Military men want to kickstart Pakistan’s green revolution

Bloomberg | 4 January 2024

Military men want to kickstart Pakistan’s green revolution

 

By Betsy Joles

 

Pakistan sees farming potential amid the rolling sand dunes of Punjab’s Cholistan desert. Here, in the South Asian nation’s vast central plains, the government plans to lease massive tracts of state-owned land to overhaul an outdated agriculture sector.

 

But in an unusual arrangement, the military will have significant stake in the project, taking over a total expanse of as much as 4.8 million acres of land and helping to decide which individuals or global firms get parcels. That will give the army an outsize role in an industry vital to the economy and raises questions over profit made from public land, potentially at the expense of small farmers.

 

Pakistan’s government argues that corporate farming is essential to ensuring food security for its 240 million people. Over the past year, the country has struggled with runaway inflation and paltry foreign currency reserves.

 

Proponents of the agriculture plan say the army, which has huge influence in the way the country is governed, is uniquely suited to revitalize an ailing sector because of its power to fast-track projects. Others see potential pitfalls — including the risk that placing the military in control could hamper longer-term structural improvements needed to modernize farming.

 

Deals for the Green Pakistan Initiative, as it is known, fall under a newly-created economic council co-led by the army and tasked with boosting foreign direct investment. The project is in large part aimed at targeting capital from friendly Middle East nations reliant on food imports. After former Prime Minister Shehbaz Sharif inaugurated it in July, he requested billions of dollars from Gulf countries to get it off the ground.

 

“The Green Pakistan Initiative is our shared national obligation, our responsibility,” Sharif said during the inauguration ceremony.

 

Though details are still unclear, the plan may involve a profit-sharing mechanism between the army and provincial governments. Pakistan’s military would also play a role in auctioning leases lasting as long as 30 years. These powers, along with military leadership in the new investment council, mean the armed forces could shape decisions around Pakistan’s farmland and investment priorities for decades.

 

A Flailing Industry

 

Pakistan’s agriculture sector has struggled to overcome hurdles including poor market access, outdated farming practices and, thanks to climate change, increasingly frequent droughts and floods. As in neighboring India, the majority of Pakistan’s farmers are smallholders, making it difficult to implement change at scale.

 

“We have land. We do not have resources. And we do not have technology,” said Sabbah Uddin, an analyst and farmer. “We lack a coherent strategy.”

 

Over the years, as Pakistan’s population has also expanded, pushing the government to look outward to meet its food needs. The country shifted from an exporter to an importer of wheat, one of its main cash crops. The average wheat yield for the past five years — 2.9 tons per hectare — is 17% lower than India, 49% lower than China and 47% lower than the European Union.

 

Continued reliance on a fraying industry, combined with threat of a changing climate, is “now raising serious concerns about the food security,” said Abdul Wajid Rana, a program leader at the International Food Policy Research Institute in Islamabad.

 

Corporate farming under the Green Pakistan Initiative is one avenue to boost crop yields. Late last year, Pakistan signed a memorandum of understanding with Kuwait for $10 billion worth of projects, including some focused on food security.

 

The government also has collaborations lined up with China Machinery Engineering Corp, an engineering and construction heavyweight, and China’s Famsun, an agriculture equipment company, according to a presentation about the initiative in November. Pakistan’s foreign investment council, the Special Investment Facilitation Council or SIFC, will coordinate future agreements.

 

Companies involved say the initiative has already helped free up large parcels of land.

 

“Economies of scale are very important and this is what SIFC can deliver,” said Farrukh Amin, chief executive of Unity Foods Ltd., a Pakistani company involved in grain and oil production. Amin said the group signed a memorandum of understanding covering 75,000 acres of land in Punjab.

 

SIFC didn’t reply to written questions. Pakistan’s army also did not reply to requests for comment.

 

Fears of Eviction

 

The Green Pakistan Initiative has its share of critics. Earlier this year, the Lahore High Court temporarily blocked the Punjab government from giving 45,000 acres to the military, questioning the constitutionality of the move. But the stay order was eventually suspended and court documents show another million or so acres in Cholistan and elsewhere have been earmarked for the project.

 

“I think it’s one of those things that is too big to fail,” said Ahmad Rafay Alam, a lawyer who was part of a public interest petition against the land transfer in Punjab.

 

The army said in its submissions to the court that the Green Pakistan Initiative falls under its domain because food issues — including preventing famine — relate to national security.

 

In Chak No.20/ML, a village in Punjab’s Bhakkar district, people have other reasons to oppose the plan. Many fear the seizure of land they live on, which the government rented out decades ago under a dairy and livestock development scheme.

 

Muhammad Saleem, one of more than 150 people who signed a legal petition protesting a land transfer, said he’s entitled to ownership rights for a plot his father started cultivating in the 1950s after Partition forced him out of India and into Pakistan.

 

“We have settled in this forest because our people worked very hard,” Saleem said.

 

The Lahore High Court, however, has ruled that the Bhakkar petitioners don’t have formal leases for the land, though they’re considered tenants by the government.

 

Others worry that the ambitious plan will cut smallholders out of potential benefits. The price of land offered under the Green Pakistan Initiative is too steep for most, said Muzaffar Hotiana, a farmer in Pakpattan district who is considering sub-leasing land in Cholistan.

 

“Pakistani local farmers are not beneficiaries,” he said.

 

An Army’s Blueprint

 

The corporate farming push comes during a trying time for Pakistan. Economic headwinds pushed the government to seek a bailout from the International Monetary Fund last July.

 

With that backdrop, the army’s involvement could be seen as a positive by investors looking for stability, said Uzair Younus, a non-resident fellow at the Atlantic Council.

 

For much of Pakistan’s post-independence history, the army has played a significant role in running the country, but over the years, it has also developed corporate interests. The military runs some 50 commercial entities, ranging from cement production to banking and real estate. SIFC will now give Pakistan’s armed forces formal clout in deals with foreign entities.

 

“That helps investors, particularly sovereign investors, like the Saudis and the Emiratis,” Younus said, noting that red tape is one of the main obstacles to doing business in Pakistan.

 

Still, the military’s involvement risks angering farmers. Army-run farms have been the site of opposition movements in the past and the commercial projects remain a contentious subject.

 

“The military’s corporate interests are a well-established fact,” said Aasim Sajjad Akhtar, associate professor of political economy at Quaid-i-Azam University in Islamabad, pointing to a long history of allotting agricultural land to military officers.

 

Through its business conglomerate Fauji Foundation, the military runs a food and dairy company called Fauji Foods, which only recently turned its finances around after years of struggles. A new business, FonGrow, will also develop high-tech agriculture facilities. The company started its first farm in Punjab last year.

 

In a November presentation in Karachi, Shahid Nazir, Director General of Strategic Projects for Pakistan’s army, said the scale of the Green Pakistan Initiative was already large, with 140,000 acres of land tied up with foreign investors so far.

 

Securing Pakistan

 

For Pakistan’s government, corporate farming is also a way to deal with the consequences of increasingly extreme weather.

 

Take the deserts of Cholistan, a maze of shifting sand and shrubs. The Green Pakistan Initiative is banking on the uptake of water-saving technologies in this part of the country. Finding more sustainable ways to irrigate is crucial for Pakistan, where agriculture accounts for more than 90% of water use.

 

Few doubt Pakistan’s agriculture needs to improve. It currently employs nearly two-fifths of Pakistan’s population but accounts for only a fifth of the country’s gross domestic product. The question is how to ensure locals are not short-changed if Pakistan’s limited land and water resources are turned toward exports.

 

“This nation needs hope,” Uddin, the farmer, said. “But a point may come when things will go out of our hands and we will get exploited.”

 

In the near term, the Green Pakistan Initiative aims to make the industry more productive by replacing imports and encouraging exportable surpluses of staple crops. Many plots available for lease are also in arid and underdeveloped regions, supporting irrigation initiatives.

 

If the vast desert does turn green, profits may well follow — all under the army’s watch.