Alleviating rural poverty

Published January 6, 2003

The World Development Report, 2003, released recently, denounces poverty and notes that food production increases are slowing. Land is becoming increasingly degraded. Scarcities of land and water are more evident.

These problems are best addressed by thinking of them not as problems of global resource scarcities but as problems of poverty among plenty. The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.

What is poverty? Over the past century, scholars and experts on poverty at the global level have remained unable to find a precise answer to this question. It is now widely recognized that poverty is an outcome of multitude of causes, it is complex and multidimensional. Different people view poverty in different ways. The worst kind of poverty is when people do not have access to basic food and water to fulfil their basic physical needs, and therefore they are undernourished, weak and are susceptible to diseases. Another kind of poverty is where people may have more or less enough food but do not have access to other basic needs such as adequate water for sanitation, health services, clothes and housing. The concept of poverty extends from low levels of incomes and consumption to lack of education and poor health, and includes other social dimensions such as powerlessness, insecurity, vulnerability, isolation, social exclusion and gender disparities.

Poor suffer from stunted growth due to malnutrition, early death among children, unsafe drinking water and high episodes of diarrhoea, and low level of schooling. The poor are not adequately protected under the law, not involved in political decision-making, and not adequately supported against droughts and floods. Thus, poverty has not only an economic dimension, it has several non-economic dimensions. The World Bank has collected the voices of more than 60,000 poor men and women from 60 countries around the globe to understand poverty from the perspective of the poor themselves. Quoting from the Voices of the Poor:

“poverty is much more than income alone. For the poor, the good life or wellbeing is multidimensional with both material and psychological dimensions. Wellbeing is peace of mind; it is good health; it is belonging to a community; it is safety; it is freedom of choice and action; it is a dependable livelihood and a steady source of income; it is food.” Regardless of how poverty is described, it is a state of human ill-being and unacceptable human deprivation. Poverty creates more poverty and destroys the productive capacity of individuals, communities and nations. The above descriptions are mostly the symptoms of poverty, the causes are complex, deep rooted and often less understood. It is now widely accepted that poverty is outcome of myriad interactions between resources, technologies, institutions, strategies and actions at various levels — household, community, regional level, national and global levels. The multidimensional and complex character of poverty has been reflected in a wide array of papers, poverty reduction strategies and policies (UNDP, 1997; Asian Development Bank, 1999; World Bank, 2000; Dutch Ministry of Foreign Affairs, 2001; Government of the Netherlands: Ministry of Foreign Affairs, 2001; OECD - DAC, 2001).

Global poverty at a glance: Recent global level estimates suggest that almost half of the world’s 6 billion people live on $ 2 a day, and one fifth live on less than $ 1 a day, with around 44 percent of the world’s poor people living in South Asia. (World Bank 2000). While the share of poor population living on $ 1 a day has slightly declined over the period 1987 to 1998, absolute number of the poor living below this level has actually increased. Future projections of poverty indicate that if the proportion of poor people below dollar a day remains around the current levels, the number of poor people will increase from 1.2 billion and hit 1.8 billion mark in 2015.

However, there is a considerable regional variation in the incidence of poverty. East Asia, North Africa and Middle East have been able to considerably reduce the number of their absolute poor. In other regions, notably, South Asia and Sub-Saharan Africa, the number of absolute poor has increased over the last one and half decade. These two regions now account for over 70 percent of the world’s population surviving on less than $ 1 a day. Within South Asia, there is significant variation in the incidence of poverty across countries. Recently available data on poverty in these countries indicates that poverty is highest in Nepal and Bangladesh, followed by India and Pakistan.

Poverty in Pakistan: According to recent estimates, Pakistan has a population of 141.5 millions in 2001, which had grown at an average annual rate of 2.5 percent during the 1990s. The population density is 183 persons per sq km. With a gross national income of only 59.6 billion dollars and large population size, per capita gross national income works out to be around $ 420 in 2001. Among other measures of human welfare, it has a life expectancy of 63 years, under-five child mortality rate of 110, and adult literacy rate of 57 percent only. As per official statistics, 28.20 percent of population was below poverty in 1998-99, with incidence of poverty higher in rural (31.95 percent) than in urban areas (19.13).

While poverty estimates vary from study to study, overall conclusion from all sources is that over one-third of the population is living under poverty, and poverty is increasing in Pakistan. (According to the World Bank estimates released in October 2002, poverty rate in Pakistan in 1998-99 was 32.6 percent). Further, income inequality among the poor and non-poor is very high, with estimates in 1998-99 suggesting that the lowest 20 percent of the households got only 6.2 percent of income and the highest 20 percent of the households got 49.7 percent of the income, with remaining 44.1 percent of income shared by middle 60 percent of the households.

There was considerable decline in poverty during the 1980s, followed by a somewhat rising trend in early 1990s and worsening situation in the late 1990s. Further, overtime rural poverty has been higher than urban poverty but that does not mean that poverty in Pakistan is purely a rural phenomenon or rural areas have been withholding progress in poverty alleviation. Rather, agricultural growth in rural areas have delivered considerable gains to both rural and urban poverty alleviation. During the period from 1985-1999, the correlation between agricultural growth and poverty rate is negative.During 1986-87 agriculture sector grew by 3.25 percent, consequently the incidence of poverty came down to 17.3 percent in 1987-88,.

But all was not well down the road. Poor harvests of 1992-93 resulted in negative agricultural growth of 5.3 percent, and thus registering a higher poverty incidence in 1993-94, particularly in rural areas. Similarly, severe drought and water shortages in 1997-98 affected agricultural productivity there by increasing rural poverty to 31.95 percent. The relationship between availability of water supplies and its impact on national economy and incidence of poverty is self evident. Overall, it can be concluded that in the 1990s, poverty in Pakistan has increased. This points to a worrisome trend in the country. The questions are now being raised, whether poverty is going to be a permanent phenomenon in Pakistan.

There is a considerable variation in poverty across regions and provinces in Pakistan. Province-wise breakdown of poverty reveals that the highest incidence of poverty is in NWFP and the lowest in Balochistan. The later is due mainly to lower population density in Balochistan, although it has one of the driest and water scarce and fragile environment. Poverty patterns in Punjab and Sindh are fairly similar and are more or less in keeping with that of the country as a whole.

Research on poverty in Pakistan, particularly rural poverty, highlights some of the key characteristics of the poor and determinants of incidence of poverty. These show that: (1) poverty tends to be generally higher in rural areas than in urban areas, and urban poverty is largely a function of rural poverty; (2) the incidence of rural poverty is generally high among resource poor households (land, water, and education); (3) the incidence of poverty is generally high in households with a large number of children and single earning members; (4) the incidence of rural poverty is generally higher among households where males/females have no formal education and are unskilled agricultural labourers; (6) poverty is generally higher in non-farm households compared to farm households; and (7) female-headed households have a higher incidence of poverty than otherwise.

Poverty-related issues in agriculture: Over 67 percent of the population lives in rural areas. Rural households depend directly or indirectly on agriculture for their livelihoods. Bulk of the rural non-farm activity, supporting mostly non-farm population, also depends on agriculture. Overall, agriculture contributes around a quarter of the country’s gross domestic product, generates 44 percent of the employment, and contributes significantly to export earnings. Any economic or climate shock to agriculture affects the entire country, with poor being hit the first and the hardest. Government has identified agriculture as one of the four major drivers of economic growth along with oil and gas; small and medium enterprises and information technology. Therefore any rural poverty reduction strategy in Pakistan must focus on rural agricultural economy and help to address its specific problems, these include: inequitable distribution of resources; degradation of land and water resources, and low agricultural productivity.

In Pakistan, land, a key rural resource, is highly unequally distributed, and land inequality in the country is the highest in the Asian region. According to the official statistics from the ministry of agriculture (2000-01), there are 5.1 million farms in the country and 93 percent of these are up to 10 hectares, accounting for 60 percent of total cultivated area. Farms under one hectare account for 27 percent of the total farms but control only 4 percent of the land. On the other hand, above 10 hectare farms are only 7 percent of the total farms but account for 40 percent of the cultivated area. Recent observations show that inequitable land ownership has a substantial negative impact on agricultural productivity, and also has indirect negative effects on natural resource base and the environment.

For example, inequality in land distribution cuts against smooth working of land-lease markets, promotes friction among owners and tenants, withholds investments in irrigation technologies and on-farm infrastructure, and encourages unsustainable use of irrigation water and production practices, and impedes technological change, all contributing to an increase in poverty through negative impact on productivity. A more serious aspect of land inequality is land degradation. As most farms tend to be small and tenant cultivated, due to lack of land title and tenure insecurity, available medium-term and long-term measures to combat land degradation are rarely undertaken, resulting in loss of cultivated area, low yields, and income, and consequent vulnerability for the community as a whole.

Distribution of available public lands and, undertaking overall land reforms in more effective and pro-poor ways, unlike the past efforts which were largely ineffective, would remain important to create assets for the poor, particularly landless which constitute the bulk of the poor in rural Pakistan.

Agricultural productivity in Pakistan is very low in both absolute and relative sense. For example, productivity of wheat (an important crop in Pakistan) remains among the lowest in major wheat producing countries.

Recent research by international organizations suggest that there is considerable scope for improving agricultural productivity, provided certain constraints are removed. These include improving farmers access to production inputs (irrigation water, fertilizers, newer seed varieties, and information on new production methods and input and product marketing), improved management of land and water resources through improvements in institutions; and formulating effective policies related to agriculture and natural resources.

Government’s new poverty reduction strategy: The new government is developing a comprehensive poverty reduction strategy, that will further strengthen the interim poverty reduction strategy formulated in 2001, which has the following main components: (1) engendering growth by correcting macro-economic imbalances, which has five sub-components - tax reforms, expenditure management, monetary policy, external adjustment and debt management; (2) broad-based governance reforms - devolution of power, civil services reforms, access to justice, and fiscal and financial transparency.; (3) improving income generating opportunities - empowering people by creating opportunities for improving livelihoods through improved access to assets including housing, lands and credit; (4) improving social sector - particularly improving health and education; and (5) reducing vulnerability to shocks by providing social safety nets.

Recently a number of anti-poverty programmes have been initiated to improve the conditions of the poor. These include Khushhal Pakistan Programme for community level public works, Food Support Programme for poorest of the poor, Zakat rehabilitation grant, and micro-credit programme. Another major programme is the Social Action Programme with four target areas - elementary education, basic healthcare, family planning, and rural water supply and sanitation. These initiatives, if implemented effectively, can be expected to contribute to improving livelihoods of the target groups.

The government has recently reinvigorated its efforts to provide irrigation facilities to marginal areas, not yet served by the canal network. Priority areas in water resources development over the next decade include: (a) raising of Mangla dam, construction of Mirani dam, Gomal Zam dam, Thal canal and other small and medium reservoirs; and (b) efficient use of stored water through construction of new irrigation schemes like Rainee/Thar canals, Kachi canal, greater Thal canal, and modernization of barrages in Punjab. According to the estimates in government’s 10 year perspective plan (2001-2011), these developments would augment irrigation water by 6 million acre feet by 2011. These initiatives are expected to contribute to at least partially addressing the problem of growing water scarcity in the country.

Keys to reducing rural poverty in Pakistan: We believe that following are the keys to reducing rural poverty:

1. Increasing agricultural productivity through pro-poor development and management of both land and water resources (including re-distribution of land);

2. Generating land-based employment and income opportunities for the poor; and

3. Generating non-land based livelihood opportunities for the poor and landless through small-business and non-farm enterprise development and skill improvement and vocational training.

In agriculture sector, we urgently need another ‘Green Revolution’ for improving economies of the poor households. This would be possible by improving productivity on poor and smallholder farms, increasing well-being per drop of water, developing and disseminating new high-yielding seed varieties, providing micro-finance for the poor, promoting income generating enterprises, disseminating knowledge through public-private and community partnerships with inclusion of the poor, developing and promoting small-scale production technologies, and most importantly adopting an integrated management of water resources with emphasis on efficiency, equity, and sustainability of resource use.

(The writer is a Senior Economist at the International Water Management Institute (IWMI) based in Colombo, Sri Lanka:



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