LAHORE, Feb 4: The federal government has offered state land to local and foreign investors on a 99-year lease and given many other incentives for attracting investment in the agriculture sector in its recently-unveiled policy package for Corporate Agriculture Farming (CAF).

Detailing the circumstances leading to the need for CAF, the policy package says that the agriculture sector is currently beset with following major challenges: low productivity — in case of wheat, the average yield in the 90s was 2.5 tons per hectre as against an average of 2.7 tons for the world, four tons for China, 2.6 tons for India and 6.4 tons for Egypt; water shortage; low level of public and private investment in the agriculture sector, which was just 8.3 per cent of the total investment in 2000-01; the small share of agriculture in the public sector development programmes, which decreased from 3.4 per cent in 1990-91 to 0.5 per cent in 2000-01 and substandard agricultural exports.

While these factors necessitate CAF, a low cost of production in the agriculture sector and Pakistan’s situation in one of the most food-deficit regions of the world make it viable. The only thing needed is safeguards and incentives for potential investors, the government has claimed.

The CAF is aimed at enhancing the efficiency of production and increasing the revenue by bringing together production, processing and marketing activities under the management of a corporate entity.

The CAF would help improve agricultural productivity and profitability through the use of latest production technology, adequate inputs, quality seed, heavy machinery, efficient water use, marketing expertise, integrated pest management and an internationally competitive unit cost of production for all major crops, fruits and vegetables.

The package listed areas open to investment. These include development and reclamation of barren, desert and hilly land and waterfronts for agriculture purpose, cultivation and processing of crops, modernisation and development of irrigation facilities and water management, plantation and forestry and dairy farming, construction of storage facilities on farms and marketing of the produce.

The policy package also listed many incentives for CAF. The size of the proposed corporate farm will be determined by the prospective investor. State land could be acquired on a 50-year lease, which was extendible by another 49 years.

The Agriculture Income Tax regime presently applicable on incomes from agriculture would be applicable to Corporate Agriculture Farming as well.

The existing labour laws will not be applicable to corporate agriculture companies. However, appropriate labour laws would be developed for this sector within five years.

Import of agriculture machinery and equipment will be exempted from payment of customs duty and sales tax. Machinery for grain storage will be covered by 437(1)-SRO dated June 18, 2001. Transfer of land to the CAF will be exempted from payment of duty.