Valuemag investigates the conversion of farmlands to housing schemes and industrial estates and its impact on our cities, towns and villages
By Ahmad Humayun
espite its declining share in GDP, agriculture is still the single largest sector, contributing 21 percent to GDP and employing 44 percent of the workforce. More than two-thirds of Pakistan’s population lives in rural areas and their livelihood continues to revolve around agriculture and allied activities according to the latest government figures. It is our bad luck that despite being an agro-based country, we are compelled to import even basic food items and cash crops to meet our domestic needs. Every year there is a crisis of wheat, sugarcane or cotton. To overcome these shortages, we have to import the short fall at a considerable expense. Not only is this embarrassing, it proves to be a pretty expensive oversight in the long run since the popularity graph of the government in charge usually nosedives immediately. The cause of this crisis is frequent government negligence, poor policies and lukewarm commitment to this sector. A little attention would go a long way in boosting our economy and making our country self-sufficient in the agricultural sector. Agriculture needs to be taken seriously as an industry because: a) it is an industry today and b) we can earn huge amounts of foreign exchange by exporting surplus items– becoming the food basket for the world can be a worthy and productive goal in the short and long terms. Boosting agriculture sector would create more jobs and stop the rural migration to the cities as well. Not only do we need to create more rural employment opportunities, we need to implement better systems of pricing, marketing, packaging and shipping our produce to the local, regional and international markets.
ESSENTIAL FACTS AND FIGURES
Pakistan’s total cultivated land is about 22.51 million acres. Out of this 16.41 million acres is in Punjab, 3.29 million acres in Sindh, 1.90 million acres in the NWFP and 0 .91 million acres in Balochistan. According to the Economic Survey of 2007-08, in the current fiscal year, there is 21.75 tons production of wheat, 63.92 million tons production of sugarcane, 5.56 tons production of rice and 11.65 million bales of cotton.
There is an increase in the agricultural production, but there is no addition to the cultivated land for the last many decades. In fact, there is actually decrease in the total cultivated area. The primary cause of this decrease is conversion of prime agricultural lands for housing schemes and industrial estates. Not only is it a dangerous waste of our resources, detrimental to the environment (as it is one of the factors causing global warming and climate changes) and major source of rural unemployment and population migration to the cities, it is bad for our economy to convert prime agriculture lands to housing or industry – a house or a factory can be built on arid land as well but you can’t grow crops on barren soils! It’s a criminal waste.
After the 9/11 incident, a number of expatriate Pakistanis sent huge amounts of foreign exchange to the country; as a result our remittances jumped from $ 1.5 billion to $ 6 billion. Moreover, Pakistan also received $ 11 billion for joining the war on terror. During this period huge investments were made in Pakistan on dead end non productive Real Estate which was mostly speculative in nature; no new jobs were created or actual groundwork initiated on the newly emerging housing schemes in the beginning – instead, housing schemes were turned into a new kind of commodity trading – sensing public demand, the developers announced housing schemes without paying costs of the acquired land and the plot files business started. It also attracted small investors. This trend further boosted the business of Real Estate; it reached a point where the files rate would increase on the hour, every hour like hot stocks climb on the stock exchange. It is mind-boggling to realize that despite being an agro-based economy, we are facing food shortages – no wonder. Killing our fertile lands to set up housing or industry is counter- productive. What would you do when you run out of fertile lands – import food? And cash crops like cotton for our industry? Or spend billions to convert our deserts into agricultural lands? It can’t be done anyway, otherwise, the Arabs would have done it by now. Don’t take my word for it, take a drive down Multan Road or Raiwind Road (Lahore) and observe this reality for yourself. These housing schemes can rightly be called “Ghost Housing Schemes” as they don’t have any housing unit or inhabitant but an outer wall and a sign board announcing the name of the scheme. The wealthy owners of these housing schemes purchase sometimes a very fertile piece of land cheaply and convert it into a housing scheme.
THE ROLE OF MILITARY AND DHA
The wheat producing lands measuring thousands of acres are being attacked by bulldozers. This fact can be judged from the statement of ex-minister of defense Rao Sikandar Iqbal that for giving accommodation to the army personnel one lac, 89 thousand and 202 kanal have been arranged. The Defence Housing Authority (DHA) Karachi received 69 thousand 376 kanal, DHA Lahore got 82 thousand 410 acres land, and DHA Islamabad share was 4500 kanal. Out of this total land 90 percent lands were previously used for agricultural purposes. Since the early 1950s, the military has acquired the millions of acres of land through out the country for distribution to serving and retired armed forces personal. According to one estimate, the armed forces control about 12 million acres, constituting about 12 percent of total estate land. Out of this, 62 percent is in the Punjab, 27 percent in Sindh, 11 percent in NWFP and Balochistan, about seven million acres of total agriculture land and estimated worth of 700 billion.
Interestingly, only about 100,000 acres are directly controlled by the armed forces and its subsidiary companies, the Fauji foundation, the AWT and the Bahria foundation, and distributed among the serving and retired personal. There are 288 cooperative housing societies out of which 154 societies are located in Lahore. Only in Lahore, the total registered cooperative societies which consist of one lac, 16 thousand and 984 kanal. Out of this figure, development work is completed on 78 thousand kanal. This is the official record excluding illegal housing schemes’ figures.
THE ROLE OF PRIVATE SECTOR
Entire villages have been wiped out by this rapid urbanization. In Punjab, there is an upsurge in the property rates. In the east of the city, DHA started with only four phases initially. It has now developed 10 phases extending down to touch Pakistan’s eastern defense line — the BRB Canal. In south Lahore, the city has been expanded up to Chung. Same is the case with other cities and smaller towns.
The situation is quite alarming and requires immediate government intervention. “Government should take immediate notice. This must be stopped right away,” says Mian Zahoor Ahmed Watto, Chairman Formanites Housing Society. “Rapid urbanization and growing number of housing schemes are not only destroying the city infrastructure, they are generating pollution, congestion and traffic problems,” he asserts.
Commenting on this dangerous trend, Mohammad Ali Mian, the President of the Lahore Chamber of Commerce and Industry (LCCI) is of the view that immediate steps must be taken by the government to curb the growth and expansion of these mushrooming housing societies. “I have always been of the opinion that the government should adopt a solid methodology for the promotion of trade and industry by discouraging property business,” he speaks out. “The property business, on one hand, is depriving the national exchequer of much needed revenue while on the other hand it is making no contribution to the national economy by creating new jobs. Rather this ‘dead investment’ is eating up precious agricultural land and reducing employment opportunities in rural populations! Spending the same amount to set up some industry could do miracles for this country,” he continues. “Pakistan is an agro-based country where over seventy percent of the total population lives in rural areas and earns its bread and butter through agri-industry. About 22.51 million hectors out of total landscape of 79.61 million hectors of this country is presently under cultivation and feeding the whole nation. Mushroom-like growth of new housing societies is posing a serious threat to our agriculture and in the presence of a large number of ‘ghost housing schemes,’ the threat becomes even more serious. A large number of villages have vanished so far thanks to wealthy developers of these housing societies. And if the situation remains the same for a few more years, I personally fear that Pakistan would have to start importing staple food! Given the high corruption levels in our society the regulatory agencies are not doing proper scrutiny of the numerous housing schemes; the result is unplanned construction and of course depletion of agricultural area,” he contends.
“The government should ensure maximum facilities in rural areas, as in the first place it would help stop the process of migration to urban centers and in the second place, it would encourage our agriculturists and farmers to expand and grow. The LCCI is grateful to the government for doing a marvelous job in the present budget by giving incentives to the agriculture sector. It was an area that needed government’s help urgently. Now the government should divert its attention towards the mushroom growth of housing societies ensuring due process,” he confirms.
“It is a criminal act that agriculture land is being converted into housing colonies,” says Dr Shakeel Qureshi, an eminent architect, planner, designer and engineer. “Agricultural lands and entire villages are vanishing right before our eyes while rapid urbanization of major cities is causing huge traffic problems, out of control expansion and poor planning and inadequate urban infrastructure for the growing city populations. In the developed world, town planners plan ahead, at least 20 to 25 years ahead and have a clear picture of how a city and its surrounding smaller cities, towns and villages would develop down the line. We should be doing the same. If we make long term planning our major goal, then there will be no unexpected migration from rural to urban centers. Town planning should be free from all political pressure. Take Lahore Ring Road’s case for example – it’s an old project but due to its political implications, no government has managed to even complete the plans on paper. Political uncertainty and discontinuity of policies after every government change means some projects never see the light of the day. Every ruling party makes short term plans because they want immediate political mileage. Due to political uncertainty and lack of due process, land developers are buying agriculture lands cheaply and converting them into expensive housing schemes to quadruple their returns on investments. Purchase and sale of plots for future investments is totally unproductive for the economy, however, purchase of plots for construction of housing would actually help the economy by creating jobs and services, since approximately 44 industries directly or indirectly benefit from this activity. However, we should protect our agricultural lands by expanding vertically instead of horizontally. A think-tank of town planners is needed to build a pressure group to stop this alarming situation from escalating any further. Already we are wasting our limited resources on this unproductive sector – environmental pollution, municipal and social issues are increasing in our cities, not to mention, rural population migration is adding to the pressure.”
Prominent Architect Dr Pervaiz Vandal has said that, “urbanization is an international phenomenon, as the world is becoming a global village. We can’t stop this by imposing bans on land development; the need of the hour is how to manage the state by taking the developers and builders into confidence. Banning new housing societies, schemes and towns or imposing new taxes on sale purchase of plots and houses is not going to work,” he says adding that the government should settle on some other strategy to curb the negative effects of this mushrooming growth. “It is an era of market economy; the investors must invest on projects they think are gainful. Though, capturing huge tracts of potential agricultural land miles from the urban areas by land developers to set up housing is smashing up the infrastructure,” he says. “We need proper town planning by the professionals and think-tanks, who know the requirement and needs of the people of the area in question.”
Dr Vandal strongly condemns the monopoly and high prices charged by the developers for establishing even a mediocre housing society for the consumers, “It is immoral to sell a plot worth over Rs 50,000 at Rs 500,000 or more,” he declares. “There is no justification for charging such high prices for their land developments and telling the world they are fulfilling the needs for housing of the poor or an average man when even the middle classes can’t afford them! I don’t see a single housing scheme offering a poor or a needy person a 3 Marla house for example at an affordable rate. I think only the government can build economy housing schemes for the lower income groups. This state of affairs can’t continue for long, we need to design strategies with the consent of the common man. We need to build pressure groups of influential thinkers to deal with this situation,” he suggests.
GOVERNMENT’S ROLE-INDUSTRY ON FARMLANDS?
That’s one side of the question. What about setting up industry on agricultural land? Mohsin Syed, chairman Punjab Industrial Estates (PIE), defends the role of Government. “Extreme care is being taken to protect prime agricultural land,” he confirms. “Industrial estates have only been established on barren land in Lahore, Gujrat, Attock, and Multan. This is not a coincidence; in fact a policy decision was taken to ensure that not even an inch of agricultural land was wasted in the name of industrialization,” he says.
“There are no two opinions that the industry cannot grow without a corresponding boost in the agricultural produce of the country. Therefore, we try to ensure that agriculture does not suffer in the hand of industry. I would give you just the example of Sunder Industrial Estate where we have several tracts of wedge-shaped green areas, mainly used to retain rain water. Whenever there is rain, water is collected here and allowed to slowly seep into the ground. This keeps the underground water table stable,” he adds.
Can there really be barren land in Punjab? So the process of fertile soils turning into a desert has already started in Punjab and the government is aware of it and setting up industry on top of it to hide this phenomena – interesting. Remember this is breaking news and you heard it first from us!
Ibrahim Mughal, Chairman Agri Forum Pakistan thinks that, “a relatively large portion of productive land is being used for housing colonies, factories, Industrial Parks rather than cultivation of prime land”. One of the main reasons for this, according to him, is decreasing number of acres per farmers and increase in the prices of agriculture inputs. The agriculture statics of government of Pakistan show that cultivated area in the country is decreasing. Data shows that in 1998, 56.93 acres of land were under cultivation, which has now decreased to 22.51 million acres.
“In the last few years, more than 491 million acres of productive land in Punjab has been converted into housing colonies and industrial estates,” Ibrahim explains to Valuemag. “Although selling land for a profit makes things easier in the short term, in the long run this is a harmful practice for agriculture. Even basic food items like vegetables and pulses are very pricey these days because the farmers who used to grow them are no longer there. The government should seriously think over this grave situation. There should be a proportional increase in the agricultural lands with the population growth. Agriculture is our future,” he asserts.
So what is the government doing to correct this situation? A government official who doesn’t want to be named says, “It’s the right of the landowners to use their lands any way they please. You can’t legislate or stop them from selling agricultural land to industrialists or land developers. No doubt, right now investors are looking for easy returns on their investments; however, in my opinion the government should encourage them to invest in setting up new industry instead of Real Estate,” he confirms.
FOREIGN INVESTORS EYE PAKISTAN’S FARMLANDS
Government is working on improving the agriculture sector by inviting foreign investors to farm our lands – large, mechanized farms – owned and operated by giant multinational agribusiness companies- growing plant varieties protected under the stringent international patent regime. That is the government of Pakistan’s vision for the future of agriculture in this poor agrarian country. The logic for this strategy is that we have to integrate our economy with the global economy; otherwise we’ll be left out in this day of competition and technology.
But an emerging group of critics is warning that economic integration may betray millions of small farmers who have been feeding the ever growing population of Pakistan, as well as undermine the national interest in food security. “Liberalization of agricultural markets under international trade agreements and influence of global financial institutions is clearly a trap by the industrialized North to effectively take control over the developing countries,” says Dr. Shahid Zia, a research fellow with the Sustainable Development Policy Institute (SDPI), a think tank based here in the Pakistani capital city of Islamabad.
Zia and others fear that, in its haste to reap short-term financial gains and to replenish its dwindling foreign exchange reserves, the government is ceding control over food, biodiversity and local economies to multinational companies. “Our future food security will be in the hands of a few multinational companies,” says Zia.
The debate over Pakistan’s agrarian future centers around two disputes: whether foreign investment and corporate farming should be permitted in Pakistan; and whether Pakistan’s intellectual property rules should provide “plant variety” protection — a non-patent form of intellectual property — to genetically altered seed.
Food rights activists believe that plant variety protection coupled with authorization of corporate farms will transform the country’s agriculture, from subsistence-based to corporate and export-oriented. “These two complementary policies are clear proof of the government’s tilt towards the multinational companies, which consider the agricultural markets of South Asia as the most lucrative in the world,” says Mohammad Arshad, who works with Islamabad based the Network for Consumer Protection. “Once these two policies are in place, these companies can own large farms and produce protected plant seeds on a mass scale. There will be no restriction on what the companies grow, and obviously they will be more interested in investing in commercially viable exportable crops rather than low-gain food grains,” he fears.
So if the choice is between the industrialists and land developers who want to do away with our agricultural land entirely or multinational agribusiness firms who want to grow cash crops on our farmland, who would you choose to lead Pakistan’s agriculture sector in the next century? The way things are developing we will be importing staple food either way and paying through our nose to buy even the basic food items from these multinational firms in the very near future. Is the food crisis here to stay? What a scary thought! ■
Ahmed Humayun is a Bureau Chief Value TV and a senior business and commerce analyst/writer/journalist in his own right
This article was originally published in the print edition of Valuemag, August 2008, issue 4