MULTAN: Agriculture is the mainstay of the country's economy and the fact is evident, among other factors, from the official statistics that about 67.69 per cent of the country's labour force belonged to the rural areas and of the employed labour , 48.42 per cent is absorbed by the agriculture sector.

According to the Labour Force Survey 1999-2000, the labour force participation in terms of crude activity rate (overall labour participation) is 29 per cent - 29.8 per cent in the rural areas and 27.1 per cent in the urban areas.

Although the official statistics put the unemployment rate in the rural Pakistan at 6.94 per cent as compared to the 9.92 per cent in the urban, the unemployment rate in the rural areas is considered much higher by the independent economists in the wake of rampant underemployment of wage labourers (landless tillers) and self-employed small farmers. This can be verified through an Asian Development Bank report that three-fourth of the poverty-stricken population of the country lives in the rural areas, where depth and severity of the poverty are also greater. According to the census of agriculture, about 85 per cent of the farmers have small landholdings.

Thus, majority of the so-called employed labour force in the rural areas is hardly maintaining a subsistence level with low productivity. High cost of production and low returns, poor farm- to-market infrastructure, exploitation of the middlemen and deplorable living conditions owing to pitiable social indicators (education, health and hygienic conditions) are resulting in shrinking agricultural incomes and pushing the rural population to explore work opportunities in the non-farm activities.

However, in the non-farm sector the rural labour force has to compete on the wages with the skilled and relatively more productive urban labour force. While, the phenomenon also gives birth to another social problem of unchecked rural-urban migration. Experts say that employment in the non-farm sector in the rural areas can be generated by developing physical and social infrastructure and setting up small and medium agro-based industrial units, such as, food processing and packing plants to combat the menace of underemployment, low-incomes and rural-urban migration.

In a country like Pakistan, agriculture remains the engine of overall economic growth as good years in agriculture translate into high rates of GDP growth and vice versa. It is believed thatmore employment opportunities can be created in the agriculture sector with relatively less investment as compared to other sectors. But, most of the government endeavours on this front are more focused on informal sector by financing through micro-credit schemes of Khushhali Bank and Rural Support Programmes, which have failed to radiate a significant impact on the overall unemployment situation in the rural Pakistan.

The looming challenge to the agriculture in Pakistan is from the trade liberalization under WTO regime as the new rules of game are supposed to encourage export-oriented agricultural products and the phenomenon will favour the large landholdings (corporate farming) where labour absorption is much lower as compared to the fragmented pieces of agricultural lands.

As is conspicuous from the shortsighted government policies in the agriculture sector, the country has not so far fully realized the impacts of new rules of business, especially on the largely unskilled rural labour force.

Chairman of the Bahauddin Zakariya University's economics department, Prof. Dr Karamat Ali say that the challenge of trade liberalization and impending gravity of the unemployment and underemployment in the rural labour force can be addressed by introducing land and tenancy reforms aimed at to land distribution among landless tillers and wage labourers supported by improvement in social and physical infrastructure with access to subsidized credits.