ISLAMABAD – The Planning Commission has admitted that faulty federal and provincial policies led to a sharp 13.5% decline in major crop production this fiscal year. This drop may increase food imports next year and put pressure on the country’s foreign exchange reserves.
According to a working paper prepared for the 2025–26 federal budget, the Commission blamed the agricultural sector’s weak performance for the lower-than-targeted GDP growth. Pakistan’s GDP grew by only 2.7% against the target of 3.6%, mainly due to contraction in key commodity-producing sectors.
Unfavorable weather, low rainfall, rising input costs, and frequent policy changes were cited as key reasons behind the drop in crop output. Last year, the government initially announced an attractive minimum support price (MSP) for wheat, but later withdrew its backing. Farmers were left vulnerable to market forces after the decision to end government intervention under IMF agreements.
The Commission also highlighted how delayed fertilizer subsidies increased farmers’ problems, further pushing up production costs. While major crops dropped by 13.5%, other minor crops saw a 4.8% increase. Cotton production fell by 30.7%, maize by 15.4%, sugarcane by 3.9%, rice by 1.4%, and wheat by 8.9%.
Furthermore, the cotton ginning industry recorded a 19% decline this year, compared to a 47.2% growth last year. This was largely due to reduced cotton availability and shutdown of ginning factories. However, reforms in commodity financing helped the government restrict net domestic assets to Rs145.6 billion—far lower than last year’s Rs1.58 trillion.
Despite setbacks in agriculture and manufacturing, the Planning Commission praised the livestock sector for showing 4.7% growth. The credit was given to government-led vaccination campaigns and better disease control programs. Yet, this did not uplift overall manufacturing, which only grew 1.3%, reflecting weak demand and sluggish industrial output.