In the waterlogged fields of rural Sindh, where the 2025 summer floods turned golden wheat into rotting waste, a farmer named Allah Ditta stands knee-deep in despair. His 10-acre plot, once a lifeline for his family of eight, yielded nothing this season—not from drought, but from torrents that swallowed seeds, fertilizers, and hope.
Across Punjab and Balochistan, millions share his fate, as the Economic Coordination Committee (ECC) warned of a renewed inflationary surge driven by slashed crop output, shattered supply chains, and cartelisation in edible oil and ghee sectors. For a nation where agriculture employs nearly 70 percent of the population, contributes 24 percent to GDP, and anchors over 50 percent of exports through cotton-based textiles, this isn’t just economic data—it’s a humanitarian crisis threatening food security, jobs, and social stability. As the IMF pushes for market liberalization, the floods have complicated the equation, raising urgent calls for flexible support to poor farmers and vulnerable consumers amid tightening fiscal and monetary policies.
The devastation is staggering. Cotton production plunged 34 percent year-on-year, ravaged not only by floods but also by infestations—whitefly, pink bollworm, and chilli leaf curl virus—that decimated crops despite initial sowing gains. This raw material, feeding Pakistan’s $16 billion textile industry, saw yields collapse from 8 million bales to barely 5.3 million. Rice, sugarcane, maize, fodder, and vegetables followed, with preliminary estimates pegging agricultural losses at Rs430 billion. Roads vanished, bridges collapsed, markets became inaccessible—supply chains fractured overnight. Hoarding surged as traders exploited shortages, and cartels in edible oil and ghee manipulated prices upward. The Sensitive Price Index for food and non-alcoholic beverages, negative 3.3 percent pre-flood, flipped violently: tomatoes spiked 65 percent monthly, wheat 37.6 percent, onions 28.5 percent, flour 34.4 percent. Clothing and footwear jumped 14.12 percent, hitting households spending Rs17,732 monthly hardest—though this excludes the unemployed or those reliant on the Benazir Income Support Programme (BISP).
Pre-flood inflation was projected at 5–7 percent; now, food prices could double that, adding 2–3 percentage points overall, pushing headline inflation toward 9–10 percent. The ECC’s briefing highlighted volatility: global lenders demand an end to government interventions, yet domestic realities scream for intervention. The IMF’s October 2024 documents—written before the floods—were blunt: “Long-standing government interventions in agricultural commodities have created distortions inhibiting the sector’s productivity and harming Pakistan’s medium-term potential.” Price setting and procurement, the Fund argued, made agriculture unresponsive to consumer preferences, exacerbated volatility and hoarding, undermined innovation, misallocated resources, and burdened fiscal sustainability. “These interventions should be discontinued,” it concluded. But post-flood, with millions of subsistence farmers ruined and urban poor facing bread shortages, calls grow for leniency: enhanced BISP, targeted food subsidies, and emergency support without derailing the $7 billion Extended Fund Facility.
Contractionary policies loom larger. The discount rate holds at 11 percent—double regional peers—despite private sector pleas for cuts to spur investment. Monetary tightening, fiscal austerity under the EFF, and higher utilities choke demand. Large-Scale Manufacturing (LSM) negativity eased recently, but unemployment rises, poverty at 44.7 percent (World Bank) deepens. Economic team leaders tout inflation’s fall from 38 percent peaks to under 7 percent as success, yet quality of life erodes: lower-middle earners compromise on health, education, and nutrition; the unemployed fall through cracks. In Khuzdar, Balochistan, 71.5 percent live below $4.20 daily; in flood-hit Dadu, families sell livestock to buy flour.
This imbalance stems from decades of flawed interventions. Administrations have subsidized at taxpayers’ expense—Rs400 billion procurement in peak years—while rich farmers match regional yields via technology, smallholders (97 percent under 12.5 acres) lag with outdated seeds, limited credit, and fragmented holdings. Zarai Taraqiati Bank Limited (ZTBL) lending plunged 54 percent in two years. The IMF warns distortions inhibit innovation and misallocate resources. Yet floods expose vulnerability: without support, socio-economic unrest brews—protests, migration, radicalization. In RY Khan last year, farmers burned crops over price crashes; this year, they may burn tires.
Hope lies in balanced, urgent reform. The ECC must push technology adoption: certified seeds, drip irrigation, pest-resistant varieties via public-private partnerships. Expand the Risk Coverage Scheme and SBP’s digital platform—collateral-free loans, 75 percent in-kind for quality inputs—to reach 2 million small farmers. Phase out blanket procurement: maintain strategic reserves (2 million tons), not market domination. Bust cartels via Competition Commission raids and price monitoring cells. For the IMF’s third review, negotiate flexibility: triple BISP to Rs10 billion yearly, delivering Rs50 monthly to 50 million vulnerable via digital IDs, plus targeted food subsidies (wheat, oil, pulses) for six months without fiscal slippages.
Long-term, invest Rs1 trillion in resilience: canal lining, drought-resistant seeds, micro-insurance for 80 percent farmers. Promote cooperatives for mechanization—shared tractors, harvesters—doubling yields. Link Electronic Warehouse Receipts commercially to banks, unlocking Rs500 billion in post-harvest financing. Empower women farmers: title 30 percent subsidized land to female heads, fund creches in villages.
Pakistan’s agriculture isn’t doomed; it’s distorted. Floods amplified flaws, but opportunity knocks: align with IMF for sustainability, extend grace for humanity. Enhance Kifalat, subsidize the vulnerable, invest in resilience—irrigation, insurance, cooperatives. Economists urge 5 percent growth for jobs; this crisis demands it inclusive. From cartel greed to flood fury, the vulnerable pay dearest. Authorities and IMF must accord: protect the poor, reform the system. Or watch unrest rise with prices. The fields flood, but policy can dam the damage—for farmers, consumers, a nation on the edge. Allah Ditta’s harvest is gone, but his hope need not be. The ECC meets, the IMF reviews. This is the moment to choose people over dogma.