ISLAMABAD: The Planning Commission has acknowledged that poor policy decisions at both federal and provincial levels have caused a drastic 13.5 per cent contraction in Pakistan’s major crops during the current fiscal year.
This downturn in the agriculture sector has directly impacted GDP growth, bringing it down to 2.7pc against the target of 3.6pc for FY2024-25.
The commission warns that the fall in domestic food production may force the country to increase food imports next year, placing additional pressure on its already fragile foreign exchange reserves.
Policy Confusion and Input Challenges Hurt Farmers
The report highlights that key policy shifts — particularly the withdrawal of wheat support prices by the Punjab government — left farmers at the mercy of private buyers and middlemen.
This came after the federal government’s agreement with the IMF to phase out market interventions, including the minimum support price (MSP) mechanism for major crops.
Further complicating matters, the government’s inconsistent fertilizer subsidy policies led to major input challenges, including high costs and late delivery, which affected sowing and harvesting cycles.
These issues severely impacted the output of crucial crops like cotton (down 30.7pc), maize (down 15.4pc), and wheat (down 8.9pc).
Cotton Ginning Down, Food Imports Expected to Rise
The contraction also affected downstream sectors, such as cotton ginning, which declined by 19pc due to reduced raw cotton supply and the closure of ginning factories. The commission predicts that Pakistan will likely import more wheat, pulses, and possibly rice to bridge the domestic production gap, worsening the trade deficit.
The only bright spot came from the livestock sector, which grew 4.7pc due to effective government vaccination and disease control efforts.
