Farmers & Business: Bridging the Gap
- Pakistan's economic trajectory hinges significantly on its agriculture sector, given the nation's industrial structure, rural-urban demographics, and workforce skills.
- The government has increasingly leaned on the private sector and market forces to drive agricultural transformation, positioning itself as merely an enabler.
- One positive aspect is the avoidance of increased federal excise duties on fertilizers and pesticides.
Uncover the critical state of PakistanS agriculture sector with this in-depth analysis of the 2025-26 budget. We assess the budget’s impact on agriculture, revealing the government’s approach, which appears piecemeal and lacks a comprehensive vision for the economic advancement of farmers.News directory 3 examines the budget’s implications, from finance programs to seed policies, revealing areas of concern and potential opportunities, including the Clean Financing Facility Program. Explore how challenges like production costs and taxation are impacting farmers’ competitiveness. This report also emphasizes the need for a strong partnership between government and the private sector, and also a focus on long-term strategies for the sustainability of the agricultural sector. Discover what’s next for agriculture in Pakistan.
Pakistan’s Agriculture Sector Faces Challenges in 2025-26 Budget
Updated june 16, 2025
Pakistan’s economic trajectory hinges significantly on its agriculture sector, given the nation’s industrial structure, rural-urban demographics, and workforce skills. However, the government’s approach has been piecemeal, lacking a comprehensive vision, a trend mirrored in the 2025-26 budget.
The government has increasingly leaned on the private sector and market forces to drive agricultural transformation, positioning itself as merely an enabler. Consequently, the agriculture sector appears to be operating without clear direction, particularly concerning strategic crops, productivity, technology, and resource management. The budget seemingly replicates previous years,failing to address these critical issues.
One positive aspect is the avoidance of increased federal excise duties on fertilizers and pesticides. Such a move would have been detrimental, especially after the sector experienced losses and negative growth in major crops during 2024-25.
The budget introduces a Clean Financing Facility Programme, aiming to improve farmers’ access to finance.This initiative plans to provide loans of up to 100,000 rupees to 700,000 smallholders without requiring guarantees.
The FY26 budget fails to address critical agricultural concerns while also lacking direction and prioritisation and seems in many ways to be a mere replica of the previous year’s budget
A similar initiative, Punjab’s cat card scheme, offered loans up to 150,000 rupees but often trapped farmers due to repayment schedules coinciding with post-harvest market gluts. To be genuinely beneficial, the government should consider a nine-month loan tenure with repayments starting three months after harvest.
High production costs also pose a important challenge. The imposition of an 18% general sales tax on solar panels has further diminished farmers’ hopes of reducing costs by switching to solar-powered tubewells.
The finance minister announced the finalization of the Seed Policy 2025 and the National Agricultural biotechnology Policy 2025, intending to foster a conducive environment for the private sector. Pakistan’s agriculture sector and its economic development suffer from low crop yields due to poor seed quality. Maintaining current productivity levels,let alone improving them,will be challenging without climate-resilient,high-