Dawn, Karachi / By Rauf Klasra
ISLAMABAD, Jan 5: An incentive package to attract local and foreign investment in corporate agriculture farming is being prepared, which envisages giving farming the status of industry, a five-year tax holiday, exclusion of big landholdings from future land reforms and no tax at district level.
To finalize these incentives, the federal government has called an inter-provincial meeting here on Monday.
The meeting is being held in the backdrop of Chief Executive General Pervez Musharraf's directive to the Agriculture Ministry and Small & Medium Enterprises Authority (SMEDA) for preparing a policy package for Corporate Agriculture Farming (CAF).
According to the proposed package, the land to be used for the purpose of Corporate Agriculture Farming will not be included in any land reforms, undertaken by the government in future.
The CAF will be taxed on the pattern of industry, though a tax holiday for the first five years will be allowed. Moreover, there will be no hurdles in exporting the CAF production nor there will be any tax at the district level.
Electricity tariff for these corporate farms will be the same as applicable to agriculture tubewells. Gas, water and phone facilities will be provided by the state. The initial lease of land will be for 50 years extendible for another 49 years. The owners will have the first right to purchase the CAF land after that period. As far as proposed interventions in the policy are concerned, officials said corporate agriculture income tax would be levied on these companies at the rate similar to commercial companies.
To avoid non-productive and upfront loading on projects, a nominal sum of Rs100 per acre will be charged as land transfer or release registration fee.
The Agriculture Development Bank, along with other financial institutions, will announce credit lines for corporate agriculture farming. These funds will be available to viable projects as equity participation or loaning facility.
A support committee will be created in MINFAL, comprising officials from the federal and provincial ministries of agriculture, Board of Investment, provincial boards of revenue and farmers organizations to launch a campaign for attracting foreign and domestic investment in the agriculture sector. All proposals from domestic and foreign investors for the CAF will be placed before the Board of Investment, which will finalize the case in consultation with the Agriculture Ministry.
The provincial governments will identify, within 60 days to MINFAL, a complete list of potential cultivable lands in blocks greater than 2000 acres, suitable for largescale mechanized farming along with terms and conditions.
The induction of corporate companies will bring modern production technology, access to capital, direct access to domestic and foreign markets, and professional management expertise.
It will also generate rewarding opportunities for the inputs industry, as the agricultural companies will act as large consumers of farm inputs. On the marketing side, agricultural companies generally undertake their primary processing and grading at farm sites and supply raw material to agro industry.:
