You are currently viewing Transition towards market mechanism in the Agri sector can salvage the national economy

Transition towards market mechanism in the Agri sector can salvage the national economy

  • Post author:
  • Post category:Agriculture
  • Reading time:4 mins read

The two-day Agri-Connections 2025 conference and expo, themed ‘Investing in Agriculture for Growth,’ began today at the Karachi Expo Center. Numerous fertilizer companies and other stakeholders are participating in the event, which has attracted significant visitor attention. The conference will cover various topics aimed at improving agricultural production and corporate farming.

A note from the organiser adds that Salimullah, Deputy Governor of the State Bank of Pakistan, said that subsidies only for vulnerable segments and a transition towards market mechanisms in the agriculture sector could help the national economy. He spoke at the Pakistan Agriculture Coalition’s two-day agri conference and expo at the Karachi Expo Center. “My view is that instead of providing support price mechanism, let the market develop because where government interventions are not available, the sectors adjust to market dynamics,” said Salimullah. 

Olivier Durand, the Lead Agriculture Specialist at The World Band, discussed the policy framework for agriculture and said public support favours large farmers. However, we should still target small farmers to fill a large productivity gap.

In his welcome speech, Chief Executive PAC Kazim Saeed said that historic geopolitical changes are rewiring global economic relations and agri-commodity flows. 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, in his address, said that the agricultural department of the Government of Sindh has several programs to support farmers from subsidized tractors, implement drip irrigation systems, various other agrarian 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, while speaking about investing in agriculture for growth at scale, 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 that are currently investing in corporate and contract farming for a total surface of 26,000 hectares, and FGM expects that the invested surface will increase to 80,000 hectares in the coming year,” said Matteo.

He said that water distribution, utilities, and logistics infrastructure are some bottlenecks in the growth of corporate farming. At the same time, regulatory issues include 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,” said Matteo.

A panel discussion on corporate and contract farming in Pakistan discussed its benefits and concluded that it could transform the local agriculture sector.

Maria Saleem from Fatima Group revealed that they are part of a big consortium for a corporate farming project on 50 thousand acres since growing population is creating great demand, hence the solution is 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.

“We are working with thousands of farmers and guiding them, and the challenges were the introduction of modern technology and a skilled workforce. Yet, the government support is there,” said Ulughbek.

Author

Sharing is caring

Leave a Reply

Search Website for more Articles