Poverty issues and policies for its alleviation: a need to redirect the focus of planning strategies

A pragmatic approach towards poverty alleviation in Pakistan was adopted in 1960s with Dr. Mahboob-ul-Haq\u2019s notion that \u2018take care of GNP and it will take care of poverty itself\u2019. A reversal of this philosophy was advocated by the Haq school of thought in 1980s addressing poverty as core issue in development lanning. The new millennium is marked by a two-pronged policy, through the I-PRSP, to combat poverty and revive economic growth. The first policy package emphasized a boost in agriculture by combining inputs, services, infrastructural development and institutional support. The improved seeds, fertilizers and plant protection materials increased manifold, while irrigation water increased more than two-fold along with a massive ractorization. The second policy package, inter alia, enjoyed a shift over to value added commodities through textile industry. It appears that the process of technical breakthrough was not tailored in accordance with a wide range of factors operating in the international scenario. More precisely, pricing signals of the international market were not responded to by adjustment in output. Pakistan has a turnover of about US$ 20 billion (Rs. 1200 billion) in international trade. Thus, focus of this study is to describe over time impacts of international prices on the domestic ones. It also aims to analyze the effects of sectoral support and domestic policies on crop production, domestic economy and general welfare. In January 1982, one US dollar was worth Rs. 9.91, which climbed up to Rs. 67 per US dollar till September 11, 2001 with a u-turn to a current level of Rs. 58 per US dollar. Since then, the export prices in US dollar have shown a declining trend. Hence, the year 1981-82 being on the borderline of policy changes is a reference point for this study. The major crops, such as wheat, cotton, rice and sugarcane, account for about two-third of agricultural output and a major share of Pakistan\u2019s international trade. In view of time and space limitations, scope of the study is narrowed down to these crops and labor wages. The analysis demonstrated that a heavy reliance on traditional commodities pushed export prices down due to pouring excessive supplies into export market. Hence, it is recommended that export/production of traditional commodities should be adjusted and accompanied by a shift over to non-traditional ones.