The dangers of corporate farming

Syed Mohammad Ali
11 May 2009

While the international spotlight focuses on the intensifying battle against militants in Pakistan, deprivation in rural areas gets very little of the same attention. Abiding inequality in Pakistan's rural landscape is an old, oft-ignored story. Yet even in a country where an insulated, de facto feudal landholding elite maintains disproportionate power and influence, moments of rural tragedy once and a while force themselves into the public realm.

Just last month, an old peasant from Sanghar district in the southern province of Sindh, who along with others had been observing a hunger strike in protest against the injustices of an influential landlord and politician, died outside the Karachi Press Club. This sudden death during a staged sit-in prompted several serving ministers to publicly express their support for the bereaved family. The provincial government has also confirmed that a judicial inquiry into the death will be launched, and the President of Sindh High Court Bar Association has offered free legal advice to the bereaved villagers. This is the kind of vigilance and institutional commitment is needed to dispel the ceaseless oppression of landless wage earners and sharecroppers by landlords across our country. Syed Mohammad Ali is a Lahore-based independent research consultant and columnist for the Daily Times of Pakistan.

Unfortunately, the plight of the villagers from Sanghar is hardly unique. In the interior of the province of Sindh, for example, there are numerous cases of entire families subjected to bonded labour. Yet despite the persisting exploitation caused by skewed land-holding patterns in Pakistan's rural areas, it was disappointing that major political parties did not squarely take up the issue of land reforms in their manifestos prior to the 2008 general elections. Instead of trying to take concrete steps to empower the rural poor, the current government is now trying to lease or sell large tracts of agricultural land to Arab states, in lieu of attracting foreign investment to Pakistan.

The extraordinary increase in global prices of staple commodities like wheat, rice, corn, soybeans and barley seems to have led many richer states to begin growing these crops on their own instead of continuing to import them, even if this production takes place on land located in other countries. Several state-sponsored companies from South Korea, Japan, and the Gulf states have acquired farmland in Laos, Cambodia, Burma, Mozambique, Madagascar, Uganda, Ethiopia, Brazil, and south and central Asia.

Saudi Arabia and the UAE also hope to steer Pakistan's agricultural sector towards their own domestic markets. Pakistan's Ministry of Investment has confirmed its intent to offer Arab countries one million acres for cultivation. According to recent newspaper reports, some private companies on behalf of the UAE government have already purchased thousands of acres near the Mirani Dam in the southwestern province of Balochistan.

The UAE is also in negotiation with the provincial government in Sindh to acquire farmland in the districts of Shikarpur, Larkana and Sukker, as well as with the Punjab government for acquiring lands around Mianwali, Sargodha , Khushab, Jhang and Faisalabad.

A version of this article appeared previously in the Daily Times Government officials claim that the land being offered to the Arab nations is not under cultivation, therefore there is no threat of displacement of indigenous communities, or the erosion of local food sovereignty. However, the environmental hazards posed due to deforestation, land degradation and increased water consumption also need to be taken into account before making such confident claims.

In particular, the repercussions of corporate farming can be very dangerous for Pakistan in terms of water scarcity. Given that already 70 percent of all freshwater withdrawn for human use goes into agriculture, it may be imprudent to place further strain on existing water sources. The problem, of course, is that countries like Pakistan, which remain willing to capitalise on their natural resources, are not facing up to their acute water scarcity problems.

Yet, in its haste to reap short-term financial gains and to replenish its dwindling foreign exchange reserves, the government of Pakistan seems to be ceding control over the country's cultivable lands. Moreover, the proposed incentive measures being devised to encourage this much-needed foreign investment raise a number of questions.

For instance, there is meant to be no ceiling custom duty and sales tax on the import of agricultural machinery and equipment. While proponents have argued that this measure enables the greater diffusion of technology, the proposed remittance of all capital and profits from these ventures seems to undermine this proclaimed technological diffusion benefit. Besides, the utility of capital-intensive technology for poorer farmers who rely on labour-intensive farming techniques remains minimal at best.

Furthermore, Islamabad is planning to offer Arab investors legislative cover to protect them from changes in the government, but hardly any attention has yet been given to the need for protecting poor labourers who will be working for foreign agricultural corporations. More concerned with attracting the investment, the government has drawn up a proposal for developing a new security force of 100,000 men to protect international agricultural operations.

Some human rights activists fear that this force could also be used to remove local communities from their lands at a later stage of expansion, especially since no ceiling has been placed on the amount of land that may be bought by multinationals. An even more threatening possibility, identified by the Campaign for Abolition of Third World Debt in Pakistan, is how introducing corporate farming will encourage big local landlords to convert their lands into corporate farms, potentially immunising themselves from future agrarian reforms.

Before national and local governments sign memoranda of understanding with potential foreign investors, the terms of reference pertaining to the issues mentioned above require a rethink, so that immediate foreign investment inflows do not undermine the worthier goal of sustainable and equitable agricultural development, and safeguarding Pakistan's food sovereignty.

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