Khalid Saeed Wattoo | Dr Waqar Ahmad

Over the past few years, the prices of key inputs — fertilisers, pesticides, electricity, diesel, and agricultural machinery — have surged sharply, whereas crop prices globally have trended downward. This widening gap has turned the cultivation of many crops into a loss-making business for Pakistan’s farmers, particularly as the impact of climate change increasingly undermines crop yields.

Today, Pakistan’s crop sector faces two major challenges: climate change and declining cost competitiveness.

In response, farmers continue to demand support prices and subsidies. Yet, under mounting pressure from international financial institutions and amid the government’s tight fiscal constraints, any meaningful relief for the agriculture sector — beyond bank loans or politically motivated showcase projects of limited scale and scope — appears unlikely in the near future.

In the past, farming was a profitable venture — though with varying margins — despite widespread on-farm inefficiencies. Today, however, in the absence of government support, circumstances are markedly different.

Pakistan’s agriculture sector today is facing policy, market, and institutional failures, all converging to make operating

In the evolving scenario, only those farmers will survive who adopt agricultural practices that can reduce their production costs and increase crop revenues through higher yields, lower harvest losses, and access to more rewarding sales channels. Their challenge becomes even greater as they need to survive financially within an agricultural ecosystem that is highly inefficient and riddled with structural barriers and systemic shortcomings.

Yet, even within this difficult situation, there remains room for improvement. Both small and large farmers can undertake targeted measures to improve their cost competitiveness — without letting yields suffer.

For instance, fertiliser remains one of the largest and most intensive components in crop production, where such cost reduction is possible, particularly in phosphatic fertilisers such as Diammonium Phosphate (DAP). The recent surge in DAP prices — currently around Rs14,700 per 50kg — has discouraged many farmers from using it, even though their soils are severely deficient in phosphorus.

To replenish phosphorus in soils without relying solely on expensive chemical fertilisers, farmers across the world use a mix of organic, mineral, and biological sources that can be processed on-farm with minimal investment and effort. Compost, farmyard manure and crop residue (processed through a fermenter), cattle dung slurry, biogas slurry, and animal bone powder are some of the affordable and effective alternatives.

Likewise, with some basic technical know-how, many farmers prepare phosphate-enriched compost by mixing rock phosphate — a raw form of phosphorus — with decomposed manure or slurry.

Irrigation is another major cost component. Over the past few years, electricity tariffs and diesel prices have climbed steeply, which have made tubewell operation increasingly unaffordable for farmers.

Transitioning to solar-powered systems — particularly for diesel-powered tube wells, which account for about 85 per cent in Punjab (1.04 million out of 1.22m as of June 2021) — could significantly reduce farmers’ expenses. It would also help cut petroleum imports and save the country millions in foreign exchange. Alongside this, effective water stewardship that decreases farm-level conveyance losses and improves water-use efficiency can further decrease irrigation costs.

Another major area for reducing cost is land preparation. Farmers in Pakistan typically carry out extensive tractor ploughing before each sowing, which consumes significant fuel and time. By adopting some selective practices from regenerative agriculture, they can lower these costs. Farmers should consider alternative cropping systems that allow zero or minimum tillage for sowing the next crop or permit relay cropping, where the second crop is sown into a standing first crop.

High harvest losses continue to drain farmers financially. Many rental service providers still use outdated paddy (rice) and wheat harvesters that are over 40 years old.

In the past, rental options were limited, but in recent years, several large service providers have entered the market with new machines that can help reduce crop losses — that reach up to 10pc in wheat and paddy. Therefore, farmers must examine the harvester’s performance in previously harvested fields before hiring its services. A little due diligence can save farmers a significant amount of money.

In addition, the exploitative agricultural marketing system continues to weaken farmers’ cost competitiveness. Across grain markets, arthis violate government-notified commission rates and charge 3–5pc on total sales, effectively eating up 20–25pc of farmers’ profit for just a few hours’ service. Worse still, this commission is taken from those who neither borrow nor use any other service from the arthee. Those who do avail credit facilities end up paying even more.

Unfortunately, the government has failed to reform this flawed marketing system, which continues to operate unchecked as exploitation deepens over time. Farmers are therefore left with no option for survival but to unite under collective entities such as cooperatives or community organisations — even if only for limited scope, such as bulk selling of produce and joint machinery hiring.

In conclusion, to many, Pakistan’s agriculture sector today is facing policy, market, and institutional failures, all converging to make operating difficult for farmers across the nation. Their survival now depends on their own initiatives to cut costs, boost efficiency, and stay competitive, because no one else is coming to rescue them from this crisis. Simply put, the “survival of the fittest” theory has begun to play out in Pakistan’s agriculture sector, and farmers must act now to survive.

Khalid Wattoo is a development professional and a farmer, and Dr Waqar Ahmad is a former associate professor at the University of Agriculture, Faisalabad

Published in Dawn, The Business and Finance Weekly, November 10th, 2025

Published Date: November 12, 2025