Abstract
Pakistan has been attracting interest in its large but underdeveloped
agricultural sector from across the
globe in recent months. This comes as
part of the increasing trend of rich food deficit countries investing
in
agriculture in poorer countries with more plentiful land resources.
In
June, news agency Reuters reported that the government of Pakistan had offered
404,700 hectares (ha)
of farmland for sale or lease to foreign investors.
It is the usual suspects of the Gulf states and South
Korea who are the
likely targets of the government' s drive for investment. Oil rich, food poor
states from
the Middle East and food deficit prone South Korea have been
spurred by the high food prices of 2007
and 2008 to increase their food
security by investing in agricultural land abroad.
In July, the Pakistani
minister for investment said that the country would be happy to provide land
for
Korean companies to build food and dairy processing facilities. Also
in July, the chief minister of the
Punjab said that there was a large
amount of interest in investing in the province' s agriculture from Qatar.
A month earlier, in June 2009, Tetra Pak announced the signing of an
memorandum of understanding
with local company Engro Foods to create a
dairy hub in the Sahiwal district of the Punjab. The hub will
serve 15
villages in the district and aims to promote more efficient production and
bring smallholders into
the formal dairy market chain.
Foreign
investment has a vital role to play in improving productivity in Pakistan' s
agricultural sector.
Investment in training farmers to improve their
production methods will be beneficial for both the
producers themselves
and the companies seeking to buy their products. Investments such as the one
by
Tetra Pak are to be welcomed wholeheartedly.
The sale or lease of
land to foreign companies is a more complex issue. While no firm deals have
been
announced as yet, the government' s apparent willingness to sell large
swathes of land could be a source of
friction with local farmers if they
feel they are not benefiting from increased production. Land and
agriculture are emotive issues, particularly in such a rural country as
Pakistan.
This is not to say that any deal to lease land to foreign
investors would always produce negative results,
but the government needs
to be sure that those who will be impacted by any deals are fully consulted
and
not just focus on the valuable source of foreign currency being
offered. Such deals have already fallen
apart in other parts of the world
owing to local resistance, most notably Madagascar where a plan to lease
a
huge tract of agricultural land to a Korean company likely contributed to the
downfall of the president
in March.
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