POVERTY MOUNTING IN RURAL AREAS

SHAMIM RIZVI
(feedback@pgeconomist.com)
Aug 16 - 22, 20
10

High level of unemployment and wide income disparity between the rich and poor are causing immense socioeconomic problems. It is due to extreme poverty that general despair and deprivation prevail in the society and people have resorted to desperate measures to alleviate their grievances.

Collective suicides of the families to get rid of hunger are a new phenomenon in country's history to prove the high magnitude of poverty level.

The State Bank of Pakistan in its annual report on the economy revealed that the head count ratio prevailing to poverty has increased to 36.1 percent in February 2009 from 33 percent in 2008. It is likely to be 40 percent during the current year. According to independent experts, there has been a net increase of about four percent in the poverty level during the present PPP led government of over two years. Dr. Mehboobul Haq development center in its annual report on poverty in South Asia released last month considered that almost 60 percent population was living at poverty level.

The Deputy Chairman of the Planning Commission, Dr. Nadeemul Haq said that the poverty survey was launched recently and its results would be available within the next four months.

Number of people falling below the poverty line has increased in the last few years mainly due to a few factors: steep rise in inflation, further shrinking of the job market due to stagnant economic activities, and uncertain law and order situation. A report suggests that more than 48 percent of the population has been severely affected by the rising food prices in the last few years. With the price-hike, rise in unemployment and constant load shedding, the common person now fears that the ultimate burden of new taxes would squarely fall upon his shoulders, as the elite class has multiple means to avoid paying taxes. Consequently, the costs of education, health and other social services may further swell. Although the government employees have been given a hefty increase in their salaries, the vast majority of the population does not see any visible and tangible incentive for them in the new budget. On the other hand, with the announcement of the budget, prices of some essential items have started increasing.

Poverty alleviation programmes such as the Benazir Income Support Program launched by the present government are not making a significant impact on the lives of the poverty-stricken people. Since its inception, its performance has been rather unsatisfactory. Instead of curtailing nonproductive expenditure the governments is focusing on borrowing both from domestic and foreign sources, the constant begging by the regime is not going to help in easing down the economic woes of the people. The perpetual habit of relying on borrowed funds for confronting the shortcomings of the economy will not strengthen the country. The best way to take the problem of poverty is generate high level of employment and control rising inflation.

Poverty in rural areas is much higher than urban. According to the International Fund for Agricultural Department Programme, 75 percent of the poor people living in developing countries including Pakistan live in rural areas.

The rural economy is heavily based upon agriculture. The livelihood of almost six percent 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 area include family based agriculture and ignorance of rural based labour for requirements while making different types of policies. As agriculture is major source of income in such areas, it can play an effective role in the 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 which 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, but it has also led to inflation as the restriction in the supply of agricultural commodities has enhanced the process 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 return of farmers' products, which they deserve cannot be earned by them due to discriminations that take place in the government. The discrimination in transaction bolsters due to mismanagement, market's faulty system, the active role of the intermediary and ultimately absence of the holding power of farmers.

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 even 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 engages in agriculture, agro-based growth can be extremely helpful for poverty alleviation.