australia, the information they gathered became
grist for the powerful analytical methods of
'econometrics'. That means information about
the farms' profitability was subjected to rigorous
statistical analysis and mathematical modelling.
For people combatting rural poverty, the
analysis produced something uniquely valuable
and enabling. It identified the factors that most
influence whether farming operations prosper,
or trap their households in hardship and poverty.
It brings clarity as to the nature of additional
assistance needed to improve the earning
potential of smallholder farmers.
The project was an initiative of ACIAR's
in-house agricultural economist, Dr Ejaz Qureshi,
research program manager for agriculture
development policy (see profile on page 19). It
was led by Dr John Steen and Dr Shabbir Ahmad
from the Australian Institute of Business and
Economics at the University of Queensland, whose
research program collaborates with universities
globally in support of small business enterprises.
"Globally, there are lots of aid dollars but
very little in the way of rigorous, evidence-based
analysis to understand how best to deliver
assistance," Dr Steen says. "ACIAR understands
this and the need to target its investments
Working alongside Dr Steen at the University of
Queensland is the Pakistan-born mathematician
and economist Dr Shabbir Ahmad. Besides his
expertise in econometrics, Dr Ahmad's extensive
connections within Pakistani universities,
government departments and aid agencies
were especially crucial to the project's success,
including organising the herculean survey process.
"It was a huge task," Dr Steen says. "We believe
this is the most detailed survey of horticulture in
Pakistan. When I say this is a breakthrough project,
I am not overstating the matter."
While the data is still being mined and
recommendations formulated, the preliminary
analysis has produced important findings. It
confirmed there are many variables at work
affecting farming performance. Nonetheless,
there are also overarching factors that have
For the Punjab smallholder farmers, three key
drivers of profitability were identified.
The first key factor relates to the capacity to
adopt new technology. In the context of farming,
'technology' can refer to better-quality seed,
improved crop varieties, water use-efficient
irrigation systems, or simple crop protection
structures, such as tunnel farming. This is the
domain of ACIAR's commodity, extension and
social science-based projects.
The second factor relates to diversification,
with the more diverse farming operations tending
to fare better economically. This is a subject often
encountered by ACIAR in its whole-farming
system and market-access projects.
The third factor, however, relates to farmers'
ability to access credit at reasonable interest rates.
Currently, few Pakistani farmers have access to
standard bank loans or microfinance and if they
do, face punitive interest rates of up to 46%.
While the findings have been presented at
Pakistan's National Agricultural Research Centre,
they have also generated widespread interest in
Pakistan beyond researchers.
"Horticulture in Pakistan has strong export
potential, and with it, the ability to grow farmers'
revenue streams," Dr Steen explains. "Anything
that can help realise that potential is especially
welcome in Pakistan."
Dr Steen has spoken with representatives
of the Punjab Government and Australia's High
Commissioner to Pakistan, Margaret Adamson,
especially on the role of women in horticulture
farms. Dr Ahmad's analysis found that in terms
of labour productivity, women are more
productive but they are paid less. A short briefing
on diversification was given to Pakistan's
Prime Minister who is considering a national
The value of cross-sector discussions,
however, are particularly stark in the case of the
non-governmental organisation the Akhuwat
Foundation, which is exceptionally positioned to
act on the third factor---farmers' lack of access to
Dr Steen explains that Akhuwat is a Pakistani
initiative that for more than a decade has turned
conventional microfinancing wisdom on its head.
The worldwide consensus has favoured lending
to the poor through for-profit microfinance
institutions. Instead, Akhuwat drew on the Islamic
principle that a society can prosper together if
the 'haves' help the 'have-nots'. As such, donations
from corporations and the salaried class are lent at
zero interest to the poor to set up or expand their
In the decade to 2013, the Akhuwat Foundation
disbursed over Rp 3.3 billion to 231,335 families in
about 105 cities and towns throughout Pakistan.
The recovery rate on that money was 99.83%, a
figure that tends to baffle microfinance experts.
"Akhuwat are interested in the findings from
this project and they want to work with us on
different models of providing credit to smallholder
farmers," says Dr Steen, who is keen to continue
The key issue moving forward into the next
phase is to use the findings to develop suitably
targeted solutions. He believes that the issue of
scale is likely to be important and may underscore
the three key drivers of productivity, especially
since farms are getting smaller as they are passed
down through families.
"We have to work out how to help farmers realise
the benefits of scale, such as through collaborative
farming and marketing, more suitable forms of credit,
value adding, and responding better to customer
demand," he says. n
ACIAR RESEARCH PROJECT: ADP/2015/004: 'Farmers'
capabilities, productivity and pro tability: A case study
of smallholders in selected agro zones in Pakistan'
MORE INFORMATION: John Steen,
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