Looking ahead to 2026, projections are cautiously optimistic. Economic outlooks forecast GDP growth in the upper range of three to four per cent, with agriculture rebounding on better inputs and incentives.
As Pakistan enters the new year, its agriculture sector – the backbone of the economy contributing around 23 per cent to the country’s GDP and employing nearly 38 per cent of the workforce – is grappling with a turbulent 2025 marked by devastating climate shocks, subdued growth, and lingering policy shortcomings. Despite pockets of resilience in livestock and emerging initiatives for modernisation, the year underscored the urgent need for transformative reforms to safeguard food security and rural livelihoods in a nation increasingly vulnerable to extreme weather.
Agriculture has long been central to Pakistan’s economic fabric. With over 24 million hectares of cropped area, the sector supports major staples like wheat and rice, cash crops such as cotton and sugarcane, and a robust livestock industry that accounts for more than 60 per cent of agricultural value addition. Pakistan ranks among the world’s top producers of milk, mangoes, and rice, with exports – particularly rice and textiles derived from cotton – forming a critical pillar of foreign exchange earnings. In recent years, about 70 per cent of exports have been directly or indirectly linked to agriculture.
Yet, 2025 proved exceptionally challenging. The Economic Survey for 2024-25 recorded agricultural growth at a meagre 0.56 per cent, far below targets, driven by setbacks in the crop sector. Reduced acreage, declining yields, and market volatility plagued key provinces, especially Punjab, which produces nearly 70 per cent of the nation’s food grains. Monsoon flooding compounded the woes, inundating vast swaths of farmland and disrupting planting cycles.
Livestock Offered Some Buoyancy
Climate change emerged as the dominant threat. Pakistan, ranked among the top 10 most vulnerable countries despite contributing less than 1 per cent of global emissions, faced intensified extreme weather. The 2025 monsoon brought record cloudbursts in the western Himalayas, triggering floods that devastated Punjab and Sindh. Rivers overflowed, submerging crops just weeks before harvest and threatening the upcoming Rabi season’s wheat sowing – the staple providing over half the country’s calories. Farmers described the ordeal as “gambling with nature,” with alternating floods and droughts eroding soil fertility and displacing communities.
In Sindh and Balochistan, stagnant floodwaters lingered, rotting standing crops and delaying replanting. Rice and cotton, vital for exports, suffered massive losses, echoing the catastrophic 2022 floods that affected 33 million people and destroyed millions of hectares. Heatwaves and irregular rainfall further stressed yields, with citrus production dropping sharply due to disease and water scarcity. The FAO highlighted how such disasters reduce global caloric availability while hitting vulnerable nations hardest, exacerbating Pakistan’s malnutrition challenges.
These shocks rippled through the economy. Food imports swelled to around $9 billion annually, half for edible oils, straining foreign reserves. Rural poverty deepened as smallholders – over 90 per cent of farmers owning less than 12.5 acres – faced mounting debts from lost harvests and rising input costs. Diesel and fertilizer prices, influenced by global fluctuations and currency depreciation, added pressure, while counterfeit pesticides plagued Punjab and Sindh, causing further financial losses.
Livestock offered some buoyancy, with Pakistan’s 225 million animals driving sustained growth and exports like leather worth nearly $1 billion. The sector’s dominance – 62 per cent of agricultural GDP – cushioned overall declines, but vulnerabilities persist, including animal diseases and feed shortages.
Projections are Cautiously Optimistic
Amid the crises, glimmers of hope emerged from government and international efforts. The Asian Development Bank signed a $304.5 million projects for climate resilience in Sindh and Punjab, focusing on coastal protection, climate-smart machinery, and skills training for thousands of farmers, including women. Initiatives like solar-powered irrigation and precision agriculture gained traction, promoted through agritech platforms and mobile advisories.
The Pakistan Agricultural Research Council advanced collaborations, including public-private genomic ventures and seed potato complexes. Programs for sustainable rice management and pulses self-sufficiency aimed at reducing import dependence. The budget for 2025-26 boosted subsidies for wheat and fertilizers, expanded crop insurance, and nearly doubled climate adaptation funding to over Rs 85 billion.
Looking ahead to 2026, projections are cautiously optimistic. USDA estimates cotton production at 4.8 million bales for 2025/26, while government targets include nearly 30 million tonnes of wheat. Economic outlooks forecast GDP growth in the upper range of three to four per cent, with agriculture rebounding on better inputs and incentives. Agricultural credit disbursements rose 18.6 per cent in late 2025, and machinery imports surged 27 per cent.
Experts stress that sustained recovery demands bolder action: improved seeds, efficient water use (with 82 per cent of land irrigated yet facing losses), deforestation curbs, and floodplain protections. Calls grow for integrating climate adaptation into policies, enhancing early warning systems, and attracting private investment in value addition and exports.
As one Punjab farmer put it, “We’ve survived floods before, but each one takes more from us.” With climate risks escalating, Pakistan’s agriculture stands at a crossroads. Harnessing innovation and resilience could transform it into a global powerhouse; inaction risks deeper food insecurity and economic fragility for millions.
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