Pakistan sustains USD2bn post-harvest losses annually: ADB

ISLAMABAD: Pakistan’s agribusiness sector is being squeezed by climate shocks, chronic underinvestment and weak infrastructure, with inefficient water and land use, inadequate cold-chain facilities and fragmented certification systems contributing to annual post-harvest losses of around USD 2 billion, the Asian Development Bank (ADB) said.

In its latest report titled “enhancing competitiveness, sustainability, and resilience in Pakistan’s agribusiness through climate-responsive strategies”, the ADB identifies climate change, market failures, limited access to finance, institutional weaknesses and technology gaps as major structural barriers preventing Pakistan’s agribusiness sector from becoming competitive, resilient and sustainable.

It further stated that agriculture accounts for around one-fifth of Pakistan’s GDP and employs more than one-third of the labour force, yet the sector continues to struggle with inadequate infrastructure, weak investment and limited institutional capacity.

The study, which focuses primarily on crops because of greater availability of data, export potential and the documented impact of flooding on crop production, says climate-related events are imposing substantial losses on agriculture while exposing deep weaknesses across the agribusiness value chain.

One of the most striking findings is the extremely low level of private investment in agribusiness, which currently accounts for less than 5 percent of agribusiness capital.

The report says SMEs face stringent collateral requirements, limited credit histories, short loan tenors, and a lack of financial products tailored to their needs.

At the same time, climate finance remains overwhelmingly focused on mitigation, with limited resources reaching agricultural adaptation.

The absence of agriculture-specific green bonds and blended-finance mechanisms is further restricting the mobilisation of climate-aligned capital.

The report also highlights serious infrastructure deficiencies, particularly in cold storage, roads, logistics, certification and testing laboratories. These shortcomings contribute to high post-harvest losses and frequent export rejections, undermining Pakistan’s ability to move from raw agricultural production towards higher-value exports.

Fragmented certification systems, weak value-chain linkages, poor branding and high transaction costs are particularly hurting SMEs, according to the report.

Pakistan’s innovation deficit is equally alarming. The country invests only 0.2 percent of its agricultural GDP in research and development, significantly below global benchmarks. Adoption of climate-smart seeds, mechanisation and agri-digital services remains among the lowest in South Asia, while outdated agricultural extension systems are failing to provide smallholders with context-specific climate-smart guidance.

The report says women and youth are also largely excluded from agribusiness ownership, access to finance and innovation ecosystems, despite women comprising more than 65 percent of the agricultural labour force.

Institutional weaknesses compound the problem, with fragmented federal-provincial coordination, inadequate monitoring and evaluation systems, and policies that are insufficiently aligned with climate-smart and export-oriented targets.

The study has proposed a five-pillar strategic roadmap to transform the sector.

First, it calls for establishing a national Agribusiness Investment Fund combining public, private, and donor capital, alongside the piloting of green bonds and sustainability-linked financing. It also recommends expanding credit guarantees and warehouse-receipt financing to help SMEs secure working capital.

Second, the government should institutionalise climate-smart public-private partnerships by establishing a PPP Investment Readiness Facility under the Board of Investment and introducing viability gap funding for post-harvest and climate-resilient infrastructure in underserved regions.

Third, the report proposes a National Agribusiness Transformation Committee, digital monitoring dashboards, and climate-smart budget tagging to improve policy execution, accountability, and coordination.

Fourth, it recommends women-led agribusiness incubation hubs, gender-disaggregated indicators in climate-finance projects and bundled digital extension and financial services for rural women and women-led SMEs.

Finally, the report calls for greater investment in innovation, mechanisation and climate-smart agriculture through leasing models for drones, solar pumps and mini-processors, agri-tech R&D hubs and technology-enabled farmer field schools using artificial intelligence, remote sensing, satellite monitoring and real-time data.

The report noted that the convergence of climate urgency, shifting global trade patterns and food-security risks has made agribusiness transformation a national priority.

It warns that policy announcements alone will not deliver results, stressing the need to translate policy intent into sequenced investment programmes, establish effective multi-stakeholder coordination and mobilise climate finance while ensuring the participation of smallholders, women and the private sector.

With disciplined implementation, the report argues, Pakistan can reposition agribusiness as a driver of inclusive growth, global competitiveness and climate resilience.

Copyright Business Recorder, 2026