Pakistan’s agricultural paradox

In the uncertain state that is Pakistan, one thing remains constant: we love quick fixes, and jumping from one topic of discourse to another. Headlines are loud and dramatic, but once the uproar quietens, we are swift to move beyond what are quite literally matters of collective survival.

The most recent case in point being the “agriculture emergency” declared in Pakistan a month ago. Four weeks in, and we rarely hear more about it beyond the closed community of activists and journalists who are associated with this issue.

The nation moved on, while we should have stopped and asked the hard questions: how did we get to this point? Agriculture - historically the backbone of this region - has been turned into a loss making endeavor, to the point where generational farmers prefer leaving behind their lands and moving to cities to embrace the uncertainties.

Our small farmers - those who form over 90% of our total agricultural workforce - are frustrated due to the neglect and exploitation they have faced at the hands of the entire system. The floods have merely exposed the flawed foundations upon which our entire food chain is resting. Had the sector not been in such a state, Pakistan would not have one of the highest rural-to-urban migration percentages in the world.

Migrations which our urban infrastructure, economies and authorities cannot afford, hence the persistent rise in unemployment, poverty and homelessness.

Unfortunately, the question of “how” is not easy to answer. Perhaps why it is avoided. Yet, it is one that is extremely crucial, and if the correct problems are not identified and addressed, our farmers will remain stuck in this loop of crisis, and every incoming disaster - which are going to be frequent - will continue to put us decades back on any progress.

Economic factors

The most pronounced problem is the economic policies implemented in the agricultural sector over the last few years. To grow any crop, there are three main inputs: seed, fertilizer and crop protection chemicals. Additionally, machinery and irrigation systems complete the ecosystem of basic facilities utilised by farmers in our country. The market price of any crop takes into account the cost of all the materials and energy sources, which rely primarily on diesel to function.

This is where the government’s “minimum support price” plays a role. In order to protect farmers from market rate - in case it is too low based on a supply-demand formula - the government sets a price floor, below which the crop cannot be sold. If such a situation does arrive, the government buys the crop at the minimum price to sustain the farmers.

For example, during 2020-21, given the global supply chain crisis following COVID-19 and the volatile prices of inputs like diesel and DAP, the government set the minimum support price (MSP) of Rs. 1800 / 40 kgs. Similarly, in 2023-24, the MSP was Rs. 3,900 / 40 kgs, but due to surplus imported wheat stock, the government cancelled procurement at the eleventh hour, forcing farmers to sell at market prices which were as low as Rs. 1800 / 40 kgs!

Most farmers chose not to sell their produce at such a loss, causing the wheat to remain in stock for months. Furthermore, as private procurement continues, many middlemen bought the wheat from desperate farmers at low rates, hoarded it, causing a faux shortage, which was later used to increase prices for end consumers.

Due to this persistent systematic flaw - both farmers and laymen suffer, while exploitative middlemen are able to cash on such crisis points.

Misplaced subsidies

Another systemic flaw that crushes both the farmer as well as the government are subsidies on fertilizers. How these subsidies operate is that they provide cheap gas to fertilizer plants, and the government has to set a price cap on fertilizer. However, bureaucratic red-taping and bottlenecks prevent timely decisions, leading to sales in black markets. Being the lifeline for crops, farmers have to buy fertilizer to sustain their crops.

Given the monopoly of few major players in the market, the farmer is forced to buy at high prices from black markets. In 2024, farmers spent an average of Rs. 5000 - 5500 for a bag of urea, the administrative rate for which was Rs. 3,250! The question arises, what benefit do these subsidies provide to the farmer or the consumer, when the prices end up getting higher? Why is the government spending billions of rupees on these subsidies every year?

Valuable money which can be rechanneled to agricultural innovation - which brings us to the next systemic problem. Lack of Innovation: Agriculture is - and has been - Pakistan’s lifeline for decades. It has grown and evolved over years with the movement of the rivers and the incoming of new technologies. In the face of high climate vulnerability and shifting global dynamics, our efforts should be directed to bring smart, sustainable innovations to our agriculture. Pakistan has six universities dedicated to the study of agriculture.

The University of Agriculture, Faisalabad, alone awarded degrees to 16,000 students during its convocation in 2024. Despite a high number of students graduating from these programs, we are unable to see any significant localised innovations being developed in the domain of agriculture which can help uplift farmers and make us resilient to impacts of climate change. It is not that Pakistani students lack the capacity, but rather the vision, as most of them end up joining the fertiliser companies.

The problems identified above form just the tip of the iceberg which is the agricultural paradox in Pakistan. It is unfortunate that the very sector which feeds us all, and also directly or indirectly provides for 60% of the population, remains neglected. As we move to the next headlines, it is important to stop and picture the world without agriculture.

What good will our money do, if we don’t have the food to buy?

The article does not necessarily reflect the opinion of Business Recorder or its owners.