Pathways for poverty alleviation
THE World Development Report 2008, released by the World Bank a few weeks ago, has discussed various facets of agriculture in regard to its role as a means of development.
This is acknowledgment of the fact that agriculture has an important role to play in poverty alleviation, especially in the developing world. Agriculture has not been accorded proper attention as an effective development strategy in Third World countries, which have tried to imitate the development strategies of the industrial countries.
As a result the agriculture sector was put on the backburner. This report shifts the focus back to agriculture as a vehicle for poverty alleviation.
The report highlights
three pathways for rural households to break the vicious circle of unending poverty. These pathways are farming, rural labour market and migration from rural areas.
The first pathway for moving out of poverty for the rural households is through agricultural farming. Farming pathway is, however, more relevant to the cultivators and farmers who own a reasonable acreage of land.
In the case of Pakistan, the distribution of land is highly skewed. This situation has two important implications: first, the farming pathway for moving out of the poverty trap is limited to a minority of rural households.
Secondly, market orientation of the farming households, who are otherwise engaged in subsistence farming, will be possible only through diversification of their farming activities
In order to effectively use the farming pathway for poverty alleviation, it is imperative that an enabling environment is created for the rural farmers to improve productivity of their land and diversify their crops. Policies need to be fashioned in a way that the market orientation of the farmers is enhanced through human capital endowments.
Effective policies need to be formulated for improving the quality of land, decreasing land concentration, enhancing technical capacity of the rural people, widening scope and outreach of insurance schemes and facilitating access of small farmers to formal credit. Investment in education and the rural infrastructure — such as roads, markets, electricity and irrigation and others — is a prerequisite for bringing agriculture into the market.
Labour pathway is the second strategy discussed in the World Development Report for making use of agriculture for development. This strategy aimed at poverty alleviation implies that income earning from the non-agriculture sector be increased so that the people who do not own lands are absorbed in non-farm activities to earn their livelihood.
To make this pathway an effective tool for poverty reduction, it is imperative that policies are oriented towards non-farm occupations in the rural area. Enhancing off-farm activities and increasing occupational diversity is the key in this regard.
The phenomenonal success in the telecommunication sector is, however, a big achievement and if supplemented with other essential requirements like easy availability of finance, it can work wonders in rural development by promoting small businesses and non-farm activities. In this regard it is important that non-agriculture activities are given proper attention by the policy makers.
The third pathway for poverty alleviation discussed in the World Development Report 2008 is
migration. There are two types of migrations, that is, permanent migration from the rural to the urban areas and migration to other countries of the world and temporary seasonal migration.
Rural to urban migration within a country adds to the problems of a country, so policy makers need to evolve development strategies that minimise the flow of rural people to the urban areas on permanent basis.
To overcome this problem, employment opportunities should be created in the rural areas through the labour pathway.
As regards migration from the native country to the outside world, it is acknowledged that this migration was used as a development strategy in some of the developing countries who encouraged their people to migrate.
In 1970s, a large number of Pakistanis migrated to the Middle East to earn their livelihoods. The remittances sent by these people have played a very vital role in the development of our country.
These remittances also contributed towards poverty reduction in rural areas as migration offers an effective pathway out of poverty for such people as well as their family members who stay back home.
The World Development Report 2008 quotes: “In Pakistan remittances from temporary migrants have a large impact on agricultural land purchases and returning migrants are more likely to set up a non-farm business.”
With the changed global scenario, migration has somehow lost its importance as an effective pathway for Pakistan. Therefore, it is appropriate that farming and labour strategies are given more attention as they are now more relevant in our case.
The World Development Report categorises the countries of the world into agriculture economies, transforming economies and urban economies. Pakistan has been placed into transforming economies by the report.
The report offers ‘differentiated approach’ to transform agriculture into a vehicle of change and development. This approach calls for different policy prescriptions for these three types of economies.
For example, in transforming economies like Pakistan, the most important element, as pointed out in the report, is reduction of rural-urban income disparities and stubbornly high rural poverty. The Report further stresses the need of political and macroeconomic stability in order to enable agriculture to play its effective role in the development.
To top it all, agriculture policies should be comprehensive in nature aimed at achieving such objectives as establishment of efficient markets, accelerating small land holders’ entry into agriculture markets and improving livelihood and food security in subsistence agriculture.
The efforts to improve the lot of the rural poor should aim at generating employment and enhancing the skills of the poor to enable them to seize emerging opportunities for moving out of the poverty trap.
By Jamil Nasir
http://www.dawn.com/2007/12/05/op.htm#4