Contacts:
In Islamabad: Shahzad Sharjeel (92-51) 2279641
ssharjeel@worldbank.org
In Washington: Benjamin S Crow (202) 458 4735
enora@worldbank.org
Islamabad, 16 May, 2008: With wheat and rice prices hitting the pocketbooks of Pakistan’s poorest citizens and with high energy prices and increasing water scarcity squeezing local farmers, a leading World Bank agriculture expert today stressed the need for greater investment in agriculture in Pakistan. Drawing from the World Development Report 2008: Agriculture for Development, the report says that despite the fact that the agriculture sector can play enormous roles in spurring economic growth and employment, and in reducing poverty, over the past 20 years it suffered from neglect and underinvestment around the world. The WDR says the need for greater investment in agriculture in emerging economies like Pakistan, is vital to the welfare of 600 million rural poor living in those countries, mostly situated in Asia. The report warns that the Millennium Development Goal of halving extreme poverty and hunger by 2015 will not be met unless the governments in developing countries and the international community reverse the trend of underinvestment in the agriculture and rural sectors. “A dynamic ‘agriculture for development’ agenda can benefit the estimated 900 million rural people in the developing world who live on less than $1 a day, most of whom are engaged in agriculture,” said Robert B. Zoellick, World Bank Group President. “We need to give agriculture more prominence across the board. At the global level, countries must deliver on vital reforms such as cutting distorting subsidies and opening markets, while civil society groups, especially farmer organizations, need more say in setting the agricultural agenda.” In emerging countries such as Pakistan, India, China, and Morocco, agriculture contributed an average 7 percent to growth in GDP between 1995 and 2005, though the sector accounts for about 13 percent of the economy and employs just over half the labor force. In many countries, slow growth in agriculture sector coupled with a rapidly growing non-agriculture sector has widened rural-urban income gaps creating social and economic tensions. On the other hand, rapid growth of urban incomes and demand for higher-value products also provide significant opportunities for faster agricultural growth and poverty reduction in these countries. According to the report, the growth originating in agriculture is four times more effective in reducing poverty than the growth coming from non-agriculture sectors. The report recommends that in the emerging countries, the agricultural agenda should focus on reducing the disparity between rural and urban incomes and raising the incomes of the rural poor. As pointed out by Derek Byerlee, the principal co-author of the report, low agricultural productivity, unequal distribution of land and access to water, inadequate infrastructure, and poor public service delivery are among the key constraints hampering more rapid growth of agricultural sector in Pakistan. Increasing water scarcity, which is expected to worsen with climate change in the face of increasing demand for water is another major concern. The Report says agriculture can be an important source of growth, even in emerging economies like Pakistan, provided we improve the asset position of the rural poor, make smallholder farming more productive, competitive and sustainable, diversify income sources toward the labor market and the rural non-farm economy, and facilitate rural-urban migration with desirable developmental outcomes. The emerging countries have the largest concentration of the world’s poor, so the direct support through well-designed and well-governed employment schemes in rural areas, and well-targeted effective safety nets can reduce poverty, improve rural investment climate, and restore degraded natural resources. Yusupha Crookes, World Bank’s Country Director for Pakistan, stressed the relevance of the report for Pakistan. “During the last 12 months Pakistan has witnessed unprecedented increases in the price of key food commodities, which have profound effects on poor and vulnerable people. There is an urgent need for increased agricultural productivity, and effective safety net programs to overcome these problems.” For its part, the World Bank is committed to increasing its support for agriculture and rural development, following a decline in lending in the 1980s and 1990s. In FY07 commitments reached $3.1 billion to all borrowing countries, marking an increase for the fourth straight year. The report also warns that global food supplies are under pressure from increased demand for food, feed, and biofuels, rising price of energy, increasing land and water scarcity as well as climate change, which in turn contribute to sharp increases in food prices and put millions of people at risk of falling into poverty. In April this year the Bank proposed a New Deal on Global Food Policy, which 150 countries endorsed. The New Deal embraces short, medium and long-term responses, including safety nets such as school feeding, food for work, and conditional cash transfers. It also calls for increased agricultural production; a better understanding of the impact of biofuels; and action on the trade front to reduce distorting subsidies and trade barriers.
# # # For more information on the World Bank in Pakistan please visit: http://www.worldbank.org/pk To download policy briefs or access the full WDR2008, go to: http://www.worldbank.org/wdr2008 To read about the latest World Bank action to deal with the food price crisis, go to: http://www.worldbank.org/html/extdr/foodprices/
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