As the shift in area under cultivation from cotton to other cash crops with better returns per hectare continues to grow pace, proposals are being made in the corridors of power to restore zoning laws for major crops.
In FY05, land under cotton peaked both in terms of area at 3,193 hectares and 42 percent share in four major kharif crops. According to latest numbers from Federal Committee on Agriculture, cotton crop will record its worst year since three decades, with cultivated area 25 percent lower than the peak figure.
This has sent alarm bells ringing across MoC, which has betted big on textile export revival but has little power to influence cropping patterns across country, thanks to devolution of agriculture as a provincial subject under 18th amendment.
This has revived proposals for zoning of agricultural land for major crops, under which government is entrusted with the wisdom to identify suitable area for each major cash crop based on factors such as climatic conditions, proximity to industrial units, and crop targets.
It remains to be seen how far the federal government can push the envelope on the proposal, considering it hands are tied so far as provincial government is concerned. On surface, it may appear that the proposal may receive strong opposition from rice and sugar millers, two crops which have gained share in area on cotton’s expense.
But BR Research’s past conversations with sugar millers indicate that the proposal may find strong support, at least in the sugar lobby.
It may be recalled that a different kind of zoning laws existed for sugarcane until early 1990s, which mandated that growers may only sell their produce to mills set up in the area.
Abolition of these laws led to mushroom growth of mills, as 52 new units were setup in the following decade, more than the total mills setup since colonial Raj. Opening of industry allowed businesses to compete for the crop by offering premium, also contributing to increase in area under cultivation.
The abolishment of zoning is to the chagrin of old players, who previously held growers in the farmgate area beholden to their demands. As farmers could only sell to the industrial unit within the zoned area, industrial units enjoyed virtually unlimited power to procure raw material on self-determined rates.
The proposal to reintroduce zoning poses similar risks. For one, the proposal is an obvious infringement of fundamental freedom of choice and right to free enterprise. Second, it is also an infringement on property rights, by bestowing government with the power to determine what business communities may engage on their privately own lands.
More importantly, it also risks entrusting the government to decide winners and losers in agriculture, as different crops offer varying rates of return. This opens the floodgates of rent-seeking and corruption, as farming communities shall lobby their MNAs and MPAs to ensure their tehsils and districts are zoned such that they grow crops with highest returns per hectare.
The policymakers should be weary of the proposal, as they may find ostensible support from a cross-section of industrial as well as farming associations. However, the proposal will leave small farmers beholden to the most powerful industrial unit, as they will have little freedom in terms of choice of crop or buyer.
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