ALI Bux — a small grower of upper Sindh region – is gradually increasing his small landholding in Larkana district by purchasing land of neighbouring farmers. His farmer friends were unable to bear expenses of land management and input costs.

“I had to sell my 30 acres of barren land in Larkana sometime back before buying a relatively better 10 acres piece of land. Now I own 50 acres of land as I bought land from friends,” says Bux. He sold his 30 acres land for Rs200,000 an acre and bought 10 acres of land at an average price of Rs500,000 to Rs600,000 per acre as this land had better canal water availability. Furthermore, soil fertility was good prompting him to make a deal.

Dynamics of agriculture land price are influenced by per acre productivity, average availability of water flows and soil fertility. If the land is located in a zone that has sweet groundwater reserves then it is precious for its owner. An intending buyer also prefers land that is located in the proximity of a road network.

Some believe that the agriculture sector has seen investment for the whitening of money which has led to an artificial increase in price as higher rates of land are not commensurate with the revenue earned from it

Since land management is cost- and labour-intensive, not all growers can make as many investments as required. Farmers, according to a paddy grower from Larkana Irfan Jatoi, tend to sell their property because their land becomes barren in the absence of due investment and attention. “Such land is sold for Rs200,000 to Rs300,000 an acre”, he remarks.

As Mr Bux mentioned, he bought the adjacent land because his friend was unable to invest owing to a lack of finance. Bux with better finances and interest to manage land properly gets 40 to 50 mounds of wheat per acre. For him, an impressive per acre paddy crop yield is achievable in Larkana.

Various factors force small- and medium-size farmers to sell their land. These are primarily increasing input cost, declining commodities’ prices, lack of subsidy, unavailability of quality seed and adulterated pesticides. While a big landowner somehow bears this amidst better resources, his smaller counterparts end up lagging behind.

Land that becomes unfit for agricultural purpose is bought by people for establishing cattle pens or businesses like filling station, poultry farms etc. A surge is also seen in the sale/purchase of agriculture land for commercial ventures such as the conversion to housing projects if the land is off highways or inter-cities roads.

Several private housing schemes dot sections of National Highways in Matiari, Tando Allahyar and Mirpurkhas districts. These districts are otherwise known for rich fertile soil for agriculture purpose as they are famous for banana and mango orchard farming.

Katcha area (riverine area) is also fertile land that mostly belongs to forest, irrigation and revenue departments or under legal/illegal ‘occupation’ of influential people, politicians, bureaucrats, officers of law enforcement agencies and tribesmen and communities who were living there for centuries.

Riverine area is fed through floodwater from Indus during flood season and those having lands grow winter crops there. However, given per acre productivity, these powerful men and communities contribute only a fraction of their revenue to the state. Production of crops from riverine areas is not reflected in official crop production estimates of the agriculture department.

Learning from his own recent experience Haji Nadeem Shah, a progressive farmer from the lower Sindh region, feels there is no buyer of land these days. He has been unable to sell his family land — 1,200 acres — to prospective buyers in Sujawal, a lower region district located on the left bank of River Indus. Shah owns land in Matiari, Sujawal and Mirpurkhas districts.

“A couple of months ago I was close to finalising a deal for my land. The buyer agreed through a broker but then disappeared,” he says. He grows sugarcane and rice on the land stretching over 300 acres and this would have fetched him Rs500,000 an acre, had the deal come to fruition, while the remaining 900 acres with a lower fertility ratio was saleable for Rs300,000 an acre.

Prospective buyers — especially agriculturists — prefer land where banana is grown. Cash payments are made in the banana business, ensuring liquidity, unlike sugarcane crop where growers fall prey to millers’ greed. A piece of fertile land in Matiari could have easily fetched a price of Rs0.8 million to Rs2m. Even buyers from Punjab invest here. Land in the close proximity of highways remains the best bet for influential builders who willingly offer Rs10m an acre for building a private sector housing scheme.

Shah believes the number of those intending to buy land for agriculture purpose has dropped because they feel the sector is no longer a profitable one. And problems have increased due to missing policy interventions.

Some believe that the agriculture sector has seen investment from multiple quarters for the whitening of money. It has led to a constant artificial increase in rates. In the last decade, politicians, bureaucrats and law enforcing agencies’ personnel (both retired and serving) have invested in the purchase of land. “For instance, in the last two decades we didn’t hear names of high-profile political personalities as native agriculturists of the area but today land sprawling from one end to the other in the district belongs to them as benami property,” confides a grower from Tando Allahyar.

Sindh Abadgar Board vice-president Mehmood Nawaz Shah contends that the price of agriculture land has been inflated. He says that the price of land doesn’t commensurate with the income a farmer gets from its as agriculture is a different ballgame now. “My family has in agriculture for ages. Yes, I fail to understand how one is ready to purchase a piece of land for millions of rupees when returns are constantly low, water resources are depleting and climate change driven seasonal conditions threaten produce. Yet people are ready to buy land at exorbitant rates. There is something more to it”, he asserts.

Published in Dawn, The Business and Finance Weekly, July 20th, 2020