Agriculture's Role in Pakistan's Economy and Food Security

Agricultural development remains the cornerstone of Pakistan’s economy, particularly in its rural landscapes where a significant share of the population depends directly on farming and allied activities for survival. As the largest employment sector, agriculture engages 37.4% of the national labor force and provides the primary source of livelihood for rural households (Economic Survey of Pakistan, 2023-24). Beyond its role in producing food, agriculture forms the foundation of rural life, shaping social structures, cultural traditions, and community interactions. In regions where industrial opportunities remain scarce, agricultural development functions as the principal driver of economic growth, poverty reduction, and social cohesion.

Over the past few decades, Pakistan has witnessed significant agricultural transformation. The introduction of high-yielding crop varieties, better access to inputs like fertilizers and pesticides, and improved irrigation practices such as drip systems and laser land leveling have contributed to productivity gains. Mechanization and digital tools are gradually reshaping farming practices, offering prospects for higher efficiency and reduced labor intensity. These changes have boosted household incomes, expanded rural employment opportunities, and improved national food security.

Yet, these achievements are increasingly challenged by complex vulnerabilities. Climate change has intensified the frequency of floods, droughts, and heatwaves, directly affecting yields and livestock health. Water scarcity is becoming a structural constraint, particularly in arid regions where groundwater reserves are rapidly depleting. Meanwhile, volatile international trade dynamics, input price fluctuations, and weak market access leave smallholders especially exposed. Even within rural economies, gains from agricultural growth are uneven, as marginalized farmers and landless laborers often struggle to benefit equally.

Therefore, agricultural development today must be seen not only as a growth strategy but as a pathway toward inclusive and sustainable rural transformation. The challenge lies in balancing productivity with resilience, ensuring that agricultural progress uplifts all segments of the rural economy.

Agriculture and the National Economy

The symbiotic relationship between agriculture and Pakistan’s macroeconomy is both profound and deeply interwoven with the country’s broader development trajectory. Despite gradual structural shifts toward services and industry, agriculture remains a cornerstone of national stability and resilience. Its importance extends beyond fields and farms, shaping employment, food security, trade, and rural development in ways that directly influence the lives of millions.

Agriculture contributes 22.9% to Pakistan’s GDP (Economic Survey of Pakistan, 2023-24). While this share has declined in relative terms, the sector’s foundational role remains irreplaceable. A good harvest season fuels growth, stabilizes inflation, and strengthens foreign exchange reserves, whereas poor output triggered by droughts, floods, or rising input costs can disrupt the entire economy. The sector’s performance is, therefore, a bellwether for national economic health.

Equally significant is its role in employment. Agriculture is the largest employer in Pakistan, engaging over 37% of the national labor force and serving as the primary livelihood source for more than 60% of the rural population (World Bank, 2022). Its reach extends far beyond farming, supporting a web of industries that include food processing, transportation, storage, machinery, and retail. This employment generation makes agriculture indispensable for social stability and rural well-being.

Food security remains another critical dimension. Pakistan is self-sufficient in staples like wheat and rice, yet production shortfalls or supply chain disruptions trigger price hikes that hit vulnerable households hardest. With 36.9% of the population experiencing food insecurity (National Nutrition Survey, 2018), the sector’s productivity directly determines both the affordability and availability of nutritious food.

Agricultural growth also has a multiplier effect on poverty alleviation and rural development. Rising farm incomes increase spending power, stimulate rural businesses, and fund community investments in education, health, and infrastructure. Research confirms that growth in agriculture reduces poverty more effectively than expansion in other sectors (Dorosh & Malik, 2016).

Significant Impact: A Focus on Pakistan

Agriculture continues to shape Pakistan’s economic and social landscape in ways that extend well beyond the farm. The adoption of modern farming practices, improved seed varieties, and better irrigation techniques has led to significant gains in productivity. Wheat production alone reached 28.2 million tonnes in 2022-23 (Economic Survey of Pakistan, 2023-24). Yet, while output is improving, yields remain below potential when compared to regional peers, leaving considerable room for growth through targeted interventions in technology transfer, soil management, and mechanization.

The sector’s influence on economic growth and poverty reduction is equally striking. Rural households benefit directly from rising productivity, and initiatives such as the Benazir Income Support Program (BISP) further highlight the centrality of agriculture in reducing poverty and vulnerability. As incomes increase, rural communities gain greater purchasing power, stimulating demand for goods and services and generating multiplier effects across the local economy.

Job creation is not confined to farming alone. The agriculture-based value chain provides employment in areas like rice milling, textile manufacturing, dairy processing, input supply, and logistics. Strengthening these linkages is essential for absorbing Pakistan’s growing labor force and for easing migration pressures on cities. Agricultural growth also drives infrastructure investment, from irrigation projects to the expansion of rural roads under initiatives like the China-Pakistan Economic Corridor (CPEC), which in turn improve access to markets and services.

The broader social benefits are equally important. Rising rural incomes supports spending on health and education, building stronger communities and enhancing human capital. At the same time, investment in nutrient-rich crops like pulses, fruits, and vegetables is essential for addressing Pakistan’s paradox of being a food-producing nation where malnutrition persists. In this way, agriculture not only sustains the economy but also underpins social development and national food security.

Limitations and Challenges of Agricultural Development in Pakistan

Agriculture remains at the heart of Pakistan’s economy, but its growth is constrained by a complex web of structural, environmental, and policy-related challenges. One of the most pressing issues is environmental degradation. Harmful practices such as over-irrigation and poor water management have led to soil salinity, waterlogging, and rapid depletion of groundwater resources, making Pakistan one of the most water-stressed countries globally. Climate change compounds these pressures, as floods, droughts, and heatwaves increase in frequency and intensity. The catastrophic floods of 2022 alone inflicted nearly $4 billion in agricultural damage, exposing the sector’s vulnerability to climate extremes.

Land ownership patterns further deepen inequality, as large landholders continue to capture the lion’s share of subsidies and state support, while smallholders and tenant farmers remain trapped in cycles of poverty and indebtedness. At the same time, poor market access and the dominance of middlemen prevent farmers from securing fair prices for their produce. Inadequate storage and transportation facilities worsen the problem, contributing to high post-harvest losses and reduced farm incomes. Limited access to modern technologies, including precision farming tools, quality seeds, and efficient irrigation systems, also holds back productivity, particularly among small-scale farmers who lack both the financial resources and the technical know-how to adopt them.

The rural economy’s over-dependence on farming heightens its exposure to shocks, while weak rural infrastructure, unreliable electricity, poor road networks, and a lack of cold storage, reduce competitiveness. Meanwhile, inconsistent policies, abrupt import-export restrictions, and underinvestment in research and development discourage long-term growth. Labor shortages present another emerging challenge, as rural youth migrate to cities in search of better opportunities, leaving behind an aging farming population and insufficient labor during peak agricultural seasons. Adding to these internal pressures are global trade barriers, such as sanitary and phytosanitary (SPS) measures, that restrict Pakistan’s agricultural exports and reduce competitiveness in international markets.

Addressing these constraints requires a shift toward sustainable and climate-smart agriculture, improved infrastructure, stronger farmer organizations, and policy consistency. Without such reforms, Pakistan risks seeing its most vital sector weakened by forces that could otherwise be managed through innovation, resilience, and inclusive development strategies.

Conclusion

Agriculture remains Pakistan’s most vital sector, not only because it feeds the nation but because it sustains rural life, employment, and economic stability. Its contribution to GDP, its role in engaging over a third of the labor force, and its direct link to food security make it indispensable for national progress. The sector’s growth has already demonstrated its power to reduce poverty, stimulate local economies, and strengthen social development through better education and health outcomes. Yet, these gains are fragile. Climate change, water scarcity, land inequality, weak infrastructure, and inconsistent policies threaten to erode progress unless addressed with urgency and foresight.

The way forward lies in embracing climate-smart practices, investing in rural infrastructure, expanding access to technology, and ensuring that benefits reach smallholders and marginalized communities. Equally important is strengthening value chains and improving market access so that rural producers can secure fair returns and drive inclusive growth. Agriculture must no longer be seen as a traditional occupation but as a dynamic driver of resilience, equity, and sustainability. By transforming agriculture into a modern, innovative, and inclusive sector, Pakistan can not only safeguard rural livelihoods but also lay the foundation for long-term national stability and prosperity.

References: Government of Pakistan; World Bank; Dorosh & Malik; Khan; Hussain; IFPRI; FAO; Azam & Shafique

Please note that the views expressed in this article are of the author and do not necessarily reflect the views or policies of any organization.

The writer is affiliated with the Institute of Agricultural and Resource Economics, University of Agriculture, Faisalabad, Pakistan 

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