Securing Pakistan's Future Through Agriculture Sector

Economic stability is essential not only for individuals and families but also as a foundation for national prosperity. It fuels progress and development at all levels—from local communities to the nation. Each sector of an economy contributes uniquely to the stability and growth of the country. In Pakistan, where agriculture is often called the "backbone" of the economy, this sector’s health and resilience are particularly vital. Despite the essential role of agriculture in Pakistan, the sector has faced persistent challenges, and progress has been sluggish. Since its inception, Pakistan has struggled with barriers to economic growth, often overlooking crucial issues that directly impact its agricultural productivity and sustainability

Agriculture: The Cornerstone of Pakistan’s Economy

Agriculture employs roughly 40% of Pakistan's workforce and contributes around 18.9% to the GDP. This sector provides food security, raw materials, and employment while directly affecting both rural and urban economies. Yet, for all its contributions, Pakistan’s agriculture sector has long been neglected, especially the farmers at its core. It is troubling to see those farmers, who are the true stewards of agricultural productivity, face an array of challenges that hinder their growth, well-being, and decision-making capabilities.

A demotivated and under-resourced farmer is unable to make informed decisions about crop choices, planting methods, and investment in farm technology. This lack of empowerment undermines their ability to maximize yields, adapt to environmental challenges, and contribute fully to the economy. Consequently, a fragile agricultural sector threatens not only food security but also economic stability on a national scale.

Challenges Faced by Pakistani Farmers

To address the plight of farmers and the agricultural sector, it is important to recognize the multifaceted challenges they face. Here are some key issues:

1. Unstable and Low Commodity Prices
Pakistani farmers frequently struggle with low and unstable prices for their produce, including essential crops like wheat and rice. Prices for these commodities often fluctuate due to poor market regulation, lack of transparent pricing mechanisms, and inconsistent demand projections. This instability creates uncertainty, discouraging farmers from investing in better inputs or modern farming techniques. Unlike in other countries where farmers can rely on price supports or subsidies, Pakistani farmers often sell their crops at prices below their production costs. In recent years, wheat prices have been inconsistent, sometimes falling below the cost of production. In Punjab, for instance, farmers faced considerable losses in 2023 as market rates fell significantly short of anticipated prices. Such instances are not rare and lead to financial distress for farmers, who depend heavily on government-supported pricing mechanisms.

2. Government Restrictions on Open Market Access
The government often restricts farmers from freely marketing their crops, particularly for staples like wheat and rice. These restrictions limit farmers' ability to negotiate better prices, access diverse markets, and maximize profit margins. Consequently, they are bound to sell their produce through government-approved channels, where prices are not competitive. While the intent is to maintain stable food prices for consumers, these controls can make it difficult for farmers to sustain their operations and growth.

3. High Input Costs
Another pressing concern for Pakistani farmers is the high cost of inputs, particularly diesel, fertilizer, seeds, and pesticides. Rising fuel prices increase transportation and machinery costs, while the prices of fertilizers have surged in recent years, partly due to inflation and supply chain disruptions. These escalating input costs erode profit margins, leaving farmers with minimal returns on their investments. When the cost of producing crops outweighs the income they generate, it discourages investment in sustainable practices and new technologies. In 2023, the cost of urea—a common fertilizer—nearly doubled, placing a significant financial strain on small-scale farmers. With limited access to affordable alternatives, many farmers reduced their fertilizer usage, resulting in lower crop yields and, consequently, reduced income.

4. Climate Change and Environmental Challenges
Climate change poses a severe threat to Pakistan's agriculture sector. Unpredictable weather patterns, including droughts, floods, and extreme temperatures, disrupt planting and harvesting schedules, reduce yields, and increase vulnerability to pests and diseases. Pakistan's farmers are often ill-equipped to cope with these changing conditions, as they lack access to resilient crop varieties, adaptive farming practices, and reliable weather forecasts. For example, the devastating floods of 2022 inundated millions of acres of farmland, resulting in billions of rupees in damages. The impact of these floods continues to affect farmers today, as they struggle to recover from lost crops, damaged soil, and depleted resources.

5. Uncontrolled Commodity Price Fluctuations
Commodity prices, especially for crops like maize, experience volatile fluctuations. This inconsistency makes it difficult for farmers to plan for future crops and secure stable income. When commodity prices fall unexpectedly, farmers face reduced revenue, which may not even cover their production costs. This volatility discourages long-term investments in the agriculture sector and creates uncertainty for stakeholders.

What Pakistan Needs to Do

To foster a resilient agricultural sector, Pakistan must implement targeted reforms that address the core challenges farmers face. Here are some essential measures:

1. Strategic Planning to Balance Input and Output Prices
A well-thought-out plan to regulate input and output prices can help protect farmers from financial vulnerability. Price stabilization mechanisms, subsidies for key inputs, and incentives for sustainable practices can provide a financial buffer. Additionally, the government should promote efficient supply chains to reduce costs associated with transportation and distribution.

2. Ensuring Fair Profits for Stakeholders
A rational profit-sharing framework is essential to ensure that all stakeholders—farmers, distributors, and consumers—benefit equitably from agricultural production. To achieve this, Pakistan can learn from successful models in other countries where farmers receive a fair share of profits through cooperatives, direct market access, and transparent pricing policies. For example, in India, several agricultural cooperatives allow farmers to sell directly to consumers, minimizing intermediaries and maximizing farmer profit margins. Implementing a similar model in Pakistan could provide a viable income source for small-scale farmers.

3. Policy Development for Production, Storage, and Export
Strategic policies must be designed to encourage production, secure surplus produce, and support export. By investing in storage facilities, such as silos and cold storage units, Pakistan can prevent post-harvest losses and stabilize market prices. Additionally, promoting export can open up international markets, which offers higher profits and strengthens the agricultural economy. For example in 2021, the government of Pakistan incentivized mango exports, resulting in a record-high export volume. By expanding such export opportunities, the agriculture sector can attract new revenue streams and contribute to foreign exchange reserves.

4. Implementing Accountability Mechanisms
Ensuring that individuals and institutions act in favor of the agricultural sector is essential. This requires strict accountability measures to deter harmful practices, such as importing surplus wheat despite local availability. Effective policies should also focus on reducing corruption and providing farmers with access to quality seeds, fertilizers, and equipment.

5. Promoting Entrepreneurship over Credit Dependency
Rather than fostering a dependency on loans and credit, Pakistan should encourage entrepreneurship within the agriculture sector. By establishing a supportive business environment, farmers can diversify their income streams and reduce reliance on seasonal crop cycles. Government programs that provide training, resources, and incentives for value-added agricultural activities can significantly boost productivity and profitability.

Example: In many regions, agricultural entrepreneurs have launched food-processing ventures, turning raw produce into market-ready products. These enterprises not only provide additional income for farmers but also create jobs, reduce waste, and strengthen local economies.

A Call to Action: Protecting Pakistan’s Backbone

To secure Pakistan's future, protecting and nurturing the agricultural sector is imperative. The country cannot afford to ignore the challenges that its farmers face, as they are the primary contributors to food security and economic resilience. A healthy agricultural sector translates to a strong economy, stable livelihoods, and improved food security for all Pakistanis. By addressing these challenges through comprehensive policy reform, strategic investments, and community support, Pakistan can unlock the full potential of its agriculture sector and empower its farmers to drive national growth.

A prosperous Pakistan begins with a thriving agriculture sector—one where farmers are respected, empowered, and equipped to face future challenges. It is time to save the backbone of Pakistan’s economy and, in doing so, secure a brighter, more stable future for the nation.

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.

Naveed Shahzad is an Entomologist and CEO of Punam Seeds, Faisalabad, Pakistan.

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