Corporate farming

Corporate farming is a term that is used to describe an agricultural operation that involves the production of food and food-related products on an exceptionally large scale. This approach is different from the operation of the family farm as a business in that the corporate approach calls for not only the growing of food products but also a wide range of additional services that are important to the marketing of the foods produced.

From this perspective, corporate farming is not just about agriculture itself but also all the other components that are found under the broad umbrella of agricultural production, processing, marketing, and distribution. Transforming from conventional farming to corporate farming might bring about prosperity provided the rules are formed and implemented strictly to benefit local communities and local farmers. Corporate farming could revitalize the agriculture sector if the hurdles and de-incentivizing weaknesses in the sector are addressed. The country does not have a culture of corporate farming, and this is a new initiative being introduced.

Huge areas of cultivable land are being acquired for the project. However, there has also been much criticism of the corporate farming programme. These focus on the likely negative impacts on small farmers who might be deprived of land and water; on herders and livestock farmers who might be denied access to grazing lands and migration routes; and on domestic consumers who might face higher prices due to greater food exports.

In this context, it is interesting to look at some international examples. Some countries in southern Africa provide the worst examples. Local people were forcibly displaced from their lands, which were then taken on by white farmers or multinationals. The high levels of mechanization meant that there were few jobs for those displaced, who often had to migrate or live in shanty towns on the edges of the big farms. In other countries, corporate farms were given leases to forest areas that they promptly cleared for palm oil or soybean production. Set against this are the successful examples. In Europe and North America, most farming is undertaken by corporate enterprises that use top-quality inputs and highly automated precision systems such as GIS-operated tillers, harvesters, and seeders. There are also many small to medium enterprises, often run by a single family. However, these mostly work together as consortia or cooperatives, which closely resemble corporate farms in terms of operational efficiency. So, what does all this mean for the introduction of corporate farming in Pakistan? There are many positive and negative lessons, but it may be worth listing some of the most important ones.

First, approximately 82% of landholding in Sindh pertains to a maximum of 16 acres of agricultural lands, which means mostly landlords in the province own lands varying from five acres to 16 acres. Another 18% of land is owned by big landlords who have lands ranging from 20 acres to 200 acres and above. Corporate farming is suitable for state lands that are spread over thousands of acres. Cooperative farming suits the private sector, as there are lands in pockets ranging from five to 16 acres. In Pakistan, instead of bringing land reforms to create a chunk of progressive middle-class farmers and to reduce the number of big land-owners and landless farmers, a new class is being introduced that will be an amalgamation of, say, feudalism and capitalism, having no cultural as well as social affinity with agriculture beyond profit maximization. This decision is set to create alienation among the native people and negatively impact environmental conservation.

Second, instead of huge corporate farming, if Sindh’s land of 52,000 acres (which is being acquired) is distributed with 10 acres to each landless peasant, over 5,000 families would be lifted out of poverty. On this scale, one can see how many landless farming families could become prosperous. The land in Sindh must be in the command area of a canal. However, these lands in Cholistan and other desert areas would need a new irrigation system—canals and water courses—and would take water from the Indus Water System upstream, which further reduces the flow of water to Sindh, which is already facing scarcity of water in both seasons—Kharif and Rabi. The corporatization will be fully operationalized if everything goes according to the managers’ plans within the coming three-to-four years. Inflation will further increase owing to the tough conditionalities of the International Monetary Fund (IMF). The value of the Pakistani currency is reduced to pebbles. Poverty has increased. The question is whether these corporate farming projects are public welfare-oriented or geared towards another purpose. Would these farms provide their produce at subsidized rates? I don’t think this farming would be feasible if they marketed their produce at a subsidized cost. Moreover, the cost for the construction of new irrigation infrastructure in Cholistan alone is estimated at Rs. 350 billion. With this amount, we can improve the efficiency of our existing irrigation infrastructure and ensure food security.

Third, integrate with national and international supply chains. Large-scale corporate farming requires access to machinery and spare parts for soil preparation, planting, and harvesting; quality inputs such as seeds, fertilizers, and micronutrients; and equipment for transport, irrigation, and soil testing. Contracts and supply lines need to be set up with national and international suppliers to ensure reliable and timely delivery. Standby contracts and retainer-ship arrangements are also needed for technical experts whose services will be needed from time to time.

Instead of viewing the agriculture sector as simply a provider of food for the poor, Pakistan must see it as an engine of economic growth for the next few decades. Meanwhile, when it comes to corporate farming, it can be beneficial for all stakeholders since efficient pooling of available resources can be ensured. Utilizing the public sector’s available agricultural lands for corporate farming purposes will actually boost the scale and efficiency of this model, but concerns over land distribution and equitable benefits must be addressed for sustainable agricultural development. In short, corporate farming done through smart and effective indigenization seems to be the only way to explore its true potential.

Copyright Business Recorder, 2024