RH, I will believe you if the poverty numbers that get published by an international agency agree with the mood of the article. Any independent source to show that rural poverty is decreasing ?
Anecdotal evidence shows an improvement in rural economy, and there is certainly no evidence of farmer suicides in Pakistan as there is in India where 200,000 farmers have killed themselves in the last ten years.
As a matter of fact, an international happiness survey revealed that Pakistanis are less unhappy than their Indian counterparts.
The results of the 2010 global wellbeing survey of 124 nations conducted by Gallup reveal that Pakistan ranks 40th with 32% of Pakistanis saying they are thriving. By contrast, India ranks 71st with 21% of the Indians thriving and China ranks 92nd with only 12% of the Chinese considering themselves thriving, the highest level of wellbeing.
Pakistanis are a resilient people. But the only tangible explanation for Pakistanis ranking ahead of their neighbors in the wellbeing Gallup survey can be found in the strength of Pakistan's rural economy. It is being spurred by the higher food and commodity prices resulting in the transfer of additional new tax-free farm income of about Rs. 300 billion in the current fiscal year alone to Pakistan's ruling party's power base of landowners in small towns and villages in Southern Punjab and Rural Sindh, from those working in the the economically stagnant urban industrial and service sectors who pay bulk of the taxes. The downside of it is a bigger hole in Pakistan's pubic finances which is being funded with increased foreign aid and loans.
Moazzam Husain, the Director General of the Punjab Board of Investment and Trade, describes the current rural resurgence as follows in a recent blog post titled "The Other Pakistan":
"GLORIOUS countryside lies between Rahim Yar Khan and Bahawalpur. Travelling across six districts in Punjab, before a blazing summer sets in, I experienced endless fields of wheat waiting to turn golden, of freshly harvested mustard, acres of ripe sugarcane and sprawling mango orchards.
Far from the drudge and gloom of metropolitan Pakistan, economic privation, traffic snarls, extreme religion and the cricket World Cup agony, this is another Pakistan. Over a quarter of a century after the green revolution ended the rural economy is back in boom, this time on the back of rising prices. The feel-good factor is all around.
Burgeoning commodity prices are churning unprecedented amounts of cash through the farm sector. I pass tractor-pulled trolleys laden with sugarcane waiting outside sugar mills. The crushing season is in full swing. Meanwhile, the flour mills are still grinding away at last years surplus crop. This is an agro economy at serious work.
Alongside the cash economy, the place is also brimming with ideas, and with an entrepreneurial spirit. A young man I meet at Rahim Yar Khans chamber of commerce has an IT degree and owns an ice cream distribution business spawning an elaborate cold chain across three districts. He tells me that sales are surging because rural society is transitioning to modern desserts which are now more affordable than traditional sweets like mithai and khoya.
Meanwhile, hes toying with the bigger vision of an electronic marketplace for agricultural produce. Live connectivity to grain mandis and markets for fresh produce and milk will empower farmers to obtain prices online and through their cellphones. He wants to materialise this and wants tips. I give him my two cents worth: study similar models, write a concept paper, galvanise partners around it, put in seed money and get the venture to mezzanine level."
In 2008, the government pushed the procurement price of wheat up from Rs. 625 per 40 kg to Rs. 950 per 40 kg. This action immediately triggered inflationary pressures that have continued to persist as food accounts for just over 40% of Pakistan's consumer price index. According to State Bank of Pakistan (SBP) analysis, cumulative price of wheat surged by 120 per cent since 2008, far higher than the 40 per cent between 2003 and 2007. it is also many times greater than the international market price increase of 22 per cent for wheat in the same period. Similarly, sugar prices have surged 184 per cent higher since 2008, compared with 46 per cent increase during 2003-07.
Bumper crops and exports at higher prices are also contributing to the rural prosperity in Pakistan. For example, the Wall Street Journal reported increased Pakistan's wheat exports in a recent story as follows:
"Asia's immediate wheat demand is being met by ample supply from Pakistan, which is exporting existing inventories to make way for the new harvest, trading executives said Monday.
"Pakistan has filled a crucial gap in Asian wheat trade due to the absence of supply from the Black Sea region," said a Singapore-based executive with a global trading company.
If Pakistan hadn't permitted wheat exports during this period of tight overall global supply, price conscious buyers in South Asia and Southeast Asia would have had to turn to costly alternative supply from Canada, the U.S. and Europe.
The absence of Pakistan would have also increased demand pressure in Australia, where ports are already facing congestion and there are logistical delays in moving wheat from upcountry warehouses.
Pakistan approved wheat exports in December and shipments began the following month.
In less than four months it has shipped out an estimated 1.16 million metric tons of wheat.
The International Grains Council has projected Pakistan's wheat exports in the year ending June 30 at 1.6 million tons, the highest in at least four years."
The steps such as the increased exports, the transfer of additional Rs. 300 billion to Pakistan's agriculture sector during the current fiscal year 2010-2011 by higher prices of agriculture produce, and direct flood compensation to 1.6 million affected families at the rate of one hundred thousands rupees each are boosting economic confidence in the countryside. This infusion of money is also generating rural demand for consumer items including consumer durables such as fans, TVs, motorcycles, cars, refrigerators, etc.
The big feudal landowners have been the biggest beneficiaries of the PPP's gift of high crop prices. However, the policy has helped small farmers as well, as shown by a recent survey reported by The Nation newspaper. The survey of 300 farmers in Sind's Sukkur district was conducted by Sukkur Institute of Business Administration for the State Bank of Pakistan (SBP). It has highlighted the following about district's rural economy:
1. In Sukkur district, majority of the farmers are subsistence farmers. 31 percent of them own less than 5 acres of land, and another 34 percent own up to 12.5 acres of land.
2. They spend an average of Rs. 1,611 a month on their children's education, with some of them spending up to Rs. 12,000 a month.
3. Wheat, rice, cotton and sugarcane are the major crops being cultivated by 93 per cent, 58 percent, 37 percent and 12 percent of the respondent farmers in that order.
4. 24 percent of them are also growing fruits including dates, mangoes and bananas.
5. 22 percent of the respondent own livestock.
6. About half (49 percent) use privately purchased seeds for wheat cultivation, 33 perecent use their own retained seed and 18 perecent use the seed purchased from Public Sector Seed Corporations.
7. On average, a farmer uses 96.73 Kg chemical fertilizer per acre with the maximum and minimum of 350 Kg and 40 Kg respectively. The average per acre cost of wheat production is Rs. 10,670.
8. All 300 farmers are using tractors for cultivation and preparing land for crops, and some are using tractors for fetching their crop produce to market.
It appears from the economic data and anecdotal evidence that bulk of the 32% of the Pakistani poll respondents who say they are thriving have income from the rural sectors of Pakistan's economy.
As expected, the people in the developed world report higher state of wellbeing than those in the developing nations. With Danes ranked the most satisfied people with 72 percent of respondents considering themselves thriving, people in Sweden and Canada follow close behind, each at 69 percent in Gallups 2010 Global Wellbeing Survey. The US came in somewhat near the bottom among developed western nations, with 59 percent of Americans thriving.
A median of just 21 percent were found to be thriving in the Gallup survey polling 1,000 adults, age 15 and older, in both face-to-face and telephone interviews in each country throughout 2010.
African nations show up near the bottom of the list, with only 12 percent of the respondents considering themselves to be thriving in Egypt, followed by 6 percent in Kenya and Chad with 1 percent ranking it dead last at 124.
Haq's Musings: Poll Finds Pakistanis Happier Than Neighbors
