Pakistan is pushing ahead with a plan to sell or lease agriculture land to foreign investors even as opposition grows at home.  A Saudi delegation is due in the country at the end of Ramadan this month for further talks on a plan to lease an area of land more than twice the size of Hong Kong, a Pakistani official told Reuters this month.

The Saudis are looking to boost their food security and Pakistan will presumably will reap monetary benefits in return. But what about Pakistan’s own food security in the longer term, All Things Pakistan asked in a recent post.

A stampede  for food in Karachi on Monday, although not related, underscored Pakistan’s own vulnerabilities and the plight of some of the nation’s desperately poor. Eighteen women and children died iin the stampede that erupted when a local businessman was handing out wheat flour among hundreds of poor women gathered in a narrow lane.

Those were the destitute, but giving away rich land to foreigners to cultivate and take the produce to their homeland will ultimately hit the ordinary Pakistani, the small farmer and those who indirectly depend on farming for their livelihood, critics are warning.

Robert Schubert in a piece for Food and Water Watch says it has been recognised in other parts of the world that such a “land grab”  harms local communities by dislodging smallholder farmers, aggravating rural poverty and food insecurity. Many of the land purchases comprise tens of thousands of acres which are then turned into single-crop farms – and these dwarf the small-scale farms common in the developing world, where nearly nine out of 10 farms (85 per cent) are less than five acres.

Giving away land carries an unhappy connotation across South Asia, perhaps more than in other parts of the world. And in Pakistan’s case, at this difficult point in its history, it raises even more painful questions.

To many it is yet another assault on the nation’s sovereignty. “With the US increasingly occupying Pakistan with their covert and overt armed presence, and the Gulf states taking over our rich agricultural lands, our rulers are voluntarily making us a colony again – as we were under the British who used our men to fight their wars and our cheap labour to ship the finished produce back to Britain! Have we come full circle after 62 years of our creation?” said defence expert Shireen M. Mazari. 

The Dawn wrote in an editorial headlined “Country for Sale” that the government stood in violation of a UN General Assembly resolution on Permanent Sovereignty over Natural Resources. It said the government had moved ahead with the plan without running it past parliament and it would do grievous damage to farmers.  And it quoted a recent study which identified Pakistan as one of the countries at “extreme risk” in terms of food security. “This is the time to help local farmers and landless peasants, not wealthy foreigners and their food needs,” it said.

And all this is being played out against the backdrop of the militancy raging across the country. Public discontent works to the militants advantage and they could use this to bolster support, as discussed in an earlier post on the same issue.

Or it could lead to fresh upheaval. Business Monitor Intelligence said such deals had fallen apart in other parts of the world because of local resistance. It cites the case of Madagascar where a plan to lease a huge tract of agriculture land to a Korean company likely contributed to the downfall of the president in March.

{Photographs of farmers in Multan and in Swabi in the northwest]

If Pakistan is to dig itself out of its current crisis it needs two things to happen.  It needs strong economic growth to tackle poverty and undercut the appeal of hardline Islamists; and it needs peace with India if it is to permanently cut its ties with militants it has traditionally seen as a reserve force to be used against its much bigger neighbour.  Or so goes the prevailing view.

This week’s United Nations report on pollution in Asia — and the melting of glaciers which feed the rivers of India and Pakistan — suggest there are serious risks to that scenario of an ultimately prosperous Pakistan at peace with its neighbours. In other words, can it achieve the economic growth it needs without worsening pollution further? And can it make peace with India if the two countries end up at loggerheads over dwindling supplies of water?

According to the U.N. report (see full pdf document here), thick clouds of brown soot and other pollutants are hanging over Asia, darkening cities, disrupting the monsoon and accelerating the melting of the mountain glaciers. These atmospheric brown clouds exacerbate the effect of global warming by depositing soot on the glaciers, which captures more solar heat than white snow and ice. ”If the current rate of retreat continues unabated, these glaciers and snow packs are expected to shrink by as much as 75 percent before the year 2050, posing grave danger to the region’s water security,” it says. (more…)

A report in the Financial Times that Saudi Arabia has agreed in principle to defer payments for crude oil sales to Pakistan worth $5.9 billion has raised speculation about what it is looking for in return.

The Daily Times suggests that the Saudis are buying political stability in Pakistan, which may include throwing a lifeline to President Pervez Musharraf.  “Apparently, the immediate impact will be on PML-N chief Nawaz Sharif’s politics of confrontation with Musharraf, which will have to be diluted significantly in line with ground realities,” it says. ”The Saudis, like the Americans, want a stable transition to civilian rule and no confrontation between the politicians and the military, including Musharraf.”

The Saudis have no interest in seeing Pakistan descend into chaos, not least because this would further strengthen al Qaeda which has set its own sights on the kingdom’s rulers. It may also see Sunni-dominated Pakistan as a potential counterweight to Shi’ite Iran. So it would make sense for it to buy stability in Pakistan.

At the same time, Saudi Arabia is looking to use Pakistani farmland to grow grains  to protect itself from food shortages and rising prices, as indeed are other Gulf states.  So there may be an element of oil-for-food as well as oil-for-stability in the deal.

The  Daily Times adds a note of warning however in a subsequent editorial. It says Islamabad must also look to alternative sources of energy so that the Saudi bailout does not become “politically suspect”.

One to watch, with no doubt far more to come before this deal is fully played out.

This is an idea that looks crazy at first glance — Pakistan, struggling with its own food shortages and rising prices, rents out its farmland to grow grains for the rich Gulf states instead. 

But the idea appears to be gaining momentum. Saudi Arabia is holding talks with officials in Pakistan, among other countries, to set up projects to grow wheat and other grains to protect itself from crises in world food supplies. Dubai-based private equity firm Abraaj Capital has already said it is looking at investing in agriculture in Pakistan  and other Gulf countries are also showing an interest.

So is this good or bad news for Pakistan?

U.S. News & World Report says there may be ”potential for large and enduring benefits on both sides. The reported sellers of under-developed farmland, Pakistan and Sudan, for example, are poor and lack the resources to make their own land productive,” it says. “Foreign investment is meant to help the investor, but in these cases it might also help the host countries by improving roads and irrigation and, of course, providing cash.”

The Financial Times last month quoted a senior Pakistani official  as saying of the talks to sell farmland to the United Arab Emirates: “Our aim is not to do away with precious farmland but in fact to raise the productivity of our farms and turn barren land in to fertile farmland.”

On the positive side is the potential for big investments in Pakistan from wealthy Gulf economies looking to use windfall oil profits to diversify away from oil.  According to one expert, the cumulative sovereign wealth fund wealth in the Middle East is now about 1.5 trillion dollars, mostly in the United Arab Emirates; and their assets could triple or quadruple in five to 10 years time.

Pakistan also has an interest in keeping relations sweet with Saudi Arabia as it seeks a deal on deferred oil payments  to ease its own financial crisis. Is this the beginning of a new version of oil for food deals?

On the negative side are all the issues about sovereignty and economic control. And of course the perennial question in emerging markets. What will it mean for the poor man who is already struggling to feed his family.

It would be hard to think of a more complex web of problems.  Pakistan and Afghanistan face, in very different ways, severe domestic political crises which are being exacerbated by soaring prices and food shortages. Both blame each other for failing to crack down on the Taliban and al Qaeda. And now tensions are rising over attempts by Pakistan, the traditional supplier of food to Afghanistan, to curb its wheat exports to make sure it can feed its own hungry population.

For an idea of how significant this is in Afghanistan, it’s worth reading this piece in the Chicago Tribune. “Western officials - including officers with the NATO-led International Security Assistance Force - say the food crisis is potentially more destabilizing to the U.S.-backed government of President Hamid Karzai than the insurgency itself,” it says.

The website Registan.net followed this up by saying that the food crisis will drive more people into the arms of the Taliban. “Hungry, disenfranchised people are angry people,” it says. ”… every time someone can’t afford to buy bread for his family, he’ll have one more reason to … blow up some Humvees.

The World Food Programme says that emergency food aid meant to help 2.55 million Afghans affected by soaring food prices has reached only about 38 percent of the targeted population, according to IRIN, largely due to curbs on Pakistani food exports.

“One of the main reasons why food aid has not yet reached even half the targeted communities is procurement and logistical hurdles,” IRIN reports. “Initially it was decided that wheat and other food items would be procured from markets in neighbouring countries, especially Pakistan, which traditionally supplies Afghan food markets. However, rising prices have prompted Pakistani authorities to impose a strict ban on food exports, hitting WFP’s operation in Afghanistan.” 

Yet look at it from Pakistan’s point of view. It has a shaky coalition government which will become all the more vulnerable if it doesn’t make sure its people have enough food to eat. For all its interference in Afghanistan, it has also felt the burden of supporting three million Afghan refugees. 

“The priority must be on feeding the people of Pakistan, not excluding the three million Afghan refugees who still enjoy our hospitality, Hamid Karzai and company’s ingratitude notwithstanding,” wrote Ikram Seghal in The News last month. “Find me another nation in the world having so many refugees.”

Can someone see a way out of this morass? Or are Pakistan and Afghanistan condemned to stumble from crisis to crisis until historians write, with 20/20 hindsight, that whatever happens next was inevitable?