The rural areas of Pakistan are fast heading towards a larger-than-ever unemployment crisis, driven by a complex interplay of several factors, including rapid mechanisation.

Given Pakistan’s historical reliance on traditional agricultural practices, its agriculture sector has lagged in mechanisation. However, recent years have witnessed significant investments in agricultural machinery by large- and medium-sized farmers thanks to their improved financial muscle.

High food prices worldwide, coupled with modestly supportive policies from previous governments, have yielded positive outcomes for farmers, leading to increased profits.

Additionally, service providers of agricultural machinery operating under a rent-based business model have also made considerable investments. Another contributing factor to mechanisation is corporate farming or large-scale contract farming, which the government is actively promoting.

As cropping intensity and the usage of farm machinery rises, demand for labour dwindles in the villages

Moreover, cropping intensity is on the rise. A higher cropping intensity system — growing over two crops annually on the same plot — offers a very limited time window for crop harvesting and subsequent sowing of the next crop. Hence, farmers find themselves compelled to opt for a higher level of agricultural mechanisation. In Pakistan, some pockets of Kasur, Okara, Pakpattan, Sahiwal, and other districts are even reaching up to three crops per agricultural year.

Due to these factors, the country has seen a notable increase in combine harvesters, half-feed rice harvesters, maise planters, rice transplanters, silage and forage machines, corn pickers, and potato field graders in recent years. Such increasing mechanisation is displacing rural workers on a large scale, who predominantly rely on temporary employment or daily casual work during crop sowing and harvesting seasons.

Alongside mechanisation, some other factors are also intensifying the issue of rising unemployment. First, with a fertility rate (births per woman) of 3.5 per cent and a population growth rate of 1.9pc — almost double the world’s average, which stands at 0.9pc — Pakistan experiences an annual addition of 4.7 million people to its population, with more than 3m new workers entering the labour market. The country’s median age of 21 signifies a very youthful population, further amplifying the pressure on the labour market.

Second, women and children are very common participants in labour-intensive farming in rural areas. However, there is no shortage of landless families where the family head remains the sole breadwinner. Unfortunately, recent high inflation and economic pressure have compelled women and teenagers to actively seek daily wage employment on farms, which has naturally led to an increase in the labour supply.

Third, the Pakistan Economic Survey highlighted that the industrial sector posted a negative growth of 2.9pc in FY23. Additionally, sectoral reports reveal that the housing and construction sector — a labour-intensive sector known for its employment elasticity — contracted significantly by 5.2pc in 2023, following a 2.8pc decline in the previous year.

Consequently, unemployment has risen, triggering a reverse rural-urban migration and exacerbating the labour surplus in rural areas.

While some of the rising unemployment in rural areas is cyclical and tied to economic downturns, a significant portion can be attributed to the rapid expansion of mechanisation and high population growth, which has resulted in long-term unemployment.

Many in positions of authority believe that slowing down mechanisation could be the solution. However, the reality is that technology and mechanisation are inexorable forces driven by a confluence of global, economic, and societal factors. They shape the trajectory of agricultural development in every country. For Pakistan, their adoption is essential to coping with the impending food security challenges caused by population explosion and climate change.

Another option is re-employing the displaced workforce, a fundamental feature of labour markets and social policies. Recently, several countries have made concerted efforts to re-employ their workforce whenever any business sector faces a decline in its capacity to absorb labour.

However, it is important to recognise that re-employment depends upon the individual’s ability to secure new work opportunities. The nature and characteristics of our rural workforce underscore a large majority, particularly those displaced by mechanisation, are unskilled and illiterate youth, many of whom suffered from stunted growth during childhood.

The United Nations International Children’s Emergency Fund (Unicef) reports a considerably high prevalence of stunted growth in Pakistan during the late 1990s and early 2000s, resulting in impaired growth and development, as well as irreversible physical and cognitive impairments among the boys and girls entering the labour market today.

Given the circumstances, what lies ahead for these workers, who lack education, skills, and physical and mental strength? Already, millions of young men are coming out of religious madrasas, who mostly have no option but to become mosque imams. To top it all off, over 23 million — 39pc of school-going-age children — are currently out of school.

Such a profile of the current and future workforce compounds the challenge of rising long-term rural unemployment. The situation demands a policy shift, as outlined below.

Firstly, Pakistan should prioritise strengthening its horticulture sector (fruits, vegetables, medicinal plants, and floriculture), as it is highly labour-intensive. The sector offers a promising opportunity for Pakistan, where per capita land availability is rapidly shrinking.

However, without boosting exports, the sector cannot flourish, as an oversupply of highly perishable horticulture produce decreases prices, discouraging farmers from growing horticulture crops.

Secondly, value-added processing of domestically grown fruits and vegetables through the cottage industry should be promoted to increase the production of value-added products.

The initiative should aim at import substitution, as export markets require much higher quality and food safety standards than domestic markets. The scope and potential for import substitutions are immense, exemplified by the annual import of a single product — tomato paste — which amounts to billions of rupees.

Thirdly, unlike its past poor performance, the technical and vocational education and training sector should develop new training programmes specifically tailored to the youth lacking skills, education, and physical and mental capabilities.

The ticking time bomb necessitates a strategic focus on health, education, and skills development as paramount priorities. Neglecting these imperative issues risks transforming our burgeoning youth population from a potential demographic dividend into a pressing social crisis and a liability.

Khalid Wattoo is a farmer and a development professional and Dr Waqar Ahmad is a former Associate Professor at the University of Agriculture, Faisalabad

Published in Dawn, The Business and Finance Weekly, March 25th, 2024