Rural poverty challenge

Agriculture being the mainstay of Pakistan's economy, accounting for nearly 25 percent of country's GDP, 60 percent of export earnings and 48 percent of employment it makes it all the more important to reform the sector so as to make it more responsive to efforts towards reducing poverty and at the same time accelerating its growth to at least on an average 5 percent per annum.
The single largest reason for rural poverty is said to be lack of access to land, whether own land or work on land because five per cent big landlords possess 64 percent of Pakistan's farmland while 50.8pc rural households are landless, according to the Society for Conservation and Protection of Environment (SCOPE). This state of affair has also opened up vast possibilities for ultra-exploitation and abuse of the landless. The power which derives from inequitable landholdings is said to be a cause and reinforcement for keeping people in poverty. The big landlords are believed to have a disproportionately large influence on social, political and administrative structure of Pakistan. Whether it is access to the state bureaucracy or to fertiliser, credit, and output market, the large landowners have far greater access than do small farmers.
Due to highly skewed distribution of land, a large part of the rural labour force remains landless and is hired seasonally, while others work as share croppers or tenant families under a wide range of contracts and tenancy regimes. However, the efficiency losses from incomplete contracts and insecure tenancies, it is believed, could be overcome by distribution of the available 2.6 million acres of state land if for the moment the opposition to redistribution of land is impossible to overcome. Assuming all the state land is cultivable its distribution among the landless could make a significant contribution towards efforts aimed at reducing rural poverty. For example, if the 2.6 million acres of state-owned land were to be transferred to landless farm households in sizes of 5 acres each, then as many as 520,000 tenant farmers would become owner operators. This means out of the total number of tenant farmers (about 897,000) in less than 25 acres category, as many as about 58 percent would be lifted from abject rural poverty overnight.
Not only will this have an instant positive impact on agricultural growth rates, it will also reduce - to a great extent - the exodus of rural landless to urban centres, thereby easing pressure on their depleting social and economic infrastructure and services.
However, the grant of land alone would not suffice to make all this possible. The first and foremost issue to be tackled by the government as essential follow-up is the availability of irrigation water which, due to poor maintenance of the canal irrigation system, has gone down considerably. The primary reasons are silting of canals and the crumbling of canal banks. A 1994 World Bank study revealed that delivery efficiency - from the canal head the root zone of crops - was around 35 to 40 percent, implying that a substantial majority of water is being lost due to canal seepages, spillage, breaches, and water course losses. While this means that farmers do not get adequate water for their crops, particularly those farmers who are towards the tail-end of the water course, the loss of water also gives rise to water logging and salinity, of particular concern in the province of Sindh which is fast losing its fertile land due to this menace.
The next important issue is that of making available quality seeds to farmers at an economically reasonable price. This again is the responsibility of the government. And, since in neighbouring India agriculturists are provided subsidised electricity, this too should be looked into by the government so as to enable our farm produce to become competitive in the international market price-wise. Availability of concessional agri-credit should also be ensured in order to enable the sector to maintain an accelerated growth rate and to make food grains available to urban population at reasonable rates.
Since all these additional obligations on the part of government would bring an extra heavy pressure on its resources, which are already falling seriously short of its current and development expenditure requirements, the need to levy tax on incomes from agriculture becomes all the more urgent. Of course there are many supposedly cogent reasons why it should not be imposed. But there are also some genuinely cogent reasons why it should be imposed and can be imposed to raise more than enough resources from those earning taxable incomes from agriculture to meet the extra resources required for the sector's development. While doing so, the government would be well advised to come up with a practicable crop insurance scheme as well and at the same time consider allowing the sector to operate as an industry.
Although, a vast majority of people engaged in agriculture are living below subsistence level, a number of big landlords have set up orchards, fruit gardens, vegetable and horticultural estates on their lands which yield higher incomes for them. There is also a class of landowners who have made substantial investments in real estate in cities. On the other hand, many traders and industrialists have purchased agricultural lands with the intent to whiten untaxed black incomes from businesses by showing it as agricultural income. Also many businessmen have entered into collusive arrangements with landowners; they obtain fictitious leases of lands from which they show enormous amounts of agricultural income which, in fact, is their business income and thus escape income tax.
Agriculture being the mainstay of Pakistan's economy, accounting for nearly 25 percent of country's GDP, 60 percent of export earnings and 48 percent of employment it makes it all the more important to reform the sector so as to make it more responsive to efforts towards reducing poverty and at the same time accelerating its growth to at least on an average 5 percent per annum.
The single largest reason for rural poverty is said to be lack of access to land, whether own land or work on land because five per cent big landlords possess 64 percent of Pakistan's farmland while 50.8pc rural households are landless, according to the Society for Conservation and Protection of Environment (SCOPE). This state of affair has also opened up vast possibilities for ultra-exploitation and abuse of the landless. The power which derives from inequitable landholdings is said to be a cause and reinforcement for keeping people in poverty. The big landlords are believed to have a disproportionately large influence on social, political and administrative structure of Pakistan. Whether it is access to the state bureaucracy or to fertiliser, credit, and output market, the large landowners have far greater access than do small farmers.
Due to highly skewed distribution of land, a large part of the rural labour force remains landless and is hired seasonally, while others work as share croppers or tenant families under a wide range of contracts and tenancy regimes. However, the efficiency losses from incomplete contracts and insecure tenancies, it is believed, could be overcome by distribution of the available 2.6 million acres of state land if for the moment the opposition to redistribution of land is impossible to overcome. Assuming all the state land is cultivable its distribution among the landless could make a significant contribution towards efforts aimed at reducing rural poverty. For example, if the 2.6 million acres of state-owned land were to be transferred to landless farm households in sizes of 5 acres each, then as many as 520,000 tenant farmers would become owner operators. This means out of the total number of tenant farmers (about 897,000) in less than 25 acres category, as many as about 58 percent would be lifted from abject rural poverty overnight.
Not only will this have an instant positive impact on agricultural growth rates, it will also reduce - to a great extent - the exodus of rural landless to urban centres, thereby easing pressure on their depleting social and economic infrastructure and services.
However, the grant of land alone would not suffice to make all this possible. The first and foremost issue to be tackled by the government as essential follow-up is the availability of irrigation water which, due to poor maintenance of the canal irrigation system, has gone down considerably. The primary reasons are silting of canals and the crumbling of canal banks. A 1994 World Bank study revealed that delivery efficiency - from the canal head the root zone of crops - was around 35 to 40 percent, implying that a substantial majority of water is being lost due to canal seepages, spillage, breaches, and water course losses. While this means that farmers do not get adequate water for their crops, particularly those farmers who are towards the tail-end of the water course, the loss of water also gives rise to water logging and salinity, of particular concern in the province of Sindh which is fast losing its fertile land due to this menace.
The next important issue is that of making available quality seeds to farmers at an economically reasonable price. This again is the responsibility of the government. And, since in neighbouring India agriculturists are provided subsidised electricity, this too should be looked into by the government so as to enable our farm produce to become competitive in the international market price-wise. Availability of concessional agri-credit should also be ensured in order to enable the sector to maintain an accelerated growth rate and to make food grains available to urban population at reasonable rates.
Since all these additional obligations on the part of government would bring an extra heavy pressure on its resources, which are already falling seriously short of its current and development expenditure requirements, the need to levy tax on incomes from agriculture becomes all the more urgent. Of course there are many supposedly cogent reasons why it should not be imposed. But there are also some genuinely cogent reasons why it should be imposed and can be imposed to raise more than enough resources from those earning taxable incomes from agriculture to meet the extra resources required for the sector's development. While doing so, the government would be well advised to come up with a practicable crop insurance scheme as well and at the same time consider allowing the sector to operate as an industry.
Although, a vast majority of people engaged in agriculture are living below subsistence level, a number of big landlords have set up orchards, fruit gardens, vegetable and horticultural estates on their lands which yield higher incomes for them. There is also a class of landowners who have made substantial investments in real estate in cities. On the other hand, many traders and industrialists have purchased agricultural lands with the intent to whiten untaxed black incomes from businesses by showing it as agricultural income. Also many businessmen have entered into collusive arrangements with landowners; they obtain fictitious leases of lands from which they show enormous amounts of agricultural income which, in fact, is their business income and thus escape income tax.
Agriculture being the mainstay of Pakistan's economy, accounting for nearly 25 percent of country's GDP, 60 percent of export earnings and 48 percent of employment it makes it all the more important to reform the sector so as to make it more responsive to efforts towards reducing poverty and at the same time accelerating its growth to at least on an average 5 percent per annum.
The single largest reason for rural poverty is said to be lack of access to land, whether own land or work on land because five per cent big landlords possess 64 percent of Pakistan's farmland while 50.8pc rural households are landless, according to the Society for Conservation and Protection of Environment (SCOPE). This state of affair has also opened up vast possibilities for ultra-exploitation and abuse of the landless. The power which derives from inequitable landholdings is said to be a cause and reinforcement for keeping people in poverty. The big landlords are believed to have a disproportionately large influence on social, political and administrative structure of Pakistan. Whether it is access to the state bureaucracy or to fertiliser, credit, and output market, the large landowners have far greater access than do small farmers.
Due to highly skewed distribution of land, a large part of the rural labour force remains landless and is hired seasonally, while others work as share croppers or tenant families under a wide range of contracts and tenancy regimes. However, the efficiency losses from incomplete contracts and insecure tenancies, it is believed, could be overcome by distribution of the available 2.6 million acres of state land if for the moment the opposition to redistribution of land is impossible to overcome. Assuming all the state land is cultivable its distribution among the landless could make a significant contribution towards efforts aimed at reducing rural poverty. For example, if the 2.6 million acres of state-owned land were to be transferred to landless farm households in sizes of 5 acres each, then as many as 520,000 tenant farmers would become owner operators. This means out of the total number of tenant farmers (about 897,000) in less than 25 acres category, as many as about 58 percent would be lifted from abject rural poverty overnight.
Not only will this have an instant positive impact on agricultural growth rates, it will also reduce - to a great extent - the exodus of rural landless to urban centres, thereby easing pressure on their depleting social and economic infrastructure and services.
However, the grant of land alone would not suffice to make all this possible. The first and foremost issue to be tackled by the government as essential follow-up is the availability of irrigation water which, due to poor maintenance of the canal irrigation system, has gone down considerably. The primary reasons are silting of canals and the crumbling of canal banks. A 1994 World Bank study revealed that delivery efficiency - from the canal head the root zone of crops - was around 35 to 40 percent, implying that a substantial majority of water is being lost due to canal seepages, spillage, breaches, and water course losses. While this means that farmers do not get adequate water for their crops, particularly those farmers who are towards the tail-end of the water course, the loss of water also gives rise to water logging and salinity, of particular concern in the province of Sindh which is fast losing its fertile land due to this menace.
The next important issue is that of making available quality seeds to farmers at an economically reasonable price. This again is the responsibility of the government. And, since in neighbouring India agriculturists are provided subsidised electricity, this too should be looked into by the government so as to enable our farm produce to become competitive in the international market price-wise. Availability of concessional agri-credit should also be ensured in order to enable the sector to maintain an accelerated growth rate and to make food grains available to urban population at reasonable rates.
Since all these additional obligations on the part of government would bring an extra heavy pressure on its resources, which are already falling seriously short of its current and development expenditure requirements, the need to levy tax on incomes from agriculture becomes all the more urgent. Of course there are many supposedly cogent reasons why it should not be imposed. But there are also some genuinely cogent reasons why it should be imposed and can be imposed to raise more than enough resources from those earning taxable incomes from agriculture to meet the extra resources required for the sector's development. While doing so, the government would be well advised to come up with a practicable crop insurance scheme as well and at the same time consider allowing the sector to operate as an industry.
Although, a vast majority of people engaged in agriculture are living below subsistence level, a number of big landlords have set up orchards, fruit gardens, vegetable and horticultural estates on their lands which yield higher incomes for them. There is also a class of landowners who have made substantial investments in real estate in cities. On the other hand, many traders and industrialists have purchased agricultural lands with the intent to whiten untaxed black incomes from businesses by showing it as agricultural income. Also many businessmen have entered into collusive arrangements with landowners; they obtain fictitious leases of lands from which they show enormous amounts of agricultural income which, in fact, is their business income and thus escape income tax.
(Issues in Pakistan's Economy - A political Economy Perspective, a voluminous compilation by S. Akber Zaidi has an elaborately comprehensive chapter captioned: Agriculture: Critical Issues (Pp64-107). The findings and conclusions appearing in this chapter have been extensively quoted in the article) (Issues in Pakistan's Economy - A political Economy Perspective, a voluminous compilation by S. Akber Zaidi has an elaborately comprehensive chapter captioned: Agriculture: Critical Issues (Pp64-107). The findings and conclusions appearing in this chapter have been extensively quoted in the article) (Issues in Pakistan's Economy - A political Economy Perspective, a voluminous compilation by S. Akber Zaidi has an elaborately comprehensive chapter captioned: Agriculture: Critical Issues (Pp64-107). The findings and conclusions appearing in this chapter have been extensively quoted in the article)