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Public finance

Pakistan's Federal Budget 2025-26 Offers Mixed Results for Agriculture Sector

Strategic Insights

— 2 min read

The Pakistani government has presented its budget for 2025-26, with a focus on supporting the agriculture sector, which contributes 24% to the country's GDP. Finance Minister Muhammad Aurangzeb recognized the sector's underperformance last year and acknowledged the need for long-term reforms. The government has proposed several initiatives, including a National Seeds and Development Authority, increased agricultural lending, and direct financial assistance to farmers. However, key stakeholders have expressed disappointment and frustration with the budget's lack of real support and financial backing for the sector. Farmer groups have criticized the government's withdrawal from procurement responsibilities, leaving the field open for hoarders and middlemen.

Key Takeaways:

  • The Pakistani government has committed to helping the agriculture sector stand on its feet again, with a focus on long-term reforms and increased support.
  • Agriculture contributes 24% to Pakistan's GDP, but last year's growth was only 0.56%, largely due to livestock production.
  • The government has proposed the formation of a National Seeds and Development Authority to ensure climate-resilient seed quality and crop standards.
  • Agricultural lending has increased from Rs1.785 trillion last year to over Rs2.066 trillion during the same 10-month period this year.
  • The government has allocated Rs4 billion to support ongoing and new agricultural development schemes, including the Green Pakistan Program.
  • Farmer groups have expressed disappointment with the budget's lack of real support and financial backing, criticizing the government's withdrawal from procurement responsibilities.
  • 1,000 agricultural graduates have been sent to China for modern farming training, with 300 already departing.
  • Farmer groups have welcomed the GST exemption on fertilizers and pesticides, but called for more significant support for the sector.

Statistics:

  • Agriculture contributes 24% to Pakistan's GDP.
  • Last year's agricultural growth was 0.56%, largely due to livestock production.
  • Agricultural lending has increased from Rs1.785 trillion last year to over Rs2.066 trillion during the same 10-month period this year.
  • Rs4 billion has been allocated to support ongoing and new agricultural development schemes.
  • 1,000 agricultural graduates have been sent to China for modern farming training.
  • The government has allocated Rs100,000 for unsecured loans to farmers under the Clean Financing Facility.

Sources:

  • The Express Tribune (no date listed), "Budget 2025-26 presented: Agriculture sector gets Rs4bn; may not meet 4.5% growth target"
  • Dawn (no date listed), "Budget 2025-26: Fiscal allocations focused on agriculture, youth"
  • Pakistan Kisan Ittehad press release (no date listed), "PKI Criticizes Budget for Lacking Real Support to Agriculture"

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