In March 2025, the Pakistan Bureau of Statistics released its second-quarter economic growth figures for FY25 (October–December), revealing a troubling picture for agriculture. The sector grew by a modest 1.1%, following an even weaker 0.74% growth in the first quarter. These numbers mark a steep decline from the same period in FY24, when agriculture recorded strong growth of 8.17% and 5.82% in Q1 and Q2, respectively.
Surprisingly, within this overall slowdown, the livestock subsector — which makes up nearly 60% of agriculture — posted an impressive 6.51% growth in Q2, the highest in a decade, despite no major interventions by the public or private sector.
But while livestock soared, the crop sector — long the backbone of Pakistan’s agricultural economy — faltered. Crop production shrank by 6.57% in Q1 and 5.38% in Q2, in sharp contrast to last year’s double-digit growth in both quarters.
The downturn is largely attributed to drastic declines in key crops:
- Cotton dropped 30.7%, from 10.22 million to 7.08 million bales
- Maize fell 15.4%, from 9.74 million to 8.24 million tonnes
- Rice saw a minor dip of 1.4%
- Sugarcane declined by 2.3%
A deepening wheat crisis is at the heart of this collapse. In 2023, wheat fetched strong prices of Rs3,900 per 40kg, encouraging over six million farmers to reinvest in high-cost inputs like hybrid seeds, fertilisers, and diesel for irrigation. This led to bumper Kharif harvests of rice, maize, and cotton.
However, in 2024, despite the Punjab government announcing the same support price, it failed to procure wheat, leaving farmers to sell at distress rates between Rs2,400 and Rs2,700 — far below the estimated cost of Rs3,200. In July, the government imposed district-level price caps that worsened the situation, further squeezing farmers’ incomes and restricting their ability to invest in the next crop cycle.
This liquidity crunch led to a domino effect: input usage fell, especially fertilisers, and the impact is now evident in the poor FY25 figures. As wheat drives both agriculture and the rural economy, its underperformance has destabilized the entire sector.
Policy failures have compounded these challenges. Without substantial reforms — including improved credit access, stronger private sector involvement, better grain storage, and stricter market regulation — another year of poor agricultural performance in FY26 seems inevitable.
Climate change also played a significant role in 2024, with erratic rainfall, heatwaves, and rising temperatures affecting yields of maize, rice, cotton, and sesame. Farmers remain unequipped to adapt, lacking access to climate-smart tools and resilient seed varieties.
Adding to the strain is the proliferation of low-quality and unapproved seeds, particularly for cotton and rice. These seeds showed poor germination rates and low resistance to pests and extreme weather, leading to further yield losses.
Irrigation challenges intensified during Q1 and Q2 of FY25. Water availability dropped on three fronts:
- Canal water decreased by 3.4%, hitting rice and cotton areas in Sindh hardest.
- Rainfall was 40% below normal between September and December 2024, causing near-drought conditions.
- Tubewell electricity tariffs rose by 20% from 2023 levels, further limiting water access for cash-strapped farmers.
The water situation in 2025 is even more dire, with declining reservoir levels expected to reduce crop acreage and productivity, which will likely reflect negatively in FY26’s figures.
In summary, Pakistan’s crop sector is rapidly losing competitiveness due to rising costs, worsening water stress, and flawed government policies. While subsidised machinery may benefit a few, it won’t resolve the sector’s underlying issues. A comprehensive, long-term strategy focused on productivity, climate resilience, and financial reform is urgently needed to revive the country’s agricultural backbone.
