Agriculture: A Rare Bright Spot in Pakistan's Economy
By Riaz Haq
CA

Pakistan's agriculture sector grew 6.3% in 2023-24, far outpacing the overall economy that grew just 2.38%, according to the  Economic Survey of Pakistan 2023-24 .  This is good news for about 40% of the country's population working in the agriculture sector. In contrast, India's agriculture growth slowed to  1.2%  in recent quarters. Studies have shown that strong growth in agriculture helps  reduce poverty  in developing nations like India and Pakistan. 

Snapshot of Pakistan's economy - Economic Survey of Pakistan 2023-24

The agriculture growth in Pakistan was the highest in 19 years. All major crops saw significant increases. Wheat output jumped 11.6% from 28.2 million tons last year to 31.4 million tons this year, the Economic Survey said. Cotton production, severely damaged by floods and rains last year, reached 10.2 million bales compared to 4.9 million bales last year, growing by 108.2%.  Rice output  also saw a significant increase — up by 34.8% — reaching 9.9 million tons compared to 7.3 million tons. 

Strong crop output is, in part, the result of higher yields from increased water and fertilizer availability to farmers, according to the Economic Survey. 

The Survey said the water availability during Kharif 2023 increased to 61.9 million acre-feet (MAF) from 43.3 MAF in Kharif 2022 (when the floods hit). For Rabi 2023-24, the water availability was 30.6 MAF, showing an increase of 4.1% over Rabi 2022-23.

Domestic fertilizer production during FY24 (July-March) rose by 17.3% to 3.25 million tons compared to 2.77 million tons in the same period of FY23. Fertilizer imports also increased by 23.7%, reaching 524,000 tons. The availability of fertilizer increased by 18.1% to 3.77 million tons. 

Agriculture is considered a key tool for reducing poverty in developing countries like Pakistan. It employs almost half of the rural workforce, contributes around 20% to the country's GDP, and provides raw materials for agro-based industries, according to a  study  by Yaping Liu, Asad Amin, Samma Faiz Rasool, and Qamar Uz Zaman.  However, some studies suggest that agriculture may only help mitigate rural poverty in the long term, while other sources say that sustainable agriculture practices can significantly improve agricultural production and reduce poverty.

(Riaz Haq is a Silicon Valley-based Pakistani-American analyst and writer. He blogs at  www.riazhaq.com)