Corporate Farming

The Potential of Pakistan Corporate Agriculture Farming
Pakistan’s Agriculture Base: Strengths • Abundant agricultural land Total area Cultivated area Irrigated Rainfed (Barani) •    •      •      • 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 79.6 Mn Hectares (MH) 22 MH 18 MH 4 MH

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 Cotton Rice Sugarcane Fruits/Vegetables 21 Mn tons 11 Mn bales 5 Mn tons 50 Mn tons 10 Mn tons 7.5 Mn tons 23 Mn 22 Mn 75 Mn 530 Mn

Fisheries & Livestock production

Fisheries potential (annual catch) Buffaloes (Number) Cattle (Number) Sheep & Goats (Number) Poultry (Number) • 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

 Corporate Agriculture Farming (CAF): Objectives • • • • •

Comparative advantage in the region Vast areas of cultivable waste land available Strong potential for expansion of agriculture base 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 Reclamation of water front areas or creeks Crops, fruits, vegetables, flowers farming/integrated agriculture Modernization and development of irrigation facilities and water

agriculture purpose and crops farming

(cultivation and processing of crops) 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

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