Ministry not ready to ban yarn export

Post Source: The Nation – December 17, 2009 

ISLAMABAD – Another meeting between Ministry for Textile Industry and Trade Associations of value-added sector ended with no results, as the ministry did not accept the major proposal of the association to ban the export of yarn, it is reliably learnt. According to the sources, trade associations of value-added sector has come with many proposals and suggestions regarding availability and prices of yarn in the country, however their major demand was to impose ban on the export of yarn. But the meeting did not prove fruitful, as the Government did not announce any strategy regarding yarn, sources informed.

The Ministry of Textile Industry called an emergency meeting of value-added textile sector on Wednesday to resolve the issue of rising cotton yarn prices in the domestic market. The sources further informed that representatives of the associations in the meeting demanded of the Government to impose ban on the export of yarn as by doing this it would be available to the domestic consumers.

The ministry before the meeting asked all the value-added textile associations to come up with suggestions and proposals to resolve the issue in a positive manner, but the issue did not resolve in the meeting, the sources further disclosed.

This was the third consecutive meeting on the said issue, as the cotton yarn prices in the domestic market have mounted to a peak level because of rising export of the commodity, sources informed. However, they said like two previous meetings no result has come out from the third meeting, as the ministry has come with no strategy regarding availability of yarn in the country.

The representatives of the value-added textile sector already said that this would be the final negotiations with the Ministry of Textile for the imposition of ban on the export of cotton yarn and they would never negotiate any further if these dialogues remained unresolved.

Before Wednesday’s meeting, a leading textile exporter said, “We will never approach the Ministry of Textile after the meeting if the Government doesn’t come with solution of the problems. The ministry is not serious in taking stern action against exporters of cotton yarn,” he added. For the last four months, cotton yarn has not been available to the value-added textile sector in Pakistan. Due to the acute shortage of yarn in the country, over 50,000 power looms have been closed down while other 40,000 looms are operating partially. The situation is further escalating the rate of unemployment, as more than 2,000,000 people are directly associated with the textile sector.

Farmers’ bodies reject Rs1600/40kg sunflower price

Post Source: Staff Reporter The Nation – December 15, 2009  

LAHORE – The Federal government has fixed minimum purchase price for the sunflower crop for 2009-10 at Rs 1600 per 40-kg in order to encourage the farmers to grow sunflower on maximum area and ensure due return of their produce. However, farmers’ organisations including Pakistan Muttahida Kisan Mahaz (PMKM) have rejected the price, demanding the government to fix Rs 2000 per 40-kg as the minimum purchase price of sunflower.

Addressing a press conference here at the Pakistan Agricultural Storage and Services Corporation (Passco) headquarters on Monday, Federal Minister for Agriculture Nazar Muhammad Gondal said that this year, the government fixed target of sowing of sunflower on 1.1 million acres of land throughout the country.

“Farmers can get 800,000 tons of sunflower crop, if the sowing target is achieved that can help produce around 2,86,000 tons of oil. Price of this oil has been calculated at Rs 25b in the international market,” the Minister said.
He further said that oil produced out of crop sown on this targeted area would save $360m to the government reducing the dependence on import.
He said the Pakistan Oilseed Development Board (PODB) and the MINFA in consultation with the Pakistan Vanaspati Manufacturers Association (PVMA), Solvent Extractors Association, Seed Companies and farmers have decided the new minimum purchase price for the coming sunflower crop. He said that the industry circles also promised to buy the crop and ensuring payment of the crop according to the minimum purchase price announced by the govt. The minimum-purchasing price last year was Rs 1300/maund, he claimed.
‘While the seed companies have promised to provide quality 2200 tons of sunflower seed to the farmers needed for sowing on 1.1m acres of land,’ he added. He advised the growers to sow sunflower on maximum area and the govt would ensure the price. He said that the Passco would facilitate the buyers and the govt would facilitate the growers.

On this occasion, representatives of the industry claimed that increase in minimum purchase price would not affect the prevailing ghee and oil prices, as the new minimum purchase price was being announced in line with the prevailing international oil prices.
Replying to various queries, the Minister said that the PODB was constituted in 1995 by late Benazir Bhutto to increase production of oilseeds in Pakistan and reduce dependence on import of edible oil. At present import bill of edible oil was around $2b. He regretted that no government paid attention towards this Board after PPP government. He said that now present government had reconstituted its board with representatives from Ministry of Agriculture, Solvent Extractor Association, Pakistan Vanaspati Manufacturers Association, Seed Cos and farmers.

At present, he said the Board was working on increasing olive, canola, palm oil and other oilseeds. He said that the government had recently started working on a palm oil extracting machine in Thatha area while an extracting machine for olive oil had already been installed. He said that all these crops would support the government efforts to reduce dependence on edible oil import.
Meanwhile, farmers’ organisations including Pakistan Muttahida Kisan Mahaz, Agri Forum Pakistan and others have rejected the support price announced by the government and demanded to fix it at Rs 2000 per 40-kg.
Pakistan Muttahida Kisan Mahaz (PMKM) Chief M Ayub Mayo rejected the support price announced by the government and said his organisation had announced in a farmers’ moot held recently which demanded that price of sunflower should be fixed at Rs 2000 per maund. He also said that due to this same reason area under sowing for sunflower had reduced in 2008-09.
Ayub Khan Mayo also said that this year the country had to import palm oil worth over Rs one billion from Malaysia and Indonesia to meet the local demand. He said that the government should encourage the local growers to reduce import bill by protecting the rights of the growers rather than exploiting the situation.

Chief of Agri-Forum Pakistan Muhammad Ibrahim Mughal said that sunflower crop was sold at Rs 1800 per maund some three years back. He said during these three years prices of diesel, fertilizers, seeds and other inputs had increased by 20-25pc. The per-40 kilogram cost of production is Rs 1850 per maund, then how the farmers would bear the loss. He claimed that there would be negligible sowing of sunflower in Punjab if this price is not revised immediately and fixed at Rs 2000 per maund.

Most peasant women cheated in land distribution, says study

Post Source: Dawn – By Habib Khan Ghori 

KARACHI, Dec 10: More than 50 per cent of the peasant women beneficiaries of the Sindh government’s land distribution programme are awaiting ownership documents. In some cases influential people have grabbed their land. They have even been allotted land reserved for graveyards, or sand dunes or waterlogged areas, reveals a study.

The study, titled ‘Sindh government’s land distribution programme: issues and challenges’, was conducted by the Participatory Development Initiatives with the support of Oxfam GB.

Launching the study in a local hotel on Thursday, PDI Director Sikander Brohi said the study had shown that over 50 per cent of women land grantees were still without legal land ownership documents.

Although at the provincial level, the Sindh government had taken a number of initiatives to ensure transparency in the process of land distribution, its implementation at the district level was cumbersome.

“The Sindh government had formed a steering committee at the provincial level to oversee the process and had issued strict instructions that such joint land distribution committees of different stakeholders should be formed at the district level. And the land identified for the distribution should be free from all the issues and should be cultivable land and proper criteria should be implemented for the identification of the land grantees,” the study said.

But, unfortunately, Mr Brohi said, at the district level the process was not participatory as only the revenue department was the key player and other stakeholders were not taken onboard. As a result, in many cases the land identified for the distribution was uncultivable, at some places it had sand dunes and at others it was waterlogged.

According to the study, the process of the identification of the beneficiaries was also flawed. In many cases land was allotted to relatives and people of the clans of political influential persons. In some cases, poor land grantees have received very small portions of the land, as small as one-and-a-half or two acres, while women belonging to influential families have received even more than 15 acres.

He said that according to the study the poor women had even been allotted graveyard lands, land with big ponds or sand dunes and even the pieces of land eroded by the sea. According to the study, a large number of women could not benefit from the programme due to the poor publicity of the land distribution and arranging open kachehries for the distribution of land in influential people’s drawing rooms.

Recalling the post-land distribution issues, the study has identified lack of legal ownership documents to the land grantees as one of the key issues as due to the only simple allotment lists or letters, there is a threat looming large over those women that their land might be cancelled and given to other influential women.

The study has documented many cases in which the land given to a woman has been cancelled without reason and re-allotted to another woman. The study has said that due to the lack of ownership documents (Form 7) in the name of the land grantees and no demarcation of the land granted, in many cases influential persons have either occupied the land granted to women or have filed appeals in the revenue department against the land grant, stopping women from cultivating their lands.

The study has recommended to the government to issue land ownership documents to all the land grantees without delay, make the second phase of the land distribution process more participatory and bring changes in the legal framework to ensure sustainable ownership of the land by the women.

Speaking on the occasion, Neva Khan of Oxfam GB said her organisation was working for rights of the poor and marginalised communities and that was why it had decided to support the local communities in the land distribution process.

She expressed the hope that the Sindh government would take serious notice of the flaws in the land distribution programme as identified in the study and would make efforts to rectify them.

MPA Humera Alwani demanded that elected representatives be given proper representation in the entire process. She said that due to lack of participation of leg islators, not only that uncultivable land had been given to poor women, but influential people also got allotted land in the name of their family women and even in the name of their women servants.

Giving the government viewpoint on the land distribution programme, Secretary for Land Utilisation Subhan Memon admitted that flaws had crept into the programme’s implementation. He said about 65 land grantees were genuine who had been provided seed and other inputs for the cultivation of the land.

He said they had learnt a lot from the process in the first phase and would soon launch the second phase, with more clear and improved legal framework and implementation mechanisms.

Sixth agriculture census from 14th

Post Source: Dawn – December 11, 2009 – By Zaheer Mahmood Siddiqui

LAHORE, Dec 10: The first phase of the sixth Agriculture Census will commence from Dec 14.

The Agriculture Census Organisation (ACO), an attached department of the statistics division, has completed planning and preparatory work for the decennial census, Statistics Division Secretary Tariq Shafiq Khan said on Thursday.

Methodology, field operation, sample design of the census, National Certainty Holding (NCH), questionnaire, data processing, tabulation and publication plans have been finalised in the light of the guidelines approved by a steering committee consisting of represen tatives of federal and provincial government departments, universities and research institutes. Progressive farmers of the province or federating unit concerned are non-official members of the committee.

Enumeration or field operation in Punjab and Sindh would be completed from Dec 14 this year to Jan 31 next under the first phase. Hot areas of Balochistan and NWFP would be covered under the second phase, while data collection in cold areas of the two provinces besides Gilgit-Baltistan and Azad Kashmir would be carried out in the third phase.

Khan said the primary purpose of the Agriculture Census 2010 would be to assess the agricultural development during the last decade. Data generated through the census would be of immense importance and would be used in future as benchmark by policymakers, planners and researchers.

The census would provide very useful information about agricultural resources of the country and the state of their use as well as on different facets of agriculture, viz. land use, land holding, fragmentation of holdings, cropping pattern, livestock, casual and permanent labour, irrigation by different sources, number of fruit trees of bearing and non bearing age, use of fer tilisers and agricultural machinery, family members employed for agriculture work, education status of family members and secondary sources of family income etc.Agricultural Census Commissioner Liaqat Ali Shah Hamdani said his organisation had been conducting agriculture related censuses under the legal cover of Agricultural Census Act since 1958 and so far conducted five censuses: in 1960, 1972, 1980, 1990 and 2000.

The sixth agricultural census has been planned to be conducted in the year 2010 in accordance with the programme of World Census of Agriculture laid down by Food and Agriculture Organization of the United Nations.

The agriculture census 2010 would be jointly carried out by stakeholders from federal and provincial governments. Presided over by the district coordination officer of each district or tehsil headquarters of Punjab and Sindh, meetings had been held for the purpose.

All district revenue officers attended the meetings besides senior ACO officers. ACO master trainer would later impart training on field staff of provincial revenue departments who would be census enumerators in the mouza of the district concerned.

After training, the field revenue staff would be mobilised for enumeration in selected mouzas and urban blocks of each district. During the first 10 days of each phase, enumerators would prepare household lists for assigned mouzas. Master trainers would then select samples of households for enumeration. The field staff would fill the questionnaire through direct interviews of selected households.

Field operation or enumeration would be carried out by provincial land revenue departments in settled areas, while the job would be done by field assistants, veterinary assistants and teachers in unsettled areas under the supervision of ACO officers, said Hamdani

Loan for small farmers

Post Source: Daily Aajkal (Urdu)

Irsa refuses water to Punjab

Post Source: The News – December 09, 2009 – By Khalid Mustafa

ISLAMABAD: The Indus Rive System Authority (Irsa) on Tuesday refused to accede to Punjab’s demand of water releases from mainstream of Indus.

Under the decision, water releases from the Indus to the province through four main canals — Thal canal, Chashma Right Bank canal, Dera Ghazi Khan canal and Muzzafargarh canal — will be closed.

“All Irsa members met here on Tuesday and took the decision on the water closure dispute from the Indus and refused to give its share to the Punjab which is in dire need of water,” a senior official source told The News.

Irsa spokesman Mohammad Khalid Idris Rana also confirmed that Punjab had been denied water from Indus, instead it has been asked to withdraw water from Mangla command.

To a question, he said presently water releases were being provided to the Punjab through four main canals that would definitely be closed later on. Punjab has been asked to get water share from Mangla command as its share has been exhausted from main stem of Indus.

However, he refused to divulge further information about the Irsa meeting. The correspondent could not get the version of either the Sindh members or that of Balochistan as their cell phones were powered off. The cell phone of Irsa chief Aman Gull Khattak was also powered off as usual.

In Tuesday’s meeting, Punjab representative in the meeting came up with the dissenting note, saying the decision will inflict huge loss on the ‘food basket’ of the country and in turn the country is bound to face food crisis next year.

MH Siddiqui, Consultant to Punjab government on water issues when contacted, said, “I would be in a position to comment once we receive the formal letter from the Irsa.” However, we have got the preliminary information from Irsa that the Punjab’s version has not been accepted, but now the question arises which part of version is not accepted. “So unless and until letter containing the Irsa decision is received, I am unable to comment.”

MH Siddiqui further maintained that Punjab would make its strategy after receiving the formal letter from Irsa. Hamid Malhi, Chief of Punjab Water Council branded this decision detrimental to the agrarian economy of southern part saying it would have more social-political adverse impact on the large area of South Punjab.

He said that the government is already in hot water, and Irsa has created another problem for central Punjab as well as the government. To a question he said that the area cannot be irrigated if water is used from Mangla command.

The problematic wheat surplus

Post Source: Dawn Economic & Business Review – By Ahmad Fraz Khan
Monday, 07 Dec, 2009

The wheat woes refuse to go away. The country regularly finds itself either short of the staple food or awash with it, and frequently fails to plan for either situation. Currently, it is caught in the problems of plenty.
The Punjab government alone is holding around five million tons of stocks, and it does not know what to do with it. With the current pace of releases, it would be holding around three million tons, costing about Rs35 billion, of carry over stock when the fresh season starts next April.
The department has indoor capacity for only 2.2 million tons. Thus, it would still have over 800,000 tons of wheat lying in the open, when the new crop would start pouring in. The cost of holding these stocks is simply staggering. The Punjab government pays some Rs1.2 billion monthly to service bank loans, taken for Rs72 billion shopping last year.
The financial pain of interest could be gauged from the fact that the provincial government defaulted on interest payment for a week in November. According to the food department calculations, it incurs incidentals of Rs175 for each maund that it keeps for the season, and, at present, it is holding over five million tons, with three million tons surplus.
Pakistan, it seems, has achieved stability in wheat production, which needs to be further built upon, and there is a huge potential for that. But even with current level of production, the country needs to find ways to regularly dispose of a part of it. Thus, along with efforts to increase productivity (per acre yield), the government needs to move on two other very crucial areas: quality and marketing. The crop is suffering on both accounts, and the problem is expected to accentuate if the government agencies succeed in enhancing yield.
Immediately after taking over, Musharraf regime had to deal with a bumper crop in year 2000. It raised two very attractive slogans, claiming that the country had achieved self-sufficiency in staple food and it would now start exporting wheat. The claim, however, fell apart due to subsequent shortages, failure to properly plan and policy summersaults, which destabilised domestic market and export dreams remained unfulfilled.
It is perhaps time to dust off those plans, and execute them afresh, because the production has matured to some extent and is expected to remain – barring national follies and weather disasters – that way. The government needs to move on four fronts if it wants to create a niche in the global wheat market. It must remove price differential between domestic and international price, help mills to modernise, avoid policy U-turns and create mechanism for quality procurement, at least for export.
Unfortunately, the wheat procurement price has been politicised to the core. Successive regimes have used the price to create or maintain rural vote bank rather than meeting market logic. But the current government broke all previous record, and granted a price that was not even thought of by any farmers’ body. The price has now come back to haunt it. It’s holding huge stocks, which no one is ready to purchase in the world. Even imported wheat cannot be exported because of massive loss that it entails. Keeping stocks is a huge fiscal liability but the government is stuck between its own folly and market reality.
When it announced the current support price (Rs950 per 40kg), it did so because the world market was climbing up and it claimed to be responding to international phenomenon. Now, when the world prices are down, it can revise the price downwards due to political reasons. Time is proving the decision to be bad politics, and worst economics.
The technological backwardness of the millers is also a big deterrent in way of claiming a part of the world market.
Out of some 1,100 mills in the country, only 10 are stated to be most modern. The government can help these mills through some kind of policy incentives and temporary tax rebates. The milling industry has survived on quota regime, which hardly left space for developing internationally credible brands and market them. Those with big market share normally purchase others quota and handsomely pay for it, increasing their cost of production. It also keeps inefficient mills in the market, and sustains a rigged market. All these aberrations need to be removed for developing domestic flour industry responsive to international quality demands and competitive prices.
The biggest harm to export value added wheat products has come from fluctuating official policies. The government is still to hammer out role of private sector in wheat trade. It has not only varied season to season but also within a season. The last few years’ history of the private sector in wheat trade is a chronology of wild policy summersaults, which sometimes assumed amazing proportions.

The government would induct private sector with fan fare – create policy and fiscal policy space for it. But it would change mind mid-stream, start raiding their stocks, ask banks to recover commodity loans, ban even inter-district movement. All these policy problems kept the domestic market on the tenterhooks and preempted any long-term planning on the part of the millers. The government needs to bring some kind of sanity in its policies so that millers could look beyond domestic market, and also earn some foreign exchange.
Finally, the government should fix an export quota for private sector and also devise ways to ensure quality purchase for that. It can fix some premium for quality.
Otherwise, the government would run the risk of holding a billion dollars baby every year – wasting precious human and financial resources.

Corporate farming: pro and cons for Pakistani economy

Post Source: Farm Land Grab.org – 7 December 2009

By Farzana Shah

Government of Pakistan has announced to lease lands to foreign entities for corporate farming under the CAF policy. Government is hoping to get notable amount of revenue and job employment through this policy. Other than that government is also hoping to bring in new technology and best business practices for agriculture in Pakistan in order to boost this crucial sector.

Critics of this policy are apposing this due to various reasons and concerns. Pool of critics includes farmer associations, human right activists, analysts, food experts and columnists who are of the view that this policy holds more bane than bone.

This paper examines the CAF policy, Corporate farming worldwide and concludes that current CAF policy adopted for leasing land is not in best interest of Pakistan in context of food, water and land security.

In the end paper also contains some policy recommendations and suggestions for corporate farming to make it more beneficial for local farmers and communities alike.

Background                  

Government of Pakistan has decided to lease or sell at least 1.2 million acres of its fertile lands to two Gulf countries i.e. UAE and Saudi Arabia for corporate farming in order to fulfill the needs of these two countries. No contract with Saudi Arabia has been signed yet whereas according to reports an agreement with a company of UAE has been reached.

Corporate farming is a term that describes the business of agriculture, specifically, agriculture methodologies of multinational corporations (MNCs) involved in food production on a very large scale. Corporate farming is not limited to leasing farm only but also encompasses entire life cycle of a crop in that farm this includes seed supply, agrichemicals, food processing, machinery, storage, transport, distribution, marketing, advertising, and retail sales. [1]

But this is not limited to this far, corporations involved in corporate farming influence on education, research and public policy, through their educational funding and government lobbying efforts as well.

According to an estimate about 50 million acre of land have been bought or leased by foreign countries, MNCs or investors abroad. African countries are top of the list

Like any other business this kind of agriculture business has pros and cons for local people and foreign consumers alike. Practices and technology adopted in this kind of farming enhances the crops growth many times. This enhanced growth provides copious supply of food to foreign consumers but foster the idea to manipulation of resources like food, water and land for local community and farmers.

Current news regarding corporate farming in Pakistan has ignited a new debate about these pros and cons of the decision by government. Most of the analysts believe that CAF has a potential in country and also can enhance the growth of crops but that is only bright side of picture. Government CAF policy (discussed below) has paint a very bleak other side of picture. Due to current CAF policy adopted by Islamabad many of the farmers, agriculture businessmen, experts and analysts are not inline with government’s view about corporate farming.

Despite serious concern of farmers’ community and civil society, previous government approved Corporate Agriculture Farming (CAF) policy, while present government push the policy step ahead and announced to offer six million acre land to resourceful countries and Multinational Companies (MNCs).

Introduction to Corporate Farming Policy

According to ministry of investment the federal government through CAF policy is trying to achieve the followings;

1. To seek 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.

2. To improve agricultural productivity and profitability through the use of latest production technology and adequate expertise particularly for exports.

3. To produce high quality agricultural products due to favorable resource base.

4. To achieve/maintain internationally competitive unit cost of production for all major crops, fruits and vegetables
Government wants to meet these goals with following benefits being offered to investor or MNCs.

• 100% foreign equity allowed (only in CAF on case to case basis)
• Minimum $ 0.3 foreign equity investment
• Remittance of 100% capital, profits, dividends allowed
• Only such local and foreign companies will be entitled to Corporate Agriculture Farming that are incorporated in Pakistan under the Companies Ordinance, 1984.
• No upper ceiling on land holding. The size of the proposed corporate farm may be left to be determined by the prospective investor.
• State land can be purchased, or leased for 50 years through open auction, extendable for another 49 years
• All banks and financial institutions will earmark separate credit share for Corporate Agriculture Farming (CAF)
• Labor laws may not be presently applicable to Corporate Agriculture Companies. Due to special circumstances of the agriculture sector however appropriate labor laws be developed for this sector within five year.
• Agriculture Income Tax regime applicable in provinces, on income from agriculture, would be applicable to Corporate Agriculture Farming [2]

Fiscal Incentives for Corporate Agriculture Farming (CAF)

• 0% custom duty and sales tax on import of agricultural machinery, equipment
• and implements under SRO 575(I)/2006 dated 5th June, 2006
• Exemption of duty on transfer of land for CAF
• Tax relief; Initial depreciation allowance @ 50% of machinery cost.
• Dividends from corporate agriculture farms are not subject to tax
• Farm income given more favorable treatment than income from other sources

Potential Impact of the CAF Agreements

While implementing (Corporate Agriculture Farming) CAF policy, government must also keep in mind long term plans for agriculture development in Pakistan one such plan is Vision 2030.

According to CAF policy document, government is clearly deviating from its own long term plan set for 2030 in agriculture sector which states, “Comprehensive and wide ranging strategies have recently been initiated to mobilize small farmers. These include 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 Organizations (VOs). Such VOs will be the backbone of our agriculture production.

These will develop into corporate entities and a conduit for transfer of technology. Together with Farmer Field Schools (FFS), the VOs will help reduce the vast productivity gap between progressive farmers and resource poor small farmers.”[3]

This document clearly presents idea of enhancing the output of small farmers by establishing small organization and bringing it to the level of progressive or large scale farmers. Current CAF policy is a clear deviation from the route set for achieving agriculture targets in year 2030 when Pakistan will be a nation of more than 250 million people.

Apart from being contradictory to a long term plan this policy also contains many loopholes which would allow MNCs and local investors to manipulate whole food supply chain in Pakistan to pursue their own financial agenda. Below is brief description of these potential issues which can harm interests of Pakistani communities and farmers alike.

Impact on Local Farmers & Communities

According to policy ascribed above, there will be no limit to land holding for investor. This is the biggest concern for local farmers and communities. Government has failed to realize long term implications of this clause in CAF policy. It is inevitable that due to superior technology and practices corporate investor will able to get more yield per acre than local farmer and hence will be in position to sell this at cheaper price than goods cultivated by local farmers subsequently this will forced local farmer with small piece of land to sell its land to corporate investor as there is no limit for him to buy as much land as he wanted to.

This single concession offered to corporate farmer can annihilate whole agriculture sector of Pakistan. There is a great deal of concern in communities of farmers and agriculture experts that this will allow foreign investor to manipulate land resource by competition with local farmer in produced goods prices.

Million of families in Pakistan depend on agriculture and their cultivable land. Once gates opened for foreign investors and MNCs to grab as much land as possible using price manipulation of goods it will be very difficult for local farmers to find any ground to grow their crops and survive.

In presence of this clause investor can simply render local farmers landless by offering to much price to them but this will counter productive for these farmers and for Pakistan as these farmers will have no near by land to buy and cultivate neither they can come to cities and urban centers to start entrepreneurship in absence of any such skills. Communities and hence Pakistan will end up with more jobless people to feed.

Economics of Corporate Farming

Though it sounds really good how Pakistan would be beneficial economically from the corporate farming but again policy which will govern this business has lots of loopholes.

Money paid against lease or buying state land by investor will be one time gain by Pakistan, whereas investor will able to compensate itself against this money many times during lease from that land.

Pakistan will get few million dollars from this deal whereas investor is allowed to take 100% capital, profits, and dividends every year leaving nothing in Pakistani banks, hence not contributing a single penny in Pakistan’s foreign reserve assets.

Pakistan will shoot in the foot if it allows such liberalization of capital in times when economic situation is not stable and national economics are depended on IMF and other international donors.

On the other hand government is ensuring to give credit and other financial incentive to MNCs and more favorable treatment to income of these farms. Paksitani banks would be lending money to the MNCs without having any capital stay in these banks.

Apart from this all, there will be no tax on dividend (a sum of money paid to shareholders of a corporation out of earnings) from these farms meaning these farms will be exempted from tax net and would not contribute in increase in annual revenue collection of Pakistan.

Food Security Issues

According to policy document “Corporate Agriculture Farming (CAF)” investor would be allowed to take the entire produced crop without paying any tax on it whatsoever.

MNCs will decide what to grow and when to grow according to need of their own country or customers.

Internal food supply situation in Pakistan is getting dire by each year due to increase in population, decrease in available water and decrease in cultivable land around cities due to their expansion etc. According to recent report by UK based risk intelligence firm, Maplecroft, Pakistan is in the list of 15 countries where a severe food shortage has been forecasted in near future. In Food Security Risk Index of 148 countries Pakistan is at 11th position which are facing extreme to High risk of food shortages due to above mentioned reasons and other factors.

Competitively Bangladesh and India are at more secure position with respect to predicted food shortages ranking 20th and 25th position respectively in Food Security Risk Index. [4]

Beside the index report also stated “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 same trend of poverty in country as per many agriculture and food experts.

In presence of this bleak picture of food security of country in future it is beyond comprehension of many experts to lease or sell large amount of land to foreign investors overlooking domestic needs of future even if it is hilly or barren land because this barren land will require fresh water and that too in more quantity to bring required fertility in barren land. Like food security water availability and security is next big potential problem which this policy can spur.

Water security Issues

Pakistan already is facing a shortage of water for irrigation and daily consumption. Per capita water share is decreasing due to clumsy behavior of successive governments in this regard. Some time disputes over water between the provinces (particularly between Sindh and Punjab) are resolved by making compromises and concessions by one province to other. In presence of this grime situation of water availability how government will able to grantee water supply to these huge farmlands?

Water is a major reason behind the low yield in between the years in many districts. As Pakistani rivers depends upon climate very heavily and water availability keeps on vary within each season it will be very difficult to provide a constant amount of water to these corporate farms and if done it will deprive small farmer from water for their family farms.

National Security Issues

When established these huge corporate farm will also require protection and security around these farms. In CAF policy it is not clear that how government will ensure this security to MNCs and their farms keeping in mind current law and order situation in country particularly in NWFP and Baluchistan provinces where most of barren hilly government land is located.

Accordingly to some reports government will establish a security force of 100,000 personnel to protect these farms from any harm. It is not clear though how this security force will be paid for its services but reports suggests that government will pay to this force and a rough estimate of this payment is around 2 billion dollars every year.

But as it is stated in policy that there will be no upper ceiling to land holding for corporate farming there are chances when MNCs and investors demand more personnel for the security of their farms. Government has a limit to spend on such forces so eventually it will have to allow MNCs to bring in private guards and security firms.

Pakistani citizens and public officers are already facing security problems by the hands of some private firms in Pakistan hired by foreign forces. Current political and geo political situation don’t allow any foreign private force to stay in Pakistan. So an uncontrolled CAF policy can also lead to serious national security concerns as well.

If MNCs are allowed to bring in any private security force this will also pressurize Pakistan’s already under stressed law and order apparatus as it will have to have a check on these private security firms and their activities in Pakistan as well.

Legal Issues

Another aspect of CAF policy which undermines the rights of Pakistani workers is to exempt MNCs and investors from labor laws. This is something never adopted anywhere in the world.

The policy talks about development of proper labor laws for corporate agriculture farming. It is strange how come government announced a policy when no adequate legal framework is in place to regulate the employers and employees of corporate farms.

In absence of any legal framework for workers it will be all on jurisdictions of MNCs managements to settle issues of workers on the farms whichever way that suits them.

These are some of the concerns and issues which can turn government’s assurance of bringing food stability in country through corporate farming. Major weakness is not in corporate farming but is in the policy which has been laid down to bring investors and MNCs in Pakistan for this agriculture business.

Below are some of out suggestions in order to make the policy more cohesive according to needs and interests of Pakistani people in particular small farmers. Pakistan needs to secure its farmers and communities from any kind of intimidation by the hands of MNCs as it has happened in many countries in the world.

Policy Suggestions

One question that arises in case of Saudi Arabia and UAE is why to buy land and then establish farms and keep huge security guards for those farms? Saudi Arabia can easily buy produced corps like wheat, rice, vegetables and fruit from Pakistani farmers under an agreement in which these customers will bring in technology and will be allowed to take a stipulated portion of produced food items in return. This approach will also help Pakistan to incorporate new technologies of irrigation system, seed, farm management and food supply management into its own agriculture sector.

Pakistan and 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 the productivity and incorporating new technologies into Pakistan’s agriculture sector. In return these partners can have an assurance of supply of a certain amount of food items from Pakistan.

Revision of Policy

Current CAF policy requires serious overhauling to make it more inline with Pakistani interests. Agriculture land must not be treated as a commodity Sale to a foreign or local entity must be ban. Leasing must only allowed in the cases when small farmers are also share holders in these agreements and has given full protection by legal cover in form of laws.

One sided concessions to investors must also be revised and adjusted like separate share of capital for corporate farming in financial institutes. There are many other industries in Pakistan which require same kind of preferred financial treatment by banks and other financial institutes but never had one in past and unfortunately would have none in future.

Concessions like exemptions from labor laws and income tax will also have negative impact so must be revised as well. Government cannot allow foreign entities to make billion of dollars per year from Pakistan and not pay anything at all. CAF business must be brought in the tax net to increase annual revenue of country.

Most importantly any policy in agriculture sector must not contradict long terms plans for development of the nation like Vision2030 current policy is not completely inline with this long term plan hence must be revised.

Land Reforms

When our own 75 percent households are landless and poverty is rampant, why we are leasing land to rich Arab countries? While on the other hand India is grabbing land in African countries to meet its food security needs.

Best way to push for an agriculture based economy in Pakistan is to do land reforms which remained an unfinished agenda of many governments since last many decades. Land distribution in past has remained a mere political stunt by ruling parties in Islamabad. It is time to change this clumsy attitude and do land reforms on a fast pace.

Landless Pakistanis must get land from government to grow crops instead of selling or leasing this land. According to reports government is going to lease or sell 700,000 acres to UAE and 500,000 to Saudi Arabia now this is a total of 1.2 million acres of fertile cultivable land. Government can feed at least 120,000 families in rural Pakistan by providing 10 acres each from this land to in villages. This will cripple the poverty in rural areas to a great extend.

To prevent this program from political interference an associated program can also be launched to give ownership of these lands to farmers or landless families after a certain time period or after receiving a certain amount against allocated 10 acres. This will pave way for preventing subsequent governments to grab the lands back from these poor families and would also be helpful in raising their standards of living.

Education and Training Framers

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.

Pakistani farmers are one of the most industrious workforces in the world but due to lack of know how about modern mechanized farming they are failed to achieve food sufficiency for the nation and competitiveness in the world market.

It is recommended that government launch training and education program for farmers giving small farmers priority to enhanced their productivity in the fields. Training about new irrigation techniques, high yield seeds, farm management are very critical at this point of time to keep Pakistan’s agriculture sector sustainable and productive enough to meet food supplies to the nation and for export as well.

Provision of New Agriculture Technology

According to the policy government has given incentive for MNCs to import machinery for corporate farming. This kind of incentive must be given to farmer communities at national level irrespective kind of farming the farmer is associated with; corporate or family.

Pakistani farmers are not incapable but only require government support in areas where small and medium scale farms cannot afford mechanized farming equipment.

Provision of Seed and Fertilizers

It is fact that during 1960s with improvement in irrigation system and government support Pakistani farmers were able to double the production of wheat, rice and enhanced cotton production 6 times to meet national demands there is no reason a our farmers cannot repeat same.

Only thing missing this time is commitment from government’s end who has absolutely no idea how to enhance the provision of necessary quality fertilizers and seed to whole farmer communities according to their soil and climatic conditions.

Comprehensive and integrated efforts are required to assess required amount and quality of necessary seed and fertilizers to the farmers. Pakistan has enhanced its fertilizer production over the years but still relay on imported fertilizers which some times lead to shortage of this crucial item in agriculture.

Protection for Small Farmer

While inviting MNCs and investor 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.

This is something very essential to protect social setup of large communities who depends on family farming totally. Government must ensure through legal means that no MNC will buy land from a small farmer against his will and nor will he threaten by other means to leave or sell his farm to MNC.

Financially small farmer cannot withstand challenges of corporate farming alone in market place as well. Government must also take this into consideration that prices offered by MNCs in market can be lower than those offered by small farmers. So a lower and upper limit of price for all items produced under CAF must be fixed to protect small farmers in local food market.

Keeping all above facts in mind it is evident that corporate farming is not a tool of increase local agriculture output in Pakistan by any means. International practices of corporate farming shows that it never paid any tangible benefit to local masses. Countries who lend their lands to MNCs are still facing severe or high risk of food shortages and decline in provision of resources like water to local communities (e.g Africa).

Local communities and citizen often deprived any benefits of corporate farming and there are multiple reasons for this like demands back in home, manipulation of local resources, influence of local supply chain of food etc. But manipulation and influence on food supply is only possible if local policy for corporate farming allow this to happen (unfortunately this is the exact case in Pakistan).

India is also growing in population like Pakistan but India has adopted to be in group of countries who lend land from other countries unlike Pakistan where own land is lend to others.

Government must take above mentioned issues and suggestions into consideration before concluding any deal for corporate farming. There is no doubt that Pakistan is in need of investment in agriculture in Pakistan but the policy which governs these investment must be inline with its national, economic, food, resource interests.

With growing population and declining food surplus worldwide every country is busy in securing food supplies for its masses. Pakistan currently facing a water shortage and is predicted to face food shortage in future as well. Pakistan must stick to its long term plans and must render all policies according to these long term plans. With rapid rate of growth in population it would very difficult for Pakistan to feed whole population when its own lands will be occupied by MNCs sending all eatable goods abroad or selling at high prices back to Pakistan.

References:

[1] Corporate Farming – Wikipedia, Free Encyclopedia: http://www.wikipedia.com

[2] Corporate Agriculture Farming (CAF) Policy: http://www.pakboi.gov.pk/pdf/Sectoral%20Policies/CAF%20-%20Policy%20Package.pdf

[3] Agriculture, Food, Water & Land Vision 2030: http://www.pakboi.gov.pk/pdf/Agriculture,%20Food,%20Water%20&%20Land%20Vision%202030.pdf

[4] Maplecroft – Food Security Risk Index, 2009:
http://www.dawn.com/wps/wcm/connect/dawn-content-library/dawn/news/sci-tech/12-pakistan+at+extreme+food+security+risk–bi-07

Boosting canola cultivation

Post Source: Dawn – Economic and Business Review – By Fahim Nawaz

WITH the increase in procurement price of wheat, there has been a considerable decrease in area for cultivation of oilseed crops resulting in lower production of edible oil this year. About 0.8 million tons of edible oil was produced locally which was merely 27 per cent of the domestic need. The rest 1.29 million tons were imported at a cost of Rs84 billion.

Rising imports can only be curtailed by promoting oilseed cultivation. Farmers prefer to grow grain and fibre crops which give them better return than the oilseed crops. Meanwhile, Minfal has reported that canola is a more beneficial crop which gives an average profit of Rs3,843 per acre as compared to Rs4,218 per acre from sunflower.

Cottonseed, rapeseed/mustard, sunflower and canola are the major oilseed crops. High levels of erucic acid and glucosides in rape and mustard seeds make them undesirable for health. Canola, also known as double-zero or double-low oilseed, is comparatively a new crop for the country. It was cultivated on experimental basis in 1985. Its cultivation on commercial scale started in 1995.

Canola contains 33 per cent protein, eight per cent fat and 10 per cent fibre. The low levels of erucic acid and glucosides in canola oil make it safe for health. Only 0.051 million tons of canola oil was produced in 2008-09 that is 6.5 per cent of the total production of edible oil. In the course of time, the area under canola cultivation decreased from 0.42 million hectares in 2007-08 to 0.26 million hectares in 2008-09.

There are various advantages of growing canola as it gives more profit than wheat and can be planted with the same expertise required for wheat crop. It also protects the soil from erosion during its early growth.

Canola requires well-drained, fertile, silt loam soils. Clayey soils may cause problems as the crown may get exposed to weather injury due to shrinking and swelling of the soil. Zero-tillage planting of canola is also in practice but relatively shallow, finely prepared seedbed allows uniform seeding depth. The use of fertiliser in the root zone is improved by tillage that minimises the chance of insect injury to seedlings. However, under rain- fed conditions, zero-tillage should be preferred to retain moisture in the soil.

The seeds should be sown in narrow rows (6-7 inches wide) using a grain drill, at a rate of 1.5 kg per acre. The Pakistan Oilseed Development Board (PODB) provides canola seed at provincial directorates and regional offices. Optimum seeding depth is about 1/2 inch. Sowing in depth makes it difficult for the tiny seedlings to emerge from the soil. It should be planted early so that the plant attains a height of 8-10 inches before the approach of freezing temperature.

The crop requires very little application of fertiliser. Use of urea helps the crop to survive under severe winter conditions and increases the crown size. The proper time for application of fertilisers is the sowing time, during second irrigation and at the time of bud formation. Excessive application of urea can cause lodging problems. Sulphur is also required for good yield of canola but most of it is available from soil. It should be applied in sandy soils and those containing low organic matter. Sulphur helps in the development of fertile canola flowers. It increases vegetative growth; total dry matter production, pod numbers and seed yield with increased amounts of protein in seeds.

Canola can also be grown by organic methods. The cover crops and tillage before planting help control weeds and eliminate need of herbicides. Nitrogen requirement of the crop can be met from a cover crop. It requires adequate nitrogen for growth needing application of manure, but injury to canola vegetation should be avoided.

Canola requires irrigation soon after the seeding has been completed. It usually requires two flood irrigations during the growing season but flooding the crop earlier may cause damage to the crop by drowning or washing the young plants out of the ground. The most important time for flood irrigation is during the late vegetative stage and during early to mid blooming.

Light, frequent water applications until the crop has fully emerged avoid crusting. At vegetative stage, moisture levels should be maintained above 50 per cent in the active root zone throughout the growing season to minimise stress.

Canola uses large amounts of moisture during flowering. In case of limited soil moisture, the most important times to surface irrigate canola is during the late vegetative stage and during early to mid blooming. Moisture stress during the late vegetative to spiking stage results in uneven growth, abortion of flowers and reduced yields. The maintenance of good soil moisture conditions lengthens the flowering period, increases the number of seeds per pod, increases seed weight, and also improves oil quality and content.

The crop may be attacked by various insect pests like aphids, white fly, painted bug and saw fly. But aphids are most serious insect pests. The selection of resistant varieties can help reduce yield losses by these insect pests.

The crop should be harvested when 40-50 per cent pods become brown and seed become reddish. Seed should not have more than eight per cent moisture and two per cent inert matter. The moisture level for long-term storage should not be more than nine per cent. If moisture is high, it will heat up quickly.

The development of new varieties of canola, both synthetic and hybrid, by Pakistan Oilseed Development Board (PODB) with indigenous resources, is highly appreciable. These varieties have given better results than the imported cultivars and helped reduce the cost and increase the benefit of the farmers.

Active implementation of PODB programme is needed to promote canola cultivation and motivate the farmers. The government should also install more oil expellers and processing units. Currently, there are three mini oilseed processing plants of PODB at Tarnab, Peshawar, Lakhi (Sindh) and Gandahawa (Balochistan). The installation of more processing plants in different areas would motivate the farmers to cultivate canola and other oilseed crops which would help lower the edible oil import bill. Private sector should also be encouraged to invest in this sector.

Rains may ruin 3m tons of wheat lying in the open

Post Source: Dawn – By Khaleeq Kiani – Friday, 04 Dec, 2009 

ISLAMABAD: A slow lifting of wheat by the provinces may develop into a crisis in the coming weeks as more than three million tons of the produce stocked in the open could be damaged in case of rains. The governments in the four provinces, Northern Areas and the Azad Kashmir have been very slow in lifting the wheat from the government stocks because they still had carryover from last year as well as the imported commodity to consume, sources in the food ministry said. 

Sindh’s lifting of wheat is less than half the quantity of last year, while Punjab is gradually increasing releases to the flour mills, these sources said, adding total lifting of wheat by all the provinces and other areas is about 26,000 tons per day against more than 40,000 tons same period last year. These sources said that a major chunk of over three million tons stocks that are lying outside in the open could be damaged in case of rains and environmental moisture although stocks available with food departments are properly covered with Tarpaulin and placed on secure plinths. Sources in the Punjab government said there were large quantities of wheat in the open lacking proper storage facilities and could catch ground moisture. 

At the same time, wheat sowing this year is almost on target, which is expected to improve per acre yield and overall production. This would mean that the country would have highest ever carryover stocks when the new crop starts arriving in April next year, leaving a lot of exportable surplus, the sources said.

The government will have to take an immediate decision to allow wheat export now otherwise it would become difficult to handle huge stocks after few months, sources said. They further said the government should have considered not procuring next year crop but that would have sent a wrong signals to the growers. That is why the government has already announced to procure at least 7.5 million tons next season at official rates to ensure better output. 

Federal Agricultural Development Commissioner Qadir Buksh Baloch said that the country had about eight million tons of wheat stocks as of November, almost 300 per cent more than last year’s 2.7 million tons. He, however, said that the arrangements, including fumigation and covers, made by provincial food departments were sufficient and could protect the produce for three years.

Mr Baloch said the sowing was in full swing and hoped that sowing target of over nine million hectare would be achieved. So far, sowing on about 4.8 million hectare has been completed, which accounts for 54 per cent of target but about four per cent less than 5.1 million hectares of the same time last year.

He said Punjab was given a sowing target of 6.8 million hectare for the year and so far sowing has been completed on about 3.7 million hectare against 4.1 million hectare last year. Sowing in Sindh has reached 0.38 million hectares against a target of one million hectares last year’s same period sowing of 0.34 million hectare. In NWFP and Balochistan sowing is almost the same as last year.

Mr Baloch said the farmers were able to produce 24 million tons of wheat last season because they were offered international prices that resulted in increase in per acre yield to 27 maund from 24 maund a year before. Next season, the target is to increase per acre yield to 30 maund to achieve 25 million tons of production target.