Sustainable Agriculture and Rural Poverty Eradication in Pakistan: The Role of Foreign Aid and Government Policies

Abstract

For decades, agriculture has been central to economic growth and development in Pakistan. However, endemic rural poverty hinders the performance of agricultural production, and thus deteriorates the sustainable development perspectives of the agricultural sector and the entire country. The need for agricultural reform emphasizes raising farmers’ incomes as a cornerstone of the sustainable development of rural areas, and this study attempts to reveal the effects of foreign aid and government policies on the level of rural poverty in Pakistan. In total, 384 farmers from major agricultural areas of Pakistan completed the survey-based questionnaire. The partial least square structural equation modelling technique tested the results. They, using sustainable agriculture practices, improved agricultural production positively and significantly. Agriculture production positively and significantly reduces or mitigates poverty. This study aimed to reveal the role of foreign aid in sustaining agricultural production and eradicating rural poverty. Foreign aid positively moderated the association between sustainable agriculture practices and agricultural production. In addition, government policies negatively, yet insignificantly, moderate the association between agriculture production and poverty reduction. Furthermore, the findings indicate that agriculture production positively and significantly mediates the association between sustainable agriculture practices and poverty reduction. The study contributes to the literature by improving the understanding of linkages within the poverty-policies-aid-sustainability framework.