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Rural economy: investment imbalance

“INVESTMENTS in agricultural development in Pakistan do not necessarily benefit the poor and landless people”, concludes the International Fund for Agricultural Development evaluation report.

Drawing lessons from the country programme evaluation of its projects, the IFAD states that there is a need to develop a better balance between agricultural and non-farm investments in the rural sector.

About 57pc of the rural poor belong to non-farm households but more off-farm opportunities are now being offered by the country’s growing business environment.

More resources should be devoted to small agribusinesses and family-based rural micro-enterprises. IFAD stressed the importance of promoting wider market linkages for both agricultural and non-farm outputs.

More rural financial services and products are central to ensuring that the poor have access to financing.

Greater attention needs to be paid to livestock development and high-value crops such as fruit, vegetables and flowers that provide higher returns on investments.

Agricultural land investments should be accompanied by measures aimed at improving environmental and natural resource management, such as integrated catchment management and increasing the efficiency of water use under rain-fed conditions.

IFAD says commercialisation of agriculture will assist, but the rural non-farm sector has greater growth potential.

The IFAD evaluation report emphasised the need for institutional restructuring and redefining the role and effectiveness of the Ministry of National Food Security and Research.

Climate change has an increasing impact on agriculture and the rural poor, and addressing nutrition needs requires a mainstream approach.

IFAD target groups include the landless, sharecroppers and smallholder tenants. Extremely and chronically very poor people suffer from intergenerational poverty, lack of land and assets, and no access to credit, extension services, markets, training and information.

Experience has now demonstrated that the poorest segment cannot escape poverty through one-off interventions or unconditional cash grants alone. A key challenge for Pakistan will be to reduce rural poverty in the face of limited access to land.

In line with the lessons learned from the concluded country programme, IFAD has decided that the first 2016-18 performance-based allocation of $90m will scale up the second phase of Azad Jammu and Kashmir Community Development Programme, and the National Poverty Graduation Programme.

The pipeline for the 2019-21cycle, will be developed during the programme’s mid-term review in 2018.

The AJKCDP-II will be a six-year programme with an estimated cost of $60m, including $45m loan from IFAD, with the balance contributed by the AJK government and project beneficiaries.

The National Poverty Graduation Programme will build on the Pakistan Poverty Alleviation Fund’s (PPAF) successful and continuous poverty graduation work in Pakistan, focusing on some 5m poor and vulnerable people in the most deprived areas of the country, with the objective of fostering graduation of 1m people out of poverty (0.16m households).

Initial financing will be about $100m, with $50m from IFAD, $25m from the government and $25m from the PPAF.

In line with reaching the rural poor, the targeting strategy of the IFAD-supported programme for the period 2016-21 will focus on four priority provinces of Azad Kashmir, Balochistan, Gilgit-Baltistan and Punjab.

Source: Dawn

Byline: Amin Ahmed

December 26, 2016

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