SBP deputy governor explains how to target subsidies in Pakistan

KARACHI: Saleem Ullah, Deputy Governor of the State Bank of Pakistan (SBP), on Wednesday emphasised that subsidies should be targeted only at vulnerable segments.

Speaking at the Pakistan Agriculture Coalition’s two-day Agri Conference and Expo at the Expo Centre, he said a transition towards a market-driven agricultural sector would better support the national economy.

“Rather than relying on a support price mechanism, we should allow the market to develop naturally. Sectors that operate without government intervention tend to adjust more efficiently to market dynamics,” he added.

Olivier Durand, Lead Agriculture Specialist, The World Bank, while speaking about the policy framework for agriculture said the public support is favourable to large farmers but we should target small farmers to fill a large productivity gap.

Earlier, Chief Executive PAC Kazim Saeed in his welcome speech said that historic geo-political changes are re-wiring global economic relations and Agri-commodity flows and this is also a great opportunity for Pakistan’s agriculture sector.

“The policies and economic structures set up in our agriculture sector in the 1960s and 1970s achieved their goals by the 1990s. So, if Pakistan’s agriculture sector is to salvage our economy, we need to accelerate the transition where the private sector is driving change and investing,” said Kazim.

Addressing the inaugural ceremony Special Assistant to Chief Minister Sindh on investment and public private partnerships Qasim Naveed Qamar said that the agricultural department of government of Sindh has several programs to support farmers from subsidized tractors, implement drip irrigation systems, various other agricultural machinery, direct subsidies etc.

“We need strategic investments in farming techniques, precision agriculture and sustainable irrigation methods that can drive productivity and profitability. We need to encourage innovation in agri-tech, climate smart farming and value chain development,” said Qasim.

Matteo Lagatti, Senior agro-economist, FGM International, while speaking about investing in agriculture for growth at scale, said that corporate farming is still a nascent sector in Pakistan as only 4% (840,000 hectare) of total cultivable land has been allocated for corporate farming development.

“There are 17 companies who are currently investing in corporate and contract farming for a total surface of 26,000 hectares and it is expected by FGM that the invested surface will increase to 80,000 hectares in the coming year,” said Matteo.

“A detailed sector policy is missing and conflicts regarding water allocation are also creating hurdles in the growth of corporate farming in Pakistan,” said Matteo.

Maria Saleem from Fatima Group revealed that they are part of a big consortium for a corporate farming project on 50 thousand acres since growing population is creating great demand, hence the solution is corporate farming.

Copyright Business Recorder, 2025