At long last, we see a World Bank that has either rectified its view of a segment of Pakistan’s economy in general and that of its agricultural sector in particular or it can now see it in a clearer perspective.

A World Bank report says, “The continued political dominance of large land owners combined with social fragmentation have kept much of Pakistan relatively backward both socially and politically” (Dawn, 21-8-02). The World Bank Pakistan Country Assistance Strategy (CAS) report says that concentration of land ownership and share tenancy have contributed to massive rural poverty and low farm yields (ibid).

A state which has thus far viewed the World Bank’s pronouncements as gospels ought to take a serious note of the bank’s recent “revelations” about which many have been clamouring in the country but without finding an audience amongst the elite corps of Pakistan’s policy makers. Since it is now none other than the World Bank that is speaking up, they ought to be listening and attentively. Here is more!

The World Bank report further points out that 2.5 per cent of big farmers own one-third of the country’s total farm area (34 per cent). (ibid) Their contribution to income tax is, however, nominal. This alone shows how skewed the land distribution pattern is which contributes to poverty. Landless comprise 50 per cent of the rural population and are afflicted the most by rural poverty which falls steadily as ownership of land increases. Almost 75 per cent of Pakistan’s poor are landless and these comprise 70 per cent of the rural poor. (ibid).

The CAS report says further, “Inequity in land ownership explains why overall agricultural yields in Pakistan remain below those of other countries with similar resource endowment. There is evidence from developing countries, including Pakistan that as farm size increases, productivity falls” (ibid). Many in the country should feel vindicated that some of their advocacy is reiterated by the World Bank whose policy advice has always held sway in Pakistan’s “powerful” decision-making corridors.

One may, however, need to pause and wonder whether the above report’s findings and conclusions are to influence Pakistan’s agricultural policy vis-a-vis land tenure arrangements and their linkage with the incidence of rural poverty or whether this is one of those consultant’s reports that either decorates the shelves or catches dust in an obscure corner of a reports’ warehouse as happens to those reports that are written to be forgotten as far as their broad appeal is concerned. One might further be curious to know if the findings of World Bank’s strong research wing found their way into a country strategy document for a specific purpose. If yes, one would be eager to know as to what that purpose might specifically be.

Upfront, it would appear that if the causes of rural poverty and productivity are being delineated and linked with the skewed pattern of land distribution in Pakistan, then the goal might be to root out the very source of poverty and inequities that is the mother of most economic ills in the country. That is, to rectify that pattern of agricultural land distribution that has been giving rise to a plethora of economic pathologies since inception. However, if the goal had been as far reaching as above, then we would not have been fearing and dreading the introduction of corporate farming branded by some quarters as neo-feudalism and rightfully so. And, we would not have had a finance ministry banking on a mere increase in economic growth rate to create jobs and a couple of fancy micro-financing outfits to alleviate poverty, the symptomatic nature of the latter’s operations notwithstanding. Also, we would not have been half as enthusiastic about a deflationary IMF programme that has not produced anything better than jobless growth, if at all, government’s claims to the contrary notwithstanding.

Why then amidst the above bleak scenario has the World Bank generated a ray of hope by talking about the maldistribution of agricultural land in the country and its impact on poverty and farm yields? While this CAS report was prepared and turned in, it did not quite hit the headlines. In fact, it was reported as a comment by an economic analyst in the above-referred source. If the goal then is not to aim at radical reform implied in the above CAS as is also evident from Pakistan’s so-called economic reform thrust, why then has the World Bank brought the ills of agriculture out on the surface so forcefully?

The above-referred comment further says, “In a coordinated effort, the IMF has also expressed its disappointment over the poor collection of agricultural income tax in the outgoing fiscal.” Forceful implementation is what the IMF is now seeking in the area of agricultural income tax collection and emphasis is on moving beyond legal and regulatory reforms. It might, therefore, be to provide impetus to tax collection with force that the IFIs are perhaps now talking forcefully about the inequities plaguing the agricultural sector in terms of both assets and income distribution.

Is it, therefore, an attempt to lower the cost of agricultural tax payment by showing a glimmer of the heavier cost of asset redistribution? That is, if the cost of direct tax payment is not borne, then the tougher route via rectifying assets’ maldistribution could become a possibility. Rational beings would opt for the former to avert the latter and tax collections might then end up increasing from agriculture which is what a key part of the focus of IFIs economic reform strategy is all about. In this case, it would be for the love of their own “reform” package that the IFIs would be talking about gross inequities in the agricultural sector and the consequences thereof rather than bringing about a substantive change in the areas of agriculture and thereby in the country’s economy.

While this is notwithstanding the importance of higher agricultural income tax revenues, the grief is about lack of attention to the findings of a World Bank’s work that should be eye-opening for policy correction if domestic advice is not considered worth it. One would then even delve into the issue of selective attention to World Bank’s presentations. Is it that only that part of IFIs’ advice is heeded that does not adversely affect the interests of the powers-that-be in the country?

By the same token, do the IFIs push only that part of their view which would not diverge from the interests of those who matter to them in the country provided radical goal-oriented reform is at all a part of their agenda? If this be the case, then the power to resist or push is a function of the cost-benefit analysis carried out by both the buyers and sellers of policy in a market place of policy dominated by monopolistic control of some.

So, even though there may be agreement over the revenue mobilization effort in agriculture as well, the difference continues to be around the approach to Pakistan’s economic ailments of inequities, unemployment, and poverty over which there is consensus only in speech but not in terms of the actions required for the purpose of addressing the same effectively. In fact, some approaches end up aggravating those very issues that the governments try to address mostly on the basis of the preferred advice of the IFIs when none can guard own interest except own independent heads and hearts. Since the subject of concern here is agriculture, we dwell upon it further.

Against the backdrop of the above-referred World Bank’s CAS, it is simply mind-boggling to see how the idea of corporate farming has caught on to the extent that the government is reportedly all set to even remove the ceiling on land holdings for foreigners. Even if not prescribed specifically, the idea for corporate farming does emanate from what the IFIs have been lending us in terms of ideas as well. These have included free markets, export-led growth, and foreign investment as sure-fire recipes for growth and development.

In the area of agriculture, there has been a mindless emphasis on land productivity when for a third world country emphasis should be on overall production, total factor productivity, employment, and poverty alleviation through inclusion rather than exclusion of people that corporate farming would end up doing. Further, farm yields in the third world are inversely related with farm size. Direct relationship between farm size and yields is first world specific that has not been replicated in the third world where farms and their sizes are more a sign of power and prestige rather than a means to enhance national wealth. To think that corporate farming will be able to eventually help achieve the goal of raising farm productivity, farm exports, and tax generation is like borrowing a small leaf out of the overall development experience of the first world that will serve as a patch so strong in a weak base that the fabric will only stand ruptured further. A fabric that is festering from the wounds of poverty, inequities, joblessness, landlessness, and exclusion which none now dispute but which are likely to become more sore through the patchwork of corporate farming also because of its negative environmental effects experienced in most intensively cultivated third world soils.

As for the labour-displacing/saving mechanization, scale economies, and technology intensity of large farms in the first world, these are labour-scarce economies where structural transformation took place rapidly from agriculture to manufacturing to service and to knowledge-intensive sectors. Farmer in these economies is getting extinct. They suit their production processes according to the conditions prevailing in their environment and on the basis of resource availability or scarcity.

Why must we follow in their footsteps? At the risk of repetition, do we adorn overcoats, gloves, and ear muffs in December just because they do so in North America’s snow belts? It sounds ridiculous. So does mindless adoption of production processes and techniques that do not suit our initial conditions and that will have more unfavourable than favourable impact on our economy. At its worst, it is the big farm lord whose power will be enhanced as joint ventures with agri-business MNCs will be encouraged. We will then have entered the neo-feudal state of affairs when possibility of fighting economic ills will recede even further into the future.

As far as farm productivity, farm exports, and farm yields are concerned, these issues were dealt with by some of us earlier this year which ought to be looked at before a further radical measure of removing land ceilings is adopted for foreign corporations. Unfortunately, the more are radical reforms advocated, the more is the radical swing towards the power of capital when it should be towards the end now promoted by all, that is, the interest of the people at large. This should be the touchstone of all policy measures and the first critical one is that of corporate farming.