One of the Middle East’s largest private equity companies has been quietly buying farmland in Pakistan as part of plans by the United Arab Emirates to increase food security and to damp inflation.
Dubai-based Abraaj Capital says it is working with the UAE government on the strategic agribusiness investments in Pakistan. The government in Abu Dhabi has been holding talks with Islamabad about a framework for investment in its agricultural sector as it seeks to secure cheaper long-term supplies of staples such as wheat and rice.
The Gulf state, which imports 85 per cent of its food needs, has already said it is to consider building a strategic reserve of staple food items, part of a broader strategy to tame inflation of more than 10 per cent, with sharp rises felt in food prices across the entire UAE population.
A senior Pakistani official told the Financial Times the government had agreed in principle to allow the sale of rural farmland to investors from the UAE, setting aside Pakistan’s own domestic concerns about increasing food prices and shortages of important commodities.
Be warned, this is not going to be an easy step for the common farmers in Pakistan, this will hurt them specially since there is no safety net and no good economy to back them up just now! And doing this without having land reform.....