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Coronavirus
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10024hr
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97,318

EDITORIAL: Prime Minister Imran Khan sought proposals on corporate farming from a delegation of industrialists who met him on Friday past (Business Recorder has always highlighted the importance of corporate farming in order to boost agri productivity in the country in a meaningful manner). Critics of the Prime Minister may argue that a group of industrialists may have limited, if any, interest in corporate farming; however, they would be well-advised to note that nearly two decades ago - in 2001-02 - Pakistan announced a Corporate Agriculture Farming (CAF) policy which declared agricultural farming as an industry, made adequate bank credit available for corporate entities, gave several tax concessions like zero-rating imports of machinery (not manufactured locally), did away with the upper ceiling on landholding for registered agricultural companies, allowed 100 percent foreign ownership with checks on repatriation of investment and profits, and exempted transfer of land from taxes.

In 2012, reports indicated that the Securities and Exchange Commission of Pakistan (SECP) had enrolled over 19 companies in corporate agricultural farming though they were mostly in seed, poultry and feed business, dairy farming, and halal meat with little interest in the vegetable and crop sector. The question is what are the lacunae in the promotion of corporate farming in the vegetable and crop sectors in Pakistan?

Research undertaken by Impact Consulting in 2012 concluded that the CAF policy was not designed to solve Pakistan's problems of poverty, inequality, environment, and food security with rights of small scale farmers who either own or are landless not taken into account. It added that ''instead of distribution of land to the small farmers as a key resource transfer for capability enhancement, the government has announced the policy of CAF under which it intends to lease vast tracts of lands to foreign entities and multinational corporations. Civil Society Organizations and farmer groups have argued that irrespective of the claims by the government, CAF is not destined to serve the interests of the small farmers in Pakistan." And appropriately noted that food security is not exclusively an agriculture phenomenon, and monetary and fiscal policies also play an equally important role.

The Prime Minister has repeatedly declared that his administration is a firm supporter of wealth creation as the engine of Gross Domestic Product (GDP) growth which, in turn, will generate employment opportunities; at the same time he has reiterated his commitment to assisting those living below poverty levels through the Ehsaas programme. Wealth creation by established industrialists is no doubt one possible way to divert investment to those areas where there is a dearth of capital; however, a better way with respect to corporate farming maybe to amend the suitably CAF to include measures targeted to strengthening the capacity of the large number of small and subsistence farmers to market their products directly. This has been achieved in the US as well as India and one would hope that lessons be drawn from their example.

After Jehangir Tareen's fall from grace - credited with being the architect of the farm policy announced last year - the Prime Minister has not announced any replacement. Needless to add, the 2019 farm policy was criticized as it ignored the cotton sector, the major export earner in the country, with no mention of amending CAF rules to include the poor farmers. The incumbent Minister for Agriculture Fakhr Imam has shown little or no interest in policy matters and remains engaged in fire-fighting with respect to the ongoing wheat and sugar "crises" in the country. This is untenable not only because the farm sector is where the bulk of the workforce is engaged and is a major contributor to GDP (either directly or indirectly through providing input to the industrial sector) but also because while the Prime Minister has the historically highest number of special assistants, 14 in total, yet he did not consider agriculture important enough to merit a SAPM. The Prime Minister needs a sector expert for agriculture ministry even though it is a provincial subject after the passage of the 18th Constitutional Amendment, especially given that the CAF policy needs a revision.

Copyright Business Recorder, 2020