Pakistan's Shift to Value-Added Agricultural Exports

Agriculture remains a cornerstone of Pakistan’s economy, contributing about 22.7% to the national GDP and providing livelihoods for 37.4% of the labor force (Pakistan Economic Survey, 2023–24). Despite its pivotal role, Pakistan’s agricultural export performance has not kept pace with its potential or regional competitors. While countries such as India, Vietnam, and Thailand have diversified into high-value and processed agricultural products ranging from packaged foods to value-added horticultural exports. Pakistan’s export profile continues to rely heavily on raw and semi-processed goods like rice, cotton, and fruits. This overreliance on low-value exports exposes the country to price fluctuations in global markets and limits income growth for farmers and exporters alike.

Several deep-rooted structural barriers underpin this underperformance. Low crop productivity, outdated farming practices, and limited access to quality inputs constrain efficiency at the production stage. Post-harvest losses, estimated at over 25% for fruits and vegetables, weaken profitability and supply chain reliability. Furthermore, non-compliance with international sanitary and phytosanitary (SPS) standards and a lack of effective certification systems often restrict market access to high-income countries. Weak logistics, insufficient cold storage, and inadequate export financing compound these problems, discouraging small and medium agribusinesses from entering global markets.

However, Pakistan’s potential for agricultural export growth remains immense. The country’s strategic geographic location linking South Asia, Central Asia, and the Middle East combined with its diverse agro-climatic zones offers opportunities for year-round production and market diversification. By addressing value-chain inefficiencies through technological modernization, enhanced extension services, and targeted policy reforms such as export facilitation, digital traceability, and incentives for agro-processing, Pakistan can shift toward a high-value, globally competitive agricultural economy. Strategic coordination between the public and private sectors can enable this transformation, helping the country reclaim a stronger foothold in the international agri-market and secure sustainable rural prosperity.

Current Status and Global Standing of Agricultural Exports

Pakistan’s agricultural export profile remains narrow and heavily dependent on a few staple commodities. Rice continues to dominate, accounting for nearly $2.5 billion, or around 41.6% of total agricultural exports during FY 2022–23 (TDAP, 2023). Other key exports include fruits, especially mangoes and citrus followed by cotton-based textile products that indirectly rely on domestic agricultural inputs. While export volumes to traditional markets such as the Gulf Cooperation Council (GCC) countries, China, and the United Kingdom have shown modest growth, Pakistan’s export basket still lacks diversification and sophistication.

A major weakness in this export structure lies in the low share of high-value and processed products, which remain below 15% of total agricultural exports. This stands in sharp contrast to regional competitors such as India (around 25%) and Thailand (approximately 30%) (World Bank, 2023). These countries have successfully invested in food processing, value addition, and compliance with international standards, areas where Pakistan continues to lag. As a result, even when Pakistan performs well in terms of volume, it captures only a fraction of the potential export value.

Globally, Pakistan ranks as the fourth-largest exporter of rice, yet it earns considerably less in the premium Basmati segment compared with India, largely due to weaker branding, packaging, and quality control systems. In horticulture, Pakistan is the sixth-largest producer of mangoes (FAO, 2022), but its share in the global mango trade remains under 5% because of high post-harvest losses, inadequate cold storage, and inefficient logistics. This dependence on bulk, low-margin commodities expose Pakistan’s agricultural economy to significant risks, including global price fluctuations, demand shocks, and climate-related disruptions. To enhance resilience and profitability, Pakistan must transition from a volume-based export strategy toward a value-driven, diversified agricultural export model.

Structural Constraints and Missed Opportunities in Pakistan’s Agricultural Export Growth

Pakistan’s agriculture sector, despite its vast potential and diversity, continues to be held back by deep-rooted structural challenges that limit its competitiveness in global markets. At the core of these challenges lie productivity gaps, weak infrastructure, and regulatory shortcomings that prevent the sector from realizing its true export capacity.

A major issue is low productivity and technological stagnation. The yield levels of Pakistan’s major crops remain well below global averages. Wheat yield stands at around 3 tons per hectare, compared to 5.5 tons in China, while maize yield is only 6.5 tons per hectare versus 10.5 tons in Egypt (FAOSTAT, 2022). These productivity gaps stem from outdated farming methods, inadequate mechanization, and limited use of high-yield, climate-resilient seed varieties. Furthermore, water-use inefficiency remains a chronic concern. The dominance of flood irrigation wastes up to 40% of available water resources (World Bank, 2023), posing long-term threats to both crop productivity and sustainability.

Another major constraint is the absence of modern post-harvest infrastructure. Pakistan lacks an integrated system of cold storage, warehousing, and processing facilities, leading to massive post-harvest losses estimated between 15% and 40% for fruits and vegetables (UNCTAD, 2023). For a high-value product such as mangoes, this translates into a loss of nearly USD 150 million (PKR ~42 billion) annually in potential export earnings (Pakistan Horticulture Development & Export Company, 2023). These inefficiencies drastically reduce exportable surplus, compromise quality, and undermine the country’s credibility in international markets.

Compliance with Sanitary and Phytosanitary (SPS) standards further hampers access to premium destinations like the European Union and Japan. Limited certification facilities, weak traceability systems, and inadequate inspection mechanisms make it difficult for exporters to meet strict international requirements related to pesticide residues, hygiene, and product grading.

Despite these weaknesses, Pakistan’s agro-climatic diversity provides a strong foundation for export expansion. The country can grow a broad spectrum of crops from tropical mangoes in Sindh and Punjab to temperate fruits in Balochistan, yet this natural advantage remains underutilized. While competitors such as Thailand and Malaysia have developed thriving agro-processing and halal food industries, Pakistan continues to focus on exporting raw materials. The global halal food market, projected at USD 2.8 trillion by 2025, and the organic food market worth over USD 188 billion (FiBL, 2024), both represent untapped opportunities for Pakistan’s exporters.

Policy frameworks such as the Strategic Trade Policy Framework (STPF) 2020–25 and various TDAP programs exist to promote agricultural exports, but their implementation has been weak. Exporters continue to face bureaucratic delays, limited credit access for SMEs, and a lack of timely market intelligence. Even preferential trade agreements, such as the China-Pakistan Free Trade Agreement (CPFTA), are underutilized, with usage rates below 30% (International Trade Centre, 2023). This underutilization largely stems from exporters’ limited awareness of tariff lines, technical standards, and the complex Rules of Origin requirements.

A Strategic Path Forward for Revitalizing Pakistan’s Agri-Exports

To elevate Pakistan from a regional commodity supplier to a globally competitive agri-exporter, a comprehensive and forward-looking strategy is essential. The transformation requires coordinated action across value chains, infrastructure, policy, and international engagement, ensuring that agriculture becomes not only more productive but also more profitable and sustainable.

The foremost priority is to shift toward value addition. Pakistan must move beyond exporting raw commodities by promoting agro-processing and packaging industries. Incentivizing private investment through public-private partnerships (PPPs), tax rebates, and export-oriented financing can accelerate this transition. High-potential areas such as horticulture, dairy, livestock (especially halal meat), and organic produce offer immense promise for expanding Pakistan’s footprint in high-value global markets. Developing small-scale processing units near production hubs can also create rural employment while reducing post-harvest losses.

Equally important is modernizing supply chains. The government should invest in integrated cold chain logistics, warehousing, and modern packaging facilities, while enabling private sector participation through concessional financing and infrastructure support. Establishing accredited quality testing laboratories and digital traceability platforms will help meet international standards, ensure transparency, and strengthen buyer confidence—key prerequisites for accessing premium export markets such as the EU and Japan.

Bridging the compliance gap remains crucial. Nationwide farmer training programs focused on GlobalG.A.P., HACCP, and other international certifications can enhance product credibility. Digitalizing phytosanitary certification and inspection systems will reduce procedural delays, eliminate human error, and improve efficiency in cross-border trade.

Finally, Pakistan must leverage trade diplomacy more effectively. Embassies and trade missions should play an active role in identifying niche opportunities, facilitating business-to-business linkages, and sharing real-time market intelligence through data analytics. By strategically targeting emerging markets in Africa, East Asia, and the Middle East, Pakistan can diversify its export destinations and reduce dependence on a limited set of buyers.

Conclusion

Pakistan stands at a crucial crossroads in its journey toward becoming a globally competitive agricultural exporter. While the country possesses vast natural resources, a rich agro-climatic diversity, and a strategic geographic location linking major regional markets, its export structure remains constrained by systemic inefficiencies and outdated practices. Overdependence on low-value commodities such as rice, cotton, and unprocessed fruits has limited Pakistan’s ability to capture higher returns and withstand international market volatility. To break this cycle, Pakistan must pursue a decisive shift toward value-added, technology-driven, and sustainability-oriented agricultural exports.

Investments in cold chain logistics, agro-processing, and digital traceability systems can substantially enhance product quality and compliance with global standards. Similarly, empowering farmers through training and certification programs will help bridge the compliance gap and expand access to premium markets. The public and private sectors must work collaboratively to promote innovation, facilitate export financing, and streamline regulatory processes. Trade diplomacy should also be used strategically to identify niche opportunities in emerging markets while strengthening Pakistan’s presence in traditional destinations.

References: FAO; FiBL & IFOAM; Government of Pakistan; ITC; PHDEC; State of the Global Islamic Economy Report; TDAP; UNCTAD; World Bank.

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 Department of Agricultural Economics, Sindh Agriculture University, Tandojam, Pakistan and can be reached at samoonmahi@gmail.com

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