he rice-and-wheat dominated agriculture sector showed a mix of resilience and fragility during the year 2024. It witnessed remarkable progress in wheat yields and record export of rice. For the bumper wheat crop, credit should be given to the enabling policy environment and a favorable weather pattern.

However, this was a bad year for cotton as well as the emerging new cash crop of sesame that suffered due to heavy rains. The production outlook for sugarcane remains promising because of a good rate of return last year. The acreage under maize has remained stable but lower yield has been been reported.

Decline in the cotton acreage is attributable to the high risk attached to this crop and the availability of safer alternatives during the Kharif season. Comparing profitability of major Kharif crops, cotton falls at the bottom. The only attraction to growing cotton is its low water requirement. This year cotton production is expected to be 5.5 million bales compared to 8 million bales last year and 14 million bales in 2004. A lot of discussion is going on for the revival of cotton. A sustainable solution requires developing climate-smart and pest-averse short-duration determinate cotton varieties.

Among the minor crops, the production of fodders is on the rise. This is supporting growth in the livestock sector. The supply of fruits and vegetables has been stable. This was a record year for potato production, thanks to forward buying contracts. There are reports of rain damage to the dates. The prospects of expansion of olives in the Balochistan province are encouraging. Mango and guava production are on the rise. The kinnow growers and exporters are frustrated due to massive disease burden and the resultant low yields and poor fruit quality.

Expansion in the area under sesame and soybean is a policy alternative. The Punjab government launched a project this year to promote both sesame and soybean.

On regulatory front, the seed sector reforms (Federal Seed Regulatory Authority) and abolition of minimum support price for wheat and end of public procurement can usher a long-term change.

The Federal Seed Regulatory Authority has been created by amending the Seed Act of 1976 (amended in 2015). This will integrate the functions of variety registration, seed certification and the Plant Breeder’s Rights Act. There is a need for further augmentation of this function by integration of Biosafety Act controlling the release of GM crops.

Rice exports witnessed the highest value of around $4 billion against the average annual revenue of $2 billion during the last five years. This increase in exports was due to enabling export environment (ban on rice export in India in an election year) and efforts of Rice Export Association of Pakistan. This could not have happened if 2023 was not a bumper-crop year. This can be an incentive for additional acreage under rice during 2024. Crop yields during 2024 have been significantly lower. The unusual temperature during the pollination time is being blamed for this. But there is also malpractice by seed companies as some are selling non-descript seed under the ‘hybrid’ label. The wheat market crash resulted in a liquidity crisis for the farmers this year and reduced fertiliser off-take during the Kharif season in general and affected the rice crop in particular.

The wheat crop witnessed record production of 32 million tonnes due to favorable weather conditions and high market prices resulting in an additional one million acre in the Punjab alone. Abolishing minimum support price for wheat is a welfare loss for small farmers and has caused a lack of liquidity. A survey during July predicted an average reduction of 17 percent of acreage under wheat during the current sowing season. The Punjab government had set a target of 16.5 million acres which is close to the historic average and about a million acres less than the 2023 season. The shift from wheat is a good sign towards diversification during Rabi season. The reduction in acreage may be compensated by better input use and through prevention of harvest losses. The alternative is oilseed crops.

While exit from the minimum price purchase is a good idea, the policy shift should not be coercive. Imposition of Section 144 to ban the movement of wheat is discriminatory. The decline in commodity prices has not been commensurate with the high input prices.

In the Punjab, a new department, the Punjab Price Control and Commodities Management Department, has been created. It has been tasked with maintaining a comprehensive database of essential commodities for tracking the demand and supply. Other provinces may follow the Punjab to bring Food Departments, agriculture marketing and the provincial food authorities under one umbrella.

Taking advantage of the government’s exit from the market and a deregulated environment, the sugar mills are buying sugarcane without announcing any price. The cane commissioner, responsible for this segment of governance, has remained silent. This leaves the farmers helpless.

The maize crop has been on the free list all along. The collapse of the poultry industry has resulted in a market crash for maize. It took unusually long for the government to allow export of maize. This made it a profitable business for the traders at the cost of the farmers.

The ban on soybean import, imposed in 2022, continued till the last quarter of 2024. The decision has resulted in a 40 percent decline in the poultry sector. The poultry meat prices rose dramatically as a result from Rs 175 per kilograme to a peak value of Rs 500 per kg. This is a case of poor understanding of the GM crops by our policy community. The opportunity in the crisis has resulted in a debate on the introduction of soybean as a Kharif crop.

The Executive Committee of the National Economic Council approved Rs 377 billion for solarization of tubewells. The bright side of the initiative is that it will reduce the cost of production for the farmers. However, the risk of water waste is high. The ECNEC has also approved digging of six new irrigation canals and operationalisation of Katchi Canal. There are some misgivings about the new canals which must be addressed through an open debate and data. More than 14 percent of the reported area of the country (i.e. 8.20 million hectares) is culturable waste. The Green Pakistan Initiative aims at bringing it under cultivation through corporate farming. The GPI includes a land information and management system, water management, agriculture malls and agriculture service companies.

The Punjab government has initiated an aggressive agriculture mechanisation plan by subsidising tractors and farm machinery. GPI and Agri Malls have joined hands to create farm services centers. The Habib Bank Limited has incorporated a subsidiary company named HBL Zarai Services Limited that combines delivery of inputs, farm machinery, credit and buying arrangements.

Agricultural Income Tax has remained a contentious issue. The efforts to bring the agricultural income under tax net have been futile due to complicated assessment and political considerations. Income tax exemption is blamed for tax evasion and inter-sectoral inequality. The constitution gives the provinces the right to levy and collect agricultural income tax.

The Provincial Assembly passed the Punjab Agriculture Income Tax (Amendment) Bill 2024 amending the Act of 1997. The bill imposes super-tax on large farmers and brings livestock income under agricultural income tax. On the face of it, levying tax on an assessed income is a fair proposition. But how and who will make fair assessment, is a million-dollar question.

Abiana (irrigation water charge) has been fixed in the Punjab at a flat rate on cultivated area since 2003. The abiana rates have been revised based on crops. This is a positive step but not sufficient as the rates are still too low to send a meaningful price signal to dictate choice of crop water requirement. Water metering, pricing and creating a water market through demand based water system can help achieve sustainable water resources management.

The writer is a former vice chancellor of the University of Agriculture, Faisalabad