Magazine article Economic Review

Role of Agriculture in Poverty Allegation

Magazine article Economic Review

Role of Agriculture in Poverty Allegation

Article excerpt

Rural population, directly or indirectly is linked to agriculture for its livelihood. And agricultural development is linked to rural development, water resources, industries, poverty alleviation and environment. Its high growth rate helps in poverty alleviation through employment and development.

Improved farm output also helps in diversification of rural economy toward agro-based industries and non-farm activities such as livestock, fisheries and poultry. Thus, agricultural development is critically important for poverty alleviation since 65.9 percent of the population live in rural areas.

According to official figures, in 2004-05 poverty was 28.10 percent in rural areas, 14.90 percent in urban areas and 23.90 on an overall basis. Despite efforts of the successive governments to mitigate poverty, it is still burgeoning and expanding.

The Pakistan Agricultural Research Council (PARC) scientists conducted a sarvey to analyze income sources, agricultural productivity and poverty status of farm families in the rice/wheat and (Sialkot, Gujranwala, Sheikhupura, Lahore, Kasur, Narowal, MandiBahauddin and Hafizabad) and mix cropping zones (Sargodha, Khushab, Jhang, Faisalabad/Toba Tek Singh & Okara) of Punjab during 2004-05.

According to survey results, crop income accounted for about two-third (66.41 percent) of the total income of farm families. It contributes 71 percent in the total income in rice/wheat zone and 59 percent in the mix-cropping zone. In the rice/wheat zone, major crops (rice and wheat) contribute 97 percent of the crop income of poor fanners and 94 percent of the crop income of not-poor farmers.

Similarly, in the mix-cropping zone share of major crops (sugarcane and wheat) in the income of poor farmer is greater than the "not poor"; 82 and 71 percent, respectively, meaning the share of minor crops in the crop income of latter is greater than the former.

Livestock sector's contribution is 5.12 percent in the rice/wheat zone and 11.5 percent in the mix-cropping zone. Thus, agriculture sector contributes 73.87 percent in the income of rural farm families in the study area: 76.12 percent in rice/wheat zone and 70.50 percent in mix cropping zone. Therefore, it is apparent that an increase in agricultural productivity results in an increase in per-capita income of rural farm people and thus a decrease in poverty in rural areas.

Wages and salaries are also significant income sources for peasants. They contribute about one-fifth (20.38 percent) of the total income of farm workers families. Rental and transfer incomes are minor sources of income for farm families; these sources contribute 5.75 percent in their income.

According to latest official inflation adjusted poverty line, 31 percent of farm population in the survey area is poor. The incidence of poverty is more in the mix-cropping zone than in the rice-wheat zone.

Poverty estimates depict that in the mix-cropping zone about 34 percent of the members of rural families are poor as compared to 28 percent in the rice/wheat zone. Mean income of poor farm households is less then the established poverty line by 0.37.

Aggregate poverty deficit of the poor in the mix cropping zone is more than in the rice wheat zone. The income inequality amongst poor in the mix-cropping zone is more than in the rice/wheat zone and overall study area. Thus, poverty is more severe in mix cropping zone than the rice/wheat zone.

The yield of major crops in the study area is low than their potential yield. The yield of major crops is still 25-50 percent below the demonstrated potential; the gap between actual and potential yield of rice is 50 percent, wheat 40 percent, sugarcane 35 percent and maize 28 percent.

The low yield of major crops may be attributed to poor quality seed, low seed rate, conventional sowing method, and inefficient use of fertilizers, poor management practices and low level of farm mechanization. …

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