This paper explores the socio-economic dynamics surrounding cotton production in Pakistan, focusing on the impact of neoliberal policies on smallholder farmers and the cotton supply chain. Despite Pakistan's historical significance in global cotton production, the sector has experienced a significant decline in productivity, leading to increased vulnerability among farmers. The study examines how neoliberalism has exacerbated economic disparities, leading to a bifurcation of the agrarian economy into petty commodity producers and large capitalist agribusinesses. Through qualitative research, including interviews with farmers and middlemen (arhatis), the paper investigates the erosion of cooperative solidarity among farmers and the rise of arhatis' influence. The findings highlight the challenges faced by cotton producers, including rising input costs, commodification of seeds, and the substitution of cotton with other crops, which have collectively contributed to the precariousness of smallholder farmers. The paper argues for a re-evaluation of current policies and suggests that strengthening farmer cooperatives and resilience strategies could mitigate the adverse effects of neoliberalism on Pakistan's cotton sector.