2 days ago
- Business
- Business Recorder
Budget boosts agri loans, but growth uncertainty remains
LAHORE: While the budget 2025 continues to present agriculture as the backbone of Pakistan's economy - contributing 24% to the national GDP - experts and stakeholders expressed concerns that real growth and resilience in the sector remain uncertain.
The government has introduced several policy initiatives aimed at improving agriculture and strengthening climate resilience. These include an increase in agricultural loans from Rs 1,785 billion to Rs 2,066 billion, digital refinancing of up to Rs 100,000 for small farmers without collateral, and the establishment of the National Seed Development and Regulatory Authority to support climate-compatible seed systems.
In addition, the National Agriculture Biotechnology Policy and National Seed Policy 2025 are in the final approval stages, aiming to improve innovation, seed quality regulation, and private sector involvement in research and development, according to Aamer Hayat Bhandara, a progressive farmer and co-founder of Agriculture Republic.
A National Agriculture Committee is also being formed to improve coordination between federal and provincial governments - acknowledging that agricultural execution primarily falls under provincial jurisdiction.
However, the Economic Survey of Pakistan reported just a 0.56% growth rate in the agriculture sector which is considered 'disheartening' for a country where millions depend on farming. 'Despite agriculture being frequently mentioned in policy debates, the lack of a long-term, consistent strategy continues to hold back meaningful progress. Relying solely on policy announcements is risky - especially when climate change, water inefficiency, and weak farmer support remain unresolved,' said Bhandara. He emphasized that real change will come only when policies are implemented effectively and reach the grassroots level.
Meanwhile, the Kissan Board Pakistan (KBP), a small farmer advocacy group, criticized the budget for ignoring the agricultural community. They argued that inadequate subsidies for crop procurement and indirect taxes on farming inputs would further strain farmers.
KBP President Sardar Zafar Hussain Khan, General Secretary Dr. Abdul Jabbar Khan, and Secretary Information Haji Muhammad Ramzan, in a press conference, pledged to continue advocating for farmers' rights. They warned that unless agriculture is placed at the top of the national agenda, economic progress will remain limited.
Pakistan Kissan Ittehad (PKI) President Khalid Khokhar and Aamer Hayat Bhandara also pointed out inconsistencies in tax policies. They called for the removal of the 18% GST on local cotton, arguing that it creates an unfair advantage for imported, tax-free cotton. Removing the tax would support local growers and help revive domestic cotton cultivation.
Experts noted that climate change featured prominently in both the Economic Survey and the federal budget speech. The government has secured $1.4 billion through the IMF's Resilience and Sustainability Facility (RSF) to invest in climate-resilient infrastructure, seed systems, and risk management. Encouragingly, no new taxes have been imposed on fertilizers and pesticides, protecting farmers from additional costs amid ongoing IMF reforms.
However, the imposition of GST on solar energy technologies has drawn widespread criticism for threatening clean energy access in agriculture. For many smallholders, solar-powered tube wells, cold storage units, and off-grid irrigation systems remain the only viable options amid high electricity costs and climate challenges. Making these technologies more expensive, experts warned, could hinder the country's goals for climate adaptation in rural areas.
Copyright Business Recorder, 2025
