The most pressing challenge facing Pakistan’s agriculture sector today is the high cost of crop production, which has increased manifold in recent years due to rising prices of agricultural inputs — electricity, petroleum products, fertilisers, and pesticides. Without tackling this, the government’s goal of fostering agricultural growth and curbing inflation by keeping food prices affordable will remain unattainable.
The issue came into sharp focus when the Punjab Government imposed highly unrealistic district-specific wheat prices of Rs2,800 to Rs3,050 per 40kg in July 2024, falling well below the farmer’s production cost of over Rs3,000 per 40kg.
For this reason, farmers often advocate for subsidies on agricultural inputs. However, given the current fiscal constraints and the strings attached to the ongoing International Monetary Fund programme, the country can hardly provide direct or indirect subsidies to farmers.
Yet, despite these challenges, reduction in overall and per-unit production costs is possible through strategic interventions aimed at improving the efficiency of agricultural inputs, boosting crop yields, and minimising crop losses.
Costly structural inefficiencies need to be addressed lest the agriculture sector falls behind on export competitiveness
Farmers often use costly inputs inefficiently, leading to substantial waste. Fertilisers, for instance, are typically applied by broadcasting or flooding, causing much of it to leach........