Corporate farming: the future of agriculture

LAHORE: Pakistani agriculture is highly inefficient mainly because of very low landholding that dilutes with time as it is distributed to the large number of heirs after the death of father or legal landowner.

One of the major drawbacks in agriculture is the small landholding size in Pakistan. Around 27 million acres of cultivation is done on 6 acres or less land holding on average by the small farmers.

Cultivating on such small land parcels results in massive inefficiency and low productivity,

Many governments in the past have tried to resolve this issue through large scale corporate farming or cooperative farming. Under cooperative farming, the government encouraged small farmers to form cooperatives to share resources and increase efficiency. However, cooperative farming was not successful in Pakistan, and this concept never really took off.

Corporate farming however has proved highly successful, but there are rare corporate farmers in the country. Jehangir Tarin is perhaps the largest and most successful corporate farmer in Pakistan. He produces crops at half the cost of small farmers. Per acre yield of his corporation is more than double the yield of every crop he cultivates.

The idea of corporate farming did not take off in Pakistan because there were not enough large pieces of land available in the country in its main cultivation area. However, real cultivable area in Pakistan is over 54 million acres of which 27 million acres is not yet developed.

The recent idea of leasing out vast virgin lands to corporate investors is a solution to our agricultural woes. If implemented transparently, it would increase cultivation area and increase crop sizes substantially.

It could in fact make Pakistan a net exporter of agricultural products instead of importer of agricultural commodities. The main challenge would be to find suitable local or foreign investors.

With a low holding average, a large number of landowners or farmers manage small plots of land. This leads to inefficient land utilisation, as small plots are more challenging to manage effectively. It may be difficult to implement modern agricultural practices, machinery, and technology on such small plots, which can hinder productivity.

Larger farms generally benefit from economies of scale. By consolidating land into larger holdings, farmers can leverage larger machinery, bulk purchases, and specialized labour, leading to cost savings. However, with a low holding average, individual farmers may not be able to take advantage of these economies of scale, potentially resulting in higher production costs and reduced profitability. Larger landholdings often attract more significant investment opportunities, both from the farmers themselves and external investors.

This can enable investments in infrastructure, machinery, technology, and research and development. However, with a low holding average, the potential for attracting significant investments may be limited, hampering the adoption of modern farming practices and innovation.

Small landholdings have resulted in fragmented infrastructure, such as irrigation systems, access roads, and storage facilities. Maintaining and upgrading infrastructure across numerous small plots is challenging and costly.

This fragmentation hinders efficient water distribution, transportation, and storage, affecting overall productivity. With small landholdings, farmers may face constraints in diversifying their agricultural activities.

Diversification can help mitigate risks, optimise resource utilisation, and increase overall productivity. However, with limited land, farmers may be limited to cultivating only a few crops, reducing their ability to adapt to market demands and changing conditions. Ultimately, the small farm holders would shift to high value agriculture like fruit farms to earn a decent living

Overall, a low landing holding average of less than 6 acres in an area with a total current cultivation area of over 27 million acres can lead to inefficiencies, reduced economies of scale, fragmented infrastructure, limited diversification, and constrained investment opportunities, all of which can impact agricultural productivity and sustainability.