The Ministry of Investment (MoI) has reportedly decided to offer over seven million acres of fertile farmland in Pakistan for long-term investment to foreigners after it has received an encouraging response from a "road show" it held in Dubai to attract potential investors. An Emirates Investment Group has also shown interest in the project.
An MoI official has said that after the investment, Pakistan would be able to save most of its agricultural produce, which has been hampered due to lack of adequate storage facilities in the country. Minister of Investment Waqar Ahmad Khan, while commenting on the move has rightly said that our agriculture sector would get the latest farm technology if the scheme is implemented.
However, at the same time, apprehensions at the public level have also been voiced, as the farming community and other stakeholders believe that foreign investors would use Pakistani farmland to ensure food security, for their own countries at the cost in a way, of Pakistan's interests.
According to the news report, Gulf-based groups have shown a keen interest in acquiring farmland for livestock and crop production projects. Saudi Arabia and China are also keenly interested in acquiring the land on lease and joining hands with private sector stakeholders to grow soft crops and vegetables. Acquisition of land by these countries is apparently aimed at exporting more food to the Gulf region, as these countries have to spend billions of dollars annually on the import of food items from different countries.
Acquiring farmland in Pakistan, situated as it is in the close proximity to the Gulf region, for growing crops for their countries, will provide, among other things, a more credible and reliable food supply chain to them. When concluded, the deal will represent a win-win situation both for the investors and their countries. However, for Pakistan and its people the initiative can have both positive and negative implications.
Clearly, of paramount importance to the government in this context would be Pakistan's own long-term food security interests, above all other considerations. Ensuring food security to the masses in sufficient quantities has already been a stupendous challenge for our governments. There are two angles to the issue: one, insufficient food production in Pakistan, and two, large-scale commodity exports, apparently due to lack of adequate storage space in the country.
However, many may view paucity of storage space as a part of the larger "strategy" to justify large-scale export of farm produce. This has also served as a handy rationale for not building sufficient food stocks in the country to tide over lean-year scarcities. This has helped generate commodity shortages, and given the market forces larger manipulative room to exploit the situation. Things in Pakistan's agriculture sector are already quite bad, and the growth in agricultural land, since 1995, has barely outpaced the growth rate in the population.
Secondly, the growth in cultivable land has been virtually non-existent, while land use since 1995 has expanded at an annual rate of only 0.2 percent, which may, in fact, has declined in the face of the rapid sale of agricultural land to developers for building housing colonies. There has, therefore, been the steady shrinking of availability of fertile farmland in the country, which is going to have a deleterious impact on the country's own long-term food security.
The decrease in employment elasticity in the agriculture sector is a proof of its falling absorptive capacity, and hence the potential shifting of farm workers to non-farm sectors. These factors have been set out here to provide a realistic portrayal of Pakistan agriculture sector's constraints. The government should ideally give preference to local investors to foreign investors.
However, if foreign investors are to be involved, their antecedents should be thoroughly investigated. Even otherwise, parcelling out seven million acres of prime agricultural land to foreign investors to ensure their food security would, in a way, be an injustice to Pakistani masses.
Secondly, the move may have serious security implications, because many groups hostile to Pakistan may succeed in acquiring land under cover of front companies, and thereby, jeopardise our national security. Thirdly, the government should come out with a clear-cut policy on whether the farmland to be given to investors from the Gulf or elsewhere would be a sale or a lease.
If the government is determined to go ahead with the project, it should give the land on lease, so that it can be taken back after expiry of the lease period, as in the case of Hong Kong, Macao and Ukraine. Instead of leaving it to bureaucrats, the government should place this highly sensitive issue before the parliament. Secondly, China and Saudi Arabia, being old, trusted and wealthy friends of Pakistan should be given due preference over others. However, the final decision should be made subject to a thorough parliamentary debate.