In 2023 Pakistan’s agriculture sector grew by 6.5% which helped the country’s GDP to increase by a modest 2.38%. Pakistan’s agricultural sector is the backbone of the national economy but unfortunately its tremendous potential remains unutilised for lack of necessary investment and appropriate planning. The agrarian sector’s ability to reduce poverty and boost exports has also been overlooked.

There was a time when Punjab was called the granary of India. But since partition Pakistan’s agricultural production has stagnated while India has fared better. While we have lagged behind, our eastern neighbour has invested heavily in agriculture. The Indian Punjab, though smaller in size, has higher agricultural productivity as compared to our Punjab. To cite an example, per hectare wheat yield is five tonnes in Indian Punjab against three tonnes in Pakistan’s Punjab although both regions have the same climatic conditions and soil fertility. The difference is that India undertook comprehensive land reforms to boost agricultural productivity, while we did not.

Pakistan’s agricultural sector is currently riddled with gross inefficiencies, an outdated product mix, low crop yield and losses during transport, storage, and marketing. Most existing government projects and programmes in the agricultural sector are ineffective and wasteful and should be eliminated. Instead, the government should focus on creating an enabling policy environment that encourages intensive farming by small landholders and private sector investment to introduce new agrarian technologies that have revolutionised agriculture in many countries.

A major issue facing Pakistan’s agriculture is lack of reform in land ownership. There are vast feudal estates in Punjab and Sindh held by absentee landlords who as a rentier class are least interested in maximising yields or production. The absentee landlords live far from their land, leaving management in the hands of half educated managers whose primary target is to extract rents from tenants rather than increase agricultural productivity. Moreover, the large landowners do not sell or lease their land to smaller, more efficient farmers or entrepreneurs eager to invest in agriculture.

One way to correct the anomalies in the agrarian sector is for the government to change its policies which disproportionately benefit large landholders, such as the wheat procurement program and untargeted fertiliser subsidies. Bank loans are also mostly hogged by the big landlords. Lack of timely bank credit and high prices of inputs put the small farmers at a disadvantage.

One of the critical factors hobbling our agriculture is non-availability of high-quality seeds and genetic material for livestock. The need is to incentivise local seed production and liberalise the import of hybrid seeds which have the potential to increase yields by 70-80 percent. Corporate farming can also help boost the production of essential crops like cotton, wheat and rice.

Agricultural financing holds the key to improved productivity. Ways should be found to provide cheap credit to small farmers on time. But this is not happening. A recent survey showed that banks mostly advance loans to big landlords or to the provincial and federal food departments/authorities for the procurement of wheat. Such credit can hardly go to boost agricultural productivity. The same applies to the subsidy on fertilisers. The state is supposed to provide subsidies on fertiliser to reduce the cost of agricultural production, but in effect this subsidy mostly goes to the fertiliser manufacturing companies and not to the farming community.

Some time back the Pakistan Business Council published a report titled ‘The State of Pakistan’s Agriculture 2023’ highlighting the issues facing the agriculture sector in Pakistan. The report focused on five key factors that impact agricultural growth in the country, including technology, water, seed, financing, animal disease and feed. The report recommended that 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.

As better seed is at the core of the long-term growth prospects in our agriculture, it suggested amending the Seed Act to encourage private sector investment. Other ideas floated in the report included expansion of  cultivated land of fruits and vegetables from 5 percent to 15 percent to save water and to achieve more growth in agriculture, building stronger linkages between processors and growers to meet the global buyers’ demand for traceability and sustainability, injection of equity capital in modern agri-technology like modern farm machinery, silo storages, cool chains for fruits and vegetables, controlled sheds for poultry, and high efficiency irrigation systems.

Needless to say, the reform measures outlined above call for urgent action if Pakistan wants to unlock its agricultural potential in order to ensure rapid economic growth. A well organised green revolution is the only way we can lift the country out of the current economic crisis.