Corporate farming pakistan

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  • AoA sir !
    we have 35 acres of agri land in district khusab Punjab,and im interested in dairy farming eg milk and meat processing marketing storage and mainly to export the dairy items and i can convince some other big farmers if any investor can be along with us to establish a big company or you can call this any thing.
    plz call at 00923002035867. Raja Iftikhar hussain
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Corporate farming pakistan

  1. 1. THE PROSPECTS OF CORPORATE FARMING IN PAKISTAN BY DR. MIDRAR UL HAQ
  2. 2. Farming
  3. 3. FARMING TYPES Farming Cooperative Farming Family Farming Organic Farming Extensive Farming Intensive Farming Collective Farming Hi-tech Farming Tunnel Farming Contract Farming Corporate Farming Farming
  4. 4. MODELS OF FARMING <ul><li>SIMPLE MODEL </li></ul><ul><li>IMPROVED OR ADVANCED MODEL </li></ul><ul><li>HIGHLY ADVANCED MODEL-CORPORATE FARMING </li></ul>
  5. 5. DIFFERENCE AMONG THE THREE FARMING MODELS Production at Farm Level Market Access Middle Man Advanced Model of Farming (Corporate Farming) Improved Model (Contract Farming) Simple Model
  6. 6. HOW PEOPLE WENT FOR CORPORATE FARMING? <ul><li>To increase agricultural production for the mushroom growing population by using modern technology. </li></ul><ul><li>To bring self-sufficiency in food and </li></ul><ul><li>increase export earnings </li></ul><ul><li>To stop land fragmentation for the cost </li></ul><ul><li>effective use of modern machinery. </li></ul>
  7. 7. FOOD SOVERIGNITY AND FOOD SECURITY ARE THE MAJOR ISSUES BECAUSE DURING THE LAST COUPLE OF YEARS THE EXTRA ORDINARY INCREASE IN PRICES OF STAPLE COMMODITIES (WHEAT, RICE, CORN, SOYBEANS AND BARLEY) HAVE APPARENTLY COMPELLED MANY STATES OF THE WORLD INCLUDING OIL RICH ARAB MONARCHIES AND MIDDLE EASTERN COUNTRIES TO GROW THEIR OWN CROPS TO MANAGE SUPPLIES TO THEIR DOMESTIC CONSUMERS AND ALSO TO BUILD STOCKPILES FOR BAD TIMES.
  8. 8. Land Grabbing Competition <ul><li>To Achieve Food Security South Korea began investing in farms in Madagascar </li></ul><ul><li>China, Japan, Libya, Egypt and Persian </li></ul><ul><li>Gulf Countries acquired farmlands in Laos, </li></ul><ul><li>Cambodia, Burma, Uganda, Ethiopia, Brazil, Pakistan and Central Asian States. </li></ul><ul><li>Saudi Arabia has acquired land in Ethiopia. </li></ul><ul><li>UAE has acquired land in Somalia. </li></ul><ul><li>India has acquired land in Ethiopia. </li></ul>
  9. 9. is a business producing food or fiber products that is organized as a corporate entity for tax purposes. It is owned by stockholders and run by a board of directors. A family  corporate farm is one where the principle stockholders are related by blood or marriage. A  non-family  corporate farm is one where the principle stockholders have no family relationships. Corporate Farming
  10. 10. VETICAL INTEGRATION OF DIFFERENT PROCESSES Corporate Farming
  11. 11. SUCCESS AND FAILURE STORIES OF CORPORATE FARMING <ul><li>America </li></ul><ul><li>Russia </li></ul><ul><li>China </li></ul><ul><li>Germany </li></ul><ul><li>UK </li></ul><ul><li>The Netherlands </li></ul><ul><li>Brazil </li></ul><ul><li>India </li></ul><ul><li>Saudi Arabia </li></ul><ul><li>Iran </li></ul>
  12. 12. CORPORATE FARMING <ul><li>In India the major companies involved in corporate farming are: </li></ul><ul><li>Jamnagar Farms Pvt Ltd </li></ul><ul><li>Pepsico </li></ul><ul><li>Anil Dhurbaoil (Ambani Group) </li></ul><ul><li>Field Fresh (Airtel + Rothschild) </li></ul><ul><li>Satluj Agriculture Pvt Ltd, New Delhi </li></ul><ul><li>Tata group </li></ul>
  13. 13. WHY PAKISTAN DECIDED TO GO FOR CORPORATE FARMING?
  14. 14. Rationale of the Corporate Farming Ordinance Halving Hunger by the Year 2015 United Nations Convention to Combat Desertification (UNCCD)
  15. 15. RATIONALE OF CORPORATE FARMING As the small farmers of Pakistan are unable to adapt new technologies and cannot afford the costly inputs required to get optimum yield from new crop varieties
  16. 16. RATIONALE OF CORPORATE FARMING The idea of Corporate Farming was to cultivate all waste Lands in Pakistan by bringing foreign corporations, which Would cultivate these lands by modern technologies by Employing local labor, at attractive wages, train local People, pay local taxes, develop roads and communication net-works, and bring prosperity at nominal profits to themselves
  17. 17. CORPORATE FARMING ORDINANCE (CFO)-2001 Corporate Farming Ordinance (CFO) was passed in 2001 Under which listed corporations could lease land in the Country for 99 years, broken into two periods of 50 years And 49 years. Besides, the then government had identified 6.764 million acres of State lands for leasing to different corporations.
  18. 18. Land Identified for Corporate Farming <ul><li>The provinces have identified 6.764 million acres of land for corporate agriculture farming by local and foreign investors. </li></ul><ul><li>Punjab 6.631 million acres </li></ul><ul><li>Sindh 29,842 acres </li></ul><ul><li>Balochistan 0.1 million acres </li></ul><ul><li>Khyber </li></ul><ul><li>Pukhtunkhwa 2,449 acres </li></ul>
  19. 19. Activities under CAF Plan <ul><li>The activities that may be carried out under CAF plan include: </li></ul><ul><li>Farming </li></ul><ul><li>Food Processing </li></ul><ul><li>Food Packaging, </li></ul><ul><li>Production and marketing of mutton, </li></ul><ul><li>Processing and packaging of milk, </li></ul><ul><li>Deep sea fishing and its processing, </li></ul><ul><li>Animal feed production and marketing </li></ul><ul><li>and many more. </li></ul>
  20. 20. Corporate Farming Objectives <ul><li>To seek efficiency of production and increased incomes/revenues by bringing together agricultural production, processing and marketing activities at one place under management of a corporate entity. </li></ul><ul><li>To improve agricultural productivity and profitability through the use of latest production technology and adequate expertise particularly for exports. </li></ul><ul><li>To produce high quality agricultural products due to favourable resource base. </li></ul><ul><li>To achieve/maintain internationally competitive unit cost of production for all major crops, fruits and vegetables </li></ul>
  21. 21. Investment Policy, Incentives & Opportunities for Corporate Farming <ul><li>Most Liberal Investment Policy: </li></ul><ul><li>CAF declared as an industry </li></ul><ul><li>100% foreign equity allowed </li></ul><ul><li>No minimum foreign investment </li></ul><ul><li>Remittance of capital, profits, dividends allowed </li></ul><ul><li>CAF will enjoy credit & other facilities </li></ul><ul><li>No ceiling on land holding </li></ul><ul><li>State land can be purchased, or leased for 50 years, and extendable for another 49 years </li></ul><ul><li>All banks and financial institutions will earmark separate credit share. </li></ul>
  22. 22. Investment Policy, Incentives & Opportunities for Corporate Farming <ul><li>Attractive Fiscal Incentives: </li></ul><ul><li>0% customs duty on import of agricultural machinery, equipment </li></ul><ul><li>and implements (not manufactured locally) New or used. </li></ul><ul><li>Exemption of duty on transfer of land for CAF </li></ul><ul><li>Dividends from corporate agricultural farms (for non industrial activities) not subject to tax </li></ul><ul><li>Farm income given more favourable treatment than non farm </li></ul><ul><li>corporate incomes because of the risk/uncertainty associated </li></ul><ul><li>with farming. </li></ul><ul><li>Existing definitions of farming activity, as distinct from processing/industrial activity, continue to be maintained. </li></ul>
  23. 23. Investment Policy, Incentives & Opportunities for Corporate Farming <ul><li>Investment Opportunities : </li></ul><ul><li>Land development/reclamation of barren, desert and hilly land for </li></ul><ul><li>agriculture purpose and crops farming. </li></ul><ul><li>Crops, fruits, vegetables, flowers/integrated agriculture (cultivation and processing of crops) </li></ul><ul><li>Modernization and development of irrigation facilities and water management plantation </li></ul><ul><li>Forestry, Horticulture, Dairy Farming, Livestock farming, breeding </li></ul><ul><li>Production of quality seeds </li></ul><ul><li>Fruits, vegetables & flowers-grading, processing, packaging, preservation </li></ul><ul><li>Seafoods (farming/fishing, processing and preservation of fish and marine products) </li></ul><ul><li>Agri-product storage facilities (separate package) </li></ul><ul><li>Marketing/Export of Agri-produce (separate package) </li></ul><ul><li>Cool Chains (Separate package) </li></ul>
  24. 24. COUNTRIES INTERESTED IN CORPORATE FARMING IN PAKISTAN <ul><li>China </li></ul><ul><li>Saudi Arabia </li></ul><ul><li>United Arab Emirates </li></ul>
  25. 25. Forward Steps towards Corporate Farming <ul><li>The United Arab Emirates (UAE), which imports 85 Per cent of its food, purchased 324,000 hectares of Farmland in the Punjab, Sindh and Balochistan Provinces in June 2008. Besides, the two UAE firms, Emirates Investments Group and Abraaj Capital, also expressed their interest in investing directly for corporate farming. </li></ul><ul><li>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. </li></ul>
  26. 26. Forward Steps towards Corporate Farming <ul><li>The government is going to develop a new security force of 100,000 men to be split among the four provinces to help stabilizing the investment by Arab Monarchs. This will cost the government about $2 billion to pay the salaries and train the security force. </li></ul><ul><li>Sindh, Balochistan and Punjab have submitted their lease terms to the BOI. Khyber Pukhtunkhwa is in </li></ul><ul><li>in the process of finalising the terms and conditions for </li></ul><ul><li>offering their land on long term basis to the investors. </li></ul>
  27. 27. Forward Steps towards Corporate Farming <ul><li>Sindh has proposed Rs 100,000 per acre lease per year with a 20 percent annual increase. The province has also indicated that the land could be leased out for 30 years with an extension of 20 years. </li></ul><ul><li>Balochistan has demanded Rs 50,000 per acre for leasing out land for corporate agriculture farming.   </li></ul><ul><li>Punjab has proposed to lease out the land in Cholistan to companies or firms registered under the Companies Act 1984 on a bank guarantee of Rs25,000 per acre for an initial period of 50 years that can be extended to another 49 years.  </li></ul>
  28. 28. CORPORATE FARMING MERITS <ul><li>New Technology Use </li></ul><ul><li>High Employment </li></ul><ul><li>Increase in Production and economic activity </li></ul><ul><li>Reduce Fragmentation </li></ul><ul><li>Increases Export Performance </li></ul><ul><li>Handsome Share of Taxes to the Government </li></ul>
  29. 29. Land Distribution by Farm Size 100 100 Total 37.5 5.5 Sub total 8.2 0.2 ≥ 60 13.0 1.4 20 - < 60 16.3 3.9 10 - < 20 19.1 8.8 Sub total 19.1 8.8 5 - < 10 43.4 85.7 Sub total 27.9 28.1 2 - < 5 15.5 57.6 < 2 Percent of total farm area Percent of total no. of farms Size of farm (ha)
  30. 30. CORPORATE FARMING DEMERITS <ul><li>Non-sustainable Production </li></ul><ul><li>Monopoly of high value input package by MNCs </li></ul><ul><li>Makes farmers landless </li></ul><ul><li>Undermines local production </li></ul><ul><li>Undermines local farm machinery </li></ul><ul><li>Rural migration to urban areas </li></ul>
  31. 31. CONCLUSION <ul><li>Corporate farming is good and it will help to increase the productivity of the farms as observed in various regions because it is backed & financed by big corporations. </li></ul><ul><li>It will enhance the use of highly advanced technology and will also develop our farm-market infrastructure and will also increase agricultural products export. </li></ul><ul><li>It will also provide employment opportunities to agriculture graduates and farmers. </li></ul><ul><li>The present condition of Pakistan’s agriculture indicates that the prospects of corporate farming in Pakistan is bright subject to the managerial skills of the companies and their relationship with the local community/small farmers. </li></ul>
  32. 32. THANKS

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