ROLE OF AGRICULTURE

IN
THE ECONOMIC
DEVELOPMENT
OF
PAKISTAN

X, Y, Z

UVAS Business School, University of Veterinary and

Animal Sciences, Outfall Road Lahore
Contents:
Executive Summary..........................................................3
Introduction:.....................................................................4
Agriculture in Pakistan:....................................................5
1-Crops:.............................................................................7
Major Crops:...................................................................7
Minor Crops:.................................................................10
2. Livestock and Poultry:................................................11
1. Livestock:..................................................................11
2. Poultry:......................................................................13
3. Fisheries:.....................................................................14
4. Forestry:......................................................................15
Problems faced by Agricultural sector of Pakistan:......16
Agriculture Performance 2022-23:.................................19
Conclusion:......................................................................21
Recommendation:..........................................................21
References:.....................................................................23
 Executive Summary
Agriculture is considered the backbone of any economy
and it is also the most important sector of Pakistan’s
economy. The purpose of this report is to analyze the
Pakistan’s agriculture and its impact on economy. This
study also highlights the agricultural challenges and its
possible solutions. The agriculture sectors i.e. major and
minor crops, fruits, livestock, fisheries and forestry are
studied in this report. There is some agriculture problems
i.e.; limited water, poor management, natural calamities
and others which have negative impact on Pakistan’s
economy. The findings shows that due to agriculture
problems there is fluctuations in Pakistan’s economic
growth (GDP) thus, Pakistan’s economic growth is going
to slowdown. Total factor of production is also going to
slow down due to these instabilities.
Introduction:
Agriculture is an art of cultivation crop and raising
livestock, it plays a very huge role in the economies of
underdeveloped or developing countries. In Pakistan
agriculture used to be a leading sector in economic
growth, during the time of independence agriculture
made up around 53% of country’s GDP and more than
65% of our labor was employed in this sector. These
figures have changed drastically in last 7 decades due to
different factors including political, social, and
environmental and climate change (Syed Ali Raza, 2012).
As of now, the contribution of agriculture to GDP is
22.04% and the total employment in this sector is 35.9%
(World Bank national accounts data, and OECD National
Accounts data files, 2020). The rural population of
Pakistan in 2019, was 63.09% (World Bank, 2019) and
agriculture is a source of income for majority of the rural
population of Pakistan as the people living in rural areas
are either directly or indirectly linked with agriculture. It
also provides the raw materials for the different
industrial sectors of the country and is a major buyer of
agricultural products like fertilizers, tractors etc.
Since, this sector provides livelihood to a major chunk of
population it is important for us to know its impact on
the economy of Pakistan and the challenges this sector is
facing today. The objective of this research therefore is,
“To find out the impact of Agricultural on the economic
growth of Pakistan”
The previous studies are relatively old and in the last
decade the political and economic conditions of the
country have changed drastically, so this study will be
filling in the gap by adding the most recent data, taken
directly from the Ministry of Finance website. This
research will cover the data analysis of 21 years from
2000 to 2020. The economic indicator included in this
research is GDP, I will be analyzing the contribution of all
4 sectors of Agriculture (i.e. Crops, Livestock, Fisheries
and Forestry) to economic growth separately. To achieve
this, firstly here is a brief description of Agriculture and
types of Agriculture sectors in Pakistan.

Agriculture in Pakistan:
With the increasing population of Pakistan, the demand
for off has also increased significantly the total area of
Pakistan is 796,096km, but 21.1 million of the area is
cultivated. The agriculture and availability of food in the
world depends upon weather conditions, natural
disasters, civil wars etc. When the production of food is
less than the demand the prices go up and the poor are
left to starve, as Pakistan is a developing country and
approximately 1/3rd of our population lives below
poverty line, so according to a report around 49% of
people in Pakistan have food insecurity (Benin, 2009).
With climate change it is estimated that the wheat
production of Pakistan will decrease by 50% in 2050.
Pakistan is already facing the effects of climate change as
the mango production in Pakistan is severely affected
due to changes in climate. Despite of all this Pakistan is
one of the largest producers of major crops like wheat,
rice, cotton, maize, sugarcane etc. and they contribute to
around 35% of agriculture, livestock contributes to
around 61% in agriculture, fisheries contribute 2.06% and
forestry have the contribution of 2.13% in the
agriculture.
The table below shows growth in all the sectors of
agriculture from 2014-2020, it can be seen that the crops
production had negative growth in 2015, 2016 and 2019,
Forestry saw a massive decline in 2015 and negative
growth of 2.33% in 2017.
Growth in Agriculture sector

Source: (Pakistan Bureau of statistics, 2020)

1-Crops:
In Pakistan there are two cropping seasons “Kharif” and
“Rabi”. The sowing of seed sin kharif season begins in
April and ends in June. The crops sowed in this seasons
include, rice, cotton, Maize, sugarcane etc., the harvesting
of these crops happen from October r to December. The
Rabi crops, on the other hands, are sowed in October to
December, these crops include wheat, mustard, tobacco,
barley etc. The harvesting season of these crops start from
April and ends in June. (Pakistan Economic Survey ,
2020). The crops harvested in Pakistan can be divided
into two different categories i.e. Major cops and minor
crops.
Major Crops:
The major crops are wheat, rice, cotton, sugarcane and
maize. These crops contribute to around 21.73% of the
agriculture sector and 4.2% of GDP (Pakistan Economic
Survey, 2020). The table below shows the production of
the major crops of the country from the year 2013 to
2020.

Production of Major crops

Source: (Pakistan Bureau of statistics, 2020)

Wheat: Wheat is one of the most used crops in the world,
and it the most used food in the country. As of 2020, this
crop contributes to 8.7% in agriculture and 1.7% in GDP
of the country. In 2019-2020, despite covid19 and locust
attacks Pakistan managed to produce 24.9 million tons of
wheat. The area for wheat cultivation also increased by
1.7%
Rice: It is very important crop, both in terms of food and
cash. It is the second most consumed food of the country
and the second major export of the country after cotton. It
contributes to 3.1% of agriculture and 0.6% to the GDP of
the country. In 2020, Pakistan produced 7.4 million tons
of rice and the area of cultivation of rice also increased by
8%
Cotton: It is the most important cash crop of Pakistan and
is also considered to be the backbone of Pakistan’s
economy. It contributes to 4.1% of agriculture and 0.8%
to the GDP of the country, in 2019-20 Pakistan produced
9.1 million bales of cotton, the production of cotton
decreased by almost 7% from the output of 2018-19. The
area of cultivation was increased by 6.5% but the overall
output decreased in 2019-20.
Sugarcane: It is another cash crop cultivated in Pakistan,
sugarcane is very important for the sugar producing and
sugar related industries in the country. Sugarcane
contributes to 2.9% of agriculture and0.6% to the GDP of
the country, in 2019-20, the production of sugarcane was
decreased by 0.4% and the area under cultivation was
decreased by 5.6%, this decrease in cultivation area
justifies the decrease in overall output.
Maize: After wheat and rice, it is the 3rd important grain
of the country. Maize contributes to 2.9% of total
agriculture and 0.6% to the GDP of Pakistan. The area of
cultivation for Maize was increased by 2.9% in 2019-20
and its production increased by 7%, this increase in
production was due to more area being allocated for its
cultivation as well as better seeds.
Minor Crops:
The minor crops include, bajra, tobacco, gram, barley,
jowar, pulses, onions, chilies etc. Apart from these
Pakistan also has oilseeds which include sunflower,
canola, mustard and cottonseed oil. The production of
gram, bajra and tobacco increased by 21.9%, 9.7% and
5.8% in the year 2019-20. Whereas the production of
jawar declined by 19.5%.
As, for the pulses the production of moong increased by
12.6%, mash decreased by 5.8% and the production of
masoor neither increased, nor decreased. Production of
chilies increased by 34.6%, due to the good weather
conditions while sowing the seeds but the production of
onions and potatoes decreased by 1% and 5.3% in the
year 2019-20. Whereas the production of oil from
oilseeds was only 0.5 million tons.
The tables below show the production and area of
cultivation for minor crops during the last two years.
Production and Area of Minor Crops

Source: (Pakistan bureau of statistics, 2020)

2. Livestock and Poultry:

1. Livestock:
Livestock is the largest sector of agriculture. In Pakistan
more than 8million families are directly or indirectly
linked with this sector and it is the source of 35-40% of
their income, this sector also contributes to 3.1% of our
exports. Livestock contributes to 60.6% of total
agriculture is based upon livestock and it contributes to
11.7% of our country’s GDP. Globally, Pakistan is fourth
largest producer of milk (Buchholz, 2019) and in 2019-20
the country produced 61.6 million tons of milk, the
country also produced 4.7 million tons of meat in the
same year. Since, it is the largest sector of agriculture the
government has a separate development strategy for this
sector which aims at the development of private sector,
improving the way breeding of animals, improving health
of the animals, etc.
The table below shows estimated milk and meat
production of Pakistan during the last three years.

Estimated Meat and Milk Production

Source: (Ministry of National Food Security and
Research, 2020)
2. Poultry:
Poultry is a subsector of livestock, currently the
investments in this sector has reached 700 billion rupees
and the sector provides jobs to around 1.5 million people
in the country. According to a report, Pakistan stands at
11th position on global poultry production. This sector
balances the overall, meat production of the country as
35% of the total meat comes from poultry and this sector
grew by 9.1% in 2019-20. The government recently
changed the poultry production in a shed system which is
completely controlled and this transformation had a
positive effect on poultry production as the sector showed
a growth in the recent year. The government has a
separate Poultry development strategy which aims to
control disease, improving poultry practices etc.
The table below shows the estimated production both
commercial and private of poultry goods in last 3 years.
Estimated Poultry Production

Source: (Ministry of National Food Security and

Research, 2020)

3. Fisheries:
It is one of the important subsectors of agriculture, as it
balances out pressure on livestock and poultry and also
plays an important role in food security. It is the source of
income for the people living in coastal areas of Pakistan.
It has 0.4% share in GDP but its impact is way larger due
to the export earnings we get from this sector. There are
two types of fisheries i.e. marine and inland. In 2091-20
the total fisheries production was approximately 701762
metric tons. In the same year Pakistan also exported Rs
49528 million worth of fishes and fish products to
European Union, china, Malaysia, Thailand etc. The
overall increase in production, in comparison to 2018-19
was 9.7%, whereas the overall increase in the exports of
fish and fish related products was 2.7%
The table below shows the export of fishes and fish
products to European Union in the year 2019-20.
Exports of fish and fish related products to EU

Source: (Marine Fisheries Department, 2019-20)

4. Forestry:
Only 5.01% area of Pakistan consists of forest, it shows
that Pakistan does not have sufficient forests. It may be
due to the climate of the country, since most parts of the
country has arid climate. The country has 4.51 million
hectares of forest, in which 3.44 million of forests are on
government owned land, the rest are on private owned
lands. The share of forestry in agriculture is only 2.1%.
There are different types of forests found in Pakistan,
they include Himalayan forests, Chirr pine forests, Scrub
forests, Tropical thorn forests, Mangrove forest, Riverine
forests, Mazri palm forests and Oak forests. These forests
provide us with wood, non-wood forest products like
honey, gum, herbs, oils etc. They also provide us with
medicinal plants, Pakistan has around seven hundred
plants that are important for medicines. (Forestry sector
review: Pakistan 2019, 2020).

Problems faced by Agricultural sector of

Pakistan:

1. Low investments in Fisheries:

Only 2% of Pakistan’s GDP is based upon fisheries
sector, this sector is often neglected and no such
investments are made to develop this sector. Pakistan has
a coastal line of 990km, most of this area is in Baluchistan
where no development projects are made. More than 80%
of fishermen are illiterate and they use their old ways of
Fishing. They have wooden boats and they throw nets in
the water to catch fishes, which is time consuming as well
as they get little to no fishes with this method and stay in
the sea for weeks. Fisheries is an important subsector of
agriculture which has the potential to increase our
exports, but it is often neglected.
2. Lack of infrastructure:

Most of the cultivation, fishing, livestock and poultry

practices happen in rural areas of Pakistan. The rural area
is very underdeveloped due to which after cultivating the
crops, when the farmers store it in the warehouses which
are not developed enough to stay intact during rain/floods,
the crops stored there are destroyed. For livestock and
poultry, the animal do not get proper sanitization since
they do not have controlled modern sheds, which is why
animals get infected with diseases and die. As far as
fishing is concerned, there are proper boats, controlled
sheds or ice/refrigerators to store the fishes caught.
3. Lack of Dams:

During monsoon season, Pakistan sometimes have severe

rainfall which results in flooding, due to the lack of Dams
and water reservoirs. Due to the lack of dams and water
reservoirs, the rain water cannot be stored and often
makes it way to the rural areas where most of the crops
are cultivated. This not only destroys the crops but also
destroys the livelihood of people and decreases the overall
agricultural output. Out of Pakistan’s total cultivated area
i.e. 22.07 million hectare, 12.52 million hectare is located
in the province of Punjab (Land Utilization Statistics,
2018) for such a large cultivated area, which also
witnesses rain, there are only 5 dams in Punjab. This
shows that there is a need of more dams, to prevent the
water from entering the cities and destroying the crops.
4. Primitive practices of cultivation, fisheries and
livestock:

The labor associated with cultivation of crops, raising

livestock and fisheries all of them use primitive methods.
The farmers do not have much knowledge of modern
ways of farming and they still are carry forwarding the
methods taught by their ancestors. They do not know
about hybrid seeds, inorganic fertilizers etc. The people
raising livestock in Pakistan, usually treat animal diseases
by their traditional medicines, they use injections to grow
the animal size and milk production instead of providing
animals with a balanced diet, because they do not modern
and humane way of raising animals. The fishermen of our
country still use wooden boats and nets, instead of using
modern technology such as sonar to locate fishes.
5. Deforestation:

Pakistan is already a country with forest deficiency but

due to rising population and infrastructural projects the
load on forest has increased. More timber is needed for
the construction of houses, more forests are cut down
for infrastructural projects and overall forests in Pakistan
are cut down, which is very alarming as this
deforestation results in climate change due to which the
overall agricultural output decreases.

Agriculture Performance 2022-23:

Consequent upon the Floods-2022, the Rabi season crops
have shown higher yield, which compensated the crop
damages of the Kharif season, leading to an overall
growth of agriculture sector to 1.55 percent. As such, the
production growth of wheat (5.4 percent), sugarcane (2.8
percent), and maize (6.9 percent) compensated the
negative growth of cotton (41.0 percent) and rice (21.5
percent). Furthermore, the normalization of livestock
activities also led convergence toward the stability path.
The overall decline of important crops during this year is
3.20 percent. This year witnessed an increase of 0.23
percent in other crops (contribute 3.32 percent in GDP)
primarily due to increase in Oil seeds production by 53.15
percent. Cotton Ginning having share of 0.97 percent in
agriculture and 0.22 percent in GDP has declined by
23.01 percent due to decrease in cotton production.
However, it is well compensated by the increase in
production of other crops. Livestock having share of
62.68 percent in agriculture and 14.36 percent in GDP,
grew at 3.78 percent compared to 2.25 percent during last
year. The forestry sector having share of 2.23 percent in
agriculture value addition and 0.51 percent in GDP, grew
at 3.93 percent against 4.07 percent last year due to
increase in timber production. Fishing sector having share
of 1.39 percent in agriculture value addition and 0.32
percent in GDP, grew at 1.44 percent compared to 0.35
percent during last year.

Agriculture Growth (Base=2015-16) (%)

Sector 2017 2018- 2019- 2020- 2021- 2022-
-18 19 20 21 22(R) 23(P)
Agriculture 3.88 0.94 3.91 3.52 4.27 1.55
1- 4.61 -4.38 6.32 5.83 8.19 -2.49
Crops(i+ii+iii)
i)Important 4.27 -8.59 5.24 5.82 5.41 -3.20
Crops
ii)Other 4.65 3.62 9.21 7.95 11.93 0.23
Crops
iii)Cotton 8.27 - -4.06 - 9.22 -23.01
Ginning 11.23 13.08
2-Livestock 3.59 3.65 2.80 2.38 2.25 3.78
3-Forestry 2.24 7.22 3.36 3.35 4.07 3.93
4-Fishing 1.57 0.78 0.63 0.73 0.35 1.44
R: Revised P: Provisional
Source: Pakistan Bureau of Statistics
Conclusion:

The results of this report conclude that Agriculture indeed

has a positive impact on the economic growth of Pakistan.
The subsectors of agriculture also have a significant
impact on the economic growth of the country, except for
the forestry which does not have an impact on economic
growth. Pakistan’s agriculture is currently not producing
the output it has the potential to produce, due to some
problem which this sector is facing today. Fisheries and
forestry sector need to be given special attention from the
government in order to get the maximum possible output.

Recommendation:
In the recent natural disasters (rain and flood) that
occurred in the several cities in Southern region, that
demolished the absolute crop yield which around
occupied the 0.5 million acres of Land in different places
of Sind. These disastrous resulting the huge damage in
Onion, potatoes and Chilies Crops and the other food and
fiber crops , This disastrous moments also resulted loss of
Millions of death in cows, buffalos and goats etc.
livestock’s sectors. This huge loss occupied the heavy
loss in agriculture sector, but the thing is that how to cope
up this situation, below have given some suggestions
through the government can overcome the burden of
recent challenge.
Re-map the strategic Plan to promote the agriculture
sector.
Provide the interest free bearing loans to the farmers to
re-build the cultivated areas.
Make awareness programs to cope-up the challenges
and un-certainties.
Make Strategic collation between Private landowners
and government agriculture sector concerns to reconcile
the agri-sector for the benefit of the nation welfare.
Governments have to take the serious concentration
towards the development of Agriculture sector. This
sector comprising the back bone of the economy.
Pakistan has enormous potential to significantly
increase its agricultural produce but the
grown is being hindered by insufficient and outdated
farming and production techniques,
ineffective use of land and water resources, poor hygiene
and low food standards.
However a lot can be achieved by improving
productivity, ensuring safety and efficiency
In food processing, efficient livestock’s management and
employing new post-harvest
Technologies
Developing skills and capabilities of human resources
and capacity building of the
academia to undertake research and development in the
agriculture sector is essential for
the long term growth of the sector.
There are already few sophisticated agri-businesses
involved in the dairy and food processing
sector, which serve as an example of the enormous
potential in this sector.
Government have to take a proper utilization of food
commodities (Finished/Sami
finished) to reduce the wastages and maintaining its food
qualities for long time period.

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