THE concept of ‘inclusive rural development’ has gained currency in a bid to improve the quality of life of all citizens.

Empirical evidence suggests that high overall economic growth is not a sufficient condition for inclusive rural development. It requires an equitable distribution of benefits of growth and opportunities for different sectors of economy and segments of rural population.

An important factor is effective land reforms. Transfer of ownership to rural households sustains long-term productivity of the land because, when farmers own it, they use it in a more sustainable way, giving boost to productivity and increasing their income significantly. A research has shown that by the provision of secure land tenures, the income of Chinese farmers increased by 25 - 65 per cent within five years.

Moreover, land distribution is of vital importance for the conservation of land and water resources. The greater the area under cultivation the greater is the possibility of owners’ neglect about its productivity, soil conditions and water resources. It is estimated that about 38 per cent of irrigated land is waterlogged, 14 per cent is saline and the application of agricultural chemicals has increased by a factor of almost 10 since 1980.

Another major determinant of development is efficient infrastructure which includes roads, irrigation, rural electrification and communication. Proper access to input markets brings efficiency in the system as farmers are able to use inputs effectively, timely and efficiently.

Similarly, access to output markets make available to farmers and rural non-farm enterprises opportunities that otherwise cannot be fully seized. Timely access to markets, availability of storage facilities and processing facilities make it viable to opt for high value-added agriculture. Regional disparities in the provision of infrastructure result in increased income gap between rural and urban people and intra-rural areas. Public-private partnership in rural infrastructure is needed for sustainable and inclusive rural development.

The presence of effective institutions is also a necessary condition, ranging from grassroots level organisations to the central and top administrative institutions. These institutions are playing and can very important role, in the development process.

Cooperatives and farmers’ organisation’s potential for quick, timely and low-cost delivery of inputs and low cost outreach to output markets make them more important. Similarly small and marginal farmers’ access to institutional sources of credit, deposit and insurance services determine the inclusiveness of development process.

With low levels of finance availability it becomes increasingly difficult for farmers to adopt fertiliser responsive varieties and new technology to improve their farm productivity. Also, due to disproportionate availability of credit services to large farmers, income inequality in rural areas has increased overtime and continues to rise.

Micro credit to rural farm and non-farm enterprises, however, signals positive signs for inclusive rural development, despite low outreach of microfinance institutions.

A vibrant agricultural sector is also very important. Research and extension expenditures are much lower, compared to its share in GDP and total employment. Wheat productivity is 21 per cent less than that of the world average. The agricultural sector is working below its potential and suffers from policy neglect, latest example being ‘rice price crash’.

Thus, a buoyant agricultural activity will provide the most important opportunity available to the country to meet its growing need for cheap raw material for industries and to provide rural labour long-term employment. The government should facilitate markets to provide proper price signals to farmers to allocate their farming resources in accordance with the growing demand of consumers for processed and high value-added agricultural products, including meat, milk, milk products, fish, etc.

To make small farming sector more dynamic, technology adapted should suit their cultivation mode. Currently, peasants have very little know-how about new technologies, nor can they afford costly technologies.

Then the rural non-farm enterprises have significant potential for reducing rural-urban income disparities and inequalities in intra-rural sector, and between farming and landless peasants.

These enterprises require low initial capital to start with and increase income of rural people and reduce their vulnerability to income shocks by diversifying the sources of income they have. These provide sustainable sources of employment and income to rural people. A rural Asia study by ADB found that about 20-40 per cent of total rural employment and 25-50 per cent of total rural income in Asia is from rural non-farm enterprises.

Lastly, the emergence of rural non-farm economy has been brought about by extensive use of subsidies in many countries. However, its impact on rural livelihood and income distribution is a controversial issue.

But the mode of subsidy, which should be provided to the farmers, involves a more thoughtful decision. Output subsidies in the form of support prices cause a crisis in the market due to hoarding. Input subsidies are thought to be more positive and directly benefit the farmers.

Almost every country subsidises its agriculture to achieve inclusive rural development objectives. Some provide input subsidies, some output and some heavily subsidise research and extension services to farmers.

All rural people should be provided the opportunity to fully participate in growth process and develop their capacity to take benefit from it, while giving special attention to less favoured areas to bring them in mainstream economy.

The writer is an M.Sc (Hons.) student at the Institute of Agricultural and Resource Economics, University of Agriculture Faisalabad