Cash Crops in Pakistan: Economic Benefits & Risks

Cash crops play a vital role in shaping the economic backbone of global and national agriculture. In Pakistan, major cash crops such as wheat, cotton, rice, and sugarcane contribute approximately 22.7% to the agricultural GDP, according to the Pakistan Economic Survey 2023–24. These crops not only generate substantial foreign exchange through exports particularly rice and cotton but also provide employment to millions of rural households. Minor cash crops like fruits, vegetables, pulses, and oilseeds add value through farm diversification, allowing farmers to hedge against market fluctuations and seasonal crop failures.

Despite their economic significance, the expansion of cash crop cultivation comes with inherent trade-offs. A growing focus on export-oriented agriculture can lead to income inequality, as large landholders with access to irrigation and capital disproportionately benefit from high-value crop production. Smallholder farmers often lack access to quality inputs, credit, and markets, forcing them into subsistence farming or tenancy arrangements with lower profit margins. Additionally, the dominance of water-intensive crops like sugarcane and rice has strained Pakistan’s already scarce water resources, accelerated groundwater depletion and contributing to environmental degradation.

Moreover, the prioritization of cash crops has diverted land away from food crops, undermining local food security. In times of climate shocks or market instability, such specialization can heighten the vulnerability of rural communities. Monoculture practices also reduce biodiversity and increase pest resistance, requiring heavier pesticide and fertilizer use those further damages soil and ecosystems.

Balancing the economic benefits of cash crops with the need for equitable and sustainable agriculture requires a strategic policy shift. Encouraging climate-smart diversification, investing in smallholder infrastructure, and regulating input subsidies can help maximize gains while safeguarding livelihoods, food systems, and environmental health.

Cash Crops in Pakistan: Engines of Rural Growth and Export Potential

Cash crops form the economic backbone of Pakistan’s agriculture sector, which employs 37.4% of the national labor force (Labor Force Survey 2022–23). Key crops such as cotton, sugarcane, wheat, and rice not only sustain domestic food systems but also drive industrial output and foreign exchange earnings. According to the Ministry of National Food Security & Research (2024), Pakistan is the fifth-largest global producer of both cotton and sugarcane, the seventh-largest producer of wheat, and ranks tenth in rice production. Together, these cash crops contributed to an 11.03% growth in the crop sector in 2023–24, signaling a strong rebound from recent climate-induced setbacks such as floods and heatwaves.

Beyond these staple commodities, horticulture is gaining momentum. With mango exports alone exceeding $250 million annually, the fruit and vegetable sector now contributes 12% to agricultural GDP (Trade Development Authority of Pakistan, 2023). These economic gains are translating into tangible social benefits. Rural households engaged in cash crop farming earn 30–50% more than those relying on subsistence agriculture (World Bank, 2023). In Punjab, sugarcane farmers report per-acre earnings of PKR 150,000 to 200,000, significantly reducing poverty levels (PARC, 2023).

Cash crops also stimulate job creation. The cotton-textile value chain supports 15 million workers across farming, ginning, spinning, and garment production (All Pakistan Textile Mills Association, 2024). Similarly, rice mills in Sindh and Punjab generate seasonal employment for approximately 2.3 million laborers. On the export front, basmati rice brought in $2.5 billion in 2023, while kinnow oranges from Sargodha earned $180 million through exports to Russia, UAE, and Afghanistan.

As Pakistan seeks to grow its agricultural economy and improve rural livelihoods, cash crops remain a vital yet complex pillar. Harnessing their full potential will require balancing productivity with sustainability and equitable access to markets and resources.

Challenges of Cash Crop Production in Pakistan

While cash crops drive economic gains in Pakistan’s agriculture sector, they also pose significant challenges that demand urgent attention. One of the most critical issues is income inequality. A mere 5% of landowners control 60% of the country’s arable land, relegating most smallholders to marginal plots with limited access to credit, quality inputs, and markets (UNDP, 2023). Women, who form a substantial share of the agricultural labor force, earn 40% less than men for the same work in cash crop cultivation (FAO, 2023), underscoring entrenched gender disparities.

Environmental degradation is another pressing concern. Cotton monoculture has exhausted 60% of Sindh’s groundwater reserves (WWF-Pakistan, 2024), while excessive pesticide use in Punjab’s rice-growing regions has contaminated 35% of drinking water sources (PCRWR, 2023), threatening public health and biodiversity.

In terms of food security, land use imbalances are proving costly. In 2023, Pakistan imported 3 million tons of wheat at a cost of $1.2 billion due in part to land being diverted to more lucrative cash crops like sugarcane (Ministry of Food Security). Meanwhile, the sector remains highly vulnerable. The 2022 floods damaged 4.4 million acres of farmland, incurring $30 billion in losses (World Bank). Repeated heatwaves have cut wheat yields by 15–20% (ICIMOD, 2023), endangering national grain supply.

Real-world examples illustrate this paradox. Punjab’s cotton industry, while contributing to $19.3 billion in textile exports (APTMA, 2023), suffered 40% crop losses in 2023 due to Bt-cotton pest resistance (CABI Report). In Sindh, mango exports generated $250 million, yet climate-induced diseases cut yields by 30% (Horticulture Development Board, 2023).

To address these challenges, policy action must prioritize equity, sustainability, and resilience. Expanding microloans and land reforms can empower smallholders. Subsidies for drip irrigation and organic practices, along with digital market access tools like the Tajir App, can improve both productivity and inclusiveness. Investing in climate-smart technologies such as heat-resistant wheat ("Dharabi") and flood-adapted rice systems, inspired by Bangladesh’s floating farms, will strengthen long-term adaptation.

A balanced approach that considers social justice, ecological health, and market competitiveness is key to ensuring that Pakistan’s cash crops fuel inclusive and sustainable rural development.

Conclusion

Cash crops are both a cornerstone and a conundrum in Pakistan’s agricultural landscape. While they generate essential income, employment, and foreign exchange, particularly through crops like cotton, rice, and sugarcane they also amplify structural inequities and environmental vulnerabilities. Their economic promise is evident in rising exports, rural wage growth, and sectoral recovery post-climate shocks. Yet the associated costs land concentration, water depletion, pesticide pollution, and displacement of food crops pose serious risks to national food security, ecological balance, and smallholder resilience.

The 2022 floods and recurring heatwaves have further exposed the fragility of Pakistan’s cash crop economy. Climate impacts, combined with unequal access to land and inputs, disproportionately affect small farmers and women, reinforcing poverty cycles. Monoculture practices and short-term profit motives continue to undermine long-term sustainability.

To resolve these contradictions, Pakistan must recalibrate its agricultural strategy. Policies that prioritize equity such as microloans, land reforms, and market access tools must be integrated with environmental safeguards, including sustainable irrigation and organic farming. Climate-smart innovations, such as heat- and flood-resistant crop varieties, must be scaled up. Only by aligning economic growth with environmental stewardship and social justice can Pakistan unlock the true potential of cash crops as engines of inclusive rural development.

References: Pakistan Economic Survey; World Bank; FAO; WWF-Pakistan; TDAP; Labor Force Survey; Ministry of National Food Security & Research; Trade Development Authority of Pakistan; PARC; All Pakistan Textile Mills Association; UNDP; PCRWR; ICIMOD

Please note that the views expressed in this article are of the author and do not necessarily reflect the views or policies of any organization.

The writer is affiliated with the Institute of Agricultural and Resource Economics, University of Agriculture, Faisalabad, Pakistan.

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