This is a two-part article discussing both the pros and cons of the government's plan to lease out farming land to foreign investors. The second part will be published tomorrow. The recent news that Saudi Arabia is negotiating with Pakistan to lease agricultural land of approximately 500,000 acres, in order to hedge food security in the future, is an alarming development.
The talks that are part of Ministry of Investment's plans to reportedly offer over seven million acres of fertile farmland in Pakistan to foreign investors, highlights the unhealthy trend that could, potentially, be disastrous for Pakistan. Most of the production of Pakistan's main agricultural crop, save for rice, is only sufficient to cover the basic needs of the population and often the country must turn to imports to fulfil its requirements.
Given that the population is growing, its growth rate at approximately 2 percent is one of the highest in the region; a shortfall is very likely to occur. If Pakistan has leased off acres of its prime land, then it will not be in a position to feed the mouths of its own people. Our society is still largely agrarian. While there are a few large farms that grow crops, fruits and vegetables to be sold in other parts of the country and abroad, the vast majority of farmland is used by small-time farmers, growing just enough cash crops to meet their own family's basic needs.
If land is taken away from these small farmers, who depend on this land for their very survival, what can the government possibly give them in return to make up for their loss? Africa has recently been in the headlights for the many land leasing deals offered by the governments of some of its countries. China, India and many countries in the Middle East, particularly Saudi Arabia, have started booking deals for purchasing land in Africa.
Then there are the myriad of issues that arise from leasing farmland to foreign countries, as exhibited in Africa. Foreign presence in farming would simply add another layer of lobbyists, this on top of the already present feudals, using their pawns in the government to keep the agrarian society underdeveloped. The rights of the small farmer are likely to be entirely quashed and feudalism all the more pronounced under so much adverse influence on the government.
Land reforms may be taken entirely off the table under such a state of affairs. It is predicted that Pakistan may face a water shortage in the near future. In 2008, the FAO ranked Pakistan last in its list of Asian countries by water availability and analysts expect Pakistan to start feeling the effects of water scarcity as early as 2020. The intensity of this water shortage is so extreme that it is predicted to result in a famine in Pakistan, if the country does not take action now.
Given this water shortage, it is probable that if land is leased to foreigners, they will be provided with water on a priority basis, as part of the conditions, deserting local farmers and the poor of the population. The single positive aspect of leasing land to foreigners is the possibility that there may be a spillover effect in terms of the modern technology.
However, the likelihood and the extent of this spillover is highly debatable and most likely not to occur to a great extent. Cases where foreigners have helped, through technology, only those farmers who are supporting them and leaving the rest to degrade have been seen in cases of land leasing in many African countries. This is, however, not a new problem; a similar situation was created during British Colonialism when they 'supported' the provinces of Bengal and Punjab.
The problem only led to the rise of feudalism, an increase in income inequality and prevention of land reforms. Long term stability fails to be achieved as resources are continuously misallocated in the public, causing constant unrest and volatility. The sheer number of problems that have cropped up, political, social and economic, as a result of land leasing to foreigners in Africa is mind-boggling. Land leasing has often been coupled with land grabbing, whereby the government takes land from the poor for very little or no compensation.
Titles to land are murky and frequent and violent demonstrations against land leasing often take place. Land is a highly emotional as well as a political issue. Take Daewoo Logistics Corporation, a company in South Korea, when it bid to lease 1.3 million hectares of land in Madagascar. The scheme led to such political turmoil that the government was overthrown as a result.
The case in Sudan is such that the country drastically requires UN food aid, but at the same time has leased arable land to a number of countries in the Middle East as well as China, and is exporting the agriculture of this land. Hastily made deals, where only high government officials have seen the benefit of the lease, while the rest of society is left with fewer resources than they began with, is also a leading concern, particularly for international agencies such as the UN and the FAO.
In their co-written report, "Land Grab or development opportunity?", they have pointed out that the vast majority of such land lease deals were extremely one-sided. Critics in the FAO have gone so far as to call land leasing a form of neo-colonialism. Africa, as a case study, should be more than enough to make us rethink the decision to proceed in this direction.
There is also the threat that such dependency may be created on foreign methods that once the foreign element leaves, local farmers are left entirely unable to stand on their own feet. The fact that this land will be leased makes it all the more detrimental. Leasing is, in effect, handing over ownership to the land for a considerable period of time.
Had this been some sort of rental arrangement, the move may have been more palatable; a more acceptable option, in the sole case of Saudi Arabia in which leeway must be given as a courtesy, would be to provide indigenous manpower to foreign corporate farms on land that is not leased for a long period or where only part of the produce is to be exported. Another option would be to form deals in which foreign countries would receive agriculture produce at discounted rates as a result of their investment in the country.
On a sector basis, our focus should be on developing corporate farming in which local farmers are trained in the best international practices of agriculture. Foreign investment in agriculture must be along the usual lines of investment; that the return of the investment be given to the investors, but the food itself still be owned by and under the control of Pakistan.
Leasing as investment is just too much in favour of the foreign country and too little in favour of Pakistan. This form of investment may be a stop-gap solution for the quick intake of foreign investment, but in the long term, it is far from prosperous for the country. The worst case scenario is a future in which Pakistan is buying agricultural produce from foreigners, at a premium, for crops that had been grown on its very own land.
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