Causes of rural poverty By Farzana Panhwar

LEISA Magazine • 17.2 • July 2001


Causes of rural poverty

Farzana Panhwar

The Sindhi farmers in Lower Punjab, Pakistan, are being systematically kept in poverty due to the low prices they get for their products. This is caused by the policy of the Government to keep the prices of wheat and other agricultural commodities low so that commerce and industry can get cheap labour and high profits.

Presently, the price farmers get for their wheat is about half the world market price and half of what they received in 1950, taking into account the depreciation of the Pakistan rupee. When farmers use the optimal levels of inputs (costing approx. Rs 10,000 per acre) they can produce about 1,400 kg wheat per acre. If farmers get a price comparable to imported wheat they can afford to pay for the inputs and get an additional Rs 3,600 per acre. For a family with 5 acres of irrigated land this is an acceptable level of income for 6 months of family work.

Since farmers do not receive sufficient returns, they reduce on inputs by:
• Replacing deep ploughing and seed bed preparation by one harrowing only
• Replacing tractors by borrowed bullocks and own labour for drilling of seed
• Using poor quality seed produced by the farmer
• Using less fertiliser than the optimum
• Replacing most herbicides by manual weeding
• Using family labour for casual work and harvesting
• Avoiding periodic and precision land levelling
• Avoiding maintenance of water courses

This reduces yields to about 600 – 800 kg per acre most of which is for domestic use, seed for the next year and payment for borrowed inputs. Thus family labour is bartered for wheat needed for food with no accrued profits. Transition from subsistence to commercial farming is very difficult, as the costs of additional inputs are not compensated for by the additional returns from additional yields. As wheat production is insufficient to feed the population due to low yields, wheat is imported at about double the price paid to farmers and provided to the urban population at a subsidised price. Rural poverty, unemployment and insecurity, created artificially by forcing farmers to sell their products at low prices, is leading to unprecedented migration from rural to urban areas. These people, who end up living in ever-growing urban slums, face serious hardships and suffering.

Farzana Panhwar, President Sindh Rural Women’s Uplift Group, 157-C, Unit No.2, Latifabad, Hyderabad, Sindh, Pakistan. Fax: +92 221 860410