The Economic Survey of Pakistan 2024-25 reveals a grim reality for the nation’s backbone: a sharp 13.5 per cent decline in the production of major crops. While officials often point to climate change as the convenient culprit, the true crisis is far more structural, driven by surging production costs, falling commodity prices, and an ineffective marketing system. Agriculture, which supports nearly 40 per cent of the national workforce, grew by a meagre 0.56 per cent last year, falling dangerously short of its 2 per cent target.
Over the past three years, the cost of farming has become unbearable as prices for fertiliser, pesticides, hybrid seeds, and diesel have skyrocketed. Even when international prices for inputs like urea dropped from $925 to $392 per metric tonne, local manufacturers failed to pass these benefits to farmers, instead raising domestic prices to protect their own profit margins. Simultaneously, the government added to the burden by raising electricity tariffs for tubewells three times in three years, further straining already depleted farm budgets.
This cost surge coincides with a global reversal of the post-COVID commodity boom. Global prices for staples like wheat, maize, and rice have plummeted, leaving Pakistani growers squeezed between rising input expenses and falling farm-gate prices. The situation reached a breaking point in 2025 when the government deregulated the wheat market without a smooth transition mechanism, causing local prices to crash to nearly half of their 2023 levels.
In response, the state has relied on loan schemes and “plastic cards,” such as the Kissan Card, which many major farmers’ organisations have rejected as mere band-aids. Farmers argue that they do not need more debt; they need fair support prices that include a 25 per cent profit margin to ensure financial stability. The current loaning system often sinks growers deeper into a cycle of poverty, especially when harvest income fails to cover the commercial interest rates small farmers are forced to pay.
Furthermore, an ineffective marketing system continues to benefit middlemen at the expense of growers. Without robust cooperatives or contract farming, growers are forced to sell their produce at rock-bottom prices immediately during harvest because they lack the financial strength and storage facilities to hold it. Currently, nearly 13.8 per cent of grain production in Punjab is wasted due to poor storage, yet the government continues to follow an “ostrich policy” by not officially recognising these losses. Modern steel silos could reduce these post-harvest losses from 10 per cent to just 1 per cent, potentially saving enough wheat to eliminate the need for imports.
To steer the country out of this deepening crisis, the government must shift from a piecemeal approach to a coherent policy framework. This includes diverting the Rs200 billion currently spent on ineffective fertiliser subsidies toward sustainable Research and Development (R&D). Investment in R&D is the only way to close the yield gap and develop the climate-resilient, high-yielding seed varieties that Pakistan desperately lacks.
The message from the fields is clear: the current strategy of extending credit is a “band-aid for deeper systemic problems”. If the government fails to prioritise fair crop prices, modern storage infrastructure, and reduced input costs, the ongoing decline of the agricultural sector will ripple across the broader economy, jeopardising national food security and the livelihoods of millions.