Pakistan's Agricultural Sector Struggles with Rising Costs and Declining Exports

Pakistan's agricultural sector is facing a deepening crisis as farmers struggle to make ends meet due to rising production costs and declining prices for their produce. The wheat market has been particularly contentious, with the government's decision to reduce large-scale procurement leaving farmers dependent on private buyers who are not offering fair prices.

The situation extends beyond wheat, however, with cotton, sugarcane, potatoes, and other major crops suffering from poor yields, weather shocks, pest attacks, market gluts, delayed payments, and policy uncertainty. The costs of irrigation and agricultural inputs have also eroded farm profitability, particularly for small and medium-sized growers.

The distress in the fields is having a ripple effect on Pakistan's external accounts, with food imports surging by 11.66% to $9.15 billion in FY26 from $8.2 billion a year earlier. Meanwhile, food exports collapsed by 29.49% to $5.02 billion compared with $7.12 billion in FY25.

The trade deficit has widened by about 283%, from roughly $1.08 billion in FY25 to $4.13 billion in FY26. Palm oil imports alone cost the country $3.8 billion, accounting for more than 41% of the total food import bill.