March 10, 2008	Monday	Rabi-ul-Awwal 1, 1429

Pakistan’s food import bill in 2007-08 is set to exceed $2.5 billion which shows the stress under which our agriculture and farmers are working.

Grocery stores in local markets are stuffed with tomatoes, garlic, pears and a variety of vegetables, fruits and pulses imported from China, India, Turkey and many African and Asian countries.

Look at the dining table of any middle class home, one would find cheese, honey, porridge, cookies, confectionaries, pickles and a variety of imported eatables from Denmark, Holland, Germany and Australia.

‘’ Agricultural development and the plight of agriculturists have never been a priority issue of our policy’’, remarked Khair Mohammad Junejo who was a minister in Pervez Mushsrraf’s cabinet after military takeover in October 1999. Junejo is one of the well known modern farmers from Sanghar in Sindh.

‘’I am now getting hardly Rs1.25 for a kilogramme of onion dispatched from Sanghar to Karachi’’. On Thursday (March 6, 2008) onion was being sold at Rs15 in Karachi markets to the consumers.

Who pockets this more than 12 times difference in the onion price that a grower like Junejo gets and a consumer in Karachi is forced to pay? Junejo is not a small, ordinary farmer. He is well connected and enjoys clout and influence but is helpless when it comes to get a reasonable and just price of his commodity. ‘

‘It is a chain of commodity brokers from village to main market and the retailers in Karachi who share Rs12-13 on a kilogramme of onion’’ he informs. This price distortion is true for all other agricultural crops in which the grower gets virtually nothing and consumer is forced to pay a high price. The key issue is: can the middleman’s profit be reduced or eliminated to ensure a fair price to farmers and consumers?

The efforts to introduce corporate farming in 2001 by Musharraf’s government of which Junejo was a member, was an attempt to expose agriculturists to modern production, management and marketing techniques.

‘’The resistance to corporate farming was from within and not that much from outside’’ recalled Wasim Haqqie, the then Chairman of Board of Investment.

Haqqie was given task of marketing the idea of corporate farming and attracting investment. Many cabinet members of Musharraf government were against attracting foreigners for corporate farming and considered it as a return of some sort of ‘’British East India Company’’.

Elections were due in the year 2002 and Musharraf relied a lot on the new assembly for validation of all his extra constitutional actions. He eventually gave in and the concept of corporate farming could not be taken up in a big way. Nonetheless, corporate farming is being practiced rather ‘’informally’’ by a few modern farmers. Jehangir Tareen’s name is mentioned as one of its main exponent. The two companies--sugar mills- in Rahim Yar Khan-quoted on stock exchange are run by him.

Nearly 25,000 acres of land is said to be under supervision of these two companies for which agricultural land has been acquired on lease. Mr Tareen has engaged an Australian as his manager who has also developed the informal structure for corporate farming.

The title owners of agricultural land are the shareholders of the company who are paid dividends which is said to be much more than what would have been earned by way of tilling it. Besides, plantation of sugar cane, other crops are also said to be cultivated in these farms. Tax on crop income is collected from the shareholders as agricultural tax while other levies are on industrial products. Mr Tareen plans to undertake sugar cultivation in ‘kutcha’ areas in Ghotki to feed a sugar mill.

The other prominent name is that of Mr Saleem Altaf, a former chairman of the Privatisation Commission. He too runs a sugar mills company and controls large tract of agricultural land acquired on lease from small owners. In Okara, a multinational company operates a fruit farm to produce a variety of jams, jellies and other agri products. In Mirpurkhas, a local company operates a small farm to produce fruit juices and some other products.

In at least half a dozen districts of Central Punjab, corporate farming is practiced by many farmers with relatively small ownership. There is fragmentation of land in Central Punjab districts and many people are in services. Any one in the family who looks after agricultural land of his kith and kin who are either in services or in foreign countries, pay them their shares and earns for himself good amount of profit. Farm productivity, agricultural credit off-take, fertiliser consumption and use of modern techniques is highest in Central Punjab districts,’’ a senior official dealing with agricultural credit in a commercial bank disclosed.

By and large, the corporate farmers are more educated, well connected and have relatively easy access to banks for credits and are good managers. Many of them have developed modest agricultural infrastructure in their small farms--- silos, storages and even refrigerated storages run with electric generators. Many of these farmers in Punjab are in process of developing their marketing chains. Comfortable farm houses in rural central Punjab are now a common sight when one travels by road.

In Sindh, the agriculture is beset with a host of problems. A small number of enterprising farmers did set up fruit and vegetable farms and at least one name-Kachelo-is seen as a pioneer in mango export. But worsening law and order situation and scarcity of water has hit agriculture badly. The provincial agricultural extension services are in bad shape. Bananas and chillies crops have been damaged and there is no durable remedy as yet. Larkana’s guavas were once known for their taste and fragrance, but now Punjab’s guavas have reached Middle East and other parts.

‘’Yes we did prepare a paper on corporate farming about six years ago’’, an official in Sindh Agricultural Department disclosed, pointing out that nothing happened afterwards. He recalled that a company asked for 5,000 acres of land on coastal highway to develop a corporate farm for cultivation of crops and install machinery for production. ‘’We could not provide a single stretch of 5,000 acres’’ he said.

It is in Sindh where agricultural credit off take by farmers is showing a declining trend for last more than five years as against a steady rise in Punjab. The main reason for this is that Sindh Revenue Department does not issue pass books to small farmers which is used as a guarantee by the bank.

This issue was raised in Agricultural Credit Advisory Committee meeting of State Bank of Pakistan several times. No improvement has been noted so far. ‘’For current fiscal year, we expect Sindh farmers to get Rs22 billion credit’’ a senior official said.

But this is about 10 per cent of Rs200 billion being given as agricultural loans in 2007-08. Sindh farmers say that they need at least Rs50--60 billion credit. ‘’Sindh farming does not have this capacity’’ a banker said.

‘’Pakistan’s agriculture is under severe stress’’, remarked Shah Mahmood Qureshi, a PPP stalwart now being tipped to hold a key position in the next government in Islamabad. He talked over telephone while travelling from Lahore to Islamabad on motorway on Wednesday.

He warned of a serious wheat crisis underway because of mismanagement by the government. He said the water was stored to generate electricity and agricultural demands were ignored. The announcement of support price was delayed and it is too inadequate.

‘’What are your plans-short and long term-to address agricultural problems?’’, the PPP leader was asked. ‘We have many ideas.’’ he replied. However he wants the party leaders to see for themselves ground realities and take stock of government resources before going ahead with short and long- term moves. However he is convinced that the country will need to import wheat next season. How much and when? He was not able to say.

But PPP has a stake in agriculture. It draws its support mainly from the rural areas and is committed to improve agricultural production and alleviate poverty. How the PPP does it is yet to be seen.