Extending prosperity to Pakistan's nearly 0.1 million villages and improving the living standards of rural people, particularly of those below the poverty line have been avowed goals.
Despite the five decades of planning there still is, a long way to go.
For a household of five members, the poverty line is represented by an annual income of Rs11,060 (2002-03 prices). Per capita income comes out to Rs3,704 at the current prices. The major determinants of per-capita rural income are gross cropped area per person and per-hectare income-generated. The gross cropped area per hectare in rural Sindh is only 0.30 hectare, indicating a heavy population pressure.
According to a study conducted by an NGO, the Basic Urban-Rural Services and Training (Burst), the gross value from agriculture per hectare at the current prices in rural Sindh in 2002-03 was Rs41,323. Using this statistics the income generated, i.e. the net value added per hectare was found to be Rs2,153 only.
The average annual expenditure of a rural household is Rs8,936, just enough for the survival, while the total farming income remained at Rs3,673. This income falls short of the minimum level required to keep the body and soul together, leave alone other necessities of life like medical care and education. A major dichotomy in our economic system is that a mere processor becomes wealthy while the basic producer struggles to have a decent living.
The agricultural income per rural person is estimated at Rs646 if the gross value from agriculture per hectare from the rural Sindh is taken (0.30 x Rs2,153). The availability of the gross cropped area per rural person will decrease given the fast population growth.
The average size of the rural household is reckoned at 5.6. The per-capita consumption expenditure of these households is estimated at Rs1,560, just for survival. Thus the annual expenditure each of these households comes out to Rs8,936, while the total farming income would be just Rs3,673 (Rs 646 x 5.6). This income falls short of the minimum level required to meet other necessities of life like medical care and education.
An analysis of the agrarian structure reveals the number of operational holdings by major size classes of farms - marginal farmers having less than one hectare, small farmers one to two hectares and semi-medium farmers with 4-10 hectares and large farmers with 10 hectares and above.
Nearly 75 per cent of the holdings fall within 2 hectares, having area of hardly 26 per cent. These rural small and marginal households numbering 78.9 million having a total of 441.84 million people can be considered as hardcore rural poor.
On an average, the suggested consumption for a household would be Rs11,537 now. This leads to the conclusion that the consumption level of small farmers is far below the nutritional requirements. The poverty estimation by the Planning Commission thus appears to be rather misleading.
Not long ago, Burst had conducted a survey in 15 villages of Sindh. According to the study, in rural Mirpurkhas village, with a population of 1,400, and average land holding of 1-5 acres, debt per farmer varied from Rs0.6-1 million(mn). In Thatta village population of 2,500, average holding was 4 acres and the average debt per farmer Rs 0.4 mn. In Sanghar of 9,00 people and 12 acres average holding the debt per head was between Rs 0.4-6 mn.
First the farmers mortgaged their lands to raise loans from the private lenders. Unable to repay, later they sold off their lands. In Mirpurkhas, Thatta and Sanghar villages, farmers sold 300, 100 and 300 acres, respectively. A few were forced to embrace death when they failed to attain relief even after selling their lands.
If one looks at the features of Pakistan farming, heavy concentration of area under food crops will be noticed. Agricultural prices, especially of food grains are depressed.
They are not determined by market price but by price controls and other measures. The agricultural price policy ignores the cost element and distributive justice and also the long-term adverse effect on capital and technology transfers to the rural economy.
Reasonable return to farm products should be provided during the initial stage of development. This argument stems from the fact that the present emphasis is on employment, rural development, meeting the basic needs and income distribution.
In recent years certain developing countries tried to keep agricultural prices low. They experienced slow growth, both in agricultural and overall production. The basic fault in our economic system is that the agricultural prices are kept low and the prices of manufactured products at a fairly higher level.
The peasants are basically the primary producers and do not have the wherewithal to process the raw material. The benefits of value-addition accrue only to the manufacturers. This is a major dichotomy in our economic system - a mere processor becomes wealthy while the basic producer struggles to have a decent living.
There is now a strong plea for the diversification of crops to improve the economic condition of small farmers. It will not redress the peasants' miseries till the farm trade and agro-processing business go into the hands of peasantry.
