In the first week of March, 2022, the Punjab cabinet gave approval for leasing out state land for corporate farming under the China-Pakistan Economic Corridor (CPEC) initiative. Agriculturists believe the move would prove to be a revolutionary step for the farming sector of Pakistan. Corporate farming refers to direct ownership or leasing of farmlands by business organisations in order to produce for their captive processing requirements or for the open market.
Agricultural experts believe corporate farming is good for farmers. They become economically stable and also get agricultural credit. They get seeds, fertilisers, modern equipment, etc. through the company for farming, which is difficult to get when pursuing farming on their own, owing to their poor economic conditions, they say.
Some agriculturists, however, oppose corporate farming and term it bad for farmers. They believe corporate power affects farmers. Unchecked corporate power distorts markets and leaves farmers vulnerable to abuse and unfair practices. Because farmers rely on both buyers and sellers for their business, concentrated markets squeeze them at both ends.
However, a majority of agriculturists support it. They believe corporate farming reduces the risk of production, price and marketing costs. Contract farming can open up new markets which would otherwise be unavailable to small farmers. It also ensures higher production of better quality, financial support in cash and /or kind and technical guidance to the farmers.
The provincial cabinet directed a ministerial committee to devise the lease rules while approving 500 to 5,000 acres of land for corporate farming to create job opportunities and to modernise the agriculture sector for food security. The project under the CPEC initiative had been pending since the previous Pakistan Muslim League-N government, which had set up a special cell at the Agriculture Department to work out modalities for the purpose and planned to establish seven agro-economic zones along the CPEC route to take full advantage of the development opportunity coming its way by promoting high-value agriculture and related businesses there.
Under the initiative, the Agriculture Department also made efforts to woo investment from China by offering partnerships in organic farming, hi-tech agricultural mechanization industry for domestic as well as export purposes, development of precision and high-value agriculture, development and production of seed and seed technology (hybrid and open pollinated varieties), manufacturing of pesticides and fertilizer units along the CPEC route, and processing units for value-addition of agriculture products along the CPEC route.
Other provinces of Pakistan are also working on legislation for leasing out farmlands for corporate farming under the CPEC initiative. The Ministry of Food Agriculture & Livestock (MINFAL) has identified specific fields of the agriculture sector of the country with a view to attracting foreign as well as local investors. The objective of the step is to commercialise the agriculture sector. Besides identifying the harnessing of cultivable waste land areas, government also pinpointed the fisheries sector, production of mutton through raising of sheep and goats, dairy farming, dehydration of vegetables, off-season vegetable production, animal feed mills, fruit juice making plants, solvent oil extraction from rice bran, tomato paste production and sunflower hybrid seed production.
Proposals relating to foreign investment in the agriculture sector would be processed by the Board of Investment (BOI) in consultation with respective provincial governments and later would be approved by the competent decision making authority. In this connection, an Investment Policy for the Agriculture sector was also announced by the BOI recently under which the import tariff on agricultural machinery (not manufactured locally) will be zero rated.
There will be no upper ceiling on land holding for registered agricultural companies. However, the income of these companies would be taxable. Activities including land development/ reclamation of barren, desert and hilly land for agriculture purposes and crop farming; reclamation of water front areas or creeks; crop, fruits, vegetables, flowers farming/ integrated agriculture (cultivation and processing of crops); modernisation and development of irrigation facilities and water management; plantation, forestry and horticulture would be available for foreign investment in the agriculture sector.
According to the government policy, land for agricultural purposes can be obtained on lease for a long period, i.e. initially up to 30 years, extending for a further period of 20 years. While, a foreign company, allowed for investment in the agriculture sector, will not be allowed to transfer the land to any other foreign company unless specifically permitted by the federal and the provincial government concerned. The cultivable waste land: According to experts of MINFAL, Pakistan has a total geographical area of 79.6 million hectares. Of this 9.1 million hectares land is cultivable waste, which is fit for cultivation but was not brought under plough due to lack of water availability, lack of interest, financial resource constraints etc. Saying that the cultivable waste area is almost half of the cultivated area, the experts said that development of the area was not only better for investment but also had the potential to contribute to increase in agricultural production.
The official statistics show that about half of the cultivable waste area (4.87 million hectares) is in the province of Balochistan from total 9.14mh, while there is 1.74mh cultivable land in Punjab, 1.45mh in Sindh, and 1.08mh in Khyber-Pakhtunkhwa. Cultivable waste land in Balochistan is mainly in the Kalat division, followed by Quetta, Nasirabad and Makran divisions. In Punjab, the cultivable waste area is mainly in the divisions of Dera Ghazi Khan, Bahawalpur, Rawalpindi and Lahore. In Sindh, the cultivable waste area is located in Hyderabad, Mirpur Khas, Sukkur and Larkana divisions. In Khyber-Pakhtunkhwa, the waste area is located in Dera Ismael Khan, Hazara and Kohat divisions.