RAWALPINDI, Dec 7: The Federally Administered Tribal Areas (Fata) and some parts of the NWFP are among the poorest in Pakistan and there is a need for adopting a more “differentiated approach” for reducing poverty there, says a report issued by the International Fund for Agricultural Development (Ifad).

According to Ifad’s “Country Programme Evaluation 2008”, the new approach should mobilise experts with experience in peace-building and in working in conflict-hit and other disadvantaged areas.

It recommended that Ifad should continue to support the government in engaging disadvantaged people. However, the approach should be flexible and specifically adapted to the social and cultural needs of the people and their priorities, the report said.

“The importance of ensuring the commitment and ownership of provincial and federal governments to Ifad’s efforts in these areas cannot be over-emphasised.” It will also be essential to mobilise specific expertise for project design, implementation and supervision.

In fact, the fund could play a complementary developmental role — in support of the people — to the government’s own initiative and those of other donors working in such environments.

Ifad says it has worked in areas like Fata, parts of the NWFP and Azad Kashmir which are also affected by out-migration, and are generally burdened by poor infrastructure, scarcity of communication and weak administrative institutions. These problems have been exacerbated by the prevailing atmosphere of conflict coinciding with military operations, especially in Fata, by efforts to eradicate the opium poppy crop and by the effects of the devastating earthquake of October 2005.

Some areas like North Waziristan, South Waziristan and some districts of the NWFP are conflict-ridden areas. Moreover, the presence of Taliban and Al Qaeda elements has increased security risks in these areas.

The report says the ‘Project-at-Risk’ rating for Pakistan is not satisfactory and two projects — Southern Fata Development Project and the Community Development Programme — had been classified as ‘problem projects’, plagued by slow progress because of management and capacity shortcomings.

Serious constraints related to security and sectarian strife were experienced in the Fata project and in the northern districts of the NWFP Barani Area Development Project, which led to the suspension of the project in North and South Waziristan.

On the whole, the performance of Ifad-funded projects in such areas has been moderately satisfactory. Any future Ifad assistance to those areas will need careful consideration, however.

The report calls for developing a better balance between agricultural and non-farm investments in the rural sector by devoting more resources to non-farm opportunities, including small agri-business and family-based rural micro-enterprises. This is important as 57 per cent of the rural poor are from non-farm households who derive their income from activities other than crop and livestock production.

The report stresses the importance of promoting wider market linkages for both agricultural and non-farm outputs in addition to develop rural financial services and products for agriculture and non-agricultural activities.

In terms of agricultural activities, greater attention should be paid to livestock development and high-value crops such as fruits, vegetables and flowers. Support to domestic production of edible oil also provides an opportunity to reduce imports and enhance food security.

The agricultural land investments should be accompanied by measures aimed at improving environmental and natural resource management and to instituting environmental assessments for infrastructure constructed by projects.

The report says on the whole, Ifad has met with more failures than successes in rural finance in Pakistan. Some projects managed to exceed targets, but these gains cannot outweigh the loss in numbers and objectives associated with the virtual abandonment of the credit component in several projects and of one credit-only project.

However, the lack of performance of badly managed government-owned banks and NGOs engaged by IFAD for credit delivery is more a reflection of the state of rural finance than of an Ifad failure.

The report says that Ifad has made an important contribution to agriculture and rural development in Pakistan, which is more significant in the light of the current surge in food and commodity prices and shortages. This has been achieved despite its relatively limited investments and the lack, until recently, of a permanent country presence.