Through CAF, the government says it will try to achieve efficiency of production and increased incomes/revenues by bringing together agricultural production, processing and marketing activities at one place under the management of a corporate entity. It says it will also try to improve agricultural productivity and profitability through the use of latest production technology and adequate expertise particularly for exports. In doing so, the government will extend such benefits to the MNCs as 100% foreign equity, minimum $0.3 foreign equity investment, remittance of 100% capital, profits and dividends, no upper ceiling on land holdings, etc. Potential Impact of the CAF Agreements.
While implementing its Corporate Agriculture Farming policy, the government must also keep in its mind long-term plans for agriculture development as stated in its Vision 2030, which includes an intensive participatory outreach approach to make available key inputs such as credit, certified seed, training, small-farm equipment, veterinary coverage for livestock, milk collection and establishment of a revolving fund for financing operations by the local communities through legally constituted Village Organisations.
Apart from being in conflict with the government's long-term vision for agricultural development, the CAF policy also contains many loopholes which would allow MNCs and local investors to manipulate the entire food supply chain in Pakistan to pursue their own financial agenda.
In fact, the government has failed to realize the far-reaching implications of this policy. It is inevitable that due to superior technology and practices, the corporate investor will be able to get more yield per acre than the local farmer and hence will be in a position to sell this at a cheaper price than crops cultivated by local farmers. Subsequently, this will force local farmers with small land holdings to sell his land to corporate investors as there is no limit on them to buy as much land as they wish to.
This single concession offered to corporate farmers can annihilate the whole agricultural sector of Pakistan. There is a great deal of concern among communities of farmers and agriculture experts that this will allow foreign investors to manipulate land resource by competition with local farmers in the prices of produced goods. Millions of families in Pakistan depend on agriculture and their cultivable land. Farmer communities and hence Pakistan will end up with more jobless people to feed.
The money paid against lease or buying state land by foreign investors will be a one-time gain by Pakistan whereas the investor will be able to compensate itself against this investment many times over during the lease period. According to the policy document entitled "Corporate Agriculture Farming (CAF)", the investor would be allowed to take away the entire produced crop without paying any tax on it whatsoever.
In Food Security Risk Index of 148 countries, Pakistan is at the 11th position among countries that are facing extreme to high risk of food shortages The index report states: "Food security is also affected by agricultural development, trade flows, foreign aid as well as government policies on nutrition." Pakistan's corporate agriculture farming policy would also push a trend of poverty in the country as feared many agriculture and food experts.
Security Issues
When established, these huge corporate farms will also require protection and security. In the CAF policy it is not clear that how the government will ensure security of these MNCs, keeping in mind the current law and order situation in the country, particularly in the NWFP and Balochistan where most of the barren government land is located.
According to some reports, the government will establish a security force of 100,000 to protect these farms. Obviously, the current political and geo-political situation will not be conducive to allowing any foreign private force to stay in Pakistan.
Another aspect of the CAF policy which undermines the rights of Pakistani workers is to exempt MNCs and investors from the country's labour laws, though the policy does talk about development of proper labour laws for corporate agriculture farming.
The major weakness, therefore, is not in corporate farming but in the policy that has been laid down to bring investors and MNCs to Pakistan to invest in the agriculture business.
One question that arises in the case of Saudi Arabia and UAE is that why should they buy land and then establish farms and keep huge security guards to protect those farms? Pakistan and the Gulf countries can also sign bilateral deals to form corporate companies at public level to establish farms on barren lands with small farmers as shareholders to enhance productivity and incorporate new technologies in Pakistan's agriculture sector.
Landless Pakistanis must get land from the government to grow crops instead of the latter selling or leasing its land. The government can feed at least 120,000 families in rural Pakistan by providing 10 acres each from this land. One major reason behind low productivity in Pakistan has been long reliance on old methods of farming by farmers and this is due to the very low literacy rate among farmers in Pakistan, particularly among small farmers.
It is recommended that government should launch training and education programmes for farmers, giving first priority to small farmers to enhance their productivity in the field. Training in new irrigation techniques, high yield seeds and farm management are very critical at this point to keep Pakistan's agriculture sector sustainable and productive enough to meet food supplies for the nation as well as for export.
New Agriculture Technology
According to the CAF policy, the government has given incentives to MNCs for import of machinery for corporate farming. Such incentives must also be given to local farmers at national level, irrespective of kind of farming they are associated with.
Protection for Small Farmer
While inviting MNCs and investors for corporate farming, it is also crucial to provide protection to the assets of small farmers who earn their bread and butter from their small farms. Financially, small farmers cannot withstand the challenges of corporate farming alone. The government must take into consideration that prices offered by MNCs in the market can be lower than those offered by small farmers.
Keeping these facts in mind, it is evident that corporate farming is not a tool to increase local agriculture output in Pakistan by any means. International practices in corporate farming show that it has never produced any tangible benefits for local masses. Countries that lease their lands to MNCs are still facing severe or high risk of food shortages and have seen a decline in supply of key resources like water to local communities (Africa is one example).
Like Pakistan, India too is suffering from a population explosion but it opted to stay in a group of countries that acquire land on lease from other countries for agricultural production, unlike Pakistan that is leasing out its own precious land to foreign concerns.
Pakistan is also moving towards a serious water shortage. It is likely to face a food shortage as well. It is therefore imperative that the country sticks to its long-term agriculture, food and irrigation plans and formulates policies that are in line with these plans, rather than indulging in short-term thinking to reap quick gains.
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