Although the agriculture sector has received a serious
setback during the current year because of drought and scarcity of irrigation
water, its potential to promote the national economy cannot be over- emphasised.
A little attention paid to this sector during the last one year has proved
beyond doubt that there is no business like agriculture specially in the context
of Pakistan. The country which imported 3 million tonnes of wheat in 1988-99 had
on exportable surplus of over 1.5 million tonnes in 1999-2000.
It is heartening to note that the present government, headed
by a professional soldier, is fully conscious of the large potential in the
agriculture sector. The government has recently taken a number of decisions to
develop and modrenise agriculture. Under corporate farming it will have the
status of industry with irrigated areas enjoying tax holidays for 5 years,
barani areas for 7 years and culturable waste for 10 years. The government will
provide land on nominal rent. Foreign investors have been invited to invest in
this sector including live stock development and Agro-based industry in
partnership with local investors and offered many attractive incentives. Farmers
credit allocation for the current year has been increased to 100 billion as from
45 billion last year.
The first-ever agri-business conference was held in Islamabad
last week. Speaking at the concluding session of the 3-day conference Chief
Executive Gen Pervez Musharraf said that a comprehensive agricultural strategy
has been worked out for import substitution in this sector and to raise per acre
yield of crops with maximum water economy. He enumerated the basic features of
the strategy such as construction of new water reservoirs and canals, raise in
the height of the Mangla Dam, increase in the cultivated area by about a million
acres with additional water resources, import substitution without affecting the
country's cash crops like cotton and rice and increase in sowing area of the two
crops in Sindh and Balochistan provinces.
The Chief Executive invited the investors to avail the
opportunities as the government would introduce several incentives for ventures
in agro-industries. He also identified areas of import substitution strategy in
agriculture sector to buttress government's economic revival strategy.
Later talking to the newsmen the Minister for Food,
Agriculture & Livestock, Kharo Mohammad Junejo disclosed that Chief
Executive has approved the policy of Corporate Agriculture Farming which will be
announced shortly. The Chief Executive Secretariat has also issued the directive
to all the relevant ministries to speed up their efforts in implementing the
proposed incentives for the introduction of the corporate farming.
He said under the incentive package for the introduction of
the Corporate Agricultural Farming, it will have a status of industry and will
enjoy all the facilities including the credit availability as admissible to
industry. He said under the package a tax holiday for five years for the
irrigated areas, 7 years for barani areas and 10 years for the cultivable areas
will be provided. However, he said such tax exemption would be given to only
those companies listed on the stock exchanges.
Besides providing tax holidays, the minister said exemption
on duties on transfer of land would also be allowed for the corporate
agricultural farming, the corporate agricultural companies will be required to
observe the relevant sections of the workmen's compensation Act 1923, payment of
wages Act 1936 and bonded labour system abolition Act (111 of 1992).
Under the present investment policy of Board of Investment (BOI)
there is no upper ceiling on land holding for corporate agricultural companies
so the legal cover will be provided in this regard to avoid any complications in
future. The Federal Agriculture Ministry has also urged the federal government
that determination of size of corporate farm may be left to the prospective
investors.
For the availability of credit for the Corporate Agricultural
Farming, it has been proposed that investing or lending to corporate
agricultural farming projects may be considered as part of the agricultural
lending targets fixed by the State Bank for financial institutions. The BOI has
also agreed to reduce the foreign equity from $ 0.5 million in the present
investment policy to $ 0.1 million.
The state land may either be sold or leased out to the
investors for 50 years and extendable for another 49 years under the corporate
farming. The preference in this regard will be given to cultivable wasteland.
The primary idea for the introduction of the Corporate
Agricultural Farming was to organise farmers, particularly the small and medium
size farmers, and to invite domestic as well as foreign investors and attract
them to corporate agricultural farming. Currently the main concern of the
government is the low productivity per unit of crops, which is comparatively low
as in the case of wheat the average yield for 1999-2000 was 2.5 tonne per
hectare whereas the world average yield is 2.7 tonnes, China 4 tonnes, India 2.6
tonnes and Egypt 6.4 tonnes per hectare.
A short term multibillion fiscal package for the revival of
farm sector has been approved by the Finance Ministry which envisages new
measures in the agriculture sector to offset the expected $ 1.5 billion losses
due to drought and water shortage.
