Corporate farming has little charm for most farmers

Updated February 11, 2019

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Composed by Leea Contractor
Composed by Leea Contractor

For Sarfaraz Ali Junejo, a progressive sugar cane grower based in Mirpurkhas, corporate farming is an entirely different ball game. He believes it is unviable for small and medium-sized farmers under the existing conventional farm practices and limited finances.

Mr Junejo is applying modern methods and has adopted good agricultural practices in corporate farming. After reducing the area under sugar cane cultivation to just 50 acres, he has started cultivating Rhodes grass — an exportable commodity to Arab states.

Corporate farming entails huge investment, expertise, qualified human resource, heavy machinery and mechanised farm practices.

The model entails huge investment, expertise, qualified human resource, heavy machinery and mechanised farm practices

Influential politician Jahangir Khan Tareen is growing sugar cane in line with the corporate farming model. Another famous political family, the Mahars of Ghotki, also owns a sugar factory and big landholdings where it cultivates sugar cane along modern lines.

However, the trend is not that widespread among farmers as 90 per cent of them are either small or medium-sized landholders. They can’t benefit from corporate farming, thanks to their limited finances and expertise.

Some growers have handed over their land to the big landowners like Mr Junejo for corporate farming under different agreements. The Tareen family, which owns a few sugar mills in the upper parts of Sindh, is said to be cultivating sugar cane on 30,000 acres in Sindh’s Ghotki and Punjab’s Rahim Yar Khan districts.

The family has obtained land from landholders like Asad Khuhro, brother of a provincial leader of the PPP, Mir Abid Sundhrani and Ejaz Bughio on long-term contracts for this purpose.

Seasoned politician Ali Nawaz Shah was perhaps the first one to enter into a partnership with the Arabs several years back to cultivate Rhodes grass, which is used as animal feed.

“In view of limited finances, small farmers can’t opt for this model of (corporate) agriculture,” says Mr Khuhro from Larkana. He believes small and medium-sized growers can hardly afford machinery like a sugar cane harvester that costs them around Rs25 million. A cumbersome financing system discourages farmers from seeking bank loans even for the conventional model of agriculture.

Mr Junejo is all set to grow Rhodes grass on 1,000 acres now after obtaining additional land on a lease. He has hired a full-time, qualified manager with a master’s degree in agriculture. In addition, there are labourers, including tractor drivers, from Punjab at work.

All of them are salaried and trained human resources. A manger under corporate farming is supposed to supervise every process from sowing to harvesting, assess market conditions and manage fertiliser application and watering etc.

“The tradition of share-cropping based agriculture takes a back seat in corporate farming. Technical staff handles all issues of major and minor nature,” he says.

Land for hay grass production was obtained for an annual payment of Rs16,000-20,000 per acre in the lower parts of Sindh. Hay grass was a short-duration crop with its first harvest taking place within two months of sowing and subsequently after every 30 days. The crop sometimes faced issues like moisture content and quality that would affect its competitiveness in the international market.

In Mr Junejo’s case, he manages a large landholding with 50 labourers who do all the work from sowing to harvest. In the traditional model where the landowner and the hari work together on a fifty-fifty basis, he would need around 100 haris along with their family members to manage 400 acres. But the manual labour has now been replaced with the lifter, baler, spreader, tractor and liner.

“The margin of profit in corporate farming is higher, although it can be less profitable in some years,” he says. He believes the federal government must relax import conditions for heavy-duty tractors in view of foreign exchange earnings from Rhodes grass exports. The law bars the import of a tractor that is more than five years old. The lifting of the ban will help promote corporate agriculture, he says.

According to Mazhar Hussain, a corporate farm manager who served in Sudan until recently and now manages Hameed Dero Farms in Mirpurkhas, modernised farming has rich potential for increased profitability. “In the sugar cane crop, huge trolleys and mechanised harvesters harvest sugar cane on hundreds of acres in a day,” he says.

Hameed Dero has also obtained lands of other landowners like Mir Atiqullah Talpur. Mr Talpur believes it is an opportunity for him to learn about mechanised farming.

Mr Hussain says diversifying into agriculture-dependent businesses such as milk production and livestock farming pays dividends to farm owners. If one crop doesn’t perform well then the landowner has the option to offset losses in other businesses, he says.

Major crops like wheat, cotton and rice continue to be managed under the conventional model of farming. Even progressive growers have not invested much in terms of machinery or equipment, except better inputs.

According to Sindh Abadgar Board Vice President Mahmood Nawaz Shah, these crops see only a selective use of machinery. The use of heavy machinery has a limited scope considering the dynamics of small- and medium-scale farming, he added.

Published in Dawn, The Business and Finance Weekly, February 11th, 2019