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Stagnant rural economy hampering success of all poverty reduction strategies

Stagnant rural economy hampering success of all poverty reduction strategies

Among the developing countries having agrarian base, Pakistan is bracketed with countries having a large rural impoverished population. According to a World Bank Report this group of countries on the globe is distinguished for having almost 90% of their rural population falling in the categories of either landless labour or those having uneconomic farm holdings, thus placing almost 80% of their rural population at the threshold of poverty.

According to Asian Development Bank report despite poverty reduction strategies in force in Pakistan the poverty in rural areas continue to increase. During the period from 1991 to 2001, percentage of poor on country basis had sharply increased from 25% to 39%. Cultivators who form the bulk of rural poor are directly engaged in cultivation and managing the crops till these are marketed. Quite a number of them are involved in farming sub sectors like livestock, poultry farming, fisheries and forestry etc for earning their livelihood. But due to intermittent economic crisis caused by frequency of natural calamities like drought, flood and unusual extreme whether conditions owners of small farms and landless labours/tenants are found worst affected. Almost every year major portion of their assets is eliminated due to natural disasters.

Women who are equal participants in managing farming and non farming activities are victim of domestic violence, under nourishment and lack of access to education and health facilities, hence their overall working efficiency is affected. Resultantly entire family remains entangled in whirlpool of poverty and resultantly both small land owners and landless cultivators are always under increasing pressure to get out of agriculture sector altogether and move to urban areas where they mostly earn their livelihood from informal sector, thus adding to urban poverty also. According to UNO reports relating to Pakistan almost every year around 180,000 people migrate from rural areas to big cities making these cities more crowded. Industrialisation has also led to migration of landless labour and educated rural youth to urban parts of the country for employment both in formal and informal sector. Use of new technology in industrial process also prompted rural educated youth to switch over to urban sector for employment. As such rural- urban gap in social and economic indicators continue to increase significantly in recent years. In order to halt mass migration of rural population to urban centres, a systematic rural sector development program need to be undertaken with focus on modernised farming approach and also on development of agribased industries by providing necessary infrastructure. In this regard CPEC recent initiative to develop transport infrastructure providing linkage to big cities, developing ware houses and cold storage facilities can be helpful for fast growth of rural economy.

In rural areas of the country non cultivators are perhaps the poorest among rural poor and on top of that fastest increase in population growth rate is visible among this particular segment of rural population. These workers including women depend on seasonal demand for labour for agriculture, particularly for harvesting of crops and for rural informal business activities, small scale/micro businesses and services. These landless workers are more vulnerable to fluctuations in demand for labour, wage rates and food prices. Their survival is at the whims of big landlords/waderas who in fact have promoted absentee landlordism culture in rural sector and above all they have a major representation in all parliaments and senate of the country and have strong grip on both rural and urban economy. The landless rural poor unlike their counterpart in urban areas are normally excluded from social sector safety nets (like food coupons and financial assistance from Baitulmal and Benazir income support program etc.) provided by the government. In this regard recent initiative from the side of government to provide interest free loans to youth for starting micro businesses under EHSAS program will go a long way in improving economic status of rural population.

Now it is a universally recognised fact that good governance, sound macro economic policies, competitive markets and public sector investment in physical and social infrastructure and people’s participation are cornerstone for development strategies leading to poverty reduction. Macro economic policies of a country finally effect market conditions and infrastructure of a country, which directly impacts rural poor. Market in which rural poor operate are of agriculture inputs and wage labour and most importantly financial market. Rapid fluctuations in prices of agriculture inputs and wages of labour and poor farmers inaccessibility to formal financial sector and their reliance on borrowings from private money lenders and other informal sources has deepened roots of poverty in rural areas. For enhancing well being of farmers through improved farming and allied agricultural sub sector activities, needed infrastructure should be in place. Rural poor should have access to all utility and public services, new farm technologies, roads and transport system for access to markets, which in turn have repercussions on overall working efficiency of farmers and finally determine extent of effective human capital available with agriculture sector.



Inaccessibility to institutional credits continues to be an impeding factor for sustained growth of farm businesses of small farm owners and landless tenants/haris. Despite past and present agriculture credit schemes launched through specialised financial institutions like Zari Tariqiati Bank and leading commercial banks and growing network of microfinance banks to make institutional credit more accessible to farmers who have nothing to offer as conventional collaterals, almost 50 percent of rural population still remains deprived of formal sources of credit. In this respect community based credit program in which poor actively participate in the making of lending decisions and which are subject to peer accountability can penetrate among all segments of poor farmers and are available at a reasonable cost. According to World Bank report released on performance of microfinance sector in Bangladesh only through efforts of Micro Finance Institutions (MFIs) Bangladesh could reduce its poverty by ten percentage points over the period of last five years and their present rate of poverty reduction is being sustained.

No doubt government sincerely aims for improving living standard of farmers by improving their income. Despite IMF pressure to cut down Public Sector Development budget sizable allocations of funds has been made by federal and provincial governments for building dams ensuring perennial water supply and building of roads linking rural areas to urban markets. Besides that arrangements are in hand to provide quality seeds and fertilizers to farmers leading to substantial increase in yield per acre and growers income.

Agriculture’s sub sectors like livestock, fisheries, poultry farming and forestry are also need to be promoted not only to create tremendous employment opportunities, but also for ensuring nutritious food to poor with affordable prices. It is heartening to note that government’s medium term development plans for agriculture aim for achieving annual growth rate of at least 3 percent for agriculture sector as whole with greater focus on sub sectors like livestock, poultry farming and fruit orchards etc. Special incentives are being offered by present government for livestock and poultry farming by providing seed capital for the purpose. Besides that there is need to eliminate menace of absentee land ownership in order to mobilise owners interest for improving farming through use of latest farming technologies.

Further, good macroeconomic management need to be recognised as routine practice, which of course is basically reflected from controlled inflation status, which in turn does not permit subsidised pricing of agriculture products, which presently is one of the main causes of fiscal and current account deficits being faced by the country.

Under the present political and culture environments possibility of rural poor participation in decision making relating to rural development issues is totally out of question. Their representation in assemblies for legislation process, in almost all the regimes has always been through big land owner MNAs and MPAs, hence issue of land reforms was neither taken up or if some headway made it was not implemented in letter and spirit. Since rural poor right to adequate land and access to water is of key importance to reduce rural poverty, a comprehensive land reform program needs to be undertaken on priority basis. This must include redistribution of land holdings ensuring a fair share to landless cultivators, total elimination of absentee landlordism and tenancy contracts to be made tenant friendly and legally enforceable. This will improve operational efficiency of farmers, which in turn would enhance overall economic growth rate of agriculture sector.

Asian Development Bank has recently proposed E-Agriculture for Pakistan and other Asian agrarian economies, which will focus on improved access to information on: 1) market data and analysis; 2) area specific weather alerts and improved technologies and techniques to increase efficiency, productivity and profitability.

For government, it will be in fitness of things to mobilise public opinion, particularly of big landlords to eliminate feudal system altogether. So far among South Asian countries it is only Pakistan where feudal lords have strong hold on entire economic and social set up. Now when government is geared up for a forward looking approach in all national matters, country must get rid of all such injudicious environments both in rural and urban sector to eradicate poverty in the real sense.

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