Initiatives for corporate farming

The Securities and Exchange Commission of Pakistan enrolled 19 companies in corporate agricultural farming last month. Most of them are in seed, poultry and feed businesses. It is, however, not immediately clear if any of these plan to invest in the vegetable and crop sector.

Nevertheless, a growing number of companies are enrolling in corporate farming, which has revived hopes of fresh investment in different areas of agriculture in Punjab, Sindh and Khyber Pakhtunkhwa.

“Major business groups are investing in corporate farming,” says Afaq Tiwana, one of the key architects of the policy framed in the early 2000s to attract foreign and domestic corporate agriculture farming.

“Numerous corporations have invested in dairy farming and halal meat since the adoption of the policy, and I expect many to invest in vegetables soon. I also know that several major textile companies are considering joint investment in cotton crop to grow quality fibre [to meet the requirements of foreign customers].”

The corporate agricultural farming ordinance was drawn to offer wide-ranging incentives to corporations to attract foreign and domestic capital in large-scale agricultural production.

corporate farmingIt was hoped at that time that investors from Gulf countries like Saudi Arabia and the UAE will lease or buy large tracts of barren and uncultivated state and private land, and invest their capital to grow food crops to be exported back home. But the plan didn’t work out according to the script.

“Initially, some Gulf investors showed their desire to lease and buy land for corporate farming. Most were interested in productive, fertile land. But the plan could not pick momentum due to deteriorating security conditions in the country,” says Midrar ul Haq, a Peshawar-based agriculture and environment consultant.

Corporate agricultural farming is believed to have tremendous promise for attracting foreign investment, as many countries try to achieve food security. The South Koreans, Chinese, Saudis, Japanese and others have acquired farmlands in Laos, Cambodia, Madagascar, Burma, Uganda, Ethiopia, Brazil and other Central Asian countries in recent years. Large Indian companies like Tata and Reliance are also said to have invested heavily in this area.

The law adopted by Pakistan offers numerous attractive incentives to potential investors. It declared corporate agricultural farming as an industry, made sufficient bank credit available for corporate entities, gave several fiscal and tax concessions like zero-rating imports of machinery (not manufactured locally), did away with the upper ceiling on landholding for registered agricultural companies, allowed 100pc foreign ownership with checks on repatriation of investment and profits, and exempted transfer of land from taxes.

“It is one of the most attractive and liberal packages offered anywhere in the world to corporations and investors,” a Punjab agriculture department official argues. “If no foreign investor has come, it is not because of any flaw in the incentive package, but because of insecurity and political instability gripping the country for last 7-8 years.”

Meanwhile, Afaq Tiwana clarifies that the incentives were not necessarily meant for foreign investors.

“The law was enacted to comfort investors that the legal cover is there, so they can come and invest in this sector. It was essentially meant to allow corporations to own and lease land for agricultural farming. Many major local investors like Mian Mohammad Mansha and Jehangir Khan Tareen have put money in it.

“Foreign investors demand very large tracts of land, which are difficult to acquire from private landowners. Only the state can provide such large tracts, which the government is not prepared to give,” he says.

Corporate agricultural farming has many advantages. It helps transfer modern technology, raises output, cuts input costs, improves food security, prevents fragmentation of cultivable land, creates much-needed — backward and forward — linkages between agriculture production, processing and marketing, and pushes industrial growth.

Nevertheless, the promulgation of the ordinance triggered a debate against the government’s decision to encourage corporate farming. Many said it would displace small landholders, create massive unemployment and increase poverty. Afaq dismisses these apprehensions.

“Those who invested in corporate dairy farming imported technology, management and animals. This is the route that other sectors of the economy also need to take to progress,” he argues. “I don’t agree with people who say that development of corporate farming will create unemployment or make people landless,” he says.

“Corporate farming speeds up the development of the services sector, which will create thousands of better paying jobs and urbanise our rural population. In America, for example, only 2pc of the population is actively involved in the fields. But a far bigger number of people are earning their livelihood in the services and industrial sectors, which are connected with and dependent on agriculture through backward and forward linkages.

“We have to decide if we want to keep our [rural] people the way are, or improve their living conditions and give them better jobs and increase their access to urban facilities. This will happen when only a fraction of them are producing food and other crops and the rest of them will be working in the services and industrial sectors,” he says.

Writer Nasir Jamal

Source: Dawn

Agricultural technologies can increase global crop yields by 67pc

Pakistan, which has an agrarian economy, is not equipped to adapt to climate change because of its low technological and resource base.

It has suffered a loss of billions because of the floods in recent years. A new strategy is required to mitigate and adapt to the impacts of climate change.

The increased demand for food due to population and income growth and the impacts of climate change on agriculture will ratchet up the pressure for increased and more sustainable agricultural production to feed the planet.

A new report released on Wednesday by London-based International Food Policy Research Institute (IFPRI) measures the impacts of agricultural innovation on farm productivity, prices, hunger, and trade flows as we approach 2050 and identifies practices which could significantly benefit developing nations.

The International Food Policy Research Institute (IFPRI) seeks sustainable solutions for ending hunger and poverty.

The IFPRI was established in 1975 to identify and analyse alternative national and international strategies and policies for meeting the food needs of the developing world, with particular emphasis on low-income countries and on the poorer groups in those countries. “The book, Food Security in a World of Natural Resource Scarcity: The Role of Agricultural Technologies, released today, examines 11 agricultural practices and technologies and how they could help farmers around the world improve the sustainability of growing three of the world’s main staple crops – maize, rice, and wheat,” the report said.

Using a first-of-its-kind data model, the IFPRI pinpoints the agricultural technologies and practices that can most significantly reduce food prices and food insecurity in developing nations. The study profiles 11 agricultural innovations: crop protection, drip irrigation, drought tolerance, heat tolerance, integrated soil fertility management, no-till farming, nutrient use efficiency, organic agriculture, precision agriculture, sprinkler irrigation, and water harvesting.

Agricultural technologies can increase global crop yields by 67pc 300x300 Agricultural technologies can increase global crop yields by 67pcThe findings from the book indicate that no-till farming alone could increase maize yields by 20 percent, but also irrigating the same no-till fields could increase maize yields by 67 percent in 2050.

Nitrogen-use efficiency could increase rice crop yields by 22 percent, but irrigation increased the yields by another 21 percent.

Heat-tolerant varieties of wheat could increase crop yields from a 17 percent increase to a 23 percent increase with irrigation.

Yet, no single silver bullet exists. “The reality is that no single agricultural technology or farming practice will provide sufficient food for the world in 2050,” said Mark Rosegrant, lead author of the book and director of IFPRI’s Environment and Production Technology Division. “Instead we must advocate for and utilise a range of these technologies in order to maximise yields.”

However, it is realistic to assume that farmers in the developing world and elsewhere would adopt a combination of technologies as they become more widely available. If farmers were to stack agricultural technologies in order of crop production schedules, the combination of agricultural technologies and practices could reduce food prices by up to 49 percent for maize, up to 43 percent for rice, and 45 percent for wheat due to increased crop productivity. The technologies with the highest percentage of potential impact for agriculture in developing countries include no-till farming, nitrogen-use efficiency, heat-tolerant crops, and crop protection from weeds, insects, and diseases.

The anticipated negative effects of climate change on agricultural productivity as well as projected population growth by 2050, suggest that food insecurity and food prices will increase. For example, climate change could decrease maize yields by as much as 18 percent by 2050–making it even more difficult to feed the world if farmers cannot adopt agricultural technologies that could help boost food production in their regions.

“One of the most significant barriers to global food security is the high cost of food in developing countries,” Rosegrant explained. “Agricultural technologies used in combinations tailored to the crops grown and regional differences could make more food more affordable – especially for those at risk of hunger and malnutrition in developing countries.”

However, based on current projections, stacked technologies could reduce food insecurity by as much as 36 percent. Making this a reality, however, depends on farmers gaining access to these technologies and learning how to use them. This underscores the need for improved agricultural education to ensure that farmers are able to use the best available technologies for their region and resources.

The IFPRI highlights three key areas for investments prioritising effective technology use: increasing crop productivity through enhanced investment in agricultural research; developing and using resource-conserving agricultural management practices such as no-till farming, integrated soil fertility management, improved crop protection, and precision agriculture.

Shahid Husain
Monday, February 17, 2014, Source:
International The News