ISLAMABAD, April 23: The World Bank on Monday said that an unequal distribution of land and water was a major obstacle to reducing rural poverty despite high agricultural growth.
In a report partially released ahead of the Pakistan Development Forum (PDF) meeting later this week, the bank called for increased participation of the poor people to reduce rural poverty.
"Unequal distribution of land and access to water for the rural poor in Pakistan limit the scope for agricultural growth alone to rapidly reduce poverty in rural Pakistan," the report said.
The report -- Pakistan: Promoting Rural Growth and Poverty Reduction -- says that ensuring efficient use of water and building partnerships with the private sector can help fulfill agriculture’s potential for diversification and growth.
An effective poverty reduction strategy, however, must also address the rural non-farm economy and needs of the rural non-farm poor. Social mobilisation, the report says, can empower the poor, enabling them to have a greater role in the development process, not only to improve delivery of public services, but also to increase their market share by building the voice and scale in farm and non-farm sectors.
The report says that agricultural growth, rural incomes, rural poverty and social welfare indicators have all showed marked improvements in recent years. "Yet despite impressive achievements, there is little reason for complacency. Around 35 million people in rural areas remain poor, representing about 80 per cent of Pakistan’s poor."
"Agriculture growth is a necessary, but not sufficient condition for rapid reduction in rural poverty," said Yusupha Crookes, World Bank country-director for Pakistan. "Appropriate investments in irrigation and the livestock sector can directly benefit small farmers who account for about 40 per cent of the rural poor.
However, the majority of the rural poor in Pakistan are not farmers, and additional measures need to be taken to revitalise the rural economy so that it could generate substantial rural employment. Such an expansion of the rural non-agricultural economy and improvement in the welfare of the rural poor cannot take place, though, without major investments in infrastructure and improvements in social services, including safety nets."
Overall, agriculture accounts for about 40 per cent of rural household incomes. The poorest 40 per cent of rural households get only 30 per cent of their incomes from agriculture. The report says Pakistan’s rural non-farm sector faces numerous constraints, particularly relating to access to credit and inadequate infrastructure.
According to the 2000 Agricultural Census, only 37 per cent of rural households owned land, and 61 per cent of these land-owning households owned less than five acres. Access to usable water is also unbalanced. Because of this skewed distribution of ownership and access to productive assets, much of the direct gains in income from crop production, particularly irrigated agriculture, accrue to higher income farmers.
Agricultural growth remains important to raise incomes of small farmers and to generate growth linkages by increasing demand for rural non-farm goods and services. However, in most of rural Pakistan, the impact of agricultural growth on rural poverty is limited for two reasons. First, much of the gains in rural incomes are spent on urban goods and services. Second, growth-linkage gains to non-agricultural incomes and employment in rural areas are shared among a large number of rural poor.
Two critical elements underpin the necessary transformation of the rural sector, the report says. First is the efficiency of public institutions and the need to make them more accountable and flexible. Second is the capacity to organise the "people sector" so that farmers, communities and villages can gain voice and reach the scale needed to attract the private sector and financial services and to strengthen the demand side of development by making the government more accountable.
The report says that a major reason for the limited impact of rural development efforts in Pakistan is the lack of participation and influence of rural poor households. This limits effective demand for public services and reduces the efficiency in development programmes. Although inclusive economic growth should be the main mechanism for reducing poverty, increased social protection efforts are needed to protect the most vulnerable.
Too often a top-down approach is implemented -- one that sees the rural poor simply as beneficiaries of public programmes supplied by the government. Instead, the report suggests, the development paradigm should be changed to one that puts the household and its community at the origin of development initiatives. Empowering the rural poor to take on this role, however, requires social mobilisation.
Social mobilisation, along with economic empowerment, should be at the heart of the rural livelihood development strategy. The benefits of broad economic growth trickle down very slowly when the poor have little access to key physical, social and financial endowments. To overcome highly unequal distribution of these endowments and achieve rapid pro-poor growth, poor people need new opportunities to organise, generate business and link with mainstream development activities.
