Pakistan’s rural labour market is undergoing significant changes driven by population explosion, farm mechanisation, a rising labour force participation rate, and reverse rural-to-urban migration trends resulting from Pakistan’s ongoing industrial slowdown.

It is well-established that as a country’s economy grows and industrialises, the proportion of agriculture sector employment tends to decline in favour of manufacturing and service sectors. To a certain extent, Pakistan has also undergone this type of structural transformation over the last few decades. In 2001-2002, the agriculture sector accounted for 42 per cent of total employment, but by 2020-2021, this share had dropped to 37pc.

However, unlike in developed countries, where a shrinking share of agricultural employment typically indicates a reduction in the absolute number of workers, the opposite has happened in Pakistan.

Despite the decrease in agriculture’s share of total employment, the number of workers has grown significantly. Pakistan’s total labour force jumped from 41.5 million in 2001-2002 to 71.8m in 2020-2021, and as a result, during the same period, the agricultural labour force grew from 17.4m to 26.6m — a phenomenal rise of 52.3pc.

The addition of such a large number of workers would make sense if Pakistan’s cropped area had expanded, but it has remained relatively stable at around 23.5m hectares over the last 20 years, leaving little room to accommodate additional labour.

With the impending supply increase in the labour market, the existing flawed skills development system must be revamped to train and upskill youths

Farm mechanisation is on the rise, compounding this challenge. The sowing and harvesting — the most labour-intensive operations — of Pakistan’s three major crops, wheat, rice, and maise (corn), have been mechanised. However, the level of mechanisation varies across regions and farmers.

In addition, other agricultural operations for these three crops and others are also becoming increasingly mechanised, with greater use of crop-specific and general purpose agricultural machines. Some large farmers have even started using drones for pesticide spraying — a major agricultural operation that used to be done manually or via tractors.

This rapid mechanisation is displacing the labour force. Adding to this challenge, a massive influx of new entrants into the labour market is expected in the coming years, given that 45pc of the country’s population is under the age of 18.

Moreover, Pakistan’s current labour force participation rate of all ages is just 32pc — the lowest in the region and significantly lower than in India, Bangladesh, Sri Lanka, and Nepal. However, Pakistan’s labour participation rate is rising as high inflation has eroded families’ real wages. This economic pressure is compelling more men and women to seek self- and wage employment.

Against this backdrop, Pakistan is grappling with a daunting crisis: while the agriculture sector — the nation’s largest contributor to employment — is shrinking in its capacity to absorb labour, the rural labour market is experiencing an increase in supply, with an even greater rise expected in the future.

Hence, a comprehensive policy and implementation framework is required to divert surplus labour from the agriculture sector to the non-farm sector by offering vocational training programmes, entrepreneurial education, and financial grants or loans.

Moreover, given the reduced labour absorption capacity of the rural economy due to mechanisation, lack of agro-industries, and Pakistan’s slow economic growth, there is also an urgent need to train youths for targeted overseas job opportunities. This entails identifying and analysing medium and long-term development plans and mega projects in the pipeline in countries that could serve as potential labour export destinations for Pakistan’s youth.

Subject matter experts and policymakers generally agree that skills development enhances youth employability. However, based on the offered training programmes — their scale, scope, and the impact achieved so far — many believe that Pakistan’s technical and vocational education and training sector has failed to adequately address the needs of rural youth.

The existing skills development system, which is largely supply-driven, has flaws in its concept, design, and training delivery mechanism that limit its capacity to train rural youth for the evolving agricultural landscape, non-farm sectors in the rural economy, or overseas job opportunities.

Under the prevailing social milieu in rural areas, convenience is one of the primary concerns for potential trainees, particularly women, despite the availability of road networks and transportation facilities. This is why several government-sponsored training centres in cities and towns struggle with dummy enrolments or high trainee absenteeism.

Given this situation, it is imperative to offer training programmes directly at the trainees’ doorsteps using semi-mobile training units. These units, stationed in rented or community buildings, can conduct one training event, lasting three to six months, in a village before moving to another village or union council. The International Labour Organisation has already practised this training model in earthquake-affected areas of Pakistan.

Technology is rapidly evolving and has a limited shelf life, which makes it crucial to partner with manufacturers and service providers of machinery and equipment instead of investing heavily in capital items. Likewise, the most practical approach is to employ temporary instructors with extensive industry experience to lead these training programmes.

Many believe that without prompt and effective policy and programmatic interventions, the influx of unemployment in the coming years could lead to a spike in crime rates in rural areas. If left unaddressed, this could undermine social stability and erode public safety in these areas.

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, May 27th, 2024



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