Agriculture and the rural economy in Pakistan: Issues, outlooks, and policy priorities

Historically, agriculture has been crucial to Pakistan’s economic growth and development and remains so even today. The sector employs almost half of the country’s labor force, supplies key inputs to the country’s manufacturing sector, generates a significant share of export earnings, and nourishes a rapidly growing population. Further, beyond agriculture is the wider rural economy, including nonfarm economic activities such as small enterprises, transport services, village retail shops, local schools, and clinics, all of which account for an estimated 40 to 57 percent of total rural household income.

Given the importance of these rural activities, the slow growth of agriculture in recent years—averaging just 2.8 percent during the period 2010–2014—should be a source of concern for Pakistan. Can the country’s agricultural sector and rural economy once again play a significant role in growth and development? Can it contribute to poverty reduction?

Agriculture and the Rural Economy in Pakistan: Issues, Outlooks, and Policy Priorities seeks to answer these questions by examining the performance of both agriculture and the rural economy. The authors identify several measures that can promote agricultural productivity growth as well as wider economic and social development. These include increasing the efficiency of water use in the Indus river basin irrigation system, especially in the face of climate change; reforming policies and regulations that govern markets for agricultural inputs and commodities; and improving the provision of rural public services for health, education, women’s empowerment, and community development. The analyses and conclusions in Agriculture and the Rural Economy in Pakistan will be of use to policy makers, development specialists, and others concerned with Pakistan’s development.

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