agriculture and the rural economy of pakistan: issues, outlooks, and policy priorities
TRANSCRIPT
Agriculture and the Rural
Economy of Pakistan
Issues, Outlooks, and Policy Priorities
David J Spielman, Sohail J Malik, Paul Dorosh, & Nuzhat Ahmed
International Food Policy Research Institute
December 2016
Why agriculture?
• Pakistan’s history is inextricably linked to agriculture
• Agriculture has contributed greatly to the country’s economic growth
• Today, Pakistan’s agricultural sector faces new and tougher challenges
Agriculture in the wider economy of Pakistan
0
10
20
30
40
50
60
0
1,000
2,000
3,000
4,000
5,000
6,000
Perc
ent
Co
nst
ant
(20
14
) b
illio
n R
s.GDP, agricultural GDP and the share of labor in agriculture
in Pakistan, 1979-80 to 2013-14
Agricultural GDP Share of Agriculture in GDP Share of Labor in Agriculture
The demise of an agricultural agenda?Year Event/policy
1953 Village Aid Program, Pakistan’s first rural social protection program, established
1958 Water and Power Development Authority (WAPDA) created
1959–60 Land reforms pursued through various ordinances and regulations
1960 India and Pakistan sign the Indus Waters Treaty
1963 Rural Works Program introduced
1964-66 Pakistan begins international collaborations to develop high-yielding wheat and rice
1972 New land reforms, Peoples Work Program, Integrated Rural Dev’t Program introduced
1980 Economic liberalization extended to agriculture
1981 Agri Prices Commission (APC), Pakistan Agri Research Council (PARC) established
1987 National Agricultural Commission (NAC), new strategy for ag development introduced
1991 Pakistan Water Apportionment Accord signed
2004 Agricultural Perspective and Policy drafted, but never formally adopted
2008 PM’s Task Force on Food Security established following global food price shock
2014 18th Amendment of the Constitution introduced
Why agriculture… still today?
-8
-6
-4
-2
0
2
4
6
8
10
12
14
Pe
rce
nt
Annual growth rate of agriculture value added, Pakistan, 1960 to 2014
Why rural poverty… still today?
0
10
20
30
40
50
60
2001-02 2004-05 2005-06 2007-08 2010-11
Pe
rce
nt
Competing estimates of rural poverty incidence, Pakistan, 2001-02 to 2010-11
Official Methodology (Poverty Lines Extrapolated CPI)
Official Methodology (Poverty Lines Estimated)
Arndt Simler (2010) Methodology
The unpopular question of the moment
• Can agriculture still contribute to productivity growth and poverty reduction?
Insights, evidence and options
• Yes… if Pakistan corrects course on agriculture and the rural economy
Agriculture and the Rural
Economy in PakistanIssues, Outlooks, and Policy Priorities
Edited by David J. Spielman, Sohail J. Malik, Paul Dorosh, and
Nuzhat Ahmad
Published for the International Food Policy Research
Institute
PENNUniversity of Pennsylvania Press Philadelphia
Agriculture, land, and productivity- Sohail J. Malik, Shujat Ali, Khalid Riaz, Edward Whitney, Mehrab Malek, and Ahmad Waqas
• The paradox of change and stasis in agriculture
– A rich natural resource base that is increasingly scarce
– Growth driven by input intensification with little technical change
– Growth in rural infrastructure, urban agglomeration with little diversification
Travel time to a city of at least 500,000 people, 1965 and 2010Input
TFP
050
100150200250300350
19
60
/61
19
63
/64
19
66
/67
19
69
/70
19
72
/73
19
75
/76
19
78
/79
19
81
/82
19
84
/85
19
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/88
19
90
/91
19
93
/94
19
96
/97
19
99
/00
20
02
/03
20
05
/06
20
08
/09
20
12
/13
Ind
ice
s
Agricultural Input and TFP Indices, Pakistan 1960/61 to 2012/13
• Food insecurity is high and relatively unchanging
• Consumption patterns remain skewed to cheaper calorie sources
• Dietary diversity remains limited, contributing to high malnutrition rates
Urban
Rural
0
20
40
60
80
2001-02 2004-05 2005-06 2007-08 2010-11 2011-12 2012-13
% s
har
e in
to
tal h
hex
pe
nd
itu
re
Food budget share of rural and urban householdsPakistan, 2001-02 to 2012-13
Consumption, poverty, and nutrition- Sohail J. Malik, Hina Nazli, Edward Whitney, Asma Shahzad, and Amina Mehmood
-1
0
1
2
3
4
5
20
08
20
10
20
12
20
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20
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20
18
20
20
20
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20
24
20
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20
30
20
32
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36
20
38
20
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20
42
20
44
20
46
20
48
20
50
% C
han
ge in
GD
P
Impact of selected improvements in the Indus basin irrigation system on GDP growth (%)
BDAM TMG WCE TRADE BDAM + WCE
Irrigation and water management in the Indus basin- Stephen Davies, Arthur Gueneau, Dawit Mekonnen, Claudia Ringler, and Sherman Robinson
• How do public policy and institutional architecture affect access to public services in rural Pakistan?
– Health, education, water, sanitation, and electricity
– Federal, provincial, and local agencies, services, and programs
• How do rural public services affect economic and social outcomes?
– Higher agricultural labor supply
– Greater technical change in agriculture
– Higher non-farm rural labor market participation, incomes
Public service delivery for rural development- Madiha Afzal, Gissele Gajate Garrido, Brian Holtemeyer, and Katrina Kosec
• Women’s participation in economic activity is essential to growth, development and poverty reduction
– Much is known about the status of rural women
– Wage gaps between women and men are significant
– Disempowerment exists absolute, relative terms
Gender equality, women’s empowerment- Nuzhat Ahmad, Madeeha Hameed, Huma Khan, and Sara Rafi
0102030405060708090
100
Perc
enta
ge
Mobility patterns of women
Can go
Can go alone
Can go with children and females
Do not have to ask for permission
• Poverty reduction requires two main elements
– The availability of opportunities to break the poverty cycle
– The will to take advantage of these opportunities
• Aspirations are “the goals that people set and intend to achieve”
– Aspiration failures within specific groups should be important to policymakers
• Predictors and correlates of high aspiration levels
– Individual characteristics: Sex, education, age, occupation
– Cognitive factors: locus of control, self-esteem, religiosity, trust
– Higher adoption rates of fertilizer, pesticides, and herbicides; higher crop yields
– Higher rates of savings, credit uptake, nonfarm enterprises
Aspirations of the rural poor- Katrina Kosec and Huma Khan
• Polls suggest wide acceptance of devolution under 18th AmendmentOpportunities for greater participation, voice, and influence on policy
Particularly for rural constituencies
• Measuring progress: authority, autonomy, accountability– Mixed record of transition from Center to province level
– Poorer record from province to local level
• Devolution’s “Big Bang” approach provided proponents with a legacy
• But a more careful approach is needed– Better sequencing of administrative, fiscal reforms at each level
– Better performance monitoring and evaluation
– Innovative incentives to improve public service delivery
Devolution, agriculture, and rural development- Danielle Resnick and Abdul Wajid Rana
• “What if…” scenarios– An economy-wide model to test impacts of different drivers of poverty reduction
Agriculture, poverty, and the rural nonfarm economy- Paul Dorosh, Emily Schmidt, and James Thurlow
0.99 1.10 0.951.33
1.60 1.62 1.56
1.040.74
1.26
0.69
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ll se
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National Rural Peri-Urban Urban
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row
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nal
G
DP
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wth
Poverty-reducing effects of growth led by different sectors
In conclusion…
• Agriculture may matter less than in the past
– But agriculture still matters for growth, development, and poverty reduction in Pakistan
• Rural poverty demands greater emphasis
– Look to the nonfarm rural economy for poverty reduction
• Focus on key policy, regulatory, infrastructure levers
– Irrigation, water management, seed, fertilizer sectors
• Capitalize on the 18th amendment
– Empower rural communities, households, and women with aspirations, voice, services