KARACHI – Subsidies only for vulnerable segments and transition towards market mechanisms in the agriculture sector can help the national economy, said Salimullah, Deputy Governor, State Bank of Pakistan.
He was speaking at Pakistan Agriculture Coalition’s two-day agri conference and expo at the Karachi Expo Center on Wednesday.
“Instead of providing support price mechanism, let the market develop because where government interventions are not available, the sectors adjust to market dynamics,” he said.
Olivier Durand, Lead Agriculture Specialist at The World Band, said the public support is favourable to large farmers, and there is a need to target small farmers to fill a large productivity gap.
Earlier, Chief Executive PAC Kazim Saeed, in his welcome speech, said that historic geo-political changes are re-wiring global economic relations and agri-commodity flows, and this is also a great opportunity for Pakistan’s agriculture sector.
“The policies and economic structures set up in our agriculture sector in the 1960s and 1970s achieved their goals by the 1990s. So, if Pakistan’s agriculture sector is to salvage our economy, we need to accelerate the transition where the private sector is driving change and investing,” said Kazim.
Special Assistant to Chief Minister Sindh on investment and public-private partnerships Qasim Naveed Qamar said that the agricultural department o has several programs to support farmers, from subsidised tractors to implementing drip irrigation systems, various other agricultural machinery, direct subsidies, etc.
“We need strategic investments in farming techniques, precision agriculture and sustainable irrigation methods that can drive productivity and profitability. We need to encourage innovation in agri-tech, climate-smart farming and value chain development,” said Qasim.
Matteo Lagatti, Senior agro-economist, FGM International, said that corporate farming is still a nascent sector in Pakistan as only 4% (840,000 hectares) of total cultivable land has been allocated for corporate farming development.
“There are 17 companies who are currently investing in corporate and contract farming for a total surface of 26,000 hectares, and it is expected by FGM that the invested surface will increase to 80,000 hectares in the coming year,” said Matteo.
He said that some bottlenecks in the growth of corporate farming are water distribution, utilities, and logistics infrastructure, while on the regulatory side, issues are water pricing, seed registration, import tariffs, and tax policy.
“A detailed sector policy is missing, and conflicts regarding water allocation are also creating hurdles in the growth of corporate farming in Pakistan,” he said.
Maria Saleem from Fatima Group said the rise in demand is due to the growing population demand for corporate farming.
Ulughbek Rahimov from Indorama Agro LLC informed that they had been engaged in corporate farming projects on thousands of acres in Uzbekistan for the last 15 years, and the agriculture sector there witnessed a gradual transfer from a state-led system to a private sector cluster.
