KARACHI, Sept 26: Over eight million hectares of state-owned agricultural land have been identified for corporate farming by four provinces, according to the Board of Investment.

Besides, railway lands would also be offered on lease for private investment in development of grain storage/silos in the private sector.

In all, the four provinces have identified 8.135 million hectares of state land for corporate farming, the biggest chunk of 6.244 million hectares being located in Punjab, followed by NWFP, Sindh and Balochistan with 820,000, 810,000 and 261,000 hectares, respectively.

Local and foreign investors interested in corporate farming and for the development of grain storage facilities will get land on lease.

Under the terms and conditions worked out by the Railways, land will be offered for a period of 33 years with an annual rent at the rate of 15 per cent of its market value as assessed by the Revenue authorities. The agreed rent will be increased by 25 per cent every third year and shall be paid in advance on an annual basis. The lease can be extended or terminated by three months notice by either side.

Similarly, Sindh is reported to have proposed a rent of Rs100,000 per acre with a 20 per cent annual increase and initial lease for just 30 years, with an optional extension of 20 years. Balochistan is asking for Rs50,000 per acre per year.

Under the corporate farming policy, the investors will get a wide-range of incentives, including no corporate tax, income tax or customs duty for first five years. There is no minimum investment limit with facility of free remittances of capital, profits and dividends and easy access to credit.

Board of Investment chairman Waseem Haqqie clarified on Thursday that corporate farming is not meant exclusively for new investors. He told Dawn that one of the reasons for introducing corporate farming was to encourage small farmers to merge their land holdings into joint stock companies so as to achieve economies of scale in production, he added.

To avoid fragmentation and splitting of land holdings among family members, says the BoI chairman, the size of the farm could be retained in corporate ownership. Besides, farmers could join their relatives and neighbours to form a corporate body and manage large size farms that operate efficiently. Once the corporates are registered with the Securities and Exchange Commission of Pakistan, they will have easy access to bank credit.

Progressive farmers like Mahmood Qureshi and Jahangir Tareen have saved their family landholdings from fragmentation by informal corporate farming, says Waseem Haqqie but laments that the agriculturists have not seized the opportunity offered by the corporate farming policy.

Farm yields are low because of the outdated cultural practices, including the crop sharing pattern between the landlord and the tenant. In developed economies, the feudal or the zamindari system has been abolished to broad-base rural prosperity and provide an expanded market for industrialization.