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Corporate Farming

The Potential of Pakistan Corporate Agriculture Farming

Pakistan’s Agriculture Base: Strengths

•  Abundant agricultural land

• 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

• 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

Investment Policy, Incentives & Opportunities:

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 

• Forestry

• 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)

Source: Pakistan Board of Investment