THE value of agriculture land has appreciated significantly in Sindh over the past decade. The increase, however, is not uniform across the province. The price of per-acre land located on the left bank of the Indus river is higher than in upper Sindh on the right bank.
People watching the price movement in rural Sindh attribute the hike to multiple factors, including better returns on farm investment, commercialisation of land for housing schemes in the periphery of major towns and rupee’s devaluation, in addition to the quality of land and access to water sources.
The left-bank area of the Indus river is fed by two perennial major canals of the Sukkur barrage — ie Rohri and Nara — while land in upper Sindh by non-perennial canals including Dadu and Rice.
In Shikarpur district (upper Sindh), an acre of B-class land is priced at Rs700,000 to Rs800,000 today. It was selling at Rs200,000 per acre 10 years ago, according to Haji Ameer Bux Pahore, a grower.
B-class land is either waterlogged or suffers salinity whereas A-class land is rich in fertility, Mr Pahore says. “Therefore, A-class rural plots are expensive and cost up to Rs2 million an acre.”
Right-bank districts in upper Sindh produce coarse and other varieties of rice in summer and wheat crop is grown during the Rabi season. If a grower gets around 40 maunds of paddy of fine variety, they returns are impressive (around Rs90,000 per acre). Therefore, the sellers of land demand higher prices.
According to multiple sources approached, large landowners don’t sell their land. Smaller landholders are typically more inclined to purchase land as their families work in fields. The crop area of the landed class is managed by peasants on a sharecropping basis.
In the past, agriculture land officially declared as sikni was permitted to change the status to commercial property. Today, the said law exists only on paper, which encourages growers to sell even their cultivable land for non-farm purposes
Until a decade back, Mr Pahore recalls, the B-class land was sold for Rs200,000 per acre. Small pieces of land were mostly bought to expand the holding or to buy out tracks causing obstruction in the flow of irrigation water to landowners’ larger fields, he says.
Rice fields in Larkana fetch lower prices than lands located close to urban settlements. A 10km radius around Larkana has witnessed growth in the construction sector, says paddy grower Gada Hussain Mahesar. Land has been sold for commercial schemes by even some parliamentarians, he adds.
“Land that is now sold for Rs500,000 to Rs600,000 could have been bought in thousands of rupees 10 years ago. I remember my relatives purchasing land for much lower prices,” Mr Mahesar insists. He said that the increasing cost of farm inputs and the unavailability of water have forced agriculturists to sell their productive land.
He says that previously only agriculture land declared as sikni by the Board of Revenue was permitted to change the status to commercial property. But today the law only exists on paper. It encouraged growers to sell even their cultivable land for non-farm purposes.
Water, however, remains one of the main determinants for determining the value of farmland. In Tando Allahyar, agriculture land has been purchased by Pakistan’s top politicians recently. Tando Allahyar district is located on the left bank of the Indus river and is famous for sugar cane and cotton cultivation.
“The land close to urban areas fetches higher price. If water supply is an issue, owners have an option to sell plots for residential purposes,” says Abdul Aziz Memon, a local grower from the area.
Although Indus’s left bank area serves as the breadbasket of Sindh, parts of it like Badin (at the tail-end of the Rohri canal system) face water shortages at intervals. “Perhaps that’s the reason why land price has not increased much,” an expert says. “The land that was sold for Rs40,000 an acre in Khairpur Gamboh subdivision’s tail-end reaches. At head regulators of canals like Jarkas, Khoski and Sangi of the same sub-division, the cost is Rs150,000 acre.”
Only a decade back the same pieces of land were being sold for Rs20,000 in tail-end areas of the irrigation system and Rs75,000 at head reaches.
Agriculture land in Benazirabad (a left-bank district) can be bought for Rs5m per acre, provided it is located in the zone that gets irrigation water from Rohri canal’s command system, says Mukhtiar Naz Dharejoe, a landowner. She says people mostly use land for cultivating banana, sugar cane and mango orchard that ensure good returns if done diligently.
Published in Dawn, The Business and Finance Weekly, February 19th, 2018