Stung by a steep price crash (wheat) and an equally massive crop collapse (like cotton, maize and rice) this year, farmers are not very hopeful for the next one either. They believe that existential issues that caused a sectoral crisis in 2024 would not only continue dogging but may worsen — at least in the short-run — and squeeze the life out of farmers and farming during 2025.

Listing those fear factors, the community pleads that a policy vacuum, the new but still uncertain taxation regime, and now agriculturally verifiable climate changes are all question marks that would loom large next year without any answers.

Instead of policymakers helping farmers find answers, they have become part of the problem, confusing the community further by inaction, adjusting policies to foreign and international dictates rather than the local realities and refusing to enter into debate even on the most crucial issues.

“We, the farmers, are at a loss of understanding how the present regime wants to deal with the sector,” says Abad Khan, a farmer and member of the Farmers’ Associates Pakistan. It is total policy paralysis. It started in early 2024 when the government announced the procurement price of wheat with much political funfair and then refused to purchase at the last moment, even after distributing gunny bags.

Uncertainty reigns in the agriculture sector as farmers reel from half-backed policies, zero clarity from lawmakers, and a steadily worsening climate crisis

This massive policy shift came abruptly, without any debate at any level — farmers, government, and the media — and no one discussed it or saw it coming, but it came. For farmers, the result was crushing; they lost over 30 per cent of their income and livelihood overnight. Even then, the government refused to explain its policy position.

Wheat is sown yet again, without any support price or policy explainer. This insensitive attitude, where the government is not ready to explain, let alone justify, its policy position despite the devastating blow to farmers, augurs hardly well for all those connected to this crop, Mr Khan laments.

“Taking a cue from the government, sugar millers have started crushing this season without telling anyone what the price of cane is. After a staple crop, a cash crop is being dealt with the same way, and farmers are calculating and suffering the cost of policy reversals without knowing what comes next.

“The governments, both national and provincial, should at least tell farmers what they want to do to them. Instead of cosmetic steps like solarising tubewells and subsidising tractors, the government should deal with the crucial policy issues,” he added.

‘The governments, both national and provincial, should deal with crucial policy issues, instead of taking cosmetic steps like solarising tubewells and subsidising tractors’

Taxation Regime

Goaded by the International Monetary Fund (IMF), the Punjab government is toying with the idea of changing the taxation regime in the province, where 80pc of agriculture takes place. Though no one knows for sure the details of the new regime, leaked media reports suggest its conversion from revenue to income-based and divide it into five slabs — with the highest income slab (over Rs4.8 million) costing 45pc tax.

This naturally causes anxiety among farmers, who do not know what awaits them in 2025, especially when some reports suggest it would be slapped with a retrospective effect.

“One should not forget that there is dreadful confusion,” claims Farooq Ahmad Bajwa, a lawyer and president of the Basmati Growers Association. Despite these rumours and different versions of the proposed regimes, which have been doing rounds in the media for the last six months, no one is bothered to own or disown these reports; there is complete silence on the part of the government.

As per reports, it may also be double taxation, cast to the owners and lessees — both are supposed to show income from the same land, with the owner as beneficiary and the absentee farmer and lessee as the actual one.

“Once implemented, this regime would kill farmers financially if tax is collected. If not, the IMF would strangulate the state. The most tragic part is that the government is not ready to explain its position despite demoralising theories about its potential act. It is economically and politically harmful for the government to think that it can leave farmers hanging, take abrupt and unexplained decisions and let growers adjust to their shocking effects — as has happened in the case of wheat and cane.”

Climate change

Climate change, according to farmers, is now a verifiable agricultural phenomenon; its 2024 damages can now be calculated mathematically. This year, among other factors, climate caught crops like rice, maize, cotton and sesame at the wrong and crucial times and caused 35-65pc production losses.

Sesame, which saw its acreage expanding from 600,000 acres to 1.7m acres in the last two years, experienced 65pc loss. Cotton lost 35pc, rice losses stand at 30pc and so is that of maize. No doubt, these crops were weak on nutrients because of the financial impact of wheat loss early this year, but beneficial weather could have helped them regain strength. Instead, it afflicted its own losses, dragging the entire production cycle down and multiplying ruinous losses.

“The policy response? None; instead, we got elegiac sermons. The government should come up with a clear policy response, broken into milestones and fiscal allocations,” demands Dr Iqrar A Khan, former vice-chancellor of Agriculture University and celebrated academic of the sector. It can neither be wished away nor would delayed response help. Rather, losses would multiply and make agriculture even more uncertain," Dr Khan warns.

Published in Dawn, The Business and Finance Weekly, December 30th, 2024