Farmland in few hands impacts inequality: NHDR

Islamabad : According to Pakistan National Human Development Report (NHDR) 2020, just one per cent of Pakistan’s population owns over 20 per cent of its farmland; each of these farmland owners own more than 400 acres of agricultural land.

This leads, first and foremost, to the accumulation of farmland in very few hands. Second, this unequal distribution of land ownership leads to an uneven distribution of agricultural income, which, in turn, adversely impacts inequality and poverty. After initial attempts towards land reform in the 1970s fizzled out, there has been no attempt to redistribute land or to introduce a progressive system for taxing agricultural incomes. Landownership is highly concentrated and feudal lords are obstructing any meaningful reforms towards fairer distribution of land.

Report also mentioned that nearly half a million (about 0.460 million) of Pakistan’s richest households own almost 16 per cent of the country’s residential property. The average value of property owned by each household is almost Rs25 million. According to NHDR 2020, over one-quarter (27 per cent) of Pakistan’s agricultural workers belong to the poorest 20 per cent of the population, suggesting that there is greater poverty in rural areas. Higher growth rate in the agricultural sector promotes employment that is less skill-intensive and is characterised by low wages. This leads to workers with lower levels of education being absorbed into the labour force in larger numbers, which reduces income inequality overall. By contrast,

industrial growth, especially in large units, is likely to increase the demand for more educated and skilled workers, who command higher wages and that also increases income inequality.