March 30, 2023


March 30, 2023

Shahid Sattar and Noreen Akhtar

Agriculture remains an important sector for Pakistan’s GDP (contributes about 24% of GDP), exports, employment (female employment in particular), and poverty reduction (Pakistan Bureau of Statistics n.d.). Pakistan has shown a stable share of agriculture in GDP over the past three decades, while it has fallen for the aspirational comparators (figure 1).

Share of agriculture in GDP, 1990 – 2020

Figure 1: Pakistan’s share of agriculture in GDP over past three decades, in contrast with comparators (World Bank Group 2022).

Agriculture is a potential sector for poverty reduction in Pakistan, as a larger population share (poor in particular) lives in rural areas. While millions are employed by the sector, the output per worker has been stagnant for three decades and is median among its peers (figure 2). It expanded at an annual rate of less than 0.7% while the average for South Asia expanded four times this rate. This sluggish productivity performance is caused due to distortions created by state interventions that resulted in the resource concentration on four major crops (cotton, sugarcane, wheat, and rice), increased advantage of big landowners and banks at the expanse of small farmers, consumers and future generations and encouraged environmentally unsustainable practices (Ahmed 2020; World Bank Group 2022).

 Agricultural value added per worker in constant 2010 US$, 1991-2019

Figure 2: Agricultural value added per worker is low and stagnant in Pakistan relative to comparators (World Bank Group 2022).


Climate change is an additional risk factor for Pakistan’s agricultural sector. Pakistan is experiencing rates of warming considerably above the global average. The projected data indicates that, even under the optimistic scenario (SSP1-1.9), the annual mean temperature, and number of days with a heat index greater than 35°C are likely to increase for Pakistan. Also, the extreme precipitation events leading to floods, droughts, and sub-daily extreme rainfall events are likely to increase, with much greater risks under the highest emissions scenario (SSP5-8.5) (figure 3) (Almazroui et al. 2020; World Bank Group 2022).

Over 75 million Pakistanis got affected by weather and climate-induced disasters in the past three decades with an estimated economic loss of above US$29 billion (World Bank group 2022). If Pakistan does not adopt the sustainable development scenario, the negative impacts of climate change on human health, ecosystems, and livelihoods will amplify to irreversible levels.

Climate change will, directly and indirectly, alter food production. Directly by altering CO2 availability and temperature and precipitation patterns while indirectly by affecting water availability, seasonality, soil quality and submerging coastal lands, and increasing invasive species. Agriculture will also be affected due to climate-induced impacts on human health and labor force productivity. Further, Pakistan’s irrigation is majorly dependent on the surface water that will experience extreme pressure from climate change (Chaudhry 2017; World Bank Group 2022).

 Extreme temperatures have become more common

Figure 3: Projected mean temperatures in Pakistan, reference period 1995-2014, multi-model ensemble (World Bank Group 2022).

*SSPs represent possible societal development and policy paths for meeting designated radiative forcing by the end of the century.

*SSP1-2.6 represents a scenario where GHG emissions (and indirect emissions) are reduced substantially, following the sustainable development pathway

*SSP5-8.5 represents a scenario with very high GHG emissions


According to the Climate Change Profile by Chaudhry (2017), with the rise of 0.5-2°C temperature, Pakistan’s agricultural productivity will decrease by around 8-10% by 2040, with major impacts on the predominant crops.

Regarding cotton yields, higher rainfall, and humidity levels negatively affect these yields. On average, an increase in humidity by 10% leads to around an 8% decline in cotton yields, while a similar increase in precipitation causes a 3.2% loss in yields. The 2022 floods in Pakistan, for instance, caused major losses to cotton with massive spillover impacts on the textile industry, as local cotton constitutes more than half of the industry’s required cotton input. As a result, the industry’s reliance on imported cotton increased while the cotton shortage is still persistent, thus threatening the industry’s sustainable functioning to a large extent.

It is estimated that the 2022 floods have affected around 40% of the annual cotton crop in Pakistan (Russell 2022). The world’s fifth-largest cotton producer is now engulfed by climate disasters with massive losses in cotton and its production. While Pakistan is still a major cotton consumer (third highest among all major cotton-growing countries in 2018) (Pakistan Economic Survey 2017-18), the mounting gap between cotton loss and its consumption has caused devastating economic losses to millions of farmers and the textile industry – Pakistan’s top export industry. The brunt of this economic instability has trickled down to thousands of industry workers whose only source of income is threatened. These challenges are compounded by a lack of research on more climate-resistant cotton varieties and sustainable cotton alternatives for textile manufacturing.


  • Removal of import duties on climate smart-technologies

Climate-smart technologies help address climate-induced disasters including droughts, floods, and heatwaves, which are likely to be intensified in Pakistan. This includes water management strategies such as alternative wet and drying or laser leveling to increase productivity. Likewise, renewable energy (RE) technologies including windmills and bio-energy production units can be used for efficient water supply and storage and to power farm equipment.

Climate-smart technologies are subject to high import duties that have increased their domestic price and made them less feasible for adoption. As Pakistan’s major industries including the textile industry are experiencing mounting sustainability requirements from the global community of buyers including EU, these import duties need to be abolished in order to enable the industries reduce their carbon and water footprint by adopting these technologies.

  • Investment in enabling services to connect farmers to markets and enhance their capabilities

Connectivity enhances agricultural productivity and farmers’ incomes by connecting them directly to the markets. In the case of Pakistan, cellphone access helps farmers to move cash crops as it improves timely coordination with traders at the time of harvest, thus minimizing loss. Therefore, both hard and soft connectivity is crucial to facilitate connectivity and information provision to farmers.

  • Improvement in the innovation ecosystem, facilitate university-private sector and public-private sector linkages and increase R&D investment

This development is crucial to ensure sustainable growth in agriculture but also to promote research on more climate-resilient crop varieties such as cotton and their sustainable alternatives. This is also important to shift Pakistan’s reliance from only few major crops to a wide variety of crops that can be cultivated to overcome food insecurity in the country.

  • Monitoring of sustainable farming practices

Farming practices in Pakistan must be regulated to avoid GHG emissions, unsustainable water consumption patterns and use of environmentally unhealthy inorganic fertilizer. This is necessary to avoid land degradation – an already major environmental challenge in Pakistan that has affected land productivity.

(World Bank Group 2022)


Pakistan – Country Economic Memorandum 2.0 (


Where We Are


Follow Our Activity