BR Research recently sat down with Arif Nadeem, CEO of the Pakistan Agricultural Coalition (PAC). Arif has over 35 years of experience in the public sector and is an expert in public policy and administration. Prior to joining, PAC he served as Secretary to the Government of Punjab in the departments of Agriculture, Irrigation and Health. He is known to be an authority on the procedural functioning of federal, provincial and local governments and holds extensive knowledge of Pakistani laws, rules and regulations. He has worked closely with various UN Agencies and international aid organisations (the World Bank,

ADB, DFID, USAID, CIDA) and managed several large projects (both local and foreign-funded). He holds a Master’s Degree in Political Science from the University of Punjab, and has done various courses and trainings at the Kennedy School of Government at Harvard University. We discuss the problems of water shortage in Pakistan, the role of water pricing as a possible solution as well as other agriculture related issues in this interview.

Below are edited excerpts of the interview.

BR Research: What is the Pakistan Agricultural Coalition (PAC)?

Arif Nadeem: PAC is a non-profit organisation and our purpose is to incubate agriculture related business models. There are 26 business houses that are our financial sponsors with each contributing Rs1.2 million on an annual basis. These not only include Nishat, Sapphire and Fatima Group but also business groups that don’t have a direct presence in agriculture but are related through some other sector.  PAC also draws on the technical expertise of our sponsors.

The formation of PAC came about to address the need for an institution that would provide a leadership vision for agriculture initiatives in Pakistan. Our vision is transforming the agricultural sector of the country into one which is technology driven, supports entrepreneurship and where the private sector takes the lead.  The idea was to basically connect the dots rather than reinventing the wheel.

BRR: Please tell us about some of the projects that PAC is involved in.

AN: One of our major initiatives pertains to the seed industry. As you are aware of, no significant investment is being made by the private sector. The reason behind this is the unsatisfactory intellectual property regime (IPR) in Pakistan. To focus on seed development, PAC came up with a program to establish Pakistan’s first world-class cotton seed company called SANIFA that will provide cotton farmers with high germination, high yielding, high purity and high pest/insect resistance cotton seed.

The initiative is being backed by three of Pakistan’s leading textile groups namely Sapphire, Fatima and Nishat Group, which purchase almost one-fourth of Pakistan’s cotton lint. Dr. Neil Forrester, who is one of the world’s leading entomologists and an international business strategist based in Australia, is its business development advisor. From August 2015 onwards, PAC incubated SANIFA’s operations. In April 2017, the sponsors of SANIFA appointed a CEO who is building a team and the company’s business.

PAC has also worked on getting together different contributors to the agricultural value-chain in order to build an e-Trading Platform where high-quality standardized agricultural products are traded. The e-Trading Platform for red chilies was officially launched in October 2015, where PAC was able to secure the involvement of three specialised partners in this market model: Agility Logistics, SGS Pakistan, and Pakistan Mercantile Exchange (PMEX).

In the academia side, we have also started collaboration between University of Agriculture, Faisalabad (UAF), and Institute of Business Administration (IBA) Sukkur to develop a 4-year BBA Agribusiness program that provides technical skills to students as well as trains them in business acumen. In addition, PAC has been working to help develop the Agri-Collateral Management eco-system in three areas: development of regulations, pilots, and scale-up.

BRR: What should be the way to go about water pricing? 

AN: Water pricing is crucial and there are some things that need to be understood. First, I’d like to explain why water pricing is necessary and why it existed in this part of the world. This entire irrigation system was designed in late 17th century. By the 1930’s, this system had become mature. The British weren’t interested in giving you anything free of cost. Even in the 60s, Abiyana used to be equal to 1 maund of wheat per month. Today, wheat price per maund is Rs1300, but let’s take the international price, which is Rs900. Abiyana is Rs135 per acre per year for two cropping seasons.

But keep in mind that the British designed this system for thin layers of water for subsistence agriculture.  It was designed for 67percent cropping intensity, whereas today the average cropping intensity is 150 percent in Punjab.  The rest of the water is coming from ground water. Now water above the surface and below the surface follows the same principle.

This above the surface water permeates through the ground into the aquifers. Punjab’s aquifer is sixty percent fresh or sweet-water. It is one of the most precious assets we have. The cost of pumping will keep decreasing every year. Now what will happen is because you’re not mining brackish water but only fresh water, the brackish water will intrude into the fresh water aquifers and you will destroy them irreparably for all times to come. Imagine 50 percent of your resource will evaporate into thin air! Boring in Lahore has reached 600 foot so you can imagine the speed at which extraction is being done and the gravity of the problem.

BRR: How do we address this problem?

AN: The need of the hour is to focus on recycling water, harvesting rain water and letting freshwater sources get recharged. The pricing needs to be revised. Another important point to consider is that more water for crops is just as bad as less water. Pick up the satellite image of any canal in Pakistan and you’ll see that the head-reach is suffocating because of over-watering and under-producing. The middle-reach is adequately producing while the tail-reach is also under-producing because of less water.

In a nutshell, we not only need to price water but also regulate it so that you push the water that is suffocating and under-producing from the head-reach towards the tail-reach. By doing this there will be a huge advantage. There are 3996 canals of Punjab spread over 27,000 km, the largest continuous irrigation system, and I am not including Sindh at this point of time. Imagine what growth in agriculture this single factor alone will bring about. It’s like Borlaug inventing the Green Revolution again.  The biggest driving factor for this change will be price.

Now when it comes determining price, the state should naturally watch out for the weakest segment and compensate them. The elites or large landowners can resort to other options but the small farmer should be subsidised.

BRR: So what would be the way to go about it? Should the focus be on penalizing the inefficient players while rewarding the efficient ones?

AN: I have my doubts about penalizing people. The only thing that can be done is keep rewarding the efficient players.  For example, they imposed Section 144 on burning of crops but that did not have a material impact. On the other hand, direct sowing and happy seeder gives the farmer an advantage of 15 days in wheat otherwise Basmati crop went on till December.

So the farmer will be able to sow it by 15th November and get a yield advantage to which he is more receptive. The focus should be on smart agriculture with lesser market distortions and private sector incentives driving the change in the landscape

BRR: If there is pricing, who will do it?

AN: The provincial irrigation authorities. They are responsible for the entire water entry and exit that they are looking after. They claim that they are owners of water above the surface and below the surface.

BRR: What should be the relevant benchmark for water pricing?

AN: It is a political decision. It has to be in sync with the political economy. You cannot introduce sudden changes as such. They are not sustainable. You have to be gradual about it, the way they have gone for fuel and electricity. Secondly, as I mentioned earlier another important question which any good reformer should have in mind is that when you introduce these things, there is a segment of our society that is more vulnerable to these changes. That segment needs to be specially catered.

BRR: Let’s move to farming now. Should Pakistan go for large-scale corporate farming?

AN: Let’s look at the corporate farm model first. Ideally, they would use top quality machines and agricultural products to produce yields, which are very competitive. In addition, there has to be contribution to a global value chain as well. Gradually, what need to be done is shift traditional crop farmers such as wheat, towards more commercial crops. Corporate farms would be in a position to do that.

BRR: One of the pillars of the China Pakistan Economic Corridor (CPEC) is agriculture. What does it actually entail?

AN: No one actually knows and that is worrisome. It will take at least 2-3 years of planning and bringing in the requisite expertise to figure out the finer points of agriculture under CPEC.  But no one in policymaking circles has even started thinking about it. China has revolutionised world agriculture. How will you compete with them?