Corporate Agriculture Farming (CAF) in Pakistan
A case Study in perspective of
Global Study on Commercial Pressure on Land (CPL)
By
International Land Coalition (ILC)
By
SCOPE
Society for Conservation and Protection of Environment (SCOPE)
D-141 (annexy) Block-2, P.E.C.H.S, off Allama Iqbal Road
Karachi-75400, Pakistan
Tel: (+92-21) 34522562, 34559448
Fax: (+92-21) 34557009
e-mail: scope@scope.org.pk web: www.scope.org.pk
skype: scopepk
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Contents
Page No.
Topic
Foreword
3-4
1.0.Profile of Pakistan in perspective of land, Agriculture an economy
5
1.1.Agriculture in Pakistan
6
1.2.Land Use
6
1.3.Land Tenure in Pakistan
7
1.5.1. Landlords
7
1.5.2. Small landlords
8
1.5.3. Family owner-cultivators
8
15.4. Marginal owner-cultivators
8
1.5.5. Tenants of better standing
9
1.5.6. Tenants-at-will
9
1.5.7. Landless rural labour
10
1.4.Farm Ownership and Land Reform
12
1.5.Cropping Patterns and Production
16
2.0.Corporate Agriculture Farming concept in Pakistan-Background
16
2.1.Creation of favorable institutional environment for CAF investments:
17
2.2.Corporate Agriculture Farming (CAF) Controversy and debate:
20
2.3.Land Shopping spree:
23
2.5.Why Pakistan is a favorite land mall for Arab states:
24
2.4.Bio-fuel plantations
25
2.3.Lack of Transparency about land deal tracking information:
26
2.4.Powerful players:
27
2.5.The Government’s point of view about CAF
28
2.6.Civil society opposition
29
2.7.Farmers’ position
32
A win-win proposal
33
2.8.Small farmers’ position on CAF
33
Sindh Province and CAF
34
2.9.Some examples of corporate farming
36
2.10.Large farmers’ position
37
2.11.Water shortages
38
2.13.Food security
39
2.14.Land reforms and Revival of Feudalism
40
Proposed Land Reforms amendments
41
2.15.CAF as industry
45
2.16.Labor laws and legal issues
46
3.0.Recommendations and policy suggestions:
47
3.1.Revision of Policy
48
3.2.Land Reforms
48
3.3.Education and Training of Farmers
49
3.4.Provision of New Agriculture Technology
49
3.5.Provision of Seed and Fertilizers
49
3.6.Protection for Small Farmer
50
2
Corporate Agriculture Farming in Pakistan
Foreword:
This study is to contribute to the global study on Commercial Pressure on Land
(CPL), initiated by International Land Coalition. The study is focused on policy of
attracting international investment in agriculture sector on the name of corporate
agriculture farming (CAF).
Pakistan is an agrarian economy where majority of the rural population is
dependent on agriculture. However the agriculture sector is facing tremendous
challenges such as lack of government’s attention, poor tenure system, lack of
finance and scarcity of water. In view of global race to acquire productive lands
for attaining food security, corporate organizations from middle east and other
countries are eying on vast land resources in Pakistan, where the government is
more than pleased to offer state lands along with an extremely luring investment
package. However international media and civil society which is keenly following the
global rush of land grab, was instrumental in alerting stakeholders in Pakistan about
the possible threats of large scale land acquisitions.
The CAF plan was conceived during 2002 under the then military government,
which saw CAF as a mean to recover cash strip economy by inviting foreign
investors. Meanwhile high food prices prompted food importing states to search
for agro-lands to produce their own food to get secure against any upset in the
food market. Now and then reports in national and international media are
appearing about large scale secret land deals in Pakistan in all four provinces;
however the government is reluctant to confirm these details.
An intensive discussion among civil society on CAF promptly started in which
serious concerns were raised against the CAF. The biggest concern was shown
towards the intention of government to offer unlimited state land for CAF purpose
with a package of lucrative offers such as exemptions in import duties on
machinery, labour laws and free hand in exporting the farm produce back to home
country. The civil society organizations working for the rights of farmers and
secure land tenure considers this policy as against peasants who have been waiting
for judicious land and agrarian reform in the country. The peasants, rejecting CAF
policy in clear terms are demanding land redistribution with comprehensive package
3
of agrarian reforms. Another section of civil society considers CAF as a serious
mistake from national sovereignty and relates it with the colonization era of
subcontinent when the East India Company conquered India through trade.
The policy has short and long term environmental consequences particularly when
Pakistan is affected by negative impacts of climate change, which is resulting in
climate extreme incidents such as long droughts or flesh floods. In view of these
climatic changes and shortage of water, which has become a precious commodity, it
is not wise to give free access to corporate sector to exploit land and water. This
is not the land they are chasing; it’s actually the water resources wrapped with
land. Extensive use of pesticides, chemical fertilizers and genetically modified
organisms (GMO) based seed and crops are another serious environmental concern
associated with CAF. The major concern of environmentalists is expansion of agrofuel industry which is offering incentives to grow oil bearing plants in marginal
lands. Such kind of massive plantations may create ecological impacts through
monoculture cropping with alien plant species, which is not favorable to micro level
biodiversity and does not support local livelihood particularly pastoralism as most
agro-fuel plants do not have forage value for livestock.
Stakeholders have consensus that land and agrarian reforms agenda should be
completed to empower millions of landless peasants and establish secure land
tenure in the country with financial facilities to small farmers and tenants. Food
security must be considered at top priority while making any policy in agriculture
sector.
4
1.0-Profile of Pakistan in perspective of land, agriculture and economy
The Islamic Republic of Pakistan was founded in August 1947 as part of the division of British
India, into India and Pakistan. Pakistan consisted on two land masses separated by 1000
kilometers, i.e. West Pakistan and East Pakistan. In 1971 Eastern Pakistan ceded to what is now
Bangladesh. Pakistan has an area encompassing 796,096 square kilometers.
The population has reached to about 170 million. Pakistan’s economy is 27th largest economy of
the world with a GDP of $ 166.5 billion , based on its purchasing power. However poverty is a
main issue with approximately 47 million people remain below the food poverty line, which is
defined as “when people are not able to incur the food expenditures needed to achieve the
minimum required level of calorie intake i.e. 2,350 calories per day”.
The main causes of poverty include: inadequate access to productive resources, particularly
agricultural land and credit; illiteracy and poor skill levels of rural masses; weak rural
infrastructure; inefficient technical support services; and poor organization and empowerment. In
respect of women, a major constraint is the gender discrimination prevalent in society and
culture due to a mix of traditional tribal culture and religious values of pardah (women conceal
themselves from stranger men). The isolation of women forces them to bear a disproportionately
high share of the burden of poverty due to their low social status, and possessing negligible
productive assets such as land, and limited access to social and economic services.
The Government has introduced measures to create opportunities for overcoming poverty.
The thrust of the Government’s poverty-eradication strategy involves:

Economic growth and employment. Policies aimed at encouraging investments in all
economic sectors by the private sector (both international and national) have been
adopted.

Enhancing agricultural-sector growth both by eliminating the major constraints to growth
and increasing the budget for drought mitigation and dry land agricultural development
support measures; stepping up the distribution of land to poor farmers accompanied by
input supply services, credit and technical services.

Off-farm income-generating activities and microcredit services.

Improved human resource development, including better education and literacy
programmes, training and skills development; increased primary health care and other
health services in the rural areas; improved water supplies; measures to improve
environmental sanitation, nutrition and food security; and population planning.

Increased decentralization, transparency and accountability of the administration;
decentralization of planning, budgeting, implementation and financial management and
5
control; people’s participation in local affairs; strengthened local administration; and
improved administrative infrastructure.

1.1-
Institutionalizing monitoring and evaluation (M&E) mechanisms to track poverty-related
expenditures and monitor progress.
Agriculture in Pakistan:
Agriculture is the mainstay of the country’s economy, accounting for 25% of GDP, 60% of
export earnings and 48% of employment. Some 20.9 million ha of land (26% of the country) is
cultivated, of which 76% is irrigated by a vast network of canals, dams and barrages of Indus
River System.
The main institutions involved in agricultural and rural development are in a state of disarray and
in need of major restructuring and strengthening, which are both; a challenge and an opportunity
for rural development. Potential instruments for this change are agricultural research, extension
and livestock services; rural financial services. There is a need to strengthen the rural support
programmes and involve the private sector, including community-based organizations (CBOs)
and NGOs into rural development.
1.2-
Land Use
Pakistan's total land area is about 803,940 square kilometers. About 48 million hectares, or 60 %,
is often classified as unfeasible for forestry or agriculture as it consists mostly of deserts,
mountain slopes, and urban settlements. Part of this area is considered as agricultural land on the
basis that it would support some livestock keeping even though it is poor quality rangeland.
Thus, estimates of grazing land, vary widely between 10 % and 70 % of the total area. A broad
interpretation, for example, categorizes almost all of arid Balochistan province as rangeland for
grazing livestock. Government officials listed only 3 million hectares, largely in the north, as
forested in the fiscal year (FY) 1992. About 21.9 million hectares were cultivated in 992. Around
70 % of the cropped area was in Punjab, followed by 20 % in Sindh, less than 10 % in the NorthWest Frontier (Now called with the new name of Khyber Pukhtunkhwa) province, and only 1%
in Balochistan.
Since the independence in 1947, the amount of cultivated land has increased by more than onethird. This expansion is largely the result of improvements in the irrigation system that makes
water available to additional plots. Substantial amounts of farmland have been lost to
urbanization and water logging, but losses are more than compensated for by additions of new
land. In the early 1990s, more irrigation projects were needed to increase the area of cultivated
land.
The scant rainfall over most of the country makes about 80 % of cropping dependent on
irrigation. Fewer than 4 million hectares of land, largely in northern Punjab and the North-West
Frontier Province, are totally dependent on rainfall. An additional 2 million hectares of land are
under non irrigated cropping, such as plantings on floodplains as the water recedes. Non irrigated
6
farming generally gives low yields, and although the technology exists to boost production
substantially, it is expensive to use and not always readily available.
1.3-
Land Tenure in Pakistan:
The history of land tenure system in Pakistan goes back to Mughal era (1526-1857). According
to Professor Frithjof Kuhnen, land tenure information in Pakistan is not very well documented.
However the available information is gotten from traditional revenue systems i.e. zamindari,
mahalwarj, ryotwari, etc. which is not very informative . While they are important for
understanding the historical development of the current land tenure situation, they are not of
much use in explaining the present tenure conditions. The Agricultural Census of Pakistan
distinguishes three forms of tenure: owners' farms, tenants' farms and owner-cum-tenants' farms,
but as there is a wide variation within these three groups, census figures explain to a very limited
extent only, the current land tenure situation. The census does not provide any information on
patterns of ownership and actual managing units.
In view of this situation, an attempt is made here to classify the rural households in seven land
tenure categories which are meaningful from the standpoint of rural development (Tribal tenure
systems, including the sardari system, are not dealt with here). The number of households given
for each category is a rough estimate derived from the available census information and is
intended to give an order of magnitude only. The seven important land tenure categories and
their characteristics, as in the early 1960s are as follows:
1.5.1. Landlords
This tenure comprises persons owning more than 150 acres of irrigated land or 300 acres of nonirrigated land. They number about 12,000 – 15,000. The productivity of these estates, before the
green revolution, varied greatly. The cropping intensity of the land was lower than in any other
category. The benefits of economies of scale played no role as these farms were not cultivated in
one unit but divided into numerous small plots which were cultivated by tenants, usually under
the batai-system (share cropping system in which produce is divided between land lord and
tenant). Crops are easy to control and to distribute after the harvest, i.e. particularly grain, were
preferred to grow. In most cases, the landlord left control of his land to a manager, while he lived
in town as an absentee landlord. His life style was quite different from that of the rest of the rural
population, and landownership was often not only a means of earning a living but also a source
of prestige and economic power which, again, was the basis of political power.
The role of the landed (land owner) aristocracy on the politics of Pakistan is very significant. The
relation of landlords and tenants was feudalistic: economic dependency of the tenant who had to
be personally loyal to his landlord, often reciprocated by the customary responsibility of the
landlord for his dependents, i.e. help in need, old age and illness, representation in matters to be
settled with outsiders, etc. While many landlords fulfilled their duties in this relationship, the
feudalistic system offered possibilities for exploitation, and many tenants were literally at the
mercy of their landlord. Under that system, capital formation was completely left to the landlord
who, from his income, had to maintain roads, canals, etc., (partly with the unpaid labour of his
7
tenants). However, a landlord's lifestyle involved quite a bit of capital transfer from rural to
urban areas in the form of urban houses, children's education, migration of family members to
town and engagement in business activities, and considerable spending on luxury items instead
of promoting agricultural development.
1.5.2. Small landlords
This category comprises persons owning 25 to 150 acres of irrigated land or the equivalent
amount of non irrigated land. Their number has been estimated to be about 200 000 to 250 000.
Holdings above 25 acres, usually require more than two pairs of bullocks for cultivation, and in
1960 self-cultivation was not so much in vogue as it is today; the land was frequently rented out
to tenants while the owner merely supervised. Much of what has been said about the category of
Landlords applies here as well; though on a more limited scale. The main difference between the
two groups apart from the acreage owned and income earned. The latter consisted less frequently
of absentee owners and took more interest in the cultivation of its land. This often led to a stricter
supervision of tenants, literally control during day and night. On the other hand, a more personal
relationship resulting from life-long and sometimes hereditary relations was involved. The result
of those landlords' greater interest in the land was a higher amount of capital formation and
reinvestment in agriculture (levelling, land reclamation, improvement of irrigation, etc.). The
improved economic condition of these small landowners who, compared to the masses of the
rural people were better educated and better informed, gave them political power and influence.
While political leadership at the national level is mostly entrusted to members of the first
category, this group controls decision making at district or divisional level, and is often related to
senior administrative officers. As will be explained later, this group underwent considerable
changes while new technology was being introduced.
1.5.3. Family owner-cultivators
This group of landowners includes all those possessing 7.5 to 25 acres of irrigated land or a
corresponding area of non-irrigated land. They number about 300,000. They personally cultivate
their land with one or two pairs of bullocks, and in the upper size range, may hire a farmhand.
Basically, however, farming is a family enterprise and it is in this group that agricultural
activities are not only a means of earning a living but also a way of life. Some owner-cultivators
have increased their farm acreage by renting some land in addition to that owned. This group
forms the upper class of the village society, especially if no landlord resides there. They enjoy
relative economic security, reasonable income and the prestige resulting from being a landowner.
Usually, they belong to a respected caste which improves their position even more. They control
village politics, occupy posts at union council level, in cooperatives, etc. and are very often,
excellent farmers with all the positive attributes of family farms, i.e. they achieve high cropping
intensity and non-monetary capital formation to improve the farm, etc.
15.4. Marginal owner-cultivators
Persons belonging to this category own less than 7.5 acres of irrigated land or the equivalent,
some of them renting areas to enlarge their holdings. They number about 1,600,000 and control
8
about 3,600,000 acres of farm land. This group consists of subsistence farmers as the average
farm size is only 2.2 acres. In addition, many of these small peasants have to work as agricultural
labourers in order to earn a living, and farming their own land is frequently only a side- (parttime) occupation. Of all the groups, this is the one with the highest cropping intensity. The
cropping pattern reflects the requirements for subsistence, and the limited acreage has to be used
completely for food production so that hardly any land is left for fodder cultivation. People
substitute labour for land by feeding their animals with grass and weeds collected by family
members at roadsides, near canals, etc. As the acreage does not suffice for their subsistence
requirements, this group is not involved in the marketing process (which means that they are not
influenced by product prices). They earn the little cash they need for their meager level of living
as remuneration for manual labour on large farms, in road construction, etc., or from the sale of
goods they are given as payment in kind for this work.
This group is a permanent and secure labour resource for larger farmers. Because of their
ownership pattern they are bound to the village, but have to look for additional employment
opportunities locally and these are often available from large landowners only. Among some of
the marginal cultivators, because of the frequent partition through inheritance, especially in the
old settled districts, underemployment is quite common and a considerable number of this
category belongs to the rural poor. As landowners, they enjoy a certain prestige which, however,
is not reflected in their economic welfare. Indebtedness often worsens their situation.
1.5.5. Tenants of better standing
This category is rather heterogeneous and consists of tenants with larger farms (over 1.5 acres of
irrigated land) and of those who, in addition to their rented land, have some acres of their own
which gives them a certain status and security. They number about 750,000 and work on as much
as 15 million acres of farm land. Some of them are tenants of government land. Others are rather
independent tenants of a larger tract of land belonging to a landlord. Usually, their cultivation is
of superior level and landlords often rent large areas to them because they improve the quality of
the land by their good cultivation practices. The lease is usually for several years, often on
written contracts, and those tenants are mostly independent of the landlord as regards cultivation.
They are tenants in the European sense of the word and the shortcomings of Asian tenancy do
not usually apply to them.
1.5.6. Tenants-at-will
The category of tenants-at-will comprises all other tenants and numbers about 1,800, 000
cultivating about 8,500, 000 acres of farm land. The most frequent system of tenancy for this
group is the batai (share cropping), in which the gross produce is shared by landlord and tenant,
usually at a 50:50 rate, but with varying degrees of participation of landlords in the production
costs. The lease is mostly without contract and for one year or one season only, often however,
with prolongation for a long period but without security for the tenant. This lease arrangement
hinders investment by the tenants, and the landlord also has little incentive, as proceeds are
shared so that only half of the return goes to the investor. The peculiar landlord-tenant
relationship influences the cropping pattern. As the landlord is interested in easily controllable
9
and marketable crops, he discourages animal husbandry and cultivation of vegetables by tenants.
The result of the high demand for land is that the acreage allotted to each tenant is small. Thus,
the labour input of the tenant is high, and the landlord's share is positively influenced. This may
lead to underemployment of tenants, at least seasonally, thus causing low income, indebtedness
and increasing dependence of the tenant. On the other hand, few are in a position to supplement
their income by offering their labour because landlords discourage this for fear that the
cultivation of their land will be neglected. Tenants have little incentive to apply more labour than
is customary to the land as they receive only 50 percent of the proceeds achieved with their extra
efforts. Several attempts at improving the tenancy situation by legislation have failed because
these laws are against the prevailing market procedure and are therefore difficult to enforce.
1.5.7. Landless rural labour
This group is composed of persons living mainly from the land, but with no direct tenure in land.
Their relation to land is indirect: they provide their labour to landowners and cultivators against a
share of the produce. The number of landless rural labourers is estimated to be about 550,000. It
must be mentioned that the actual number of rural labourers is larger, but some succeeded in
fulfilling their wish of owning or at least renting a little land and are, therefore, incorporated in
the category of "marginal owner-cultivators" or "tenants-at-will". Among the rural labourers, one
has to differentiate between three distinct groups:
a) The kammis or sepis provide the technical and social services which are necessary in a rural
community and work, for instance, as blacksmiths, carpenters, potters, weavers, barbers, etc.,
and also perform certain social services. Their work is regulated by the customary "sep"-system
which requires them to do all the necessary work in their special craft against an annual lump
sum remuneration by the farmers of the village, or, in the case of a large village, by a certain
group of farmers. In addition to their professional work, they have to provide their labour free of
charge, except meals, to landowners for such activities as construction of houses, etc. Quite
often, they are unemployed, but they have to be ready for work whenever summoned and are not
allowed to offer their labour to other parties.
b) Permanent labourers have a full-time contract with a specific cultivator, usually on an
annual or seasonal basis and often against payment in kind. They run no risk of being
unemployed during the time covered by their contract, and very often their relation with a certain
cultivator is long-lasting.
c) The largest group is that of casual labourers who have no definite relation to an employer,
but offer their labour to whoever weeds it, such as in agriculture, road construction,
transportation, petty trade and other escape jobs, or whatever they can find. Quite often, they do
not find work at all and are unemployed. The poorest rural families are found in this group. That
they can earn their living at all - especially in the more densely populated areas, where their
number is large - is due to the unusually high wages paid at harvest time, when they are in great
demand. Schematically, they earn their living by working at harvest rate (three times the normal
wage rate for the long working day) for about three months per year (wandering to different
10
areas), another three months at the normal wage rate, while during the remaining six months of
the year they are unemployed. Their annual income in this calculation equals 12 times the normal
wage rate which suffices for a meager living. At the time under discussion, the beginning of the
1960s, their number was growing rapidly on account of population increase in excess of new
jobs. In areas with a higher concentration of landless casual labourers, their situation was steadily
worsening.
Table 1. Land tenure categories in Pakistan
Category
Characteristics
Estimated number in
1962
Percentage of
agricultural
households
Land lord
more than 150 acres
of irrigated land
owned *
12,000 – 15,000
Less than 1
Small land lord
25 - 150 acres of
irrigated land owned
*
200,000 – 250,000
4
Family owner
cultivator
7.5 - 25 acres of
500,000
9
irrigated land owned
*
11
Marginal owner
cultivator
less than 7.5 acres of
1,600,000
30
irrigated land owned
*
Tenant of better
standing
more than 12.5 acres
of irrigated land * or
with some land
owned
750,000
14
Tenant at will
less than 12.5 acres of
1,800,000
33
550,000
10
irrigated land owned
*
Landless laborers
no land owned or
rented
* or corresponding area of non-irrigated land
1.4-
Farm Ownership and Land Reform
At the time of independence from British Empire in 1947, Pakistan was a country where,
distribution of landownership was badly skewed. There was a great disparity in the size of
agriculture farms i.e. large numbers of small-scale farms as against a small number of very large
land holdings which can be gauged from the fact that less than 1% of the farms consisted of more
than 25 % of the total agricultural land. Many owners of large holdings were absentee landlords
(living in cities or abroad), who did not work on the land but had peasants who tilled their land
on sharing of production basis, known as “share coppers”.
On the other extreme, about 65 % of the farmers held some 15 % of the l total farmland of about
two hectares or less. Approximately 50% of the farmland was cultivated by tenants, including
sharecroppers, most of whom had little security and few rights. An additional large number of
landless rural people worked as farm laborers. These farm laborers and tenants were extremely
poor, uneducated, and undernourished, in sharp contrast with the boundless wealth, powerful
status, and immense political power of the landlord elite.
However soon after independence, on the pressure of socialist lobby, the country's political
leaders recognized the need for more equitable ownership of farmland and security of tenancy. In
the early 1950s, government attempted to eliminate the absentee landlordism, but they had little
success in the face of strong opposition by the land owning elite class. Security of tenancy was
legislated in the provinces, but because of their weak and dependent position, tenant farmers
benefited only slightly. In fact, the half hearted and weak reforms process created an atmosphere
12
of uncertainty in the countryside and intensified the animosity between wealthy landlords and
small farmers and sharecroppers.
In January 1959, accepting the recommendations of a special commission on the subject, General
Mohammad Ayub Khan's government issued new land reform regulations that aimed to boost
agricultural output, and to promote social justice, and ensure security of tenure. A maximum
limit or ceiling of about 200 hectares of irrigated land and 400 hectares of non irrigated land was
placed on individual ownership; compensation was paid to land owners for surrendering their
excessive land. However numerous loopholes in the form of exemptions, including provision of
title transfers to family members, limited the impact of this attempt to limit the land ceilings.
From these reforms slightly fewer than 1 million hectares of land was surrendered, of which a
little more than 250,000 hectares was sold to about 50,000 tenants. The land reform regulations
made no serious attempt to break up large estates or to lessen the power or privileges of the elite
landlords. However, the measures attempted to provide some security of tenure to tenants,
consolidate existing holdings, and prevent fragmentation of farm plots. An average holding of
about five hectares was considered necessary for a family's subsistence, and a holding of about
twenty to twenty five hectares was pronounced as a desirable "economic" holding.
In March 1972, the Government led by Zulfiqar Ali Bhutto, announced further land reform
measures, which went into effect in 1973. The landownership ceiling was officially lowered to
five hectares of irrigated land and twelve hectares of non irrigated land; exceptions were in
theory limited to an additional 20 % of land for owners having tractors and tube wells. The
ceiling could also be extended for poor-quality land. Owners of expropriated excess land
received no compensation, and beneficiaries were not charged for land distributed. Official
statistics showed that by 1977 only about 520,000 hectares had been surrendered, and nearly
285,000 hectares had been redistributed to about 71,000 farmers.
The 1973 reforms had defined legal arrangement between land owner and tenants. According to
this land reforms package any tax, water charges, seed costs, and half cost of fertilizer and other
inputs are the responsibility of the land owner, while tenants responsible for providing labour
and half cost of inputs. This package provided security against forced eviction to tenants as long
as they cultivate the land, and it gave tenants first priority right of purchase of land, had the land
owner decides to sell his land. Other regulations increased tenants' security of tenure and
prescribed lower rent rates than had existed.
In 1977 the Bhutto government, again revised the reforms and further reduced the land ceilings
on private ownership of farmland to 4 hectares of irrigated land from 5 hectares, and 8 hectares
of non irrigated land from 12 hectares as compared to the formula in previous reform package.
The military regime of Zia-ul-Haq that ousted Bhutto Government, neglected to implement these
later reforms. Governments in the 1980s and early 1990s avoided significant land reform
measures, perhaps because they drew much of their support from landowners from the rural
areas.
13
According to experts, land reforms in Pakistan have never transformed rural society in the
context of property structure and production relationships (Zulfiqar Shah, Question of land
reforms in Pakistan, Dawn 2-2-2008). The maximum limits of ownership of land in reforms were
fixed for the individual, but not prevented every member of the same family to own
landholdings, which resulted in transfer of large land to the family members and relatives of the
landlord and in this way they saved their lands from surrendering. During the military regimes,
feudal lords supported the ruling junta to get protection against possible land reforms. It is
obvious that the military dictators badly needed land owner elite class to give them much
required political legitimacy.
Even after three waves of land reforms, there was not significant reduction of large land holdings
in the country. Still there are 3,529 landlords have 5,13,114 holdings of more than 100 acres in
the irrigated areas, and 3,32,273 holdings exceeding 100 acres in un-irrigated areas. Some
7,94,774 landowners have 54,64,771 land holdings of less than 12 acres in irrigated areas. In unirrigated areas 1,44,098 are reported to have 16,28,826 holdings of less than 24 acres.
Government policies designed to reduce the concentration of landownership had some effect, but
their significance was difficult to measure because of limited data.
At the other extreme, the number of very large farms of sixty hectares or more was 14,000, both
in 1960 and in 1980, although the average size of the biggest farms was smaller in 1980. The
number of farms between two and ten hectares increased during this time. Greater use of higheryielding seeds requiring heavier applications of fertilizers, installations of private tube wells, and
mechanization accounted for much of the shift away from very small farms toward mid-sized
farms, as owners of the latter undertook cultivation instead of renting out part of their land.
Observers believed that this trend had continued in the 1980s and early 1990s.
In early 1994, land reform remained a controversial and complex issue. Large landowners
retained their power over small farmers and tenants, especially in the interior of Sindh, which has
a feudal agricultural establishment. Tenancy continues on a large-scale: one-third of Pakistan's
farmers are tenant farmers, including almost one-half of the farmers in Sindh. Tenant farmers
typically give almost 50 % of what they produce to landlords. Fragmented holdings remain a
substantial and widespread problem. Studies indicate that larger farms are usually less productive
per hectare or unit of water than smaller ones.
More than one third of the land in Pakistan is tenanted and about two-thirds of land is under
sharecropping, a form of farming where outputs are shared by the landowner and tenant (Hussain,
F. “Extreme inequality in Pakistan land ownership: WB.” TheDaily Times. February 5, 2007.)
Land reforms and elimination of feudalism remains a long standing demand of peasants in
Pakistan, but unfortunately it has not become a reality despite 2 major attempts in the past.
According to the Federal Land Commission, only 1.8 million hectares (or less than 8 % of the
country's cultivated area) have been resumed so far in the result of those failed attempts. Of
these, 1.4 million hectares have been distributed to 288,000 beneficiaries. Today in Pakistan,
land ownership still remains highly concentrated. More than half of the country's total farm land
is in of the size of fifty acres or more.
14
Nonetheless, although meaningful land reforms in Pakistan may be difficult to implement,
especially given the current feudal structure of power in the country, it is still necessary to work
towards a feasible and viable reforms process. The question is how to implement reforms by a
determined government which is not dominated by the landowning classes, which have been
avoiding dodging it in the past.
When General Pervez Musharraf toppled elected government of Pakistan Muslim League led by
Mian Nawaz Sharif, in 1999, presented a moderate and progressive posture. General Musharraf's
regime (1999-2008) declared feudalism as main cause of poverty and backwardness. In February
2000 it announced plans to carry out a massive land reforms programme to remove what was
described as “centuries old feudalism”. In October 2000 the regime issued a report
“Decentralization and the Devolution of Power” that called for rapid land redistribution so as to
empower landless peasants. The report was impressive, but there was little indication that
Musharraf was serious about implementing land reforms. To do so he would have involved in a
major confrontation with some of Pakistan's most shrewd politicians who were supporting his
regime (Sharif Shuja, 2005). Moreover during this regime the issue of peasant’s revolt came up
which is known as Okara Military Farm peasants’ movement. In Okara, Punjab, where peasant
have been tilling on 68,000 acres of land for last 100 years, the military asked the peasants who
had worked for over 88 years on these lands, to withdraw their peasant status and become
contract laborer.
The tenant organization rejected this proposal and then decided not to pay anything to the
military farms administration instead to pay the tenancy cost to the Punjab revenue department.
Agitation and violence flared up in March 2008 in which 3 peasants lost their lives and many
were made imprisoned. The peasantry organizations of this area organized a historical peasant's
struggle under the slogan "Maliki ya mout (ownership or death)".
After the tragic elimination of Benazir Bhutto in a terrorist attack on December 2007, Pakistan
Peoples’ Party (PPP) came again in power in 2008 by forming coalition government in centre
and three provinces. However since inception, this government is constantly going through a
troubling period of “fight against terrorism”, which is characterized by an insurgency by Taliban
fighters, who have waged war against USA and NATO forces in Afghanistan and ultimately this
war is shifted in Pakistan. However the party leadership doesn’t seem too serious for land
reforms, instead they are keen to continue the policy of offering land to foreign parties for
corporate farming.
In these circumstances agrarian reforms still looks like a distant possibility, particularly as long
as the ruling governments are dominated by feudal who keeps important party positions and
decision making power. Regardless what kind of government is in Pakistan, it is a common
belief that decisions are made out of parliament, away from eye of public and the media, and
these decision are not only influenced by the nexus of powerful elements in civil military
bureaucracy, and secret agencies but also from foreign powers such as USA, which is blamed to
be God father of Pakistani rulers.
15
1.5-
Cropping Patterns and Production
In the early 1990s, most crops were grown for food. Wheat is by far the most important crop in
Pakistan and is the staple food for the majority of the population. Wheat is eaten most frequently
in unleavened bread called roti or chapati. In FY 1992, wheat was planted on 7.8 million
hectares, and production amounted to 14.7 million tons. Output in FY 1993 reached 16.4 million
tons. Between FY 1961 and FY 1990, the area under wheat cultivation increased nearly 70 %,
while yields increased 221 %. Wheat production is vulnerable to extreme weather, especially in
non irrigated areas. In the early and mid-1980s, Pakistan was self-sufficient in wheat, but in the
early 1990s more than 2 million tons of wheat were imported annually.
Rice is the other major food grain. In FY 1992, about 2.1 million hectares were planted with rice,
and production amounted to 3.2 million tons, with 1 million tons exported. Rice yields also have
increased sharply since the 1960s following the introduction of new varieties. Nonetheless, the
yield per hectare of around 1.5 tons in FY 1991 was low compared with many other Asian
countries. Pakistan has emphasized the production of rice in order to increase exports to the
Middle East and therefore concentrates on the high-quality basmati variety, although other
grades also are exported. The government increased procurement prices of basmati rice
disproportionately to encourage exports and has allowed private traders into the rice export
business alongside the public-sector Rice Export Corporation.
Other important food grains are millet, sorghum, corn, and barley. Corn, although a minor crop,
gradually increased in area and production after independence, partly at the expense of other
minor food grains. Chickpeas, called gram in Pakistan, are the main non grain food crop in area
and production. A number of other foods, including fruits and vegetables, are also grown.
In the early 1990s, cotton was the most important commercial crop. The area planted in cotton
increased from 1.1 million hectares in FY 1950 to 2.1 million hectares in FY 1981 and 2.8
million hectares in FY 1993. Yields increased substantially in the 1980s, partly as a result of the
use of pesticides and the introduction in 1985 of a new high-yielding variety of seed. During the
1980s, cotton yields moved from well below the world average to above the world average.
Production in FY 1992 was 12.8 million bales, up from 4.4 million bales ten years earlier. Output
fell sharply, however, to 9.3 million bales in FY 1993 because of the September 1992 floods and
insect infestations.
Other cash crops include tobacco, rapeseed, and, most important, sugarcane. In FY 1992
sugarcane was planted on 880,000 hectares, and production was 35.7 million tons. Except for
some oil from cottonseeds, the country is dependent on imported vegetable oil. By the 1980s,
introduction and experimentation with oilseed cultivation was under way. Soybeans and
sunflower seeds appear to be suitable crops given the country's soil and climate, but production
was still negligible in the early 1990s.
2.0- Corporate Agriculture Farming concept in Pakistan-Background
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Corporate farming is a term that usually describes the organized business of agriculture,
specifically, agriculture methodologies of multinational corporations (MNCs) involved in food
production on a very large scale. Corporate farming is not only limited to leasing of farms but
also covers entire crop management in that farm which includes seed supply, agrichemicals, food
processing, machinery, storage, transport, distribution, marketing, advertising, and retail sales.
"Corporate farming" is a fairly broad term that deals with the general practices and effects of a
small number of large, global corporations that dominate the food industry. It does not refer
simply to any incorporated agribusiness enterprise, although most agricultural businesses today
are in some way economically connected to the dominant food industry players. As such, it may
be thought of as a movement, which is at times also referred to as "anti-corporate farming"
(Wickipedia)
But this is not limited to this far, corporations involved in corporate farming influence on
education, research and public policy, through their educational funding and government
lobbying efforts as well. According to an estimate about 50 million acre of land have been
bought or leased by foreign countries, MNCs or investors abroad. African countries are top of
the list (Farzana Shah, Pros and Cons of Corporate Farming for Pakistan Economy, Asiantribune.com 12-72009)
Pakistan has been going through economic crisis for last many years. Burden of dept, poor
economic conditions force planners and economists to seek quick fix solutions based on
attracting foreign investments. The recent global wave of large scale land grabbing has been seen
as a window of opportunity, therefore the top brass in government seems excited about CAF as a
win-win situation which would not only bring quick bucks but also modernize agriculture sector.
The issue of corporate farming came up in public debate when the annual budget 2000-2001, by
the then military-led government of General Musharraf, announced a policy measures to
facilitate corporate farming in order to increase much needed foreign investment in the country.
The policy included grant of a 50 years lease of government owned lands to foreign companies.
This lease was extendable by another 49 years. In July 2002, the federal cabinet decided to
allow duty and sales-tax free import of equipment for use in corporate farming. Tax holiday for
irrigated, rain-fed, and cultivable areas was announced. Under the 1977 land reforms, ceiling of
land was fixed for ownership of land. In order to tempt investors, last hitch was removed by
proposing an amendment in the 1977 Land Reforms Act to do away with the limit of maximum
limit of 100 acres.
2.1- Creation of favorable institutional environment for CAF investments:
The Government moved fast to make favorable grounds for CAF so that investors may not face
any hurdle. In May 2009 “farmland road shows” were organized in UAE to lure investors with
attractive incentives in CAF in Pakistan.
The Ministry of Food, Agriculture and Livestock (MINFAL) asked all provinces to provide
details of cultivable barren lands in their respective areas for utilization in corporate farming.
Although media has been constantly speculating about Government’s offer of millions of
hectares to prospective investors and there were stories of large scale land deals in the country,
17
however, the federal government has not officially confirmed any land deal with any party to
avoid backlash from aggressive media and civil society who are sensitive on this issue.
An eight-point concept paper on corporate farming was prepared. According to the plan the
Federal Ministry of Industries and Production, the Board of Investment (BOI) and Ministry of
Food, Agriculture and Livestock (MINFAL) were supposed to look after the industrial part of the
plan. Local and foreign companies incorporated under the Companies’ Ordinance1984 will be
entitled to corporate farming. The respective provincial revenue departments were to take care of
the taxation part as corporate farming is to be covered by the provincial agriculture income tax
law. Some special laws were also be proposed to deal with possible labour problems. This would
involve the ministry of labour as well as MINFAL. Out of the total 79 million hectares in the
country, survey of 57 million hectares has been completed and documented, while survey of 22
million hectares is to be documented. There are about eight million hectares of fertile cultivable
land in the four provinces, besides barren land which can be used for crop production by
developing corporate farming.
The Corporate Agriculture Farming (CAF) Policy:
According to ministry of investment the federal government through CAF policy is trying to achieve the
followings;
1. To seek efficiency of production and increased incomes/revenues by bringing together agricultural
production, processing and marketing activities at one place under the management of a corporate entity.
2. To improve agricultural productivity and profitability through the use of latest production technology and
adequate expertise particularly for exports.
3. To produce high quality agricultural products due to favorable resource base.
4. To achieve/maintain internationally competitive unit cost of production for all major crops, fruits and
vegetables Government wants to meet these goals with following benefits being offered to investor or
MNCs.
• 100% foreign equity allowed (only in CAF on case to case basis)
• Minimum $ 0.3 million foreign equity investment
• Remittance of 100% capital, profits, and dividends allowed
• Only such local and foreign companies will be entitled to Corporate Agriculture Farming that are
incorporated in Pakistan under the Companies Ordinance, 1984.
• No upper ceiling on land holding. The size of the proposed corporate farm may be left to be determined by
the prospective investor.
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• State land can be purchased, or leased for 50 years through open auction, extendable for another 49
years
• All banks and financial institutions will earmark separate credit share for Corporate Agriculture Farming
(CAF)
• Labor laws may not be presently applicable to Corporate Agriculture Companies. Due to special
circumstances of the agriculture sector however appropriate labor laws be developed for this sector within
five year.
• Agriculture Income Tax regime applicable in provinces, on income from agriculture, would be applicable to
Corporate Agriculture Farming [2]
Fiscal Incentives for Corporate Agriculture Farming (CAF)
• 0% custom duty and sales tax on import of agricultural machinery, equipment
and implements under SRO 575(I)/2006 dated 5th June, 2006
• Exemption of duty on transfer of land for CAF
• Tax relief; Initial depreciation allowance @ 50% of machinery cost.
• Dividends from corporate agriculture farms are not subject to tax
• Farm income given more favorable treatment than income from other sources
Potential Impact of the CAF Agreements
The areas of Investment for Corporate Agriculture Farming (CAF)
i. Land development / reclamation of barren land, desert and hilly areas for agriculture purpose and crop
farming.
ii. Reclamation of water Front Areas/ Creeks.
iii. Crops, Fruits, Vegetables, Flowers Farming / Integrated Agriculture (Cultivation and processing of crops).
iv. Processing of agriculture products.
v. Modernization and development of irrigation facilities and water management.
vi. Plantation/ Forestry.
vii. Dairy, small ruminants (sheep, goat) and other livestock farming.
A debate started in the country on the idea of corporate farming in which pros and cons of CAF
were discussed. The proponents maintained that modern technology and practices adopted in this
kind of farming enhance the crops production to many folds. However the opponents maintained
19
that this enhanced growth may provide abundant supply of food to foreign consumers but on the
cost of precious resources like food, water and land for local community and farmers.
The government’s CAF policy as projected on the website of the Board of Investment (BoI), is
essentially to attract foreigners by providing legal cover to foreign land acquisitions, which is
first priority of Investors besides cheap land, labour and fairly very easy financial terms.
The salient features mentioned in the above box form a surprise package of ideal facilities and
incentives to attract local and foreign investors and was given approval by ex-president Pervez
Musharraf in 2002 and then formally adopted by the cabinet for implementation in 2004.
The BOI has presented a list of lands available all over Pakistan in the form of compact blocks of
500 acres and more, which have been reserved for corporate farming in districts Muzaffargarh,
Rajanpur, Bahawalpur and D.G. Khan. The total area available is 31,111 acres. In addition, 6.6
million acres of land is available in Cholistan of which two million acres is relatively plain but it
can be developed only if canal water is made available. The Board of Revenue, Punjab, has
identified a compact block of 25,000 acres for corporate farming in Cholistan (a desert inhibited
mostly by moving pastoral communities).
Several livestock farms are also on offer in Punjab. These include a farm of 1,538 acres in
Sargodha and of 900 acres in Khushab, four farms of 8,943 acres in Bhakkar, two farms of 3,488
acres in Bahawalpur and two farms of 1,639 acres in Khanewal. Total land in livestock farms
available comes to 22,170 acres. There are eleven sites identified for enhancing foreign
investment in agriculture sector in the NWFP province. The biggest site is located in Drab Kutch
in Kohat, measuring 5,293 acres. Besides, four livestock farms are available for investment.
Land for agriculture is available in D.I. Khan, Bannu, Mardan, Charsadda and Haripur of Khyber
Pukhtunkhwa province.
In Sindh, a total cultivable area on offer comes to 29,841 acres, mostly in the jurisdiction of
forest department. Land is available in district Shikarpur, Badin, Matiari and Thatta. In
Balochistan, land on offer for corporate farming exceeds other provinces. It comes to 1.4 milion
acres. The biggest chunk is available in district Lasbela which is 0.75 million acres followed by
0.51million acres in district Chagai. But most of the area is cultivable waste, meaning it is fit for
cultivation but has not been yet cropped.
2.2- Corporate Agriculture Farming (CAF) Controversy and debate:
Media was prompt to comment on this policy of the government. Several published reports in
newspapers and presented on electronic media highlighted extraordinary investor attractive
initiatives by the government. These reports raised the concern that the government’s Corporate
Agriculture Farming (CAF) policy will effectively legalizes large scale land acquisitions by
foreigners on very easy terms. Concerns were raised from the supporters of land reforms, that
CAF policy is in contrast of land reforms laws and condition of the maximum limit of ownership
of land will be eased for the corporate sector. The peasants and landless labourers and the civil
society organizations supporting the cause of peasants spoke firmly against CAF, as they believe
20
that as citizens, peasants have the prime right that state lands should be distributed among them,
instead of foreigners who will take away all the production to their respective countries leaving a
food insecurity situation for poor people of Pakistan.
The civil society believes that CAF involving large, mechanized farms owned and operated by
giant multinational agribusiness companies, which will grow plant varieties that may be hybrid
or genetically modified, and protected under the stringent international patent regime. These
crops may have negative environmental implications. “That is the government of Pakistan's
vision for the future of agriculture in this poor agrarian country” (Mudassir Rivi, Corporate Farming
Comes to Pakistan)
The media reports and reaction from the civil society on great rush of the government for
corporate agri-investors by announcing incredibly attractive package for the CAF sparked a
controversy and debate, which reached to its peak when media dig out reports of mind boggling
huge sale/ lease deals involving foreign parties on the name of modernizing agriculture and to
increase agricultural productivity and earn foreign exchange money. Federal and provincial
governments seemed very keen on CAF by offering vacant lands to investors. In September
2009, the MINFAL informed the corporate world that Pakistan has about 8 million hectare fertile
cultivable land in four provinces besides the large quantity of barren lands which can be used for
crop production through introduction of corporate farming and for maximization of agriculture
production in the country.
However this CAF package has also become a matter of great debate within the government
circles itself. Questions are being raised about viability of this policy of selling and leasing out
precious land resources to foreign companies for food production, while the country has a huge
challenge of feeding to its huge ever-increasing population, wouldn’t it be wise to distribute this
land to landless peasants for food growth and meeting unemployment or underemployment
challenge.
The government intention to sell or lease huge state lands in the Punjab on the name of CAF has
already been challenged in Lahore High Court through a constitutional writ petition. In this
petition the petitioner plead that that the sale or lease of land on such a massive scale and on such
attractive terms might pose a security risk to the country because the people of the subcontinent
had faced the same problem when the East India Company, which came to this part of the world
from Britain to colonize them and exploited the resources. The High Court had asked detailed
information from the government. The current political leadership has also made up its mind,
which is apparent from the statement of the Foreign Minister Mr. Shah Mahmood Qureshi who,
personally a big farmer himself maintains that there is nothing wrong with the CAF.
Many circles raised another issue concerned with the “extra generosity” on the part of the
government to rush for inviting investors they say that no matter the main purpose is obviously
to make foreign hard currency based capital from CAF. But situation has changed in favour of
Pakistan as in 2006, a new global trend emerged by sharp rise of grains prices, which made food
importing countries to feel more insecure, and in the result a wave of land grab start to go high
and deep in Asia, Africa and Latin America. When wealthy countries and companies are rushing
in with huge money to seek land, why on Earth would some government chase them with such
21
unbelievably attractive terms by compromising its own vital national interests of food security
and livelihood of poor peasants? Is it wise to allow the investors to take away all the produce
leaving the host country food insecure on the cost of natural endowments (like land and water)
and angry masses of peasants, who have been waiting for state lands to be distributed among
them?
The advocates of CAF claim that the policy will bring much needed foreign investment, modern
machinery and new methods of cultivation in the country which will help is transformation of
age old agriculture in the country. They maintain that agriculture sector suffers from serious
capital drought and for that reason agriculture production output is lesser than other countries in
the region. Due to the backwardness and uncertainty in this sector, banks and financial
institutions are reluctant to lend to farmers and their share in credit is hardly 4% in the private
sector credit volume in the country, which is extremely low considering the fact that agriculture
is the mainstay of Pakistan’s economy and constitute 25% of the GDP. They remind us of
trickledown theory of green revolution which they think will be an ideal solution for beating
poverty from the rural Pakistan.
On the other hand small farmers, who are dejected and consider themselves losers in the present
scenario, see great opportunity and thus have high hopes to make quick and big cash by selling
their small pieces of landholdings to the corporate entities and to come out of poverty trap.
But the opponents of CAF are skeptic about trickledown approach and consider CAF as a short
cut but wrong approach to get rural prosperity. “Corporate farming is being projected and
considered as a big blessing in disguise, especially for the poor peasants” (Ramzan Ali, Political
economy of corporate farming). The government, which is not apparently looking serious in
developing agriculture, water, power and rural infrastructure with long term investment
measures, is seeking towards a quick fix solution for economic growth by compromising on food
and economic security of its poor rural masses.
Some development professionals in Pakistan, while advocating for CAF policy goes patriotic to
imply CAF that it would bring greater investments for development of agricultural infrastructure,
create more jobs in the rural areas and contribute to the country’s ailing economy. They put CAF
a better option than looking for aid “It would probably be better than begging for aid before the
‘Friends of Pakistan’ (the international donors group to fund Pakistan) or other donors.
Some critics of CAF believes that it could have large scale, long term and complicated impacts
on our environment, economy, and urban and rural social fabric. A new awareness of the costs is
beginning to suggest that the benefits are not as great as they formerly appeared. Many of the
costs of corporate farming are coming as something of a surprise.
However, small farmers, NGOs and laborers organizations in the country are strictly opposing
this policy, with harsh criticism, as they believe that such arrangement would jeopardize
country’s food security, environmental endowments and poor peoples’ meager livelihood base.
There will be long term social and legal implications of this policy.
22
Small farmers, who have been expecting from all subsequent governments, throughout the
history of the country, with great hope, to implement comprehensive land and agrarian reforms,
are now upset and severely opposing the CAF. The civil society organizations (CSOs) and thinktanks working on agriculture and farmers related issues, expressed their fear that the CAF will be
resulted in increasing of commercial pressure on land, which would set new trends and will only
benefit large land holders, who will make large fortunes by partnering with corporations, but
landless and small farmers will be the ultimate losers in this scenario because it will be hard to
secure jobs in new agriculture system which would be highly automated, mechanized and would
require only technically skilled and formally educated work force . Civil society activists fear
eviction of tenants and daily wages laborers, as the CAF will be highly mechanized and
automated.
Food rights activists are deeply concerned to see government to go ahead for implementation of
the CAF. The corporatization of the farm sector, they fear, will lead large landlords to convert to
corporate farms, potentially immunizing their land from future agrarian reforms, and stimulating
new investments in capital-intensive technologies that will displace farm workers.
Corporate farming is feared to cause displacement of subsistence farmers, forcing them out of a
livelihood that has run in their families for centuries, and causing massive rural unemployment.
This displacement, will cause a mass exodus from rural areas to urban centers, where the
industrial base is weak and not able to absorb millions of new workers. In a country where
approximately 50 million people struggle to live on less than a dollar a day, social catastrophe is
feared. (Muddassir Rizvi, Corporate Farming Comes to Pakistan, Multinational Monitor)
2.3- Land Shopping spree:
Most of the corporate companies interested in acquiring large tracts of land for CAF in Pakistan
and other countries are originated from the Middle East Gulf region, as they have very limited
cultivable land and irrigation water. They have almost already exhausted these resources and are
concerned about the constant food supplies. Skyrocketing of food commodities resulted in heavy
outflow of petro-dollars, prompting these sultanates to switch from importer to grower mode
Outsourcing agriculture production seems an easy way out for them, particularly when poverty
affected countries struggling with poor governance and shortage of much needed foreign hard
currency for trade purpose, where it is relatively easier to negotiate with “not so competent”
bureaucrats and short sighted politicians in the government to twist laws in their favour and
buying or leasing huge agri-estates to grow food or other commodities.
The Gulf countries and Gulf countries, consider Pakistan as their favorite holiday hunting
ground, as most of hunting caravans of royal VIPs descend in winter at the time of winters
alongside of wintering populations of birds from cold regions of central Asia. They are well
familiar with Pakistan, its conditions and its rulers Most of the rulers have their palaces and agroestates in Pakistan. That is why Pakistan is always a favorable destiny of Gulf investors.
23
The United Arab Emirates (UAE ), which imports 85 % of its food, purchased 324,000 hectares
of farmland in the Punjab and Sindh provinces of Pakistan in June 2008.(Kerr, S. and Bok, F. “UAE
investors buy Pakistan farmland.” FinancialTimes. May 11, 2008.)
2.5- Why Pakistan is a favorite land mall for Arab states:
One needs to understand the background of relations between Pakistan and the rich Arab
kingdoms and sultanates states like Saudi Arabia, UAE and other Gulf countries. Pakistan is a
predominantly a Muslim county and has traditional relationship with the Arab world for number
of reasons such as religious, cultural, economical and political. Since most of the Arab states are
rich in oil and accommodate millions of Pakistani labor force, and also their rulers visit Pakistan
for wildlife hunting for pleasure, they consider Pakistan as their backyard. They use to provide
generous financial aid to Pakistan at the time of dire needs.
These countries have great influence among Pakistani military and elite class, and there are many
examples when they intervened and arbitrated serious political feuds. Therefore one can say that
Saudi Arabia and UAE are like big bothers of Pakistan and they rightly consider Pakistan (and
other poor Islamic countries) as their second home where they are always welcome. No wonder
they always have leverage in Pakistani politics and economy. However the liberal sections of
civil society have been criticizing over illegal hunting of wildlife in Pakistan by Arab rulers, and
illegal smuggling of “camel kids” who have been used in camel races in the UAE, as jockeys.
Generally this relationship is mostly acknowledged and appreciated by Pakistani bureaucracy
and establishment.
Therefore Pakistan is a logical choice for Gulf investments. An investor from Abu Dhabi,
bought about 16,000 hectares of farmland in the Pakistani province of Balochistan. Two UAE
firms, Emirates Investments Group and Abraaj Capital, have also expressed interest in investing
directly in Pakistani agriculture.
Some sources from the Makran, Baluchistan, reported farm land acquisition by Gulf based
companies for agricultural purposes. They bought these lands directly from the locals on the
promise to give them employment on these farms; however these promises were not honored
causing unrest among local population, as these companies sub-contracted the farms operation to
other outsiders.
According to the press report of Daily Times, “the Gulf States have acquired more than 150,000
hectares of land in Balochistan near Mirani Dam to begin mechanized farming”. The UAE was
on a buying spree even before the policy announcement. But the Balochistan government
decided to block direct deals between the UAE based private investors and farmers. Rather
government wants them to go through the official system of acquisition on the state owned lands
Pakistani Government is now implementing a strategy to develop medium and small dams to
collect rainwater and to support agriculture in those rain fed areas, such as Baluchistan, which
are not part of Indus Basin system and thus not served by canal irrigation network. The land
24
where a dam project is being conceived, its market value shoots. The land grabbers rush to buy
the land from the poor families who practice subsistence farming for their livelihood. The buying
of land is usually undertaken with the help of front men of buyers. The Windar Dam in
Baluchistan, and other small dam projects, though apparently built for the development and
welfare of the local people has become means for land grabbing and to bring about demographic
changes in the form of influx of outsider laborers. The government also bond to allot a fixed
percentage of land (in the command area of dam irrigation) is allotted to the armed forces and to
attract Gulf State Emirs to buy land; who come every year during winter season to many dryland
areas of Pakistan, on hunting trips to eliminate the already endangered bird, Houbara Bustard (a
migratory endangered bird which is used as a prey in falconry, a traditional sport of Arabs).
2.4.Bio-fuel plantations:
One of the biggest concerns of environmentalists is growing demand of land for cultivation of
agro-fuel crops, as these projects on massive scale would result in degradation of biodiversity by
monocultures and alien species.
Pakistan is facing serious energy crisis, meeting its energy and transport requirements by
importing fuel. It spent US$ 3.1 billion on the import of petroleum products. These imports
account for almost 85% of Pakistan’s total consumption of fuel and almost one-third of
Pakistan’s trade deficit. By introducing Jatropha as bio-fuel the country could save as much as
US$ 150 million in foreign exchange for every hectares of Jatropha cultivated in Pakistan.
The In the Sindh Province expects Kijani Energy (KE), a sustainable energy company of
Canada, is reported to acquire large tracts of land, 200,000 acres in District Tharparkar for
Jatropha cultivation. The local people have protested against the violation of their centuries-old
livestock grazing rights, claiming they are being deprived of a primary source of livelihood due
to restrictions. (Mir M.A.Talpur, Daily Times 07-02-2010). Pakistan Agricultural Research Council
(PARC), the apex agricultural research organization of the country and KE, have signed a
memorandum of understanding (MoU) to focus on the development of large-scale cultivation of
Jatropha curcas L (Jatropha), which is said to be an environmentally and cost-effective source of
bio-fuel. Under the agreement, PARC and KE would jointly work for the promotion of Jatropha
cultivation to develop bio-fuel culture in Pakistan; to undertake Jatropha cultivation at mass
scale, to investigate the potential of Jatropha, including on marginal and semi-marginal lands
with the consideration that such areas should not have been used for food agriculture in the last
five year period, and educate farmers and industry with the benefits of growing and processing
Jatropha.
KE Canada would invest US$ 150 million during the next five years for cultivation and
production of Jatropha as a source of bio-fuel. Feasibility reports of Cholistan and Thar areas
have been conducted and found ideal locations for cultivation of Jatropha. It is said by KE and
PARC that the areas identified are mostly not being used for food agriculture. However most of
these areas come under rain fed category and local people cultivate these lands, which are
considered as waste lands, during rainy seasons with subsistent crops.
25
It is to be noted that large scale agro-fuel schemes such as jojoba or Jatropha plantations were
not as successful as promised. Myths associated with Jatropha that it requires waste land, low
quality and low quantity water to give good production has proven wrong in many cases. Like
other crops Jatropha flourish on good quality prime soils and require good quality water like
other tree crops. Projects like large scale plantation of oil bearing plants have no direct benefit to
the local communities as they seldom get any fodder for their livestock, also engagement of large
land areas proved to be a problem for livestock keepers to graze their animals.
2.3- Lack of Transparency about land deal tracking information:
Democracy has always been in very fragile and infancy stage in Pakistan, due to a series of
martial law regimes now and then in the country, during which democratic institutions and
judiciary could not take firm roots in the country’s governance. Similarly the media and civil
society institutions could also not become strong. A traditional culture and bureaucratic legacy of
“top secret” and “classified” information always had been a big hurdle in accessing reliable and
authentic information. Access to official information about policies, programmes and projects
always remained a challenge for media and civil society. Due to sensitive nature of this issue of
large scale land acquisitions and threat of public backlash, government would never incline to
provide accurate information about the land deals. The main source of information is media,
which has to dig information from the circulating rumors and conspiracy stories about corruption
in government offices.
There is a flux of officially unconfirmed reports of large land deals. However monitoring of this
phenomena is difficult, as fearful from media backlash, the government is not giving any formal
information on land deals to media or civil society and in state of denial. However through
published report in national and international media, one can have a best guess that the
government has put aside 1 to 7 million acres for CAF. When SCOPE inquired from Mr. Salim
Mandviwala, Minister of State for Investment, about the offering of vacant state lands for CAF
under the investment policy, he declined and said that foreign companies are only negotiating
with the private owners. He also turned down the civil society’s concerns about the food security
and told that the companies will not be allowed to export food grains such as wheat, which is
staple food in Pakistan. The federal minister of investment has also clarified to the parliament
that no such deals are underway; however the officials of the same ministry were quoted by the
international news agencies that investment groups from Saudi Arabia and UAE are engaged in
negotiation for lease of 0.5 million acres land.
Recently press reports surfaced that the government planned to offer about 700,000 acres of land
to potential investors probably from Saudi Arabia and the United Arab Emirates (UAE). At this
moment it is not clear what methodology will be used for the acquisition of land. Will it just
involve state land or include private land as well?.
CAF is still in the initial stages of policy formation and secret land deals. Although some
officials and ministers have given outlines of the policy at different occasions but due to fear of
public outcry and political backlash, government is not clearly announcing its position. We have
yet to see full scale of implementation at large scale. However there are some examples of
26
scattered farming projects in the country which were initiated well before this issue came in
public eye in 2000.
Reportedly, it was discussed during the last years of previous government of General Parvez
Musharraf’s (1999-2008) with the option of leasing land to the Chinese and Arab states. Beijing
had proposed that it be leased 2,000 acres of land for a period of 10 to 15 years with the
agreement that China would make technological and financial investments in the land, invest in
latest seed varieties and other products and leave the new infrastructure to the state or the owners
after the termination of the contract.
Further changes were recommended by people in the government, suggesting that the investors
sign agreements with individual owners guaranteeing their continued ownership with the
additional advantage of an annual share in the profits. This would be in addition to providing
them with the existing level of income at the time. While the negotiations with China the present
government seems to have moved to other potential clients like Saudi Arabia and the UAE..
There are news that the government leasing state lands in Cholistan (A desert area in the Punjab
Province which is centre of “land grabbing” by retired Army personnel and foreigners, despite
severe resistance by the local people and civil society) and Balochistan to foreign contractors.
There are also unconfirmed reports that the government is helping private companies from the
Saudi Arab and UAE to acquire land from private owners to grow vegetables and other crops,
which would be exported to their own countries. It was suggested that the government could
provide some sort of tax holiday and have special security units protect the leased/sold land.
Getting this clue the civil society and media have raised questions on such suggestions. First,
why would the government provide any financial concessions to these investors, especially if it
plans to make money? It doesn’t make any sense, especially when they will take away the
produce to their own countries. Second, why would the government need to have security
contingents if there is no genuine claims over the land or if the entire arrangement is reached
cordially? Or is it that land would be taken forcibly from at least some people, which would
make both government and the contracting countries anxious about retaliation?
2.4.Powerful players:
There is a basic problem with leasing or selling land to Middle Eastern or Gulf States i.e. these
countries already have stakes in Pakistan’s real estate. For example, for years large tracts of land
in Cholistan have been earmarked for different rulers from the Gulf, who use the land as hunting
grounds and have built huge palaces in the area. These rulers are said to have developed their
powerful influence in Pakistani bureaucracy and ruling elite and they would exert their influence
with greater involvement in Pakistan’s matters related to land. In this scenario the tenants and
landless labourers have absolutely no chance to continue their meager livelihood. The nomad
pastoral people and indigenous population of Cholistan are already marginalized due to this great
land grab.
27
As supporters and donors, the Gulf States and Saudi Arabia have the maximum influence and
leverage in internal political matters of Pakistan, as was seen recently when King Abdullah
intervened in the political disputes between General Pervez Musharraf and Nawaz Sharif, when
former arrested later after military coup and booked him in a plane hijacking case, which has a
death penalty in Pakistan. The capital and political influence brought in by these rulers creates
local-level partnerships as well, many of which can be seen in south Punjab.
With a weak governance system, and away from public eye, secret negotiations may harm the
interests of smaller or mid-level farmers who will have to sell their lands on throwaway prices as
they cannot stand the power of land grabbers. The politically influential landowners would not
only get better arrangements but also become partners in such deals. This would also include the
numerous retired military officers who have been allotted lands in and around Cholistan. Not
familiar with farming and probably not making a lot of money at the moment, these individuals
would be too happy with such an arrangement.
The big land lords and feudal are very happy with this situation, which, in any case, will
capitalize on available resources and use their contacts with rich buyers to maximize profits from
their land by leasing it to them, so that they will no more to depend upon the tenants.
It is not difficult to judge. Industrial livestock and crop agriculture has been developed with a
narrow focus on increased production. The corporate research establishment in Pakistan that
underpins modern industrial agriculture has until recently paid little heed to the long-term and
remote consequences of the new systems of farming. Industrial agriculture impacts the
environment in many ways. It uses huge amounts of water, energy, and chemicals, often with
little regard to long-term adverse effects.
2.5- The Government’s point of view about CAF:
Government in the public and media does not look very confident about the CAF issue as it does
not expect a wide public support. Land acquisition is always been a very sensitive and touchy
subject in Pakistan’s social and political background. Several peasant and small farmers
communities have been protesting against massive scale organized land grabbing in provinces of
Sindh and Baluchistan by feudal, builders mafia and retired army officers. On the question of
what kind of land will be offered for land acquisition, the government always gives this
“cautious” line that the government will only lease or sell state owned land (vacant land) for the
purpose of corporate farming. However nobody in Pakistan is ready to buy this because it is
obvious that no investor would like to puts his/her money on wastelands with least fertility and
limited supply of water, which is the case with the vacant state lands. This suspicion and
uncertainty is the main reason of resistance against CAF in Pakistan.
Since land tenure is not organized on modern scientific bases therefore many small farmers and
tenants are afraid of forced eviction and not getting any compensation or less compensation than
the market prices. The landless labourers are worried about their employment as they are not
expected to be absorbed in highly mechanized and modern farming systems to be introduced
under CAF. The government on the other hand maintains that small farmers need not fear, as
28
nobody could deprive them of their lands. Only the willing farmers would sell their land to
foreign or local investors.
The ministers and policy makers are trying to build public opinion in favor of CAF by saying
that small farmers will not be affected and that developing successful CAF projects will create
replicable and viable production models, which will cause trickle-down effect on rest of the
agricultural sector in the country. They say that CAF policy could obviously be considered, since
the whole debate is still being conducted on a conceptual level, possibilities of adjustments
should not be ruled out. It is up to farmers to come up with as many suggestions as possible to
refine the whole concept. The government is always there to protect farmers and peasants
interest. But on the other hand, the government is luring the foreign investors with all out
benefits and attractions, such as tax holidays, duty exemptions on imports, and most interestingly
a special security force of 100,000 personnel to protect the investors, their property and their
interests.
In the support of CAF, the government officials argue that the opening up of the local market for
the investor is necessary to make Pakistani agriculture more efficient in an era of globalization.
''We have to make our agricultural sector highly efficient and competitive in order to meet the
future food requirements at home and also to be able to compete in the international trade arena,''
an official said in the World Trade Organisation (WTO) wing of the Ministry of Commerce. The
government had already announced a five-fold hike in agriculture spending over the next 10
years, but officials said this had to be supplemented by investment and know-how from private
business.
The Government experts described CAF as the need of the hour as without induction of new
technology in the country's stagnant agriculture, neither the burgeoning food demands can be
met nor can the country compete in the world markets. Federal minister of investment, Mr.
Waqar Ahmad Khan said that in Pakistan 28 million acres of barren land, with the help of
foreign investment, can be converted into productive cultivated land, which will provide the job
opportunities to thousands of people as well as increase the country’s GDP. He further said that
the government would provide exemption from taxes and different levies to the foreign investors,
that the government would install 100,000 strong security forces to ensure secure environment at
farm land. He said that in the new investment policy, foreign investors interested in Pakistani
farmland are bound to make Pakistani farmers as 50% partners. He said that the agricultural productivity can get a major boost if sufficient companies are facilitated to start business by injecting capital and introducing modern management and technologies. Our people have displayed
great potential in adapting to smart business practices, he further added.
2.6- Civil society opposition:
Farmers, particularly small farmers and peasants, do not have strong institutional representation
in the country; however a vibrant but small civil society section represents small farmers and
peasants. This section has been severely criticizing the CAF in Pakistan.
29
The Sustainable Agriculture Action Group (SAAG), an umbrella organization of 15 civil society
bodies working for the rights of farmers, has expressed concerns over the introduction of CAF in
the country. SAAG maintained that it is not only a shock to small farmers but also for the civil
society organizations. According to CAF policy, announced by the government, is against land
reform and labour laws of Pakistan. There will be no upper land ceiling and no labor laws will be
observed on large corporate farms, which is against human rights. No duty will be charged on the
agricultural equipment imported by the agricultural firms. It will give free hand opportunity to
transnational corporations (TNCs) and feudal lords to take full advantage and make as much
profit as they can, while denying right to food or food security to the poor peasants.
SAAG said that they had always voiced the rights of vulnerable small farmers, who were being
pushed to the wall by the government. In the past, there had been two attempts of land reforms
by the government in order to curtail the power of feudal lords and land holders, it added but this
government has reverted previous land reforms efforts by allowing any individual or firm to own
as much land as one can.
According to SAAG, about 93 % of the agricultural community comprise of small farmers, who
are already in a miserable state because of the policies of the government which are promoting
corporate farming in the perspective of multilateral trading system in the arena of WTO. Another
civil society organization, the Punjab Communist Mazdoor Kissan Party (PCMKF) has strongly
condemned the proposal to introduce agriculture corporate farming (CAF), arguing that it will
strengthen the U.S.A multi-national corporation. The PCMKP claimed that the proposed CAF
system would provide opportunities to the US multi-national corporations to strengthen their grip
on the socio-political environment of the country. Besides, it would also change the status of
tenants from agriculture labor to "slavery", adding that it would also help the feudal lords to
"corporatize" their big land-holdings, depriving the tenants of their rights under the 1997
Tenancy Act. They further said that the CAF negated the concept of agriculture reforms, added
that the introduction of mechanized farming would increase unemployment on the one hand and
reduce the fertility of lands on the other.
Abdul Khaliq in an article titled ‘Pakistan offers one million acres of agriculture land to Arab
monarchs, corporate farming to lock up scarce water resources in Agri-belts. The writer said that
the land deals weren’t about land, but water. For with the land comes the right to withdraw the
water linked to it. And, because this water has no price, the investors can take it over virtually for
free. Their lusty rushing to lock up scarce water resources in agricultural belts is nonetheless disturbing, he asserts further.
Civil society is particularly critical on the absence of labor laws in the CAF; government has
assured investors that labor laws will not be applicable to Corporate Agriculture Companies,
which is a clear violation of human and labor rights. Chairman standing committee of Federation
of Chambers of Commerce (FPCCI) on the report of Emirates Investment Group’s acquiring
farmland in Pakistan to export more food to the Gulf region, argued that instead of selling land it
would be better to sell its yield to the people in the Gulf Region. Apparently the decision is
a continuation of privatization process, similar to selling shares of public corporations, banks and
30
other state enterprises in Pakistan to attract foreign investment, but if it is seen in depth and
historical perspective this can have serious repercussions in the future.
According to one analyst selling six million acres of farmland mean in effect that multi-national
colonists are being invited back to the country. It can create security risk for the country and the
decision to offer farmland to foreigners lacks vision and foresight, especially since the only draw
is short-term gains at the cost of selling the homeland. The decision is a continuation of privatization process similar to selling shares of state-owned institutions to attract direct foreign investments but if seen in depth and historical perspective, selling six million acres of farmland means
once again inviting East India Company (the British Indian Company which set a business in
India and gradually occupied the country in 17th century) to our country.
Ms. Najma Sadeque a renowned civil society activist, responding a question, whether she knows about foreign
companies are buying large tracts of land in Pakistan said that it is happening but the government is not providing
any data, apart from the media or recognized international organizations that are keeping track and leaked media
information. She said that her organization Shirkat Gah is against land grabbing in disguise of CAF, as it has been
proved to be environmentally, economically, climatically, biologically, socially, and financially damaging wherever in
the world it has been adopted, is unnecessary and wasteful, and its consequences tend to be irreparable.
She said that CAF is large-scale, heavily mechanized petroleum-based industrial farming carried out with highly toxic
chemical pesticides and fertilizers. It ignores biological cycles and natural inputs, and destroys essential
microorganisms in the soil and their processes essential for beneficial plant growth. Because it degrades the living
soil and environment, and is inherently unsustainable, its forerunner feudal farming has already displaced small
farmers and peasants;
She said now further displacement is to make room for CAF companies, or to forcibly apply CAF on semi-desert and
pasturelands which are unfit for farming, through irrigation. CAF practitioners later abandon the land when it is no
longer productive because essential microorganism life have been killed off or land salinized, and peasants who were
deprived of land including community lands in the first place, are afterwards not able to make use of the land either
because it is rendered dead.
Regarding a question about the best alternative policy of CAF in the country, she recommended to return to the
natural, sustainable, cyclical, biologically based farming systems that are proven and have been practiced for 10,000
years or more since settled agriculture was developed. It is the only way in which to restore the land as to normalcy
much as possible, along with totally giving up chemical inputs and intensive methods; and the UN has categorically
stated that unless this is done, global devastation awaits agriculture. Petroleum-based farming is no longer
sustainable and only hastens environmental death. She said the solution has always existed, is easily applicable, and
was always known. But agricultural policy has always been driven by vested, hegemonic, corporate and profiteering
interests both at home and abroad. In Pakistan feudalism which dominates parliament and all power structures, and
extreme corruption, have seriously damaged our prospects.
Prominent farmers right activist G.M.Ghanjera commented about CAF said this plan would harmful for small scale
farmers and peasantry because 1-they would be excluded from their lands and livelihoods 2-issue of food security
would emerge 3-Multinational companies would play role as east India company,4-state security would be at high
risk.5-small farmers would become more vulnerable.6- It would be new colonial system and new feudal system.
Regarding alternative to CAF he recommended land reform and abolishing of existing feudal system.
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Irfan Mufti, Programme Manager South Asia Partnership Pakistan (SAP-PK) said that they totally reject CAF as it is
against the interest on local farmers. He said corporatization and industrialization of agriculture itself is not a bad idea
to develop agriculture sector in the country, but it should be done with the real participation of local farmers in
Pakistan. The way the government is handling this matter is totally wrong they should made local farmers as partners
and give titles to peasants and then provide them financial services by making them partners with the investors. He
said that SAP-PK has agitated against CAF and organized rallies and seminars. He said that media has reported
shadowy land deals in settled prime irrigated areas of Khanewal and Rajanpur in Punjab where foreign investors
were invited by the government but later we were told that lands are only considered to be reserved in Cholistan (a
desert area in South East of Punjab province) area. He said that civil society should protect any policy which is to
displace local farmers and threaten their livelihood and food security
Another land right activist Shahzado Malik, from Advocacy, Research, Training & Services (ARTS) Foundation
commenting on CAF informed that foreign companies are buying large tracts of land in Pakistan, According to their
knowledge Aldahra Agricultural Company (L.L.C) UAE has purchased more than 9,000 acres land in different
districts of Sindh i.e. Sanghar, Ghotki, Khairpur Mir's, Mirpurkhas and Karachi to grow different imported verities of
grass on these farms to export it to UAE for their animals feeding purpose. His foundation considers CAF as a
against danger sign for small farmers for the reason of affecting food security, livelihood and their livestock. They
planned to launch a campaign to aware masses, media to develop pressure on government to stop selling / leasing
large tracts of land to multinational companies. In this context they have developed a series of activities. He said
CAF is highly harmful for local farmers specially the landless tenants and women tenants. According to their
observation, multinational companies are using machines and growing fodder instead of food items, crops or
orchards for human food consumption.
Another dark side of CAF is freedom from application of labor laws by these multinational companies, which are
employing a very small number of local tenants on very small wages i.e. Rs.3000/month and there is no additional
benefit for them and job security. According to his opinion the land reforms are the best alternatives to attain food
security and tackle the poverty issue. Small pieces of lands to be given to tenants with some seed money to cultivate
the lands, this will bring prosperity for the people and state. There is a great need to raise collective voice through
establishing local, regional, national and international alliances to campaign to develop pressures and lobby with
governments and multinational companies to cope with the situation. There is dire need to aware, educate and bring
to gather civil society on the issue.
2.7- Farmers’ position
Small and large farmers seem to be divided on CAF. While large farmers sensing tremendous
opportunity is offering their lands and sharing as corporate partners, small farmers are skeptical
about CAF, fearing they will be left out in the competition due to lack of modern technology and
finances. The representative of the Punjab Chamber of Agriculture, expressed apprehensions that
the policy by creating monopolies have the risk of exploitation of small landholders by the
multinationals. A farmer from Southern Punjab goes on to proclaim CAF as a recipe for bringing
disaster to small and middle class farmers. He thinks that big landlords have once again
conspired to save their holdings from land redistribution by avoiding possible land reforms in the
future. Now, under CAF they can register private limited companies transfer all of their land in
its name and save it from any future land reforms.
Chairman Agri-Forum Pakistan said that the decision to sell six million acres of farmland can
prove extremely dangerous in the long run. They think that by selling six million acres of land
32
we will introduce new type of feudalism and create relative deprivation in the area which can
spoil the future of next generations, who are already victims of our short-sightedness. Pakistan
should have followed India, where land reforms were implemented immediately after
independence in 1947 and feudalism was buried once and for all and total land was divided
among landless farmers.
According to the farmers there are other options available than present form of CAF, for Pakistan
such as instead of selling the farmland outright, the government can offer to lease it on short
term, like 10 years, and secondly, these lands should be offered to domestic investors first. In this
regard farmers cooperative can be encouraged to come forward and these cooperatives can
establish partnership with the foreign based corporate sector.
Farmers are raising question that what is wrong in offering the same incentives and subsidies to
local farmers who are capable of increasing production and pay back to their own country with
food and cash crops.
A win-win proposal:
Farmers’ cooperatives can be a best alternate to CAF. The best option according to the broader
consensus is that the government should distribute state land among cooperatives of landless
farmers and facilitate them to cultivate the same with proper financial services and subsidies
which it is offering to foreigners. For this arrangement the government should prefer local
investors and banks to partner with these cooperatives of landless farmers so that they can
increase the GDP and per capita income by increasing employment opportunities and food
security. This is the best way to restructure our ailing agricultural system and revolutionize
economy. Finally, government can easily assess the population growth in the country in coming
years. The country would need more and more cultivated area to feed its own population rather
than feeding other nations.
2.8- Small farmers’ position on CAF
Small farmers and peasants will be the main victims of CAF. Civil society activists believe that
corporate farming may also displace subsistence farmers, forcing them out of a livelihood that
has run in families for centuries, and causing massive rural unemployment. This rural
displacement will result in migration from rural areas to crowded urban centers, where the
industrial base has no more capacity to absorb millions of unskilled labors. In a country where
approximately 50 million people struggle to live on less than a dollar a day, CAF would bring a
social, economical catastrophe. The present poor agriculture policies of the government, overall
neglect towards agriculture sector, shooting prices of inputs, lack of water, climate changes, and
plant diseases by virus attacks have already plunged tenants and small farmers into poverty. In
Southern Punjab and Sindh, hundreds of suicides among peasants and small farmers have been
reported, of which main cause is abject poverty and debt burden.
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The situation for small farmers in the Punjab province of Pakistan is very grave. Pakistani
farmer’s movements warned that about 25,000 villages will most likely be displaced due to the
large scale land deals with foreign corporate entities and the situation could get even worse. Over
6 million families work approximately 50 million acres of land in the country, and 94% of these
people are considered subsistence farmers, each having less than an average of 12.5 acres. In
many cases, these are tenants working large private holdings or government land, and they have
been farming this land for Generations (Husain, I. “Pakistan, the Great Land Grab.” DAWN. May 9, 2009).
Subsistence farmers are already leading an insecure poor life in Pakistan. About 80 % of farmers
have less than two hectares of land or are landless. Small farmers are already under a tight
financial squeeze due to ever-growing inflation and rise in prices of farm inputs, dwindling
government subsidies and government price controls. Those who grow crops that will be forced
into competition with a highly organized and capital-intensive corporate sector may find
themselves unable to stay in business. Although they are not well organized and prominent in
Pakistan’s socio-political spectrum, but they have been raising their voice against the possible
onslaught of CAF. In a seminar the civil society activists said that in Pakistan 93 % of the rural
population belongs to small growers. Over and above, the landless tillers were already living in
miserable condition due to the official agriculture policies formulated by the elite class of
agriculturists. Small farmers would have no option but to sell their meager land-holdings at
throw away prices to the corporate firms. The decision to lease out state lands to powerful TNCs
would also result in a massive eviction of indigenous communities living in Balochistan,
Cholistan, Greater Thal and riverine areas of the country. According to a farmer once foreign
investors throng the market, small farmers would not be able to compete with them. Cost of
inputs and machinery would go down for them (CAF) because of bulk purchases, putting small
farmers at a comparative disadvantaged situation.
Sindh Province and CAF:
Sindh province is known as power base of big land lords and feudal, who dominates country’s
political picture. Land holdings of some land lords are so big that it requires 2-3 days to cross
these lands by driving a vehicle. These land lords have been dodging land distribution according
to the previous land reforms by technical method, in which they distributed land either to their
relatives or servants on fake title papers, and thus kept their estates intact.
The land reforms of 1972, like the land reforms of 1959, also failed to affect the power of big
landlords significantly. Most of the 1972 reforms were an extension of the 1959 reforms; perhaps
the only difference was the lowering of the land ceiling. The first attempt at land reforms was
undertaken by the military regime of Ayub Khan back in 1959. This attempt aimed to fix the
ceiling on the private ownership of land at 500 acres irrigated and 1,000 acres un-irrigated. Since
the ceiling on ownership was fixed in terms of individual rather than family holdings, it enabled
most of the big landlords to circumvent the ceiling by transferring their excess land to various
real and fictitious family members. Moreover, a number of additional provisions in the 1959 land
reforms allowed landlords to retain land far in excess of the ceiling even on an individual basis.
34
For example, a provision that enabled landlords to retain land above the ceiling was that an
additional area was allowed for orchards (Syed Mohammad Ali, Daily times 08-06-2010).
Therefore, most big landlords were able to circumvent the ceiling and retain their land without
declaring any land in excess of the ceiling. Those who actually declared excess land were superlarge landlords who could not conceal their entire holding. It is interesting however that even out
of the land declared in excess of the ceiling, only 35 % could be resumed by the government.
Also, of the land resumed, as much as 57 % was uncultivated land. Most of this area needed
considerable land improvement before it could be cultivated. Yet the government paid millions
of rupees to the former owners as ‘compensation’ for surrendering land that was producing
nothing. It should come as no surprise that the land reforms of 1959 failed to affect the economic
power of the landed elite in Pakistan.
The 1972 land reforms shared with the 1959 land reforms the essential feature of specifying the
ceiling in terms of individual rather than family holdings. But the ceiling in the 1972 land
reforms was lower, being 150 acres for irrigated and 300 acres for un-irrigated lands.
Development economists have calculated that if an owner also took advantage of the provision
for intra-family transfers, the ceiling came to 932 acres irrigated in Punjab and 1,120 acres in
Sindh. Of the land that was declared above the ceiling by landlords after they had made use of
the provisions for circumventing the ceiling, only 42 percent was resumed in Punjab and 59
percent in Sindh. Most of the resumed land was again uncultivable.
The land reforms of 1972, like the land reforms of 1959, also failed to affect the power of big
landlords significantly. Most of the 1972 reforms were an extension of the 1959 reforms; perhaps
the only difference was the lowering of the land ceiling. The dull progress of the 1972 reforms
led to an attempt to launch further measures in 1977, but this third attempt was in fact aborted by
the government’s overthrow in a military coup soon after.
Sindh province has specific conditions and political set up as compare to Punjab the largest
province. Sindh is characterized by large land holdings, as compare to small ones in Punjab, and
strong domination of land lords in the politics of Pakistan.
Corporate farming is to become a reality in Sindh province. The civil society and media people
believe that CAF is not really a federal agricultural policy, although the centre has been
subscribing to it, but actually it is the outcome of the initiative taken by some land lords who are
ministers in the federal and the Sindh government. Following the loud demand for land reforms
in Sindh which has a large number of mega-farms, Senator Nisar Memon, a politician and an
aide of previous ruler, General Musharraf, has said that in the modern world the answer to the
massive landless farming was not disrupting the land of the big land owners but corporate
farming was regarded as a very modern agricultural system practiced around the world, from
America to Australia, and from Canada to New Zealand to maximize production, ensure quality
output and optimize the yield per acre.
Analyst says that what is proposed in Sindh is not the real corporate farming either in size,
composition, ownership and other essential features. CAF will not help landless farmers, they
35
will not be made shareholders in the corporate farms in the manner the public can become
shareholders in the companies listed on the stock exchange. The land is a sensitive and tricky
issue in Sindh. At least 50,000 acres of land pledged for CAF, is either comes under forest area
or under state ownership. The problem is that much of the forest lands are under illegal
occupation by big and powerful land lords and that has to be cleared before they become
available for use in CAF.
The landless farmers fear that under possible land reforms or land redistribution schemes,
announced by the government, at different times they will now, not are able to get any lands
which will now be reserved for companies under the CAF. On the other hand it is learnt that the
initial land allotment period will only be five years, after that land will be re-leased for further 5
more years. So it is expected that the corporate farmers will not make major investments on the
land as their holding being valid only for five years after which, possibly a new agriculture
minister of new government might have a new policy.
Corporate farming needs very large investment and equipment and development of the irrigation
system on very modern lines and the farmers may not be ready to make such investment on the
basis of holding the land for five years, and possibly five years more. The sources in the Sindh
cabinet, which approved the CAF, informed that corporate farming would be treated more like
industry and similar compatible fiscal and financial concessions would be given to CAF
companies. The fact is if the banks are not sure the corporate farmers will make adequate
investment on proper equipment and hold the farm for long enough, they may not come up with
the requested loans.
Secondly, while the landless or small farmers may not object to the fiscal concessions given to
the corporate farmers, they may demand the same kind of financial facilities which the corporate
farmers enjoy from banks particularly in respect of interest rates. And normally the small farmers
should also have been enabled to become a part of corporate farming by using their land as a part
of the enterprise and sharing the profits. This would enable them to get an income from corporate
farming if operated honestly while the famer himself becomes a worker in the same farms or
elsewhere, doubling his income.
That kind of a facility is not envisaged. As under the new scheme the small farmer will live in his
own world, while the corporate farmer will make profits by his large farms. So he will be better
off under the CAF, while the landless farmers will wait for state lands to be allotted to him to be
able to get water in these days of acute water shortage and drought.
2.9- Some examples of corporate farming:
Corporate farming exists in Pakistan but on a very limited scale. It is not significantly large at
current scale to affect small farmers. A spectacular success of corporate farming in Pakistan is
the Mitchells fruit farm in Renala Khurd, Punjab. Efforts to replicate that have in cattle farming
even with foreign capital joint venture has hardly been a success and that is a reflection of the
agricultural failure of Pakistan in the non-cereal and cotton sectors.
36
In Districts of Jhang and Chinute (Punjab), Shakargang Sugar Mills is producing sugarcane on
20,000 acres area which has been taken by small farmers on contract for 10 years. Similarly in
Sanghar district of Sindh, a Korean company is cultivating Lucerne on 2000 acres and in those
two cases companies are giving lucrative terms to farmers which are better than the locally
prevailed system of contract farming.
The effort to promote corporate farming in fishing has had no better results. But the reformers
who feel that they can fend off the demand for land reforms in Sindh by moving towards
corporate farming are not taking into account the hardships of the landless farmers and until the
rules for the corporate farming are framed and a more compact scheme is presented, it will be
difficult to pronounce the last word on the merit of the scheme in Sindh.
2.10- Large farmers’ position
Large farmers have been publically supporting CAF, because they see a lot of opportunities in it.
The biggest advantage they see is that after CAF is introduced, they will make collusion with the
foreign investors by offering their lands on good prices and will enter in partnership with them
by providing man power and local facilitation. However the biggest advantage they are sensing
is suppressing of land reforms slogans reflected by demand by peasants and civil society. There
is not land ceiling limit in CAF, which will provide a legal protection actually to big land lords
and they will form their own companies or join foreign companies and escape any possible
division of their land under any land reforms attempt in future.
A member of the Farmers Associates Pakistan (FAP) and one of the architects of the concept of
corporate farming holds that agriculture in Pakistan lacks capital, and corporate farming is an
attempt to attract required capital in the agriculture sector. He said that selling an agricultural
land on good price is harder than selling a house because agriculture in Pakistan is backward and
suffers from over-employment. These factors have turned it into a non-profitable business. In the
western world, only two to 3% of the population is normally involved in agriculture, but in
Pakistan, around 70 % of the country's population is directly or indirectly involved in it and is
still unable to feed the remaining 30 %. It is because the sector is inefficient due to a lack of
funds. Supporting CAF he said that corporate farming would attract investment, make the system
efficient and end stagnation in this sector.
FAP believes that CAF presents both opportunities and challenges, and the FAP supports
corporate farming but with word of caution. They think that the idea is the need of current time.
The agriculture sector needs money that can only come from the private sector, but they also say
that it should not certainly not at the cost of poor farmers livelihood who constitute a majority of
Pakistanis.
2.11- Water shortages
37
Irrigation water availability for agriculture is a decisive factor. The repercussions of corporate
farming can be risky for Pakistan in the context of our water scarcity. Given that some 70 % of
all freshwater withdrawn for human use goes into agriculture, it may be prudent for desert states
of Arabian peninsula, who have spent their groundwater resources, and even fossil water, to
invest in agriculture in other countries so that their existing water sources are not placed under
increased pressure. That’s why some activists have pointed out that it is not the land they are
buying (in other countries) but it’s actually water they are buying wrapped with land. The
problem of course is that countries like Pakistan, which are keen to sell them the natural
resources required to do so, are also facing acute water scarcity problems, and placing the burden
of providing water to corporate farms will only make matters worse. The country is going
through water shortage crises which are affecting agriculture. It is said that lands that will be
engaged for CAF, are located in barren areas, without irrigation infrastructure. If this is the case,
then obviously these farms will be irrigated by deep aquifer of groundwater.
Government officials claim that the land being offered to the Arab nations is not under
cultivation, therefore there is no threat of displacement of indigenous communities, or erosion of
local food sovereignty. However, the environmental hazards posed due to deforestation, land
degradation and increased water consumption also need to be taken into account before making
such confident claims. The other important fact is that most of the so called vacant lands are
actually rangelands which are extensively used for livestock grazing in all over the country.
Pastoral communities will be silent affectees of CAF, because mostly they are away from the
social and political discourse and leading a life which is totally dependent of land resources.
The environmental impact of CAF is yet to be assessed. In Pakistan environmental impact
assessment (EIA) is mandatory for major project. Large scale farming projects have serious
environmental consequences such as extensive drafting of groundwater, which can deprive water
rights of subsistent farms around large corporate farms. It is not out of possibility that corporate
farmers will be using genetically modified organisms (GMO) based seed along with pesticides
and fertilizers for maximum production. It is unlikely that the government which is providing
blanket facilities and attractive investment terms to corporate farmers will pay any heed to
environmental issues.
The environmental costs of agriculture are mounting. Irrigation systems are pumping water from
reservoirs faster than they are being recharged (M.Ramzan Ali, Political economy of corporate farming).
Herbicides and insecticides are accumulating in ground and surface waters. Chemical fertilizers
are running off the fields into water systems where they encourage damaging blooms of microorganisms. Heaps of waste and noxious odors are the characteristic of poultry and livestock
operations. Many of the negative effects of industrial agriculture are remote from fields and
farms. The adverse effects are showing up within agricultural production systems for example,
the rapidly developing resistance among pests is rendering our stock of herbicides and
insecticides increasingly ineffective. The Indus River is becoming dry and the entire provincial
politics of Sindh revolves around the water issue. Large tracts of fertile lands are now lying
barren because of absence of water. The tension around water between Punjab and Sindh has
gone to extreme bitter level.
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Estimating the economic costs of industrial agriculture is an immense and difficult task. A full
accounting would include not only the benefits of relatively cheap prices consumers pay for
food, the dividends paid to the share holders of fertilizer and pesticide manufacturers, and the
dollars earned by exporting goods abroad, but also the offsetting costs of environmental pollution
and degradation. Such costs are difficult to assess for a number of reasons. In some instances,
such as water pollution and global warming, agriculture is only one of several contributors.
More research is needed to determine the extent of the health and environmental damage done by
such compounds and the relative contribution of agriculture and other sectors and activities.
Among the many environmental costs that need to be considered in a full cost accounting of
industrial agriculture are:
I - Damage to fisheries from oxygen-depleting micro-organisms fed by fertilizer runoff
ii - Cleanup of surface and groundwater polluted with animal waste
iii- Increased health risks borne by agricultural workers and farmers exposed to pesticides
In addition there are enormous indirect costs implicit in the high-energy requirements of modern
agriculture. Agriculture requires energy at many points: fuel to run huge combines and
harvesters; energy to produce and transport pesticides and fertilizers; and fuel to refrigerate and
transport perishable produce cross-country and around the world. The use of fossil fuels
contributes to ozone pollution and global warming, which could exact a high price through
increased violent weather events and rising oceans.
Among the possible benefits of industrial agriculture have been cheap and plentiful food; large,
profitable chemical and agricultural industries; and increased export markets. All this is very
attractive to the profit-hungry corporate elite, but very lethal for the poor workers and farmers of
the developing world. Transnational companies claim that there is substantial increase in
industrial agricultural production all over the world and all this is being attributed merely to the
new trend of corporate farming. This is the half-truth.
2.13- Food security
Food security is the largest concern in the CAF issue in Pakistan. The country which once used
to meet the food demand of its entire population by growing grain is now increasingly dependent
upon the foreign countries to import food grains. Its role of a grain exporter is changed as grain
importer in result of poor policies and market onslaught. It is an irony that Pakistan considered
itself as an agricultural country, is today importing wheat and soybeans rather than exporting
them. For last 4-5 years country has experienced worst shortages of wheat and sugar, due to
many reasons including smuggling and illegal stocking. Poor policies towards agriculture and
discrimination attitude towards small farmers are another menace. Farmers were literally
discouraged to grow wheat as they good not sell it to announced support price by the
government.
39
Poor governance, lack of official attention towards making agricultural resources sustainable,
limited financing and insurance facilities for small farmers and absence of secure tenure rights
are named as main reasons for degradation of agriculture sector in the country. However, food
rights campaigners expressed the fear that profit-driven agribusiness transnational companies
(TNCs) would use Pakistan as a base for exporting cash crops which would replace staple cereals
on the country's farms. In an general environment of poor governance in the country, it is less
likely that government will be determined to regulate the corporate sector for their wrong doings
with the natural resources.
The civil society activists say that the government is giving away the control over food to a
bunch of multinational companies, said Islamabad-based, The Network for Consumer Protection.
Agriculture is a mainstay of the economy, contributing 25 % of the Gross Domestic Product
(GDP) and 60 % of the total annual export earnings of some eight billion U.S. dollars. More than
70 % of Pakistan's labor force is engaged in farming and related economic activities. The critics
noted that the move to allow foreign business into farming came at a time when the government
was cutting down support to farmers. According to Ayesha Iftikhar who works in food rights
issues, the government had already slashed farm subsidies in keeping with its international trade
commitments.
Food rights activists believe that plant variety protection by the MNCs through patented seeds
coupled with authorization of corporate farms will transform the country's agriculture, from
subsistence-based to corporate and export-oriented. These two complimentary policies are clear
proof of the government's tilt towards the multinational companies, which consider the
agricultural markets of South Asia as the most lucrative in the world
2.14- Land reforms and Revival of Feudalism
Land reforms and land concentration are the most contentious subjects in the backdrop of
opposition of CAF by the civil society and the peasants’ organizations. Land reforms remain as
an unfinished agenda for long time, a decades old promise which is to be fulfilled.
The founder of Pakistan, Quaid-i-Azam Mohammad Ali Jinnah had, even before the
establishment of Pakistan; vowed to eliminate feudalism from the society. While delivering his
presidential address at the 30th session of All India Muslim League at Delhi on 20th April 1943,
he warned the feudal lords in the following words: "Here I should like to give a warning to the
landlords and the capitalists who have flourished at our expense by a system which is so vicious,
which is so wicked and which makes them so selfish that it is difficult to reason with them."Is
this civilization? Is this the aim of Pakistan? Do you visualize that millions have been exploited
and cannot get one meal a day. If this is the idea of Pakistan, I would not have it. If they are wise,
they will have to adjust themselves to the new modern conditions of life. If they don't, God help
them, we shall not help them. (Speeches & Writings of Mr. Jinnah Vol.: I, 7th Edition).
When the present government formed by Pakistan Peoples’ Party took over in 2008, the peasants
and landless masses in Pakistan were hopeful that the party will take immediate steps to
complete the long pending land reforms agenda, set by their leader and former Prime Minister
40
Bhutto, who initiated land reform process in 1972 and 1977 and try to redistribute land among
the poor. However, unfortunately the current government has so far not shown any indication or
even lip service to the cause land reforms. This is because landed elite are at the top positions in
the party and the parliament.
According to a report by Mr. Rauf Klasra, a prominent journalist, the government of Pakistan
plans to introduce 17 sweeping amendments in the Land Reforms Act 1977. The Land Reforms
Act was approved during the late Zulfiqar Ali Bhutto government. An ordinance was submitted
to the then president in 2001 for its immediate promulgation to support CAF and facilitate
investors. The amendments introduced in the new ordinance are unlikely to give any benefit to
the landless class. The ordinance was also presented before the cabinet meeting along with a
summary prepared by the Cabinet Secretariat.
Despite criticism by human right groups and farmers right activists the government was moving
swiftly by formulating and implementing laws to remove all hurdles in giving as much lands to
multinational corporations as much they want without any ceiling mentioned in land reforms act
1977. Majority of the critics of that government termed the foreigner's clause in the ordinance a
new kind of feudalism supported by the government in rural areas where the farmers with fewer
resources will be fully exploited.
They argue that the poor and less resourceful farmers will be ultimately selling their lands and
becoming laborers and daily wagers at the lands owned by these big multinationals. The 2002
ordinance would enable the government to keep the ban on owning of land holding to 100 acres
while the foreigners and foreign companies would be exempted from this clause. In addition to
it, the cabinet secretary has also sought decisions to re-impose limits on individual land holdings
wide effective from the date prescribed by the federal government.
Although this ordinance draft was not approved by the then cabinet, because of the legal issues
associated with on the current status of land reforms, which prevent ownership of land more than
the ceiling limit given in 1977 land reforms. It is also interested to be noted that the Federal
Shariat Court (FSC), a parallel Islamic court, in 1989, in one case gave its verdict against celing
of land under federal and provincial land reforms laws. Therefore one interpretation is that there
is no need of implementing this ordinance because its purpose has already been served by the
FSC.
Proposed Land Reforms amendments:
Following is the full text of the ordinance which was to be promulgated to facilitate CAF.
AN ORDINANCE 2002 ( Further to amend the Land Reforms Act 1977, (II of 1977) and to re-enact certain
provisions thereof in conformity with the injunctions of Islam)
The ordinance may be called the Land Reforms (Amendment) Ordinance 2002.
41
2- It shall come into force on such date as the federal government may, by notification in the official gazette,
specify.
Amendment of Section 2, Act-II of 1977. In the land revenue act, 1977, herein after referred to as the said act, in
section 2 clause 7 after the words 'does not include' the words 'religious waqf or a religious trust, an agricultural
farming company incorporated under the companies 1984 (XLVII of 1984) and duly listed on the stock exchange,'
shall be inserted.
Amendments of section 3, Act II of 1977. In the said act, in section 3 in the provision for the full stop at the end and
column shall be substituted and thereafter the following new provision shall be added namely:
"provincial further that after coming into force of land reforms ordinance 2002 nothing in this section shall apply to
such land in excess of prescribed limits as is acquired through inheritance from any source"
4 Substitution of section 4, act ii of 1977. In the said act, for section following shall be substituted namely:
"4- Choice and exchange of land. Save as otherwise provided in this act a person who owns or possess land
including his share in Shamlat if any in excess to his entitlement under act shall out of such land, select in compact
blocks as large as possible, the area which he is entitled to retain.
ii. A person who is required to surrender land under this act before doing so, may if allowed by an officer of the
district concerned who is authorised by a commission in this behalf, exchange the whole or any part of such land
with land owned or possessed within the same district by any member of his family for the purpose of consolidation
on the basis of quality of produce index value of the land proposed to be exchanged.
iii- no appeal shall lie in any court or before any authority whatsoever, against an exchange of land allowed or
disallowed under clause-ii.
Provided that the provision of this section shall not apply to the land of a person in excess of his entitlement under
section 3, which has been voluntarily acquired after coming into force of land reforms (amendments) Ordinance
2002.
Explanation: for the purpose of clause ii "family shall mean father, mother, brothers, sisters, husband, wife or wives,
sons and daughters"
5- Substitution of section 5, Act ii of 1977. In the said act for section 5, the following shall be substituted namely:
"partitioning of joint holdings and undivided shamlat- Notwithstanding anything contained in any other law for the
time being in force, a joint holding or an undivided shamlat shall for the purpose of this act be subject to partition to
the extent of the share in such joint holding or such undivided shamlat".
6- Substitution of section 6, act II of 1977. In the said act, for section 6, the following shall be substituted namely:
"6- Certain transfers void-(1) The transfer of any land, made in any manner whatsoever in respect of any area, on or
after coming into force of the land reforms, (amendment) ordinance 2002 by any person holding immediately before
that date an area exceeding his entitlement under section 3, shall be void and the land so transferred or encumbered
shall be deemed to have been owned or possessed as the case may be by the person by whom it was owned or
possessed immediately before that date.
2- Nothing in sub section(1) shall apply to any transfer of land or the creation of any right or interest in or
encumbrance of any land left with a person after he has surrendered the land in excess to his entitlement under this
Act".
7- Amendment of section 7, Act II of 1977. In the said act, in section 7 for subsection (5) the following shall be
42
substituted namely"(5) where a person fails to make a declaration under this section, an officer of the district concerned who is
authorised by a commission in this behalf shall of his own motion or otherwise, and after calling for such
information and according such evidence as he may deem necessary, determine the land owned or possessed by such
person in excess to his entitlement under section 3 and shall make an order to this effect. After an order has been so
made, the excess land shall, subject to the other provisions of the Act, vest in government with effect from the date
of its having exceeded his entitlement and it shall be surrendered by him to the Land Commission of the province
concerned, and this will be without prejudice to any other liability incurred under any provision of this act.
8- Substitution of section 8, Act II of 1977. In the said act for section 8, the following shall be substituted namely:
"8 Certain restrictions on cutting of trees and dismantling or removal of permanent installations or structure: A
person who owns or possesses land in excess to his entitlement under section 3, or nay one on his behalf shall not
with effect from coming into force of land Reforms (Amendment) Ordinance 2002, cut or remove any tree or
dismantle , demolish, damage or remove, any permanent installation or structure including buildings and tubewells
on land, owned or possessed by him until the land in excess to his entitlement has been surrendered by him under
this Act".
9- Substitution of section 9, Act II of 1977. In the said act, for section 9, the following shall be substituted namely:
"9- Vesting in government of excess land (1) Land in excess of the area possible for retention by a person under
section 3 shall be surrendered by him to the land commission of the province where such land is situated and it shall
vest in government free of any encumbrance or charge.
Provided that rights and obligations of any person in respect of the standing crops on land surrendered under this
section retains unaffected until the standing crops are removed.
(2) Land determined under sub section (5) of the section (7) to be in excess to the entitlement of a person shall vest
forthwith in government free of any encumbrance or charge and the defaulters shall be deemed to have forfeited the
right and option under section 4.
4- Any land surrendered by a person which was in his possession as a lessee or mortgage, shall not vest in
government but shall subject to the provision of section 3, revert to the lessor or mortgager as the case may be.
(5) Any land surrendered by a person which was held by him as the landlord of an occupancy tenants or a
Muqarraridar or as an Adna Malik shall not vest in government but shall, subject to the other provisions, of the act
vest in the occupancy tenants, Muqarraridar or Adna Malik as the case may be, free from any encumbrance or
charge".
10- Substitution of section 10, Act II of 1977. In the said act, for section 10, the following shall be substituted
namely:"10- Permanent installations and structure- Permanent installations and structures, including building and tubewells
on land surrendered under section 9, shall not be removed, damaged, dismantled or demolished and shall vest in
government alongwith such land, free of any encumbrance or charge"
11- Substitution of section II, Act II of 1977. In the said act, for section 11, the following shall be substituted
namely:"11- Compensation of Land: (1) subject to the other provisions of the act, the federal government shall in respect of
land , permanent installations and structure thereon, surrendered under section 9 on coming into force of the land
reforms (amendment) ordinance 2002, pay compensation to the person who surrendered the land.
(2) compensation under sub-section (1) shall be determined and paid in accordance with the provision of the land
43
acquisition Act 1894 (1 of 1894) by an officer of the provincial land commission, authorised for the purpose, whose
orders shall be subject to appeal and revision under the rules, made under section 21 of this act and the
compensation so determined shall be paid in such manners as may be prescribed.
(3). The provisions of sub-sections (1) and (2) shall not apply to
(a) land the surrender or resumption, of which has been finalised or in which action has been initiated before the 23,
March 1990. The compensation in respect of such land shall be paid in cash at the rate of Rs 30, per produce unit
and
(b) Land acquired voluntarily after the commencement of the land reforms (amendment) ordinance 2002 by a person
in excess of his entitlement under section 3, such land shall vest in government without any compensation".
12- Omission of section 12, Act II of 1977. In the said act section 12 will be omitted.
13- Omission of section 13, Act II of 1977, in the said act, section 13 shall be omitted
14. Substitution of section 14, Act II of 1977: In the said act for section 14, the following shall be substituted namely
(14) Transfer of encumbrance or charge; Any encumbrance or charge existing on land surrendered by a person or on
permanent installations and structures, including tubewells on such land, shall be deemed to be an encumbrance or
charge or land retained by him under this Act.
Provided that if the encumbrance charge exceeded the value of land left with person, it shall to the extent of such
excess, be deemed to be an encumbrance or charge on compensation payable to him , if any under this Act".
15- Substitution of Section 15, Act II of 1977. In the said act, for section 15, the following shall be substituted
namely
"(15)- Disposal of surrendered land: (I) Land vested in government under this act, shall subject to the provisions of
this section, be granted free of charge of the tenants who are shown in the revenue record to be in cultivating
possession of it during Khairf 1976 and Rabi 1975-76.
Provided that where at any time after the commencement of this act, a person acquires any land by reasons of which
the areas of the land owned or possessed by him of charge to such tenants as are shown in the revenue records to be
cultivating possession of it in the Kharif and Rabi immediately preceding such acquisition.
(2) land vested in government under section 9 shall on coming into force of land reforms ordinance 2002, and
subject to the provisions of this section, be granted free of charge to the tenants who are shown in the revenue
records to be in cultivating possession of it during kharif 2001 and 2001-2002.
Provided that where at any time, after coming into force of land reforms ordinance 2002, a person acquires any land
by reason of which the area of land owned or possessed by him exceeds the limits fixed by section 3, the land
revenue records to be in cultivating possession of it in Kharif and Rabi immediately preceding such acquisition
(3)where any tenant who is entailed to grant of land, he shall be granted only so much land which together with the
land already owned by him, does not exceed a subsistence holding.
(4) No land shall be granted to tenants who but for the coming into force of this act, would have been entitled to
inherit land from a person who is required to surrender land under section 9
(5) Land which is not granted under sub sections (1) (2) and (3) shall be granted to the other landless tenants or
persons owning less than a subsistence holding.
Provided that government may utilise any such land for public purpose it may deem fit.Explanation: For the purpose
44
of this section, "means an area of 32 acres of land in the province of Balochistan, sixteen acres of land in the
province of Sindh and half a square or half a recentagle or twelve and a half acres of land, whichever is more,
elsewhere.
16. SUBSTITUTION OF SECTION 16, Act II of 1977. In the said act, for section 16 for the following shall be
substituted namely.
"16. Conditions for grant of land: (1) grant of land to tenants and small landowners under section 15, shall be on
condition that a grantee or his heirs shall not be alienated by sale, gift, mortage or otherwise the land, or any
partition thereof, or sub-let it , during a period of 20 years from the date of grant.
Provided that for the purpose of obtaining a loan for the development of the land, the grantee or his heirs may
mortgage in the favour of government, government 'sponsored institutions, a Bank or Co-operative society'.
(2) The provincial land commission concerned may cancel a grant of land for violation of any of is conditions after
giving an opportunity of being heard to the grantee or his heirs as the case may be".
17- SUBSITUTION OF SECTION 17, Act II, of 1977. In the said act, for section 17, the following shall be
substituted namely:
"17- UTILIZATION OF LAND: Notwithstanding, anything obtained in section 15, a provincial government may
subject to the approval of the federal government, utilise or dispose of land surrendered under section 9 of the said
act and paragraph 15, 16, and 17 of the land reforms regulation 1972 (Regulations No 115 of 1972) for such public
purpose and in such manner as the provincial government may deem fit, if it is
(a) an orchard, (b) land surrendered by any religious, charitable or educational society, or institution; or (c) land
surrendered by any trust or waqf, whether public or private or (d) land under Shikargah and study or livestock
farms".
General Pervez Musharraf,
President of Pakistan.
2.15- CAF as industry
Since the agriculture in Pakistan is considered to be a backward sector and investors did take
very little interest in it, therefore to promote CAF, government has granted it status of an
industry under a new package of incentives, the package opens a window for foreign investment
in agriculture sector of the country. In the new policy, there would not be any limit or cap on
foreign ownership, the amount of investment and ceiling on land holdings for the registered
companies. It also envisaged a tax holiday of five years for irrigated agriculture, seven years for
barani (rain fed) lands and 10 years for cultivable wastelands.
The general consensus in the government was that imposition of duties, taxes or land ceiling may
dampen investor’s interest in the initial stage as it would make it necessary to subject CAF to
numerous levies and to strict enforcement of labor laws. On the other hand, there would be little
value addition from the measures as the State Bank of Pakistan has already extended credit
facility to CAF under its normal banking channels. All the ministries and department including
MINFAL share this view of facilitating the CAF investors with all possible supports and
incentives. The Chief Executive secretariat had requested the cabinet to declare CAF as an
45
industry along with the exemption that it would not be subject to those levies and the industrial
establishment laws which are applicable to an industry.
Under the new policy about CAF, state land would be sold or leased for 50 years, which will be
extendible for another 49 years. Moreover, a substantial share from the credit programme of all
the banks and financial institutions would be earmarked for corporate farming. The transfer of
land for corporate agricultural farms would also be exempted from duties. The labor laws would
not be applicable as in the case of export processing zones. Storage facilities for agriculture
produce would also be placed under the corporate agriculture and these would enjoy the same
incentives. Apart from the package, the tax relief in the form of first year allowance (FYA) for
agriculture had been increased to 75 % of the machinery cost, which was in line with 75 % FYA
allowed in the case of infrastructure, agro-based and engineering/chemical projects. Other
facilities available to export-oriented industries also apply to agriculture or processed agroproducts.
The Board of Investment declared that more credit would be made available to the agriculture
sector and it would be doubled from the next financial year. Examples of China and Egypt are
given who had done a great deal in developing corporate farming. A Chinese delegation was on a
visit and they would be taken to provinces, where they would explore possibilities of
investment.
2.16- Labor laws and legal issues
The most significant difference of opinion has been raised on the declaration of the CAF as an
industry, was the labor issue. Pakistan has ratified the ILO Convention concerning the right of
association. The Labor ministry strongly advocates that the government is obliged to enact labor
laws to extend to agriculture. The ministry maintains that since CAF is being declared as an
industry, therefore labor laws must be applied. They argue that the non-application of labor law
in agriculture is something never adopted anywhere in the world. The policy talks about
development of proper labor laws for corporate agriculture farming. It is strange how come
government announced a policy when no adequate legal framework is in place to regulate the
employers and employees of corporate farms.
In absence of any legal framework for workers it will be all on jurisdictions of MNCs
managements to settle issues of workers on the farms whichever way that suits them. These are
some of the concerns and issues which can turn government’s assurance of bringing food
stability in country through corporate farming. Major weakness is not in corporate farming but is
in the policy which has been laid down to lure investors and MNCs in Pakistan for this
agriculture business.
Another aspect of the CAF policy which undermines the rights of Pakistani workers is to exempt
MNCs and investors from the country's labour laws, though the policy does talk about
development of proper labor laws for corporate agriculture farming. The major weakness,
therefore, is not in corporate farming but in the policy that has been laid down to bring investors
46
and MNCs to Pakistan to invest in the agriculture business (Farzana Shah, Corporate Farming Boon or
Bane?, Southasia online).
Equally important is the question whose laws and conventions will prevail in the settlements of
disputes: the investor countries or the host? These settlements for all means and purposes will be
autonomous states within the state, further undermining and fragmenting its already waning
authority. These autonomous areas with their security force will have all the advantages and
none of the obligations and thereby create an even deeper split between the people and the rulers.
3.0- Recommendations and policy suggestions:
The proponents of CAF believe that rapidly increasing population need higher agricultural
production. In order to compete with the international markets, country should boost the
agricultural production and increase export earnings. They welcome government of Pakistan
initiative to invite multinational companies to invest in Pakistan’s agricultural farming. Similarly
it is believed widely among government circles that the corporate agricultural farming will open
new windows for multinationals to do entrepreneurship in country’s agriculture. CAF is a
symbol of globalization phenomenon.
However CAF will come with its own advantages and disadvantages it may bring revolution in
agricultural production or may be resulted in inevitable problems concerning to socio-cultural set
up and economics inequalities among the rural people. There are lots of controversial issues
related to equity, food security and other socio-economic issues related to agricultural corporate
farming. Many critiques stress on the need of making CAF policy more cohesive according to
needs and interests of Pakistani farmers in particular small farmers. Pakistan needs to protect its
poor and small scale farmers from the onslaught of globalization and CAF, by making policies
pro-poor.
One question that arises in case of Gulf countries is; why they would buy land and then establish
farms and keep huge security guards in these farms? While they can easily buy produced corps
like wheat, rice, vegetables and fruit from Pakistani farmers under an agreement in which these
customers will bring in technology and will be allowed to take a stipulated portion of produced
food items in return. This approach will also help Pakistan to incorporate new technologies of
irrigation system, seed, farm management and food supply management into its own agriculture
sector.
Pakistan and gulf countries, and other interested corporate entities may sign a bilateral deals to
form corporate companies at public level to establish farms on barren lands with small farmers as
their shareholders to enhance the productivity and incorporating new technologies into
Pakistan’s agriculture sector. In return these partners can have an assurance of supply of a certain
amount of food items from Pakistan.
3.1- Revision of Policy
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In the result of discussion with the civil society and small farmers organizations, and study of
published articles; following recommendation;
Current CAF policy requires serious overhauling to make it more in line with Pakistani interests
and conditions. Agriculture land must not be treated as a commodity; sale to a foreign or local
entity must be banned. Leasing must only be allowed in the cases when small farmers are also
share holders in these agreements and has given full protection by legal cover in form of laws.
Policy of offering too many concessions to investors must also be reconsidered and revised and
be treated as separate share of capital for corporate farming in financial institutes. This policy
will be discriminatory to the domestic industry as there are many national industrial groups in
Pakistan which badly require same kind of preferred financial treatment by banks and other
financial institutes but, they never had treated like that of foreign investors in the past and
unfortunately no chances to be get same preference in the future.
Concessions like exemptions from labor laws and income tax will have negative impact on the
psyche of local people so this policy must be reviewed and revised. Government cannot allow
foreign entities to make huge profits from Pakistan without paying taxes and duties. CAF must
be brought under the national tax net to increase annual revenue of country.
CAF must conform to the long term policy framework of the county, which provides a coherent
approach to deal with the economy, such as the Vision 2030 of Pakistan
3.2- Land Reforms
Land reforms have always been a very sensitive subject for the civil society of Pakistan. When
country’s 75 % households are landless and poverty is rampant in the rural areas, why the
government is considering leasing and selling the land to rich countries and foreign investors?
This will pose a huge risk to the food security and national sovereignty of the country. Actually
the short term visionary planners of the country are thinking about a short cut to fill exchequer
with quick money, by selling country’s land for cash.
Here it would be interested to compare the case of difference in approach between India and
Pakistan, while we are offering our lands without giving a serious thought, the Indian
entrepreneurs are out and grabbing land in African and Latin American countries to meet their
food security needs.
Civil society activists have consensus that best way to revive rural economy and beat poverty is
to work for a strong agriculture based economy in Pakistan. The civil society needs to strongly
advocate for land redistribution under comprehensive land and agrarian reforms which always
remained an unfinished agenda of many governments since last many decades. Land distribution
in past has remained a mere political slogan by ruling parties sitting on power in the capital.
They have consensus that actually it is the time to go outright for the land reforms campaign on a
fast pace.
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Landless peasants must get land from government to grow crops instead of selling or leasing
their land. It is an irony that government is going to lease or sell a total of millions of acres of
fertile cultivable land to investors of Gulf countries. Government can feed at least 120,000
families in rural Pakistan by providing 10 acres each from this land to in villages. This will
reduce the poverty in rural areas to a great extend.
An activist suggested that to prevent this reforms program from political interference an
associated program can also be launched to give ownership of these lands to farmers or landless
families after a certain time period or after receiving a certain amount against allocated 10 acres.
This will pave way for preventing subsequent governments to grab the lands back from these
poor families and would also be helpful in raising their standards of living.
3.3- Education and Training of Farmers
One major reason behind low productivity in Pakistan has been long reliance on old methods of
farming by farmers and this is due to the very low literacy rate among farmers in Pakistan
particularly among small farmers. Pakistani farmers are one of the most industrious workforces
in the world but due to lack of know how about modern mechanized farming they are failed to
achieve food sufficiency for the nation and competitiveness in the world market. (Farzana Shah, 7
December 2009)
It is recommended that government launch training and education program for farmers giving
small farmers priority to enhanced their productivity in the fields. Training about new irrigation
techniques, high yield seeds, farm management are very critical at this point of time to keep
Pakistan’s agriculture sector sustainable and productive enough to meet food supplies to the
nation and for export as well.
3.4- Provision of New Agriculture Technology
According to the policy government has given incentive for MNCs to import machinery for
corporate farming. This kind of incentive must be given to farmer communities at national level
irrespective kind of farming the farmer is associated with; corporate or family.
Pakistani farmers are not incapable but only require government support in areas where small
and medium scale farms cannot afford mechanized farming equipment.
3.5- Provision of Seed and Fertilizers
It is fact that during 1960s with improvement in irrigation system and government support
Pakistani farmers were able to double the production of wheat, rice and enhanced cotton
production 6 times to meet national demands there is no reason a our farmers cannot repeat
same.
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Only thing missing this time is commitment from government’s end who has absolutely no idea
how to enhance the provision of necessary quality fertilizers and seed to whole farmer
communities according to their soil and climatic conditions.
Comprehensive and integrated efforts are required to assess required amount and quality of
necessary seed and fertilizers to the farmers. Pakistan has enhanced its fertilizer production over
the years but still rely on imported fertilizers which sometimes lead to shortage of this crucial
item in agriculture.
3.6- Protection for Small Farmer
While inviting MNCs and investor for corporate farming it is also crucial to provide protection to
the assets of small farmers who earn their bread and butter from their small farms. This is
something very essential to protect social setup of large communities who depends on family
farming totally. Government must ensure through legal means that no MNC will buy land from a
small farmer against his will and nor will he threaten by other means to leave or sell his farm to
MNC.
Financially small farmer cannot face challenges of corporate farming alone in market place as
well. Government must also take this into consideration that prices offered by MNCs in market
can be lower than those offered by small farmers. So a lower and upper limit of price for all
items produced under CAF must be fixed to protect small farmers in local food market.
Keeping all above facts in mind it is evident that corporate farming is not a tool of increase local
agriculture output in Pakistan by any means. International practices of corporate farming shows
that it never paid any tangible benefit to local masses.
India is also growing in population like Pakistan but India has adopted to be in group of
countries who lend land from other countries unlike Pakistan where own land is lend to others.
Government must take above mentioned issues and suggestions into consideration before
concluding any deal for corporate farming. There is no doubt that Pakistan is in need of
investment in agriculture in Pakistan but the policy which governs these investment must be in
line with its national, economic, food, resource interests.
With growing population and declining food surplus worldwide every country is busy in
securing food supplies for its masses. Pakistan currently facing a water shortage and is predicted
to face food shortage in future as well. Pakistan must stick to its long term plans and must render
all policies according to these long term plans. With rapid rate of growth in population it would
very difficult for Pakistan to feed whole population when its own lands will be occupied by
MNCs sending all eatable goods abroad or selling at high prices back to Pakistan.
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