Quietly but steadily, corporate money is betting on Pakistani agriculture. One of the country’s largest business conglomerates — Nishat Group — for example, which began to expand into agriculture by setting up a modern dairy farm near Sukheki more than a decade ago is now planning to venture into the manufacturing of “precision” farm machinery in the country.

The growing corporate interest in agriculture is not surprising given the huge business opportunities offered by this sector in terms of its production of some key agriculture commodities like wheat, rice, cotton, meat and milk.

“I am very much excited about the agricultural sector in Pakistan. There are enormous opportunities here for sustainable business growth and exports,” Mian Mohammad Mansha, the chairman of Nishat Group, told this correspondent last week.

The country’s food exports, especially of rice, grew 37 per cent to $8bn in the first 11 months of last fiscal year to May. “The sector’s actual potential remains unexplored. The large productivity gap underscores that agriculture can make huge contributions to economic growth, food exports, and poverty alleviation,” he adds.

Ever since venturing into corporate farming in 2013, his company, Nishat Agriculture Farms Limited (NAFL), has invested consistently and heavily in agriculture. The group owns five farms spread over 1,500 acres of farmland and a large modern dairy farm producing packaged milk and other dairy products in collaboration with a Turkish firm for the large urban market.

While farm mechanisation can yield substantial benefits, it is only possible through high capex

“When Nishat Agriculture bought the land, it was water-logged and barren. We have constantly been investing in mechanisation of our farms every step of the way, from seed plantation to irrigation to crop harvest since 2017. This has helped us reclaim uncultivable land and turn it into one of the most fertile pieces of farmland in the country,” Mian Mansha notes.

His efforts to turn his own farms into fertile land have also helped his neighbouring farmers in Thatha Raika village recover their thousands of acres of water-logged farms. Nishat Agriculture is growing four crops — Alfalfa (protein-rich fodder), corn, rice and wheat — at the farm.

“Our lands were almost knee-deep below water when Nishat began reclaiming their land,” a local farmer recalls. “Now the groundwater level has gone down significantly, and we are again able to cultivate our area.”

Mian Mansha argues that Pakistan’s agriculture has enormous potential, but there is a need to improve farming practices, especially replacing the age-old flood irrigation method, by promoting mechanisation to get more out of the land at a reduced cost and less burden on natural resources and land under cultivation.

“The rapid climate change demands that we quickly adopt mechanisation in agriculture to reduce water consumption (around 90pc of available water in Pakistan is consumed in farm irrigation in the country), improve crop output, and cut time spent on sowing and irrigation,” he maintains.

Since Pakistan does not manufacture most of the machines used in farming, the upfront cost of farm mechanisation is quite formidable, especially for smallholder farmers.

“Nevertheless, the long-term benefits of mechanisation in the shape of huge water conservation, significantly reduced input and labour costs, and notable increases in crop yields and product quality can be enormous,” the Nishat Group chairman underscores.

“We are also helping smallholder farmers from the area by educating them in efficient farming practices and new technology.”

“The Pivot Irrigation System that we have installed to irrigate our farms, for example, is extremely efficient and uses 70pc less water compared to conventional flood irrigation, lowers electricity consumption, improves precision application of inputs, and results in time and labour savings due to its uniform uses as against flood irrigation methods.

The use of rice transplanters is estimated to drastically slash labour costs from Rs11,000 per acre to less than Rs1,000

“The pivot irrigation system can also be accessed online through a mobile app to perform various functions. The water thus saved could be used by other farmers. This also helps us get much better crop yields even from dry land or sandy soils than other farmers,” he says.

Local Manufacturing: Recently, Nishat Agriculture Farms has imported the Yanmar rice transplanter, the automated seedling picking and planting system, from Japan and aims to manufacture the machine locally.

“We have plans to invest in local manufacturing of agriculture equipment and machines in Pakistan, starting with the Japanese transplanter. We may collaborate with Millat Tractors or may use our own auto assembly facility in Faisalabad,” he asserts.

A hydraulic system for effortless operations and maintenance, the transplanter significantly reduces seedling waste, improves crop spacing and uniformity for optimal growth, controls plant density, and increases efficiency in water and fertiliser usage.

“The use of rice transplanters is estimated to drastically slash the labour costs from present Rs11,000 per acre to less than Rs1,000,” a senior Nishat Agriculture Farms official claims. According to him, the Japanese manufacturer of the machine claims that Bangladeshi rice growers had more than doubled (up to 100-200pc increase) their production by using this machine.

Agriculture is the backbone of Pakistan’s economy, contributing more than a fifth. The sector is the largest employer, employing more than 45pc of the country’s total workforce and is a major source of export earnings.

However, the sector faces multiple challenges: low yield, negligible mechanisation, growing water scarcity, large post-harvest crop losses, absent storage and cold chain facilities, rapidly declining soil fertility, extreme climate events, land fragmentation and so on.

Economic experts are unanimous that Pakistan cannot achieve robust, sustainable economic growth without a boost to its agricultural productivity and rural incomes. That will require intensive efforts to manage energy, water, land, soil and energy more efficiently and sustainably through adaptation to climate change and mechanisation.

It requires substantive policy reforms in agricultural research, extension, seed technology, and input markets, as well as large investments. Corporate participation and investment in agriculture are key to tackling these challenges and transforming agriculture with precision and efficient farming techniques and practices.

With Pakistan’s agriculture at a turning point, corporate participation will go a long way in realisation of the sector’s untapped potential provided policymakers seize this opportunity to execute reforms needed to encourage corporates like Nishat Group to invest in this largely neglected area.

Published in Dawn, The Business and Finance Weekly, July 8th, 2024