Inclusive Agricultural Growth in Pakistan— Understanding Some Basic Constraints

Inclusive agricultural growth is important for overall economic growth and particularly critical for rural socio-economic stability and poverty reduction in Pakistan. The majority of Pakistan‘s population and 44 percent of the overall labour force are dependent upon agriculture which only accounts for a little over 20 percent of national GDP. The paper highlights some basic constraints that have not been explicitly addressed in the policy research and implementation and have impeded inclusive agriculture growth. A descriptive analysis based on data from the Agriculture Census of Pakistan and the Pakistan Household Income and Economic Survey—both of which were conducted in 2010-11—is used to show how high levels of poverty and its disparity across regions, combined with the declining size of operated holdings and associated fragmentation especially in the smallest size categories which now form over 60 percent of the agricultural holdings in Pakistan, are fundamental constraints. Poverty is both the result as well as the consequence of fragmented markets, weak institutions including governance; and, inadequate policy research and implementation. A better research based policy understanding of some basic constraints, and the variations across regions in such factors such as the declining size and fragmentation of operated farms, rural poverty; and, the levels of market development and institutions is essential along with effective implementation. One size fits all policies have not and will not work. JEL Classification: O40, Q15, I32, P46 Keywords: Inclusive Growth, Land Holding, Land Tenure, Income Distribution, Povert