EDITORIAL: The recent steps towards corporatising agriculture in the country, with the government leasing unused state land to corporates and individuals for irrigation and cultivation, have been met with much opposition and apprehension.
As highlighted by a recent report in media concerns exist that corporate farms may undermine the interests of smaller farmers, and concentrate agricultural power in the hands of a few large players that engage in predatory practices.
Despite these fears, the fact remains that the advent of corporate farming could, in fact, potentially represent a step towards revitalising an agricultural sector long stuck in a rut.
Even with agriculture playing a critical role in Pakistan’s economy, as it directly and indirectly supports a significant portion of the population — approximately 70 percent of the populace is connected to agriculture in some capacity, with 37.4 percent of the workforce directly employed in the sector — it has long struggled with challenges such as unequal land distribution, outdated farming practices, water scarcity and resistance to modern technology.
This has considerably hindered its full potential for growth, resulting in significant inefficiencies, low yields, food insecurity and reduced competitiveness in global markets, making it imperative for Pakistan to embrace the path of modernisation.
The outright dismissal of the shift towards corporate farming overlooks the sorry history of the agriculture sector, where a lack of meaningful land reforms has resulted in the concentration of landholdings in the hands of large feudal lords, exploiting smaller farmers and farm labourers.
Additionally, the sector remains under-mechanised, with outdated practices like hand-picking for harvesting leading to contaminated crop yields, compounded by the use of low-quality seeds and reliance on inefficient flood irrigation that wastes water and fails to meet farmers’ requirements, ultimately resulting in persistently low agricultural output and compromised export potential.
A study of agricultural practices in the country reveals that around 27 million acres of land is cultivated on landholdings of six acres or less by small farmers, resulting in inefficient land use and making it difficult to adopt modern farming techniques, advanced machinery and technology, thus hampering productivity.
The case for corporate farming is, therefore, compelling: with larger landholdings and financial resources corporate farms can lower per-unit production costs, increase yields and augment profits through investing in modern machinery, bulk purchasing and specialised labour, leading to significant economies of scale.
The increased investments in infrastructure, advanced technology, modern irrigation practices like drip irrigation, and research and development will likely result in positive spillover effects, benefiting non-corporate farms as well, as they transform their practices to stay competitive. This could put the country on the path to becoming a net exporter of agricultural products and enhance food security.
Most importantly, with provincial governments now required to tax agricultural incomes under IMF stipulations and corporate income tax rates being applied to commercial farming, the expansion of the sector is likely to lead to significant growth in tax revenues.
Despite foot-dragging by provincial governments to introduce legislation taxing agricultural incomes, pressure from the IMF and the potential benefits of expanded tax revenues from corporate farming could eventually compel them to bring in the necessary changes in tax laws.
To allay fears regarding corporate farming, the government must ensure proper safeguards, including transparent land allocation, protection of small farmers’ rights, and ensuring that the benefits of increased agricultural productivity are accrued by local communities through job creation, improved infrastructure and access to modern farming techniques.
Cautionary examples from countries like India show how large corporate farming ventures led to land-grabs displacing many small farmers. Rather than outright rejection of corporate farming, a more considered approach would involve enacting well-crafted regulations that prevent exploitative practices, balance the interests of corporate and small-scale farmers, and protect local communities, fostering sustainable agricultural growth.
Copyright Business Recorder, 2025
Comments