PERSISTENTLY high level of poverty in the rural areas afflicts the households of most small landowners (family farmers) and the landless, including small livestock herders, tenants, and wage workers engaged mainly in the agriculture sector.
In many of these households, women tend to suffer more than men because of the culture-based discrimination. The feeble growth of farming sector is only one reason for rural poverty. Perhaps a more important reason is that the rural poor do not own or control income-generating assets, good quality land being the main asset.
In fact, landlessness has two effects. First, it makes the landless dependent on others’ demand for tenants and wage workers. The demand for tenants by landowners to cultivate land has been on the decline, being replaced by machinery and wage workers for efficiency and profit.
Should the landless poor continue to depend on their own devices and charity in various forms for their survival?
Second, the landless are unable to access finance (credit) and build human capital. Access to finance itself depends on collateral that the landless do not have. Human capital depends on exposure to education, which in turn depends on its direct and indirect costs to the poor households.
There are two basic reasons for landlessness. The first is the highly unequal distribution of landownership. We do not have direct evidence on who owns how much land because the provincial land commissions do not publish or allow the public to see the data on individual ownership of land.
The decennial agriculture census data tend to show that landownership is highly concentrated and the inequality has increased over time in spite of the land reforms of the Ayub and Bhutto era.
The second reason is that the access to land through tenancy for the poor households has been falling as the landowners are shifting to machinery and wage labour.
This is particularly true of the sharecropping mode of tenancy throughout Pakistan: capitalist agriculture is far more profitable to the large landowners. The displaced tenants must offer their labour and compete for wage income either in the rural or urban area.
The land rights of tenants, though well-defined and laid out in the provincial revenue acts, are in practice quite easy for large landowners to circumvent or violate with impunity.
On the issue of land redistribution, the Federal Shariat Court in 1990 decided unanimously that the Islamic law sets no limit to the amount of land a person can own. The plea for social justice carried no weight in the Court’s judgement.
The appeals against this judgement are still pending with the Supreme Court. Governments do not have any option but wait, even if they are willing to consider land redistribution.
Land reform does not seem to be on the government’s agenda. The much-publicised distribution of state land is a public relations gimmick. Most of that land is of low fertility, bad location and difficult access to water and requires much investment and effort.The new owners do not have a public support system to make a living on these lands. In fact, most land redistribution schemes have been ineffective or failed because of the lack of a good support system for the new small landowners.
In the meantime, the potential beneficiaries of land redistribution are losing their claim on land as they are being forced into wage labour outside agriculture. Tenants are no longer in much demand and small landowners (farmers) are being squeezed out as well in the competition for land.
There are at least two ways in which the poor can escape their precarious existence. One is to get a reasonable parcel of land in size and quality that they can cultivate and use to access financial capital (credit) and markets for inputs and outputs.
That is not on the horizon any time soon, if ever. The other is to move either a part or all of the household to an urban-industrial area and offer their labour for wage income.
It’s a risky business, but often desperately necessary to get out of the vicious cycle of poverty. Public policy plays an important role by giving signals to the rural poor for making their decisions.
For the landless, whose number is rising, a major source of survival is wage labour. The problem is that the income from wage labour, especially in the rural areas, depends on the demand for labour in farming and the wage rate.
The demand for labour in agriculture is seasonal (highly variable) and apparently not rising. In some parts, close to the urban-industrial area, employment avenues tend to be better, but there is greater competition for low-skilled jobs.
What is more important is that the nominal wage rate does not keep up with the inflation rate. In other words, the purchasing power of whatever the wage workers earn is falling and not rising.
This is particularly true for food items, of which prices are rising faster than of other goods and services. Food security of the wage workers depends entirely on the market for labour (job and wage) and the price of food.
It seems obvious that public policy has done little if anything for the landless (rural) poor. The mix of indirect taxes and price subsidies in the agriculture sector have been a major source of its lacklustre performance reflected by the low annual growth rate and stagnant if not falling productivity.
Governments have under-invested in agriculture research and technology dissemination and in building the physical and social infrastructure for rural areas.
In any case, agricultural growth is necessary but not sufficient to alleviate rural poverty. Food and income security for the landless poor should be well targeted and administered locally.
In many countries, seasonal employment for these groups (men and women equally) for building the rural infrastructure and conditional cash transfer to the poor households have been two effective ways to secure food and income security and to build human capital through schooling and health care for children.
The twin policies provide support in the short run as they also help secure a far better future. The important point is that the food and income security programme—funded largely by revenue from a fair and progressive tax on agriculture income and wealth—in its deigning and delivery should involve the prospective beneficiaries, local representatives and local administration as active participants.
The problem is that the ‘democratically’ elected federal and provincial governments do not seem to like the local participation and decentralised administration.
This has been a major source of bad assessment of the needs and much waste and inefficiency in delivering public goods and services. There is substantial evidence of this all around the country.
How long will (or should) this state of waste and inefficiency last and at what cost to the rural poor and society? Should the landless poor continue to depend on their own devices and charity in various forms for their survival?
The writer is Professor Emeritus (Economics), Simon Fraser University, Canada.
Published in Dawn, Business & Finance weekly, May 2nd, 2016