APPROPRIATE rules and regulations are imperative for the resolution of a conflict of interest among stakeholders, to discipline the market and to support reforms required for the country’s socio-economic progress. This is expected to translate into a ruled-based economy, politics and society.
But the reality is different because of ad hoc, ill-conceived and extractive government policies and weak regulatory oversight. It indicates poor governance. For rule-based economic activities, good governance is a pre-requisite. To quote development economists, governance has to be ‘problem-driven, context-specific and people-centric.’
Nevertheless past experience demonstrates that over-regulated, state-directed economies have failed to deliver. Regulations should not stifle the economy. Experience calls for creating awareness for voluntary compliance by improving the government’s service delivery, not by sermons by state functionaries.
Administrative and regulatory measures operate within the ambit of a given social and cultural milieu. For example, issues become more problematic in a backward agriculture sector. That much of farming remains in the informal sector shows that neither past reforms nor regulatory measures have worked effectively.
In the absence of modern production methods, crop yields per acre are so low that 42 per cent of the country’s workforce produces and survives on 20pc of the national income. Agriculture is growing at less than half its potential of 7pc per annum. Sustainable development remains elusive because farming is not being run on industrial lines.
Experience demonstrates that over-regulated, state-directed economies have failed to deliver. It calls for creating awareness for voluntary compliance by improving the government’s service delivery, not by sermons by state functionaries
As the backbone of the country’s economy, and for ensuring food security for all, farming deserves to be placed at the centre of the national development strategy. It contributes 19.5pc to GDP, employs 42pc of the labour force, provides livelihood to 62pc of the population and 65pc of export earnings.
The Food Security Assessment Survey 2016 shows that agricultural growth has not benefitted the rural poor. Approximately one-fourth of the population in the countryside is undernourished with child wasting and stunting posing major problems.
Millions are just subsistence farmers or landless peasants whose families suffer from malnutrition and are unable to afford proper education or healthcare facilities. The output and accessibility of crops such as vegetables, fruits, nuts, oilseeds, pulses, livestock products etc, which contribute 50pc of nutrition, are inadequate for the vulnerable.
Diets of the people are deficient in essential micro-nutrients such as iron, calcium, vitamins. The “zero hunger’ and poverty reduction programmes have yet to become a part of the mainstream farming or food processing industries.
The issue of rampant poverty and inequality remains essentially unresolved despite two land reforms and subsidised farm inputs given to small growers. Big farmers, according to anecdotal evidence, often force small farmers to sell their land.
Perhaps the major reason for discontinuation of distribution of state lands to landless peasants in Sindh was the opposition by the landed gentry. Big growers occupy, illegally or legally, kutcha lands. Maximisation of yields suffers at the hands of absentee landlords.
Supply of irrigation water and subsidised gunny bags are skewed. Tenancy laws are observed more by their violations. The question arises: what are regulatory authorities doing? Answer: helping the powerful.
Barring farm lords, earnings of the majority of the famers are squeezed by a host of other stakeholders, leaving very little money in their hands for much needed savings and investment.
The production of crops, their prices and cost of farm inputs fluctuate from one harvest season to another. Indicative prices of wheat and sugar cane are becoming increasingly controversial and a mounting burden on the government exchequer.
To achieve economies of scale and empower growers with technology and innovation, small farmers should be encouraged to join corporate or cooperative farms. Their individual share, in a corporate entity, could be determined by the size and fertility of their landholdings.
Digitalisation has made title of landholdings transparent while de-freezing the murky farmland market. This can help consolidate landholdings, encourage bank lending, spur documentation, and increase tax revenues.
In this age of individual self-determination, the real issue is to empower farmers and households to boost production. This shall ensure food security for all and enable farmers to improve their own livelihood.
Published in Dawn, The Business and Finance Weekly, April 22nd, 2019
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