Pakistan’s agriculture, the backbone employing 70 percent of its people and fueling 24 percent of GDP, is in freefall. Declining yields, climate shocks, outdated practices, and a catastrophic 54 percent drop in farm lending—from Rs85.66 billion in 2024 to Rs39.66 billion this year—have created a perfect storm.
For small landholders, who make up 97 percent of farmers with under 12.5 acres, the crisis isn’t just economic—it is existential. As rural distress deepens and cities swell with displaced families, Pakistan faces a future where its fields lie fallow and its food security hangs by a thread. The numbers are brutal. Zarai Taraqiati Bank Limited (ZTBL), the nation’s primary agricultural lender, has slashed credit by more than half in two years, leaving farmers starved of liquidity. Even 2023’s Rs85.66 billion was a pittance—barely 0.3 percent of GDP—for a sector anchoring textiles, Pakistan’s $16 billion export lifeline.
Small farmers, already battered by floods that submerged 10 million acres in 2022 and 2025, now face fertilizer prices up 40 percent, diesel costs doubled, and wheat market crashes (Rs2,200 per 40kg last harvest). Without cash to buy quality seeds or withstand price shocks, they sell land, migrate, or sink into debt traps with private lenders charging 50–100 percent interest. In RY Khan, a farmer said, “I borrowed Rs50,000 for seeds; now I owe Rs120,000. My son drives a rickshaw in Karachi.” The 2023 agriculture census confirms the scale: 8.2 million farms under 12.5 acres, fragmented by inheritance laws, unable to achieve economies of scale. Low mechanization—only 5 percent of farms use tractors regularly—locks them in labor-intensive, low-yield cycles.
Crop failures delay loan repayments, eroding bank confidence. Climate shocks—droughts in Balochistan, floods in Sindh—wipe out harvests, turning Rs100,000 investments into zero returns. Farmers resist modern techniques, clinging to poor seeds and flood irrigation, but who can blame them when credit is a mirage? A Rs200,000 loan for drip irrigation requires collateral most don’t have, and digital literacy is near-zero in villages without electricity. The result? Yields stagnate at 3 tons per hectare for wheat—half India’s—while post-harvest losses eat 15–20 percent of produce. Rural poverty, already double urban rates, surges; in Khuzdar, 71.5 percent live below $4.20 daily. Women farmers, managing 60 percent of labor but owning 2 percent of land, are hit hardest, with 21 percent workforce participation squandering 20–30 percent GDP potential.
Yet, glimmers of hope emerge from recent initiatives. In August, the government launched the Risk Coverage Scheme for Small Farmers, a credit guarantee program to de-risk lending for marginalized growers. Building on this, the State Bank of Pakistan (SBP) rolled out the National Subsistence Farmers Support Initiative—a digital platform offering collateral-free loans to tenants and smallholders via the Land Information Management System (LIMS). Farmers apply online, get verified through land records, and choose their bank. At least 75 percent of financing comes in-kind—quality seeds, fertilizers, pesticides from approved merchants—with 25 percent cash for expenses. Advisory support follows, from soil testing to market timing. In theory, it’s transformative: Rs100 billion targeted annually, reaching 2 million farmers, boosting yields 20–30 percent.
But ground realities threaten to derail even these bold steps. Digital literacy is a barrier—60 percent of rural households lack smartphones, and LIMS coverage is patchy in Balochistan and tribal areas. Verification requires CNICs, land records, and bank accounts; many tenants farm orally leased land, invisible to systems. Banks, scarred by ZTBL’s 20 percent non-performing loans, demand guarantees the scheme only partially provides. In-kind disbursements, while preventing misuse, tie farmers to approved merchants—often overpriced or distant. A pilot in Faisalabad saw 40 percent of applicants drop out due to documentation hurdles. Without mass digital training, mobile vans, and community facilitators, the platform risks becoming another urban-centric tool.
The deeper challenge is structural. Fragmented holdings—average 2.5 acres in Sindh—make scale impossible. Inheritance laws split land further; consolidation needs political will to face feudal backlash. Credit alone won’t fix low mechanization—Pakistan has one tractor per 100 farms versus India’s one per 20. Climate resilience demands Rs500 billion annually for irrigation, drought-resistant seeds, and insurance—yet the budget allocates Rs10 billion. The Electronic Warehouse Receipt (EWR) system, meant to let farmers store and borrow against grain, is distorted by government subsidies, crowding out private banks.
True recovery demands a holistic overhaul. First, scale digital inclusion: Rs20 billion for rural connectivity, 50,000 community agents teaching apps, and simplified LIMS for tenants. Second, consolidate credit: merge ZTBL with microfinance banks into a Rs500 billion Agricultural Development Bank, offering 8–10 percent loans with crop insurance bundled. Third, modernize farming: subsidize drip irrigation (50 percent cost), laser leveling, and mechanization for cooperatives, not individuals. Fourth, fix markets: enforce EWR commercially, link to daily price platforms, and cap arthi interest at 15 percent. Fifth, empower women: title 30 percent of subsidized land to female heads, fund creches in villages.
The stakes are national. Agriculture isn’t just GDP—it’s identity. Empty fields mean pricier roti, weaker textiles, and cities choked with migrants. The IMF wants fiscal space; farmers want survival. Both are possible. Without credit, there’s no reform. The Risk Coverage Scheme and SBP initiative are seeds—nurture them with ground-up design, or watch them wither. For Akbar Ali and millions like him, the choice is stark: a loan to plant hope, or a bus ticket to oblivion. Pakistan’s future grows in its soil. Will leaders let it flourish, or watch it fade?