The Role of Agriculture in poverty alleviation:
A case study of rural area in sindh
Dr. Ali Muhammad Khushk & Aslam Memon
Introduction
Pakistan’s economy is still predominantly agrarian in nature. Almost a quarter of GDP is contributed by the agriculture sector, and agriculture remains a direct source of livelihood for over 60% of country’s population living in rural areas. A record agriculture growth rate of 7.5% was registered during 2005-06, which is expected to significantly contribute to decrease in rural poverty. Based on existing on-going structural adjustments in Pakistan, agriculture is playing a key role in stability and growth of country’s economy. Main policy focus in agriculture has been ensuring food security for a growing population, expanding foreign exchange flow through agricultural exports and reduction of poverty through agriculture growth. To achieve these objectives, main policy initiatives adopted by government include increasing productivity and profitability of major crops, providing rural infrastructure and access to agricultural inputs, ensuring water availability and efficiency, and liberalizing commodity markets and trade regimes. Improving support services, especially for small farmers, enhancing efficiency and delivery capability of agriculture institutions, and providing an enabling environment for public-private partnership are other policy concerns of ministry of food, agriculture and livestock (MINFAL) Pakistan.
Poverty is a condition in which a person or community is deprived of, or lacks the essentials for a minimum standard of well-being and life. Since poverty is understood in many senses, these essentials may be material resources such as food, safe drinking water, and shelter, or they may be social resources such as access to information, education, health care, social status, political power, or the opportunity to develop meningful connections with other people in society. Poverty may also be defined in relative terms. Therefore income disparities or wealth disparities are seen as an indicator of poverty and the condition of poverty is linked to questions of scarcity and distribution of resources and power. It may be defined by a government or organization for legal purposes, see Poverty threshold. Poverty is also a type of religious vow, a state that may be taken on voluntarily in keeping with practices of piety. The problem of over-population has been even more serious in context of the developing countries like Pakistan.
Pakistan being an underdeveloped country is confronted with many problems. One of these problems is poverty. Poverty has many dimensions; the poor has not only low incomes, but also lack of access to basic needs such as education, health, clean drinking water and proper sanitation. The latter undermines their capabilities, limits their opportunities to secure employment, results in their social exclusion and exposes them to exogenous shocks. Therefore, poverty is a state of multiple needs such as food, clothing, education, medical relief, job opportunity and security and political and social freedom, all of which are essential for meaningful existence.
Absolute poverty indicates the position of an individual or household in relation to the minimum cost of food and a set of basic needs consistent with the spending pattern of the poor. All those who are unable to satisfy these needs are considered as poor. It is further divided into poverty based on caloric intake and basic needs.
The incidence of poverty in Pakistan has increased from 30.6 percent in 1998-99 to 32.1 % in 2000-01; severely impacted the rural economy of Pakistan. The rise in the incidence of poverty in 2000-01 as against 1998-99 may have reflected the effects of droughts.
Poverty alleviation has always been the priority objective of developing countries and the estimation of poverty status is considered as one of the important factors for future planning. Pakistan did not have an official poverty line until recently. Although a large number of estimates were available, their analyses were difficult. Therefore, various researchers have used their own methods to arrive at different poverty lines to measure the incidence of poverty. Some may use specific calorific requirements to draw their poverty lines at income levels sufficient to meet the food and non-food requirements. Some may use a basic needs approach which will include income as well as access to various services. Even in caloric requirement, some researchers may use 2550 calories per adult equivalent. While, others use 2350 calories and still others may use 2250 calories per adult equivalent. Some may use market prices to convert the expenditure into caloric intake while others may use prices. To draw a poverty line, some use consumption as the basis; while others use income of the households as the basis. Some researchers may use the same poverty line for rural and urban areas while others use different poverty lines for the two. Furthermore, even if the caloric requirements of all the researchers are the same, the poverty line will differ depending upon the methods applied to estimate these lines.
Poverty profile of respondents
Study results revealed that on an overall basis, 57% of the households were under the poverty line using criterion of Rs. 800 per person per month. Highest proportion of poor was recorded for tenants (70%) followed by non-agriculturist (59%), peasant proprietor (50%), and landlords (36%). These estimates appealed the policymakers for viable agriculture reform and economic package for agriculturists. Due to disparity between prices trends of inputs and agriculture produce, farming communities are continuously pushed under the poverty line since it was reported that input prices were increasing at higher rate than that of agriculture produce.
Poverty gap
Average income of per person per month of households falling under poverty line was recorded to be Rs. 487 while poverty gap was Rs. 313. This indicated that an economic boost of Rs. 313 was required to achieve the poverty line of Rs. 800 per person per month. Highest gap (Rs. 331) in income was recorded for the peasant proprietors and lowest gap (Rs. 203) for landlord. Poverty gap for non-agriculture households was Rs. 329 and for tenants was Rs. 319 table 1.
Table 1 Poverty Gap in Income
Tenancy status | Average income of poor | Poverty gap | Std. Error of Mean | |
Non Agriculturist | 471 | 329 | 52 | |
Agriculturist | Landlord | 597 | 203 | 59 |
Peasant | 469 | 331 | 46 | |
Tenant | 481 | 319 | 40 | |
Total | 487 | 313 | 24 | |
Table 2 indicate of lowest Sen Index of 0.12 for landlords and the highest (0.46) for tenants, while the overall index of the study area was about 0.36. Peasants’ index was recorded to be 0.35 which is pretty close to the overall index. Data collected from respondents belonging to non agriculture professions indicated index of 0.41. Increased input costs, stagnant output revenues, shortage of irrigation water, and poor quality of inputs have deteriorated economic conditions of tenants. Shanty villages, ragged clothes, children out of school, and gloomy look were the distinct features of poor tenants and the same were protesting to the policymakers, public and private institutions as well as multinational donor agencies that despite their big claims, the poor were going to be more poor. They were looking for agricultural and land reforms so that they could come out of poverty curse.
Table 2 Sen index estimation of the study area
N | Poor (P) | P/N | (A) | B – A | (B-A)/A |
| ||
Non Agriculturist | 22 | 13 | 0.59 | 471 | 329 | 0.70 | 0.41 | |
Agriculturist | Landlord | 14 | 5 | 0.36 | 597 | 203 | 0.34 | 0.12 |
Peasant | 24 | 12 | 0.50 | 469 | 331 | 0.71 | 0.35 | |
Tenant | 30 | 21 | 0.70 | 481 | 319 | 0.66 | 0.46 | |
Overall | 90 | 51 | 0.57 | 487 | 313 | 0.64 | 0.36 | |
Where as P = number of people below the poverty line
N = total number of people in society
B = poverty line income
A = average income of those people below the poverty line
About 57% of the total households were under poverty line. Although various studies contradicted each other in calculating proportion of poor under poverty line in Pakistan. On national level, about one-third of the population was pronounced to be under poverty line. However, the present study estimated much higher proportion than reported. The poverty estimate of the present study can be supported by Syed (2005) that one out of every two persons (50%) is under poverty line. The poverty estimate of this study exactly coincide with Arif and Ahmed (2001) who reported that in wheat cotton zone of Sindh, the poverty incidence was about 57%. Based on World Bank (2002) report that in rural Pakistan nearly 57% of the households were prone to falling into poverty as they were clustered around the poverty line
Relatively more proportion (59%) of the non-agriculture households were under the poverty line. Similar findings were reported by Qureshi and Arif (1999) that higher incidence of poverty was among the non-farm households in all provinces of Pakistan. Kemal (2003) reconfirmed the same findings as well.
On an overall basis, Sen Index was about 0.36 while highest index (0.46) was recorded for tenants and lowest (0.12) for landlords, which revealed that with little economic boost, quite a good proportion of landlords can come out of poverty menace. Gini coefficient was calculated to be 0.43 which revealed moderate inequality in distribution of income in the study area.
Conclusions
Estimates of the survey revealed that average household size was of 10.5 members (male adults 2.92; female adult 2.81; male minor 2.48; and female minor 2.31). More than three-forth (76%) of the population was directly related with agriculture while only 24% of the households were engaged with non-agricultural professions. Among agriculture related categories, majority (56%) of the households were tenants. Total farm size was 11.7 acres. Largest farm size (17.25 acre) was recorded for landlords followed by peasant proprietors (12.39 acres) and tenants (8.45 acres). Wheat (91%) and cotton (81%) were major crops of rabi and kharif seasons respectively while they were less profitable crops in comparison of sugarcane and banana cultivated by only 4 and 13% respectively. Small profit margins of Rs. 6000 and 8200 were recorded for wheat and cotton, respectively while higher profit margins of Rs. 28,000 and 42,500 were reported for sugarcane and banana respectively. The higher proportions of total input costs to total revenue were recorded for wheat (50%) and cotton (46%) respectively in comparison of higher profitable crops namely sugarcane (30%) and banana (39%).
Major problems of the farming community were shortage of irrigation water, high prices of inputs, low prices of agriculture produce, and shortage of quality supply of inputs particularly seed and pesticides. Average income of a household was estimated at Rs.9573. Lion’s share (57%) was contributed by agriculture (49.7% crops and 7.7% milk). On an overall basis, income per person was Rs.1019 while income per person of non-agriculture households was relatively low (Rs.708). Likewise, about 57% of the total households were under poverty line while relatively more proportion (59%) of the non-agriculture households were under the poverty line taking criterion of Rs.800 per person per month. From this, it was inferred that agriculture played pivotal role in enhancing income of rural households. Average income per person of households under poverty line was Rs.487 and poverty gap was Rs.313. Among agriculture households, lowest income of Rs.481 with poverty gap of Rs.319 was recorded for tenants. On an overall basis, Sen index was about 0.36 while highest index (0.46) was recorded for tenants and lowest (0.12) for landlords, which revealed that with little economic boost, quite a good proportion of landlords can come out of poverty menace. Gini coefficient was calculated to be 0.43, which revealed moderate inequality in distribution of income in the study area.
Recommendations
On the basis of conclusions drawn from primary data analysis and qualitative inferences, the following policy suggestions and recommendation for poverty alleviation were developed:
International trade can expand markets, facilitate competition and disseminate knowledge, creating opportunities for growth, poverty reduction and human development.
Trade can also raise productivity and increase exposure to new technologies, which often spurs growth.
Nevertheless, cross-national comparisons reveal no systematic relationship between countries’ average levels of tariffs and non-tariff barriers and their subsequent economic growth.
Opening and excess of Agriculture Markets
Raising Unskilled Labor Wages
Boosting Productivity
Inducing Investment
An early harvest: free market access for poor nations
Efforts may be taken to reduce the household size. Family planning measure may be expedited to control rapid increasing population which is depleting natural resources i.e. water and land per capita at the faster rate.
Literacy ratio may be increased. Viable educational programs may be developed and effectively implemented to enhance enrolment ratio in schools. Special efforts may be taken for female education. Vocational education may be imparted for females so that they could be able to generate income. Training programs particularly focusing on profitable crops and raising livestock and poultry may be arranged for capacity building of farmers to enhance their incomes.
Water may be supplied during crop growing seasons. Efforts may be taken for equitable and judicious use of irrigation water. In this regard, a viable social mobilization program may be initiated. Training program on the different methods of efficient use of irrigation water may be imparted.
Quality inputs i.e. seed, pesticide and fertilizers may be supplied during cropping season. Price of inputs may be increased at par with that of agriculture produce. In this regard, price commission may develop a viable model on agricultural input and output prices.
Marketing infrastructure may be improved to enhance the profit margins in comparison of intermediaries. Cold storages may be developed to stabilize the prices of agricultural products especially for fruits and vegetables. Efforts may be taken for the export of agricultural products.
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