Agriculture at the Crossroads of Climate, Policy and Technology – Pakistan & Gulf Economist

Agriculture remains the backbone of Pakistan’s economy, yet 2025 proved once again that the sector is also its most vulnerable link. With climate variability intensifying, water scarcity becoming structural, and rural productivity plateauing, the year demanded difficult choices from policymakers. But it also unveiled opportunities—technological, financial, and institutional—that could redefine agriculture’s future if properly harnessed.

The year began with farmers grappling with erratic winter rains and rising input costs. Fertilizer shortages persisted in several regions due to supply chain distortions and hoarding. High electricity tariffs reduced the affordability of tube-well irrigation systems. Meanwhile, the IMF’s insistence on rationalizing subsidies constrained the government’s ability to offer blanket relief packages.

Despite these challenges, agricultural output did not collapse. Wheat production remained broadly stable, thanks largely to better quality seeds and timely sowing in major producing districts. A moderate recovery in cotton—long considered a declining crop—offered a glimmer of hope for the textile sector, which had suffered due to years of poor raw material availability. Sugarcane production maintained its upward trajectory, though concerns over water usage and mill payment delays continued to cloud the sector’s sustainability.

Water remained the central issue. The Indus basin experienced inconsistent flows due to abnormal weather patterns. While some regions benefited from above-average rainfall, others faced early-season drought spells. The absence of large-scale water storage projects—despite years of debate—continued to limit the country’s ability to smooth out seasonal fluctuations. Farmers increasingly turned to high-efficiency irrigation systems, but adoption remained low due to financial constraints.

In 2025, one major shift was the growing adoption of digital agriculture. Start-ups offering satellite-based monitoring, soil analytics, and precision farming tools expanded their footprint. Although uptake remained modest, the trend indicated a structural transition. Younger farmers, particularly those managing medium-sized farms, began realizing that traditional methods could no longer compete with climatic uncertainty.

Livestock, which contributes significantly to rural incomes, faced mixed fortunes. High fodder prices strained small farmers, yet dairy processing companies reported improved profitability due to better supply chain integration. Poultry, as always, remained sensitive to feed costs and disease outbreaks, but overall output grew moderately.

Policy measures played a crucial role. The government prioritized improving cold chain infrastructure, enhancing crop insurance frameworks, and encouraging corporate farming partnerships. Chinese and Gulf investors showed renewed interest in agricultural ventures, particularly in hybrid seed production and large-scale mechanized farming. While such investments raise concerns about land consolidation, they also offer opportunities for productivity gains.

Exports of rice and fruits performed well in 2025. Pakistan benefitted from tighter global supply conditions and currency stability. However, compliance barriers and weak branding continued to limit potential in high-value markets.

Despite the relative resilience, the sector remains at a crossroads. Productivity gaps compared to regional peers are widening. Climate adaptation is progressing slower than required. Fragmented land holdings restrict mechanization. Rural financial inclusion remains inadequate, with small farmers still dependent on informal lenders.

Going forward, Pakistan must integrate climate-smart agriculture, deploy technology at scale, expand crop diversification, and improve water governance. The year 2025 underscored that agriculture can survive under stress—but survival alone is no longer enough. The sector needs transformation.

Agriculture is Pakistan’s economic backbone, but provincial mismanagement has left it fractured. Punjab’s selective progress and Sindh’s chronic inefficiency expose a shared failure. For the small farmer, promises remain the only bumper crop.

Despite lofty claims, provincial policies continue to reflect complacency and political expediency rather than long-term vision. Punjab and Sindh, the two main crop-producing provinces, reveal both contrast and common failure — uneven reform, weak water governance, and misplaced spending priorities.

Punjab projects itself as the country’s agricultural engine, and in some respects that reputation holds. The government has invested in canal lining, farm mechanization, and digital services such as the Kisan Card to link farmers with subsidies and credit. Yet much of this progress remains confined to central Punjab, leaving southern districts under-served. Water distribution is still inequitable, with influential landholders diverting supplies while tail-end farmers watch their fields dry up. Agricultural extension has lost vigor; field staff are few, and new seeds or pesticides are often introduced without proper testing or follow-up support.

Sindh’s situation is more chronic. The irrigation system is silted and mismanaged, and water theft is routine from Badin to Khairpur. Provincial authorities have done little to promote efficient irrigation such as drip or sprinkler systems. Research institutions once known for developing locally suited seed varieties now barely function. The market is flooded with uncertified seeds and adulterated pesticides, eroding productivity and farmer trust. Repeated talk of “agrarian reforms” has produced little beyond slogans, while feudal intermediaries continue to dominate land and politics.

On financial inclusion, Punjab’s digitized land records have eased access to bank credit, but smallholders still face procedural barriers. In Sindh, absence of digital records and weak governance keep most farmers dependent on informal lenders who dictate prices and repayment terms. Neither province has built a sustainable credit model that empowers small growers.

Grain procurement also reflects similar flaws. Punjab’s wheat drives often benefit large farmers and politically connected millers, while delays in payment persist. Sindh’s system, riddled with corruption, routinely denies farmers the official support price despite good harvests.

Both Punjab and Sindh must move beyond rhetoric and reform the basics — transparent water allocation, quality inputs, accessible finance, and fair markets. Until agriculture becomes an economic priority rather than a political showcase, Pakistan’s subsistence farmers will keep toiling harder and earning less, while both provinces trade blame for a crisis they have equally nurtured.