LAHORE: The Pakistan Kissan Ittehad (PKI) has called on the government to establish an Agricultural Commodities Price Commission to implement a transparent pricing system that ensures farmers earn at least a 25% return on their investments.
Additionally, PKI has proposed the formation of an Agricultural Export Authority to help stabilize domestic prices and promote sustainable marketing of surplus produce.
These demands were voiced by PKI President Khalid Mahmood Khokhar during a recent press briefing. He also urged the government to eliminate the 18% General Sales Tax (GST) on seed cotton, abolish GST on tractors and agricultural machinery, and implement a uniform electricity tariff of Rs 10 per unit for irrigation tube-wells.
“Without urgent reforms, experts warn that Pakistan (green pakistan)’s agriculture sector—long considered the backbone of the economy—is rapidly deteriorating, posing serious threats to food security, economic stability, and social cohesion,” Khokhar said.
In response to the Punjab budget, Khokhar criticized the government’s modest 10.75% increase in agriculture funding, arguing it either reflects a severe misjudgment of the sector’s crisis or a willful disregard of its urgency. “
Despite the dire state of agriculture, the Punjab government has only allocated Rs 129.8 billion in the 2025–26 budget—a mere Rs 12 billion increase from last year’s Rs 117.2 billion. This is grossly inadequate in the context of a multi-trillion-rupee crisis,” he stated.
Khokhar also expressed concern over the government’s proposal to tax agricultural income, saying it reveals a troubling disconnect from the financial struggles of farmers.
Applying corporate-style tax brackets to smallholders grappling with climate change and water shortages, he warned, could deepen rural poverty, reduce investment, and further destabilize the sector.
He noted that farmers are currently facing a severe affordability crisis, evidenced by plummeting usage of fertilizers like urea and DAP, along with a significant decline in tractor sales.
As a result, investment during the current Kharif season has dropped, raising fears of reduced cotton yields and threatening the upcoming Rabi wheat crop. If this trend continues, the country may be headed toward a food security crisis.
Khokhar highlighted the severity of the situation, citing a 5.84% contraction in agricultural growth over the past year, with major crop output falling by over 13%.
Agricultural exports have also suffered in 2024–25: maize exports plunged by 86% to just USD 58.9 million, while rice exports (hidden genetic) declined by 15% to USD 3.3 billion—underscoring the deep structural problems facing the sector.
Frequently Asked Questions (FAQs) and Concepts
What is Agricultural Income Tax and how might it impact farmers in 2025?
Agricultural income tax refers to a levy on earnings from crop production and farm activities. In 2025, many farmers are already struggling with rising input costs and climate challenges. Applying standard tax slabs—meant for stable businesses—to climate-sensitive farming could deepen poverty and reduce incentives to invest in agriculture.
What is the Agricultural Commodities Price Commission?
This proposed commission would regulate crop pricing to ensure farmers receive fair compensation, especially amid market volatility. In 2025, the Pakistan Kissan Ittehad is demanding this body to guarantee at least a 25% return on farmers’ investments, protecting them from exploitative middlemen and unpredictable price swings.
What is the impact of GST on agriculture in 2025?
General Sales Tax (GST) on key agricultural inputs like seed cotton, tractors, and implements increases the financial burden on farmers. PKI has demanded the removal of these taxes, arguing that they make farming unsustainable, especially in a year when input affordability and yield risks are already critical issues.
What is the significance of electricity tariffs for tube wells in agriculture?
Electric tube wells are essential for irrigation, especially in regions facing water shortages. A flat electricity tariff of Rs 10/unit, as proposed by PKI, could help standardize costs and support struggling farmers in 2025. Without this reform, uneven rates and high bills may discourage timely irrigation, impacting crop yields.
What is an Agricultural Export Authority and why is it needed in 2025?
This proposed body would manage surplus crop exports, ensure stable domestic supply, and fetch competitive international prices. In 2025, a sharp fall in maize and rice exports has highlighted inefficiencies in agricultural trade, and such an authority could help prevent losses and better integrate farmers into global markets.
What does a post-budget press conference reveal?
A post-budget press conference is typically held by experts or interest groups to respond to newly announced budget policies. In June 2025, PKI used such a platform to criticize the Punjab government’s “token” increase in agriculture funding, calling it insufficient in the face of a sector-wide economic and structural crisis.
What is the affordability crisis in farming today?
The affordability crisis refers to farmers’ inability to invest in basic inputs due to rising costs and falling returns. In the 2025 Kharif season, fertilizer use has dropped drastically, and tractor sales have slumped—both signals of a cash crunch that threatens not only yields but also the upcoming Rabi wheat crop.
How is Pakistan’s agricultural sector performing in 2025?
The sector is facing a deep downturn, with agricultural growth falling by 5.84% and major crop output shrinking by over 13%. Exports like maize have declined by 86%, showing a clear structural breakdown. These indicators highlight the urgent need for systemic reforms, fair pricing mechanisms, and investment in the rural economy.
