The State of Pakistan’s Agriculture 2023

The Pakistan Business Council’s report on ‘The State of Pakistan’s Agriculture 2023’ captures the essence of the issues confronting the agriculture sector of Pakistan and discusses five key factors that impact agricultural growth in the country. These include: technology, water, seed, financing animal disease and feed. The report constitutes five policy papers on these thematic areas and proposes the following policy priorities for agricultural growth:

1. Shift from being a victim of high global agri-commodity prices to a beneficiary. For Pakistan to achieve 4 percent real GDP growth in agriculture, it needs to improve crop yields to transition from being a food importer to a food exporter.
2. Amend Seed Act to encourage private sector investment. Better seed is at the core of the long-term growth prospects in Pakistan’s agriculture. The main hurdles to seed development is the legal and regulatory regime that discourages the private sector to invest. Therefore, the Seed Act must be amended to encourage reputable private seed companies to invest and the approach to seed regulation must shift from controlling the seed sector to maximizing benefit to the farmer. Furthermore, local production of hybrid seed must be encouraged to achieve scale.
3. Expand cultivated land of fruits and vegetables from 5 percent to 15 percent to save water and to achieve more growth in agriculture. If global players in this trade can be attracted to Pakistan for off-take of fruits and vegetables for export, serious investment into cold chain infrastructure can be justified. Farmers are ready to respond to an assurance that their fruit and vegetable will be guaranteed off-take and the certainty that this produce will not die on the way to end-consumers. This shift is only possible with an increase in yield.
4. Build stronger linkages between processors and growers to meet the global buyers’ demand for traceability and sustainability. Pakistan’s own examples of excellence in agriculture are found where processors have done backward integration with farmers. Processing of agri-commodities into higher value products is what drives agriculture to the next level. Investment in agro-processing in the production areas is a priority for Pakistan to multiply its agriculture GDP.
5. Invest equity capital in modern agri-technology to achieve growth in agriculture. Upgrade in agri-technology like, modern farm machinery, silo storages, cool chains for fruits and vegetables, controlled sheds for poultry, high efficiency irrigation systems, etc, is difficult to achieve through debt alone, therefore, equity needs to be invested at scale through corporate farming.
6. Upgrade Pakistan’s irrigation system to increase agricultural exports. Precision agriculture is not possible without precision water delivery. Furthermore, the unpredictability of water from Pakistan’s irrigation system harms not only the transition to mechanization, it encourages flood irrigation causing enormous on-farm wastage of water.
7. Pakistan’s irrigation system needs to be fixed to reduce massive loss of water in the irrigation system and the uncertainty associated with water delivery. The Indus Aquifer has a slower source of re-charge and it now constitutes half of the water available to Pakistan’s farmers. Therefore, it must be preserved. This requires Pakistan’s irrigation system to be fixed by adopting better water accounting and better water governance—both are politically charged activities but also essential for building trust. Additionally, the quality of water is also essential for growth in agricultural exports.
8. Use the available risk transfer mechanisms to protect farmers from the impacts of climate change and biological perils. The devastating heatwave and biblical floods of 2022 have highlighted the need for strong, globally accepted institutional mechanisms to address these risks. There is a critical need to use the risk transfer mechanisms available at a predictable cost to shift this burden to the insurers.
9. Livestock has driven growth in Pakistan’s agriculture sector but it has plenty of further potential for growth. As the growth trajectory of the poultry sector has shown, modern feed is necessary for animals with modern genetics. Better surveillance and management of disease outbreaks can protect animals’ health and economic value. Disease-free zones with a complementing vaccination regime can be pillars of livestock-based exports.
10. As crop yields and animal yields rise, the price at which each grower breaks even falls. This bears the great promise of agricultural growth regarding lower inflation, higher profitability for growers, and better competitiveness for exporters. Coordinated action by the business community, the financial sector, governments, donors, and growers is required to achieve this.
11. Wealth generation from growth in agriculture is the main route to prosperity in rural Pakistan where most of Pakistan’s poverty resides. The introduction of technology can create better-paying jobs in the rural landscape. But those whose jobs get displaced will also need to be accommodated into the industry.

In addition to this report, as part of the “Grow More/ Grow Better” theme of its Make-in-Pakistan thrust, the Pakistan Business Council has previously published a number of studies on the agriculture sector of Pakistan to highlight significant opportunities to increase value addition, exports and employment in the sector. The studies on horticulture, bovine meat, dairy, olives, honey and potato examine the value chain and highlights factors impeding productivity and quality, and identify potential global markets for export. These reports propose a set of recommendations to enable agricultural growth.

During the FY 2023, The Pakistan Business Council plans to publish four policy briefs on the selected thematic areas in the agriculture and livestock sector that are critical for sectoral improvement and growth. These are:

1. Fruit pulping,
2. Green house/ vertical farming,
3. Artificial insemination for dairy and meat, and
4. Milk collection networks/co-operatives based around large farms.

The policy briefs will highlight the existing gaps/constraints and recommend measures for improving efficiency and sustainability to promote agricultural growth. The briefs will enable PBC to advocacy policy actions with the relevant federal and provincial departments for improving the sector performance.

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