Climate shocks agriculture
Pakistan's agriculture sector once again found itself trapped between climate shocks and policy uncertainty in 2025. For a sector that contributes around 24% of GDP and provides livelihoods to more than one-third of the country's workforce, the year served as a stark reminder of how vulnerable national food security remains.
As Punjab is the key province when it comes to agricultural output, the crisis has been far more pronounced there. The combination of lower agricultural output in FY25, high input costs, hyperinflation and devastating monsoon floods that destroyed crops and damaged infrastructure pushed thousands of farmers deeper into financial distress.
The Economic Survey of Pakistan 2024-25 reflects this fragility. Agriculture recorded a modest growth of 0.56% in FY25, far below expectations and insufficient to support broader economic momentum. While livestock showed relative resilience with growth of 4.72%, the crop sector contracted sharply due to erratic weather, reduced acreage and falling productivity. Major crops such as cotton and wheat underperformed, undermining farm incomes and weakening backward and forward industrial linkages.
Punjab, which accounts for nearly 70% of national food grain production, entered 2025 already under pressure from rising input costs, falling crop prices and a controversial shift to a free-market wheat and sugarcane regime. Subsequent floods turned a difficult year into a near crisis. Torrential rains, followed by an unusual release of water by India into Pakistani rivers, inundated large parts of central and southern Punjab, submerging standing crops of rice, cotton, sugarcane, maize and vegetables. Irrigation channels, farm-to-market roads and storage facilities were damaged, delaying harvests and disrupting supply chains.
Although the floods also affected Khyber-Pakhtunkhwa and Sindh, the agriculture sector in those provinces was not hit as hard as in Punjab. Official assessments estimate that crop and agriculture-related infrastructure losses exceeded Rs430 billion nationwide, with Punjab accounting for the largest share. The destruction has not only reduced output for the current season but also disrupted subsequent sowing cycles, raising fears of prolonged pressure on food supplies and rural incomes.
For farmers on the ground, the impact has been immediate. Muhammad Aslam, a small farmer from southern Punjab, said floodwaters remained on his land long enough to wipe out his entire crop. "Everything was ready and we were just weeks away from harvesting, but floodwater spared nothing," he said. While compensation covered some costs, it did not replace a season's income. "I am not alone. The entire belt suffered. Even our homes were destroyed, pushing us into extreme poverty, debt and depression," he added.
Such accounts are echoed across Punjab's countryside. Farmer leaders argue that repeated shocks have left growers exhausted and disillusioned. Khalid Khokhar, President of Pakistan Kissan Ittehad, said the crisis extends far beyond floods. "In the last two years alone, farmers have suffered cumulative losses of Rs2,200 billion in the wheat crop because of low market prices under the free-market regime," he said. Losses in cotton, sugarcane and other crops, he added, were equally severe. Farmers believe the government sides with powerful market players rather than food producers, he said, noting that despite shattered prospects they remain on the land because farming is their only means of survival. The policy environment in 2025 did little to restore confidence. Although the provincial government announced it would purchase wheat at a support price of Rs3,500 per 40kg, farmers said the price offered little relief as production costs were significantly higher. They also fear that when wheat stocks enter the market, prices may fall below the announced level, pushing growers into further losses.
Business and industry groups highlighted deeper structural weaknesses. The Pakistan Business Forum (PBF) described agriculture's weak performance as the outcome of fragmented governance and long-standing policy failures. Ahmad Jawad, PBF chief organiser, said crop agriculture remained under severe stress throughout the year, with cotton output falling to nearly six million bales against a target of 11 million. The shortfall disrupted the textile value chain, increased reliance on imports and weakened export competitiveness at a time when foreign exchange stability remains fragile.
He argued that the sector's decline is systemic and worsened after agriculture was devolved to the provinces. According to him, provinces lack the fiscal space and institutional capacity to manage pricing, research, input costs and risk mitigation effectively. He stressed that wheat pricing and acreage serve as a barometer for the entire agricultural cycle, warning that instability in this crop spills over into other sectors and fuels rural distress.
Stakeholders, including small-scale farmers, believe agriculture should now be treated as a national economic priority rather than a provincial afterthought, particularly in 2026. They emphasised the need for a unified national agriculture policy focused on lowering input costs, improving seed quality, restoring confidence in cotton cultivation, promoting mechanisation, expanding access to affordable credit and strengthening linkages between agriculture and industry. A federally led framework, they said, would allow better planning, economies of scale, export orientation and long-term sustainability.
They added that agriculture has the potential to revive growth, stabilise food prices, support industry and strengthen exports, but only if decisive institutional and constitutional reforms are undertaken. "Without correcting the governance structure of agriculture, Pakistan will continue to pay the price in lost productivity, higher imports and rural distress. The 28th Amendment offers a critical opportunity to put agriculture back on the right track," Jawad said.