Rising Production Costs and Falling Returns Strain Pakistani Farmers

Farmers in Pakistan are facing financial difficulties due to increased production costs and reduced returns on their crops. Contributing to their woes are the Islamabad government’s policies on food imports, inadequate supply of crop inputs, and the adverse effects of climate change.

The Sindh Abadghar Board (SAB), an agricultural organization, has called for control over the rising costs of crop production, stating that the economic condition of farmers has worsened, especially following the unprecedented floods of 2022. “The cost of production has increased by 100 to 150 percent in the last 12 to 18 months,” SAB reported.

Urea, an essential fertilizer, saw a price increase of 47 percent this year, reaching PKR 5,000 per bag. Wheat farmers are particularly concerned about the government’s failure to provide timely and reasonably priced crop inputs. The Kissan Board Pakistan (KBP) noted that practices like hoarding and overpricing are causing significant financial strain on farmers.

KBP President Sardar Zafar Hussain Khan accused the government, local authorities, and the fertilizer mafia of colluding to create black markets, arbitrary pricing, and artificial shortages. He stated that an increase in gas tariffs affected 60 percent of fertilizer production capacity, allowing middlemen and dealers to gain substantial profits.

According to Pakistan Kissan Ittehad (PKI), a farmers’ union, production costs have doubled in one year while the prices of major crops such as wheat, maize, and cotton have dropped by an average of 25 percent. “Both these aspects have made farming economically unviable,” said PKI President Khalid Mahmood Khokhar. He explained that the rising production costs and reduced returns have severely impacted the agricultural sector.

The delays in fertilizer distribution and higher prices have negatively affected productivity targets for all major crops. “The unprecedented spike in urea prices has made farming unviable. Farmers suffered heavy losses in cotton crops, selling produce at Rs6500 per maund compared to the government’s indicative price of Rs8500 per maund,” Khokar said.

Agriculture accounts for about a quarter of Pakistan’s economy, with wheat alone comprising 2 percent. With the country facing an inflation rate near 30 percent, the higher costs incurred by farmers could lead to further increases in food prices. Khalid Mahmood Khokhar urged the government to make urea available at affordable prices to “ensure national food security and economic sustainability.”

Over the past four years, production costs have increased by 200-250 percent due to higher prices of inputs like diesel, electricity, seeds, fertilizers, and pesticides, according to Agri Forum Pakistan. The Sindh Abadghar Board and other farm organizations have called for government intervention and budgetary support, which has not been forthcoming.

Dr. Waqar Ahmad, a former associate professor at the University of Agriculture in Faisalabad, noted that the latest national budget did not include significant support for the agriculture sector. “Farmers were hopeful for relief and support from the government to reduce their production costs, but the budget dashed these hopes,” he said.

Farmers were expecting better price support following reports of higher production costs. However, the government imported a large quantity of wheat just before the harvest season, causing wheat prices to fall from PKR 4,000 to PKR 3,000 per bag. This led to protests from farmers who suffered substantial losses.

Ishfaq Jatt, a wheat and cotton farmer from Punjab, expressed distrust in the government. “We farmers have to sell our wheat to middlemen at a much-reduced rate, incurring losses,” he said. “I have a small farm with no space to store my wheat. If I can’t earn from my harvest, how can I sow my next crops?”

These challenges highlight the critical need for supportive policies and timely interventions to alleviate the financial distress of Pakistani farmers and ensure the sustainability of the agricultural sector.

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