Pakistan needs a national agricultural mechanization policy before food security becomes a crisis

Chief Executive Officer MTL

Over the last three decades, Pakistan’s agricultural output has grown far more slowly than that of China, India and Bangladesh. As food demand rises and productivity growth lags, the country needs a comprehensive agricultural mechanization policy to secure its food future, strengthen farm incomes and build a globally competitive machinery industry.

Agriculture remains the backbone of Pakistan’s economy. It contributes approximately one-fifth of GDP, employs more than one-third of the labor force, supports the livelihoods of millions of rural households, and provides the raw material base for a large portion of the country’s industrial sector. Beyond its economic importance, agriculture is central to Pakistan’s food security and social stability. As the country’s population continues to grow, ensuring a reliable and affordable supply of food will become one of the defining policy challenges of the coming decades.

Yet while agriculture remains critically important, Pakistan’s agricultural performance over the last thirty years raises important questions about its future trajectory.

A Regional Comparison

Since 1995, Pakistan’s agricultural output has grown by approximately 155 percent. While this growth appears substantial, it compares unfavorably with the performance of neighboring countries.

Over the same period, agricultural output in India increased by approximately 265 percent, Bangladesh by over 300 percent, and China by nearly 500 percent. These figures demonstrate that while Pakistan’s agriculture has expanded, it has done so at a considerably slower pace than its regional competitors.

Figure 1: Agricultural Output Growth Since 1995 - Pakistan’s agricultural output has increased substantially since 1995, but growth has lagged significantly behind China, Bangladesh and India.

The contrast becomes even more striking when agricultural growth is compared with food consumption growth. Food demand in Pakistan has increased rapidly due to population growth and gradual improvements in living standards. Estimates suggest that total food consumption has increased by around 140 percent since 1995, while agricultural output has increased by approximately 155 percent.

In other words, agricultural production has only marginally outpaced food demand.

Figure 2: Food Consumption vs Agricultural Output - Pakistan’s agricultural production has only marginally outpaced growth in food demand, leaving a narrow margin for future food security.

By contrast, Bangladesh, India and China have achieved significantly larger gaps between agricultural output growth and food consumption growth. These countries have created what may be described as a productivity surplus, where agricultural production has expanded much faster than domestic food demand. Such a surplus provides greater food security, enhances export potential and strengthens resilience against climate shocks.

Pakistan, however, appears to be operating with a much narrower margin of safety.

The Emerging Food Security Challenge

Pakistan’s population has increased by nearly 90 percent since 1995 and is expected to continue growing for several decades. Future food demand will rise not only because of population growth but also because of changing dietary patterns, urbanization and rising incomes.

If agricultural productivity continues to grow at its current pace, Pakistan could face increasing pressure on food supplies, rising food imports and greater vulnerability to global commodity price shocks.

Food security is not merely an agricultural issue; it is a national security issue.

The experience of neighboring countries demonstrates that sustained improvements in agricultural productivity are possible. The question is why Pakistan has lagged behind.

The Mechanization Gap

One of the most important explanations is the country’s relatively low level of agricultural mechanization.

Farm power availability in Pakistan is estimated at approximately 0.9 horsepower per acre, significantly below both regional competitors and the level generally considered necessary for efficient modern agriculture. India has more than doubled its mechanization intensity over the past three decades, while China has undertaken one of the largest agricultural mechanization programs in history.

Table 1: Mechanization and Agricultural Growth - The countries that invested most heavily in mechanization achieved the strongest gains in agricultural productivity.

The consequences are visible throughout the value chain. Pakistan has achieved substantial tractor penetration, but mechanization remains heavily concentrated in land preparation. Large gaps remain in planting, harvesting, spraying, precision application, post-harvest handling and fodder management.

Mechanization is no longer simply about owning a tractor. It is about improving productivity per acre, reducing input costs, conserving water, minimizing harvest losses and increasing cropping intensity.

Countries that have embraced comprehensive mechanization have consistently outperformed those that have not.

The Missing Policy Framework

Despite agriculture’s importance, Pakistan still lacks a comprehensive long-term agricultural mechanization policy. There is no national roadmap that clearly defines mechanization targets, technology priorities, financing mechanisms and localization objectives.

This policy gap has become increasingly costly.

The country requires a coordinated strategy that links agricultural productivity, food security, industrial development and export growth. Such a strategy should recognize agricultural machinery as a strategic industry rather than merely a manufacturing sector.

A National Tractor and Farm Machinery Policy

Pakistan urgently needs a National Tractor and Farm Machinery Policy that focuses not only on supply but also on demand creation.

Historically, policy discussions have centered on production incentives for manufacturers. While these remain important, future growth will depend equally on expanding machinery adoption among farmers. The policy should establish clear targets for increasing farm power availability and mechanization levels across all provinces.

A major challenge in Pakistan is the increasingly fragmented structure of agriculture. Average farm sizes continue to decline as land holdings are subdivided across generations. For a large number of small and medium farmers, purchasing a tractor or modern farm implement has become increasingly difficult due to affordability constraints. Even where machinery can generate significant productivity gains, the initial investment remains beyond the reach of many farmers.

For this reason, provincial machinery subsidy programs should be expanded nationwide. Punjab’s tractor and farm machinery support initiatives have demonstrated that targeted subsidies can accelerate technology adoption, increase farm productivity and stimulate domestic manufacturing. Similar programs should be adopted across all provinces under a coordinated national framework so that mechanization is not limited by geography or fiscal capacity.

Pakistan can also draw valuable lessons from India, where agricultural mechanization has been supported through a combination of central and state-level subsidy schemes for more than a decade. Under India’s Sub-Mission on Agricultural Mechanization (SMAM), farmers receive financial assistance for tractors, harvesters, seed drills, sprayers and a wide range of farm equipment. The program also provides support for Farm Machinery Banks and Custom Hiring Centres, enabling small farmers to access machinery without owning it. Several Indian states supplement these programs with additional subsidies and dedicated mechanization schemes, significantly reducing the cost of adoption for farmers.

Learning from India’s Custom Hiring Centres

One of the most successful features of India’s mechanization strategy has been the development of Custom Hiring Centres (CHCs). These centres function as farm machinery rental hubs, allowing farmers to hire tractors, harvesters, planters, seed drills and other equipment on an hourly or acreage basis rather than purchasing them outright. India’s national mechanization programs provide financial assistance for establishing such centres, while many states operate additional support schemes. Thousands of CHCs and Farm Machinery Banks now serve farming communities across the country, particularly benefiting small and marginal farmers.

The relevance of this model for Pakistan cannot be overstated. More than ownership, access is the key challenge facing small farmers. A network of professionally managed Custom Hiring Centres, operated through private entrepreneurs, cooperatives, farmer organizations and machinery dealers, would enable farmers to use modern equipment without assuming large debt burdens. Such a system would also improve machinery utilization rates and accelerate the diffusion of new technologies.

A National Tractor and Farm Machinery Policy should therefore include a dedicated program for the establishment of Custom Hiring Centres throughout Pakistan, supported through concessional financing, matching grants and public-private partnerships. This would simultaneously increase farmer productivity, expand the machinery market and strengthen the economics of domestic manufacturing.

Beyond Tractors: Building a Complete Machinery Ecosystem

Pakistan’s localization efforts have historically focused on tractors. While this has been a notable success story, future policy must encourage the indigenous development of a broader range of machinery.

Planters, seed drills, harvesters, balers, sprayers, precision agriculture equipment, hay and forage machinery, post-harvest handling equipment and irrigation technologies all require greater local manufacturing capability.

Localization offers multiple benefits. It reduces import dependence, lowers equipment costs, creates employment, strengthens engineering capabilities and supports technology transfer.

The objective should be to build a complete agricultural machinery ecosystem rather than a tractor industry alone.

Mechanization as an Export Opportunity

Agricultural machinery should also be viewed as an export industry.

Pakistan has developed significant expertise in tractor manufacturing and has the potential to become a regional supplier of agricultural equipment to Africa, Central Asia and other emerging markets.

A national policy should therefore include export incentives, international certification support, export financing mechanisms and targeted trade promotion initiatives.

As agricultural mechanization expands across developing economies, demand for affordable and reliable machinery is expected to increase significantly. Pakistan is well positioned to capture a share of this opportunity.

The Way Forward

The evidence from the last thirty years is clear. Countries that invested in mechanization, technology adoption and productivity enhancement have achieved stronger agricultural growth, greater food security and larger export opportunities. Pakistan has made progress, but not enough.

The country cannot afford to wait until food security pressures become acute before acting. A comprehensive agricultural mechanization strategy, supported by a National Tractor and Farm Machinery Policy, can simultaneously improve farmer incomes, strengthen food security, promote industrial growth and create export opportunities.

Agriculture built Pakistan’s economy. Mechanization can help secure its future.

Copyright Business Recorder, 2026