Great Importance of Agriculture in Pakistan’s Economy

Agriculture in Pakistan’s Economy Introduction

Importance of Agriculture in Pakistan’s Economy – Agriculture is the largest sector, employing over 43% of the workforce, contributing around 24% to the country’s GDP, exports, and 2256 million dollars in exports in June 2023. The agriculture sector is one of the important sectors of Pakistan economy. It plays a vital role in the economy of Pakistan, contributing significantly to its GDP, employment, and exports. According to the Ministry of Finance of Pakistan, the agriculture sector of Pakistan will contribute almost 22% to the GDP of Pakistan in the year 2023. The following factors show the significance of Agriculture in Pakistan’s Economy in various aspects.

Importance of the Agriculture in Pakistan’s Economy:

The importance of the agriculture sector of Pakistan can be determined from the points given below:

Agriculture in Pakistan's Economy
Agriculture in Pakistan’s Economy

Contribution to Gross Domestic Products:

Agriculture is one of the largest sectors of the Pakistani economy, contributing about 22% to 25% to th;e country’s GDP. It serves as the backbone of the economy, providing essential raw materials for various industries and ensuring food security for the growing population.

Opportunities of Employment

Agriculture is the largest employer in Pakistan, employing a significant portion of the country’s workforce. Particularly in rural areas where employment opportunities are limited.

Although, the latest technologies have reduced the number of jobs in rural areas in the agriculture sector. But still, there are thousands of jobs for the people who are engaged in this sector.

The sector provides livelihoods for millions of people involved in farming, livestock rearing, and related activities.

There are dozens of sub-sectors of the education sector that generate foreign reserves for the country by exporting agricultural products, crops, and dairy products.

Food Security through Agriculture

In the modern world food security is a big issue for non-agrarian states. Because of the increase in population, food insecurity has been enhanced.

Agriculture in Pakistan's Economy
Agriculture in Pakistan’s Economy

Furthermore, agriculture is crucial for ensuring food security in Pakistan. The sector produces a wide variety of crops including wheat, rice, sugarcane, potatoes, tomatoes, Oats, maize, and fruits, which are staple foods for the population. The presence and absence of these food items matter a lot for the population.

Lastly, a robust agricultural sector helps in meeting the dietary needs of the population and reducing dependency on food imports. In the case of Pakistan, the state is self-sufficient in many crops and other food items, such as flour, maize, sugar, etc.

Generate Foreign Reserves:

The agriculture sector of Pakistan is one of the major sources of foreign reserves. Every year millions of metric tonnes of flour, wheat, sugar, and maize are exported to other states. So, the agro sector of Pakistan is generating billions of dollars for the economy of Pakistan.

In addition, Pakistan earns a substantial amount of foreign exchange through the export of agricultural commodities. Cotton, rice, fruits, and vegetables are among the major agricultural products exported from Pakistan to various countries.

In short, these exports from these agro-based products and crops, contribute significantly to the country’s foreign exchange reserves and help in balancing the trade deficit.

Development of Rural Areas:

The agro sector plays an important role in the development of the rural areas. To deliver agricultural products to urban areas there is a need for better infrastructure and other means of communication. So, the government developed communications means to reach the agri products to urban areas as well as to the rest of the states through exports.

Likewise, Agriculture plays a crucial role in rural development by providing livelihood opportunities, improving infrastructure, and reducing poverty. It also plays a significant role in the development of many other attached sectors.

Further, investments in agricultural infrastructure such as irrigation systems, roads, and market facilities not only benefit farmers but also stimulate economic growth in rural areas.

Source of Raw Materials for Industry

Apart from food production, agriculture also serves as a source of raw materials for various industries such as textiles, sugar, and agro-based industries. Cotton, for example, is a key raw material for the textile industry, which is one of the largest contributors to Pakistan’s exports and industrial output.

Agriculture in Pakistan's Economy
Agriculture in Pakistan’s Economy

Contribution to National Income:

The agriculture sector’s contribution to GDP or national income is significant. It contributes billions of dollars to the economy along with the provision of hundreds of thousands of jobs.

Similarly, the performance of the agricultural sector has a significant impact on overall economic growth in Pakistan. This sector is helping the economy from different perspectives. Favorable agricultural policies, technological advancements, and efficient resource allocation can lead to increased productivity, higher incomes for farmers, and overall economic development.

Related: Government’s Role in Pakistan’s Agriculture

What are the sub-sectors of agriculture?

There are many sub-sectors of the agriculture sector. These are mentioned below:

Agri Sector or Crop Sector:

The crop sector or agri-sector is the largest sector of the agriculture sector. It contributes a major portion to the agri sector.

Dairy Farming:

Dairy farming is also a primary sub-sector of the agri sector. It refers to the production of meat and dairy products.

Horticulture:

The horticulture sector refers to the production of flowers. It also shares a significant part in the agri sector.

Forestry:

Forestry refers to the growing of all kinds of trees for commercial purpose as well as their protection.

Poultry:

Poultry refers to bird keeping for commercial purposes.

Aquaculture:

Aquaculture is a smaller sector in the agri sector. It means the production of aqua species or fish for commercial purposes.

What are the three

The three major factors or government initiatives that play a role in support of the agriculture sector of Pakistan are subsidies, loans, and market access.

Many other subsidiary factors are also important for the support of the agriculture sector. They include:

  1. Access to the latest equipment.
  2. Provision of easy and interest-free loans.
  3. Accessibility to local, national, and international markets.
  4. Agro-based exhibition.
  5. Bilateral and trilateral agreements with states for easy export of agri products.
  6. Trade agreements and signing of MFO (Most favorite nations).
  7. Safety of crops from flood and unseen situations.
  8. Insurance of crops.
  9. Proper and timely provision of fertilizers.
  10. Timely provision of water for various crops especially during the summer season.

Bottom Line:

In conclusion, agriculture holds immense importance in Pakistan’s economy, not only as a major contributor to GDP but also as a provider of employment, food security, export earnings, and rural development. Sustainable development and modernization of the agricultural sector are essential for ensuring long-term growth and prosperity in the country. So, the importance of Agriculture in Pakistan’s Economy is open to all in the above context.