Agriculture is the lynchpin of Pakistan’s economy and a dominant force for growth and development. It contributes substantially — at a rate of about 60% — to Pakistan’s exports earnings, with rice and cotton, and more recently wheat, the predominant export commodities.

Almost 68% of the population lives in rural areas and is directly or indirectly linked to agriculture for its livelihood. The government tries to encourage improvement in agriculture not only to help with economic growth but to benefit a large segment of the country’s population.

About 27% of the total land area of 79.6 million hectares is currently under cultivation. Of this area, 80% is irrigated, and Pakistan has one of the highest proportions of irrigated crop area in the world.

The agriculture sector grew at an average rate of 4.5% annually during the 1990s. That growth, however, has fluctuated widely each year — rising by as high as 11.7% in one year and declining by 5.3% in another during the period.

In the past three years, particularly in 2000-01 and 2001-02, Pakistan has suffered crippling drought that badly affected its agricultural output, and growth turned negative each season. Although water shortages persisted into 2002-03, drought conditions eased, and agriculture grew by 4.2% in that year.

Food security and the availability of export surpluses at competitive prices are important policy goals. The government is trying to attain these goals through more efficient development and use of agricultural resources, including expanding productivity investments such as subsidizing seed and offering credit for other inputs and machinery.

To cope with the increasing demand for agricultural financing, institutional credit is provided through Zarai Taraqiate Bank Limited (ZTBL), formerly known as Agricultural Development Bank of Pakistan; commercial banks; cooperatives; and small private banks. Of these, the ZTBL provides the largest share of total credit disbursements, followed by commercial banks.

Still, raising productivity to optimum levels remains elusive. The government noted in its most recent agricultural economic review that the future challenges of a free-market economy and faster globalization made further modernization more pressing, and it is working on developing a comprehensive strategic plan to reach these goals.

One way the government hopes to improve productivity is through a more-efficient irrigation system. Although Pakistan already has the world’s largest contiguous irrigation network, which became operational in the 1970s, the country still suffers from large amounts of waste in the irrigation process.

The government also has invested heavily in agricultural research. The Pakistan Agricultural Research Council, a form of which has been around since the country’s birth in the 1950s, is a key component, conducting and coordinating agricultural research and training and disseminating information.

In addition to the national center in Islamabad, PARC operates research facilities in six other regions. PARC also works with other countries and the World Bank to develop and/or import technologies and methodologies to help productivity.

Pakistan agriculture basically operates under market conditions, but the government provides support price levels for key crops, including wheat, and a procurement program. Procurement is important, independent of total output, because that program allows the government to influence the market and moderate flour and bread prices for consumers.

Grain storage and handling is another area in which Pakistan’s agricultural sector is seeking improvements. The goal of becoming a net wheat exporter has made this issue more compelling, as quality concerns abound.

Despite a few storage projects in the 1990s, capacity is still inadequate. New grain handling facilities are included in a port upgrade project currently under way at Gwadar, but agricultural analysts are urging the government to adopt a more comprehensive nationwide strategy.


Wheat is Pakistan’s staple food, is the largest grain crop, contributes 12.5% to total agricultural value.

Although traditionally Pakistan has been a wheat importer, good harvests in the past three seasons (despite drought conditions) have permitted exports, which are a valuable foreign exchange earner. Although the 2003-04 crop is forecast to be the lowest in five seasons, the government is trying to encourage an increase in wheat area and production over the longer term to sustain export availabilities.

Pakistan’s wheat milling industry is privately owned and consists of about 900 flour mills located across the country. Total flour grinding capacity has been reported at 100,000 tonnes daily against approximate daily domestic demand of 30,000 tonnes.

The Pakistan Flour Mills Association actively represents the milling industry in its dealings with government and credit agencies, including private banks. In the past six months, PFMA has lobbied for more competitive credit terms from banks in the northern regions and against concessional tariffs for flour imports from India.

Pakistan’s consumer preferences are shifting, from traditional flat bread to western-style loaf bread, particularly in urban areas where it is viewed as a convenience food. A shift from traditional home-ground flour to commercially-produced flour also is occurring.

Principal milled products include "midda," a 72% extraction flour used for loaf bread and other products, and "atta," an 82% extraction flour used for flat breads. For quality and price reasons, millers prefer to mix local semi-hard white wheat with imported soft white wheat at a 60:40 rate.

Although consumers traditionally prefer white wheats, millers can blend up to 20% bran to produce "atta" and up to 10% to produce "midda," while still producing an acceptable product, according to a recent U.S. Department of Agriculture report.

The change in preference from higher to lower extraction flour is translating into greater consumption of wheat. Demand for specialized products also is expected to increase in response to changing lifestyles and the introduction of western-style fast food chains.


Pakistan’s commercial animal feed industry consists mainly of poultry feed production. In contrast to the cattle feed industry, poultry feed mills with varying capacities have been established across the country, but are concentrated in Punjab and Sindh provinces. The growth in the industry corresponded with the rapid transformation of rural poultry units into commercial ventures.

As of December 2002, Pakistan was estimated to have more than 5,000 poultry farms, with about 80% relying on commercially produced feed. Total poultry feed capacity at the end of 2002 was estimated at about 1 million tonnes.

Pakistan’s poultry feed is not governed by quality standards, resulting in wide variations, and perceptions are that feed quality in general is deteriorating, which is hampering further industry growth. The deterioration in feed quality is due to a lack of protein ingredients; a shortage of coarse grains, which make up about 50% of total ingredients; and a lack of quality control.

Installed commercial capacity utilization was estimated in December 2002 at only 40%, with annual production put at 600,000 to 700,000 tonnes a year. To combat under-utilization, some poultry feed mills are eager to produce for export, as long as certain incentives are provided. They are urging policies that would ensure regular, adequate and reasonably-priced supplies of various ingredients, particularly coarse grains, and the duty-free import of sophisticated feed manufacturing equipment not available domestically.

Only sporadic efforts have been made to develop a commercial cattle feed industry and with limited success. But a movement is growing. The aim is to provide nutritious composite feed at reasonable prices.

Because the private sector is reluctant to invest in plants now, such ventures should be established in the public sector and could be transferred eventually to the private sector, analysts say.


Rice is an important cash crop and one of Pakistan’s main foreign exchange earners. Rice is not a staple commodity in the Pakistani diet, although its consumption is increasing slowly. Only about 60% of annual production is consumed domestically, with an estimated 150,000 tonnes, 40% to 100% broken, used in poultry feed annually.

Pakistan rice exports include Basmati, as well as traditional varieties. All trade is conducted by the private sector, as the state-owned Rice Export Corporation was abolished several years ago.

Key Facts

Capital: Islamabad.

Demography: Population 150.7 million, 2.01% growth rate (2003 estimates); Punjabi (48%), Urdu (official, 8%) languages; Muslim religion (97%).

Geography: South Asia, bordering India, China, Iran and Afghanistan, Arabian Sea forms southern boundary; mostly hot, dry desert; temperate in northwest; arctic in north; flat Indus plain in east, mountains in north and northwest, plateau in west.

Government: Federal republic. Chief of state is President Pervez Musharraf; head of government is Prime Minister Mir Zafarullah Khan Jamali.

Official agricultural agencies: Ministry of Food, Agriculture and Livestock under Minister Sardar Yar Muhammad Rind.

Economy: Pakistan’s economy has suffered from internal political disputes, low levels of foreign investment and an on-going, costly confrontation with neighboring India. The government has made significant inroads in macroeconomic reform since 2000, and Pakistan’s economic prospects improved in 2002 following huge amounts of foreign assistance beginning in 2001. But development spending remains low, regional tensions remain high and political tensions weaken Pakistan’s commitment to economic reforms, which remain uneven. GDP growth will continue to hinge on crop performance and the costs of oil imports.

Agriculture accounts for 24% of gross domestic product and employs 48.4% of the work force.

G.D.P. per capita: U.S.$2,100 (purchasing power parity), 4.5% growth rate, 3.9% inflation, 7.8% unemployment, (2002 estimates).

Currency: Rupee. Aug. 26, 2003 exchange rate, 57.82 PKR = 1 U.S. dollar.

Exports: U.S.$9.8 billion (f.o.b., 2002-03), textiles, rice, leather.

Imports: U.S.$11.1 billion (f.o.b., 2002-03), petroleum and products, machinery, edible oils.

Major crops/agricultural products: Wheat, rice, cotton.

Wheat: Production has averaged 18.9 million tonnes a year in the past five years, including a record 21.1 million in 2000-01. Five-year annual exports averaged 370,000 tonnes versus virtually none prior to that period. Annual imports have dropped to an average of 627,000 tonnes in the five-year period against about 3 million earlier. Virtually all domestic use is for food.

Rice: Milled production averaged 4.5 million tonnes, with exports at about 1.8 million and total use at 2.7 million.

Transportation: Highways, 247,811 km, 141,252 paved; railroads, 8,163 km, mostly 1.676-m gauge; Karachi, Port Muhammad bin Qasim are major ports.

Internet: Country code, *.pk; 30 service providers (2000); 1.2 million users (2000).


Data (1,000 tonnes)















Rice production is on a milled basis. 2003-04 marketing year projections

Source: U.S. Department of Agriculture