Potential of Pakistan Corporate Agriculture Farming

Pakistan's Agriculture Base: Strengths

Abundant agricultural land

Total area
79.6 Mn Hectares (MH)

Cultivated area
22 MH

Irrigated
18 MH

Rainfed (Barani)
4 MH

Contribution to economy

26% to GDP

Employs 44% of labour force (16.35 Mn)

70% of exports (Agri-produce & processed products)

Natural Merits

4 seasons, tropical weather

Crop production throughout the year

Largest canal irrigation network

Vast tracts of land along Indus Basin - comprising 5 rivers

Centuries old farming culture

Amongst the lowest cost producers

Cost effective and hardworking agricultural manpower

Low cost irrigation water

Reasonable price of land

Farm to market road network

Competitive cost of inputs

Crops production

Wheat
21 Mn tons

Cotton
11 Mn bales

Rice
5 Mn tons

Sugarcane
50 Mn tons

Fruits/Vegetables
10 Mn tons

Fisheries & Livestock production

Fisheries potential (annual catch)
7.5 Mn tons

Buffaloes (Number)
23 Mn

Cattle (Number)
22 Mn

Sheep & Goats (Number)
75 Mn

Poultry (Number)
530 Mn

Country side

Traditional but simple culture

Inspiring music

Lively folk

Strategic location

Located in food deficit region:

Central Asian Republic (North)

Middle East (South)

Iran & Afghanistan (West)

Principal gateway to CARs

Strong historical & traditional links

Strong Potential

Comparative advantage in the region

Vast areas of cultivable waste land available

Strong potential for expansion of agriculture base

Corporate Agriculture Farming (CAF): Objectives

Large local market increasing at 29% per year

Internationally competitive unit cost of production for all major crops, fruits & vegetables

High quality agricultural products due to favourable resource base

Low transportation cost, and developed routes to Middle East, Iran, Afghanistan and CARs

International Quality inputs available in country

Market driven polices. Least Government interventions

Most Liberal Investment Policy:

CAF declared as an industry

100% foreign equity allowed

No minimum foreign investment

Remittance of capital, profits, dividends allowed

CAF will enjoy credit & other facilities

Local or foreign, private or public limited companies to invest in corporate farming

No ceiling on land holding

State land can be purchased, or leased for 50 years, and extendable for another 49 years

All banks and financial institutions will earmark separate credit share.

Attractive Fiscal Incentives:

0% Customs duty on import of agricultural machinery, equipment and implements (not manufactured locally) New or used

Exemption of duty on transfer of land for CAF (under consideration)

Tax relief: First Year Allowance @ 75% of PME cost

In Addition:

Provincial Agriculture Income Tax (AIT) laws provide for proportionate liability of corporate shareholders

Dividends from corporate agricultural farms (for non-industrial activities) not subject to tax

Farm income given more favourable treatment than non-farm corporate incomes because of the risk/uncertainty associated with farming

Existing definitions of farming activity, as distinct from processing/industrial activity, continue to be maintained.

Investment Opportunities:

Land development/reclamation of barren, desert and hilly land for agriculture purpose and crops farming

Reclamation of water front areas or creeks

Crops, fruits, vegetables, flowers farming/integrated agriculture (cultivation and processing of crops)

Modernization and development of irrigation facilities and water management Plantation

Horticulture

Dairy farming

Livestock farming, breeding and small ruminants (sheep, goat)

Production of quality seeds

Fruits, Vegetables & flowers - grading, processing, packaging, preservation

Seafood (farming/fishing, processing and preservation of fish, shrimps and other marine products)

Agri-produce storage facilities (separate package)

Marketing/Export of Agri-produce (separate package)

Cool Chains (separate package)