Agriculture, rural development and poverty alleviation
As the population living in rural areas is already engaged in agriculture, a
gro-based  growth can be extremely helpful in reducing poverty and 
promoting economic development

By Ch. Kamran Naseer

Poverty is a fundamental issue which is considered extremely perilous for the growth of any economy. It hampers the process of human capital formation as common individuals are denied the access to basic facilities, such as education, food etc, which are essential to improve their capabilities and skills. As a result, it becomes very difficult for the rural workers to enhance their creativity and intelligence levels, thus resulting in slow productivity and economic growth. The general public has to pay the social cost as due to poverty people get involved in criminal activities as well, which disrupts the society’s way of living. For the development of a community and growth of an economy, it is obligatory to reduce poverty.

Unfortunately, poverty is pervasive and increasing in the country. According to the World Bank’s estimates, the poverty headcount ratio increased from 33.8 per cent in 2007-08 to 36.1 per cent in 2008-09 and about 62 million people in 2008-09 lived below the poverty line.

Poverty in rural areas is much higher than urban. According to the International Fund for Agricultural Development’s report, 75 per cent of the poor people living in developing countries live in rural areas without basic facilities, such as electricity etc. On the basis of this, poverty within the country is rural-based and the rural economy, if promoted can play an imperative role to reduce it.

The rural economy is heavily based upon agriculture. The livelihood of almost 66 per cent of the population residing in rural areas depends upon agriculture. There is a direct relationship between poverty and agriculture, and the basic reasons of high poverty in rural areas include family-based agriculture and ignorance of rural-based labour force requirements while making different types of policies. As agriculture is the major source of income in such areas, it can play an effective role in poverty alleviation and economic development.

The overall agriculture system, right from livestock farming to marketing of products is below par. Farmers neither have the resources nor the skills to perform agricultural activities efficiently. Growers are not even aware of what type of crops is most suitable for their land. Wrong selection of crops for cultivation leads to low production. Not only has this affected the income of farmers living in rural areas, it has also led to inflation as the restriction in the supply of agricultural commodities has enhanced the prices of various essential items.

To prevent farmers from lower production, with the help of research and analysis, the

government must specify the areas most suitable for growing different crops according to the ability of land. Growers must be directed to cultivate recommended crops in specified areas to attain maximum output. Furthermore, the actual financial returns of the rural farmers’ products which they deserve cannot be earned by them due to discriminations that take place when growers are forced to sell their products below the market price or price settled by the government. The discrimination in transaction bolsters due to mismanagement, market’s faulty system, the active role of the middleman and ultimately absence of the holding power of farmers. Price support cannot even upgrade their income.

The discrimination in transactions holds back small farms’ growth, which forms most of the farming community (5.6 million of the total 6.62 million farms) by decreasing the farmers’ income and pushing them into the vicious circle of poverty.

Cultivation is a continuous process. A particular land’s productivity or yield of each crop depends upon the financial gains of the previous one. As farmers work in a cycle, after one crop, a farmer has to prepare their land for another and for that they need finance. The second off-farm income of growers is zero due to either lack of capital or skill.

Consequently, a farmer is totally dependent on the farm income and at the end of each crop season, the more financial returns he receives, the better it would be for him to invest for the next crop, resulting in higher yield and ultimately income. This becomes even more substantial as the area of land decreases. To make agriculture a profitable business, besides provision of credit and low cost inputs, it is also necessary to reduce the discrimination in transactions by improving the market system and reducing the role of the middleman.  

To employ the rural labour force, the importance of agro-based projects has not been sufficiently recognised till now. Mostly investment is directed and budgetary funds are allocated towards urban areas and no serious attention has ever been paid to utilise the human potential in the least developed areas. This has isolated majority of the rural population from the mainstream economic activities, which results in lower income of the rural people leading to a greater incidence of poverty.

There is an abundant unskilled labour force in rural areas, technologically the country is not strong enough to raise industrial-based growth, and most importantly there is a poor inflow of capital and foreign investments. Since, the population living in rural areas is already engaged in agriculture, in such a scenario, agro-based growth can be extremely helpful for poverty alleviation.

Financial benefits can be provided to the poor by transforming family-based agriculture to more profitable business ventures, improving the market system and engaging effectively the vast labour force in agro-related activities. Agricultural-based programs can help to raise the income of the less educated and unskilled labour force residing in the backward areas of the country, hence reducing poverty. However, sadly in the new budget, no such policy was announced by the government.