Corporate Agricultural Farming (CAF) - Bane or Boon?

Mazhar M. Chinoy

As Pakistan’s population swells, provision of safe and quality food at minimum impact to the environment
assumes the biggest challenge. Modern farming techniques and production methods are key to meet this
head on – a factor sorely lagging from Pakistan’s agricultural base.

In many countries, Corporate farming helps achieve the food question through efficient land use, and
innovations in technology, along with environmental controls and pollution prevention. And now the
concept has come to Pakistan.
Corporate Agricultural Farming (CAF) has been branded full industry status by the GOP and has great
potential to bring in latest methods in cultivation, with foreign investment forming the crux for a projected
step-jump on the local agricultural circuit.

Essential policy ingredients would be a zero limit on foreign investment with 100% foreign ownership
allowed. There would be no ceiling on land-holding with state land allowed for outright purchase or leased
for up to 99 years. A full credit infrastructure will be guaranteed, with the green signal on remittances of
capital and profits. Great incentives to lure in investment.

But is CAF really a prelude to certain turnaround in quality and quantity of Pakistan’s agricultural
produce? The issue is nothing short of controversy and is a constant debating point between stake
holders, more so the small farmer.
Small farmers who make up nearly 93% of Pakistan’s total farmer base are already vulnerable within the
under-developed agriculture sector with no subsidies, little domestic support, imposition of GST on
fertilizers, rising input costs and increase in power tariffs. CAF may add insult to injury with formal policy
offering greater privileges to Corporate Farming Investors as they bring in latest machinery and major
investments to completely sideline the majority of farmers with their mismatched and limited resources.
Because of huge disparity, competition would always favour the rich.

Moreover, the driving objective of profitability may well put investor focus more on cash crops than food
crops, risking food security. Acquisition of land by these investors would result in probable eviction of the
local people, and with major resources not in control of the small, now non-competitive farmer, there may
be an exodus of this working class to the bigger already-choked cities, increasing poverty and crime. This
would be in sharp contrast to the notion of distributing state-owned land amongst the poor farming
populace to alleviate the poverty that has besieged them for the generations

And with imports of modern machines at zero tariffs, the local agri-implements industry will be out in the
boondocks.

A sordid picture indeed. But, implemented judiciously, there are major benefits as well. Agriculture in
Pakistan is over employed, with nearly 70% of the population associated with agriculture and yet barely
meeting the nation’s food requirements. Current crop productivity per unit in Pakistan is one of the lowest
in the world. A case in point is wheat where Pakistan’s average yield is 2.4 tonnes per hectare against the
world average of 2.7 tonnes per hectare - China stands at 3.8 tonnes, India 2.8 tonnes and Egypt (a CAF
success story) a massive 6 tonnes per hectare.

With CAF in place, economic activity is certain to boost. With crop cultivation, storage and processing all
under the corporate umbrella, production and distribution will increase substantially. Quality of produce
will be quite in line with international paradigms, catapulting Pakistan’s standing on the world markets.
Economies of scale inherent in CAF should result in low cost, quality food for the common man

CAF is good practice and much needed to inject efficiency into Pakistan’s stagnating agriculture. The
challenge is to have an equitable policy framework to solidify the fine line between lucrative foreign
investments and domestic farmer interests. In the interest of fair competition, small farmers will have to be
factored into the equation and given support to assure an even playing field