Pakistan's population, estimated around 149 million, is growing at the rate of 2.1 per cent per year. Nearly 67.5 per cent of country's population is living in rural areas. In Pakistan, poverty has been higher in rural areas (38.65 per cent) than urban areas (22.44 per cent). More than 45 per cent of the people generate their income from agriculture sector and 85 per cent of them are small farmers. Small farmer is one who is operating less than 12.5 acres of irrigated land or less than 25 acres of un-irrigated land (Agricultural Census 2000).

In Pakistan, not only small farms are becoming smaller, but land is also becoming more concentrated among larger farms. As 56 per cent of the total farm area lays under only 14 per cent large farms and 46 per cent area fewer than 86 per cent small farms. (Agri.Census 2000). This implies a worrying expansion in the number of landless and near landless workers in rural Pakistan, and a possible rapid exodus from the countryside despite sufficient urban employment.

The small farms are seriously challenged today in ways that make their future precarious. Marketing chains are changing and are becoming more integrated and more demanding of quality and food safety. This is creating new opportunities for higher value production for farmers who can compete and link to these markets. The danger for many small farms is that they are not yet positioned to compete and access these markets and many will simply be left behind.

In developing countries, small farmers also face unfair competition from rich country's farmers in many of their export and domestic markets. The viability of many is further undermined by the continuing shrinkage of their average size. As the population density increases, farmers must produce even more food than before. With the increasing population today, people are being pushed to new lands and many into marginal lands.

From the foregoing, there is crucial need to raise agricultural growth, especially of small farmers who make the vast majority, as growth is the most efficient means of alleviating poverty.

A most recent survey, conducted (by authors) in the mixed cropping zone (Faisalabad Division) of the central Punjab, showed that majority of the small farmers in the division are growing major crops such as cotton, rice, sugarcane and wheat. The other minor crops like Rabi and Kharif vegetables, fodders, and maize, are also grown on the small farms. However, wheat being the food crop is dominating the cropping pattern, covering about 38 per cent of the total cropped area of small farms which is close to the national average. Crop income is the major source of income for these small farmers.

The survey results revealed that vast majority of the small farmers 48 per cent, 59 per cent and 56 per cent of the respondents are below national poverty line on the head count basis in Faisalabad, Jhang and T.T. Singh, respectively. The corresponding poverty gap across districts is 65 per cent, 53 per cent, and 57 per cent. The severity of poverty is 42 per cent, 28 per cent and 32 per cent in Faisalabad, Jhang and T.T. Singh, respectively. In the Faisalabad division, nearly 54 percent of the respondents are below the poverty line; poverty gap and severity are 58 per cent and 34 per cent, respectively.

The survey results further revealed that among many determinants of poverty, the low productivity of crops, bigger family size, and high dependency ratio, low education of the head and lack of infrastructure are the major poverty causing factors for small farmers.

The empirical data showed that large majority of the small farmers below the official poverty line and depth and severity of poverty is alarming. One of the major causes of poverty is the low productivity of crops and livestock is primarily due to lack of access credit and infrastructure. Therefore, it is imperative to target small farmers for poverty alleviation programme in the rural areas.

The productivity enhancement and access to productive resources will empower the small farmers to increase their income. In order to enhance the productivity of small farmers, various crop and livestock enterprises are evaluated to provide policy oriented information. The enterprises are evaluated through an optimization model.

The threshold income of poverty line is Rs66,183 and the existing income of small farm (6 acres) is Rs28,272 of a small farm (6 acres) in Faisalabad Division, showing that the poverty gap is almost 60 per cent for a family size of 8 members. The model results showed that if small farmers fetch the market or economic prices for their produce, the poverty gap is reduced by 13 per cent. The productivity enhancement through increased water supply, bring the small farmers above the poverty line. The productivity model through better use of nitrogen and phosphorus take the small farmers out of the poverty trap and the income of the farmers increased two hundred to three hundred times.

The use of phosphorus showed robust results. This shows that small farmers experience water fertilizer shortage and or can use the vital resource due to lack of access to capital and productive resources. The other scenarios were introduction of hybrid tomato and cut flowers and increased productivity of milch animals through better use of concentrates.

In these scenarios the income of the small farmers increased by 170-300 times. Thus, in order to empower small farmers productivity enhancement through proper use of water and fertilizer is the promising option. The other option includes increasing the milk yield through proper use of concentrates. The livestock is perceived as insurance for small farmers.

The introduction of hybrid of season vegetable and cut flowers are the high value alternative crops.

However, small farmers are risk averter and feel shy in adopting new technology. Thus new technology of off-season vegetable may take sometime. On the basis of farmers indigenous knowledge perceptions it is concluded that true and timely supply of phosphoric fertilizer, enhancement of irrigational water and off farm employment are the prerequisite for the reduction of poverty of small farmers.

Therefore, productivity enhancement model has an appeal and will bring the farmers out of poverty trap in the short run. The government should consider targeting small farmers in alleviating rural poverty and provide incentives for productivity enhancement. In order to achieve this objective, the government should consider the following options:

* The establishment of more effective and equitable methods of delivering farm inputs and providing agricultural services as private sector initiatives;

* Installation of private tubewell at canal delivery points (moghas) to enhance irrigation water; and

* Improving market access for most of the critical inputs such as fertilizers, seeds, and pesticides etc., in each village and right price of farm produce, are the prerequisite for productivity enhancement of the small farmers and hence Poverty reduction.