This work summarizes background papers prepared for the World Bank Group with significant input from government counterparts and other development partners. It takes stock of major recent developments and argues that a lot has been achieved in the last decade in terms of production of commodities for export and food consumption, with favorable impact on rural poverty reduction. It also argues that the two factors driving the recent agricultural performance, namely favorable international prices and expansion of the agricultural frontier, have reached their limits.
In order for agricultural development to fulfill its potential role as a source of growth and reducer of poverty, it must be constantly renewed through knowledge and innovation. Getting resources into the hands of innovators and providing incentives for producers, agricultural service providers, and entrepreneurs to collaborate in developing and applying new methods and technologies is a priority among institutions concerned with agricultural knowledge.
Poverty in Pakistan is overwhelmingly rural. Some two-thirds of Pakistan's population, and over 60 percent of the country's poor, live in rural areas. In 2005, average per capita expenditures in rural areas were 31 percent lower than in urban areas. This inequality between urban and rural areas is re-enforced by inequality within and between rural areas.